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Opinion
Business Observer Friday, Oct. 22, 2004 15 years ago

Act Like Act Lke Founding Fathers

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Sarasota Countyis fixes for the affordable housing problem has more of problems than solutions and has the possibilty of creating widder ranging troubles than the original issue.

Act Like Act Lke Founding Fathers

We preempted Coffee Talk this week for another cover story report and commentary on affordable housing.

The issue continues to gain momentum in the halls of Sarasota County government. On Oct. 13, Susan Scott, assistant county administrator, and Larry Arnold, the countyis community development manager, issued a memorandum that contains nearly five pages of examples of how other communities around the nation are addressing their affordable housing issues with taxes and subsidies (the memo calls them iincentivesi). Weive reprinted the memo, starting on page 1. Itis frightening.

But you ought to read it. Even if your business is not directly part of the housing industry, your business will be adversely affected if the county commission adopts any or some of the measures that are now law in other places. We say adversely affected because any new distortions or costs placed on the buying and selling of goods and services always exact a price on someone and depress economic activity and a regionis business climate.

Meantime, this whole thing about affordable housing continues to mystify. For one, it was surprising to hear Scott tell us last week: iThe community hasnit grabbed onto this issue.i Our interpretation: Virtually no one in the private sector o at least not large numbers of consumers and voters o is clamoring in front of the county government to adopt policies that will dispense subsidies and create new taxes that will result in increased supplies of more affordable housing.

Whois pushing the agenda? Jud Boedecker, a partner in Southwest Florida Homes Inc., wonders himself from where the impetus is coming. iItis hard to tell whether itis from the commission or county staff.i Dickson Clements, executive vice president of the Sarasota County Home Builders Association, echoes Boedecker.

Then thereis Scott: iWeire looking for direction from the board.i

But two weeks ago, one of the county commissioners raised a question during discussions on the subject about whether housing affordability is as bad as it is made out to be.

Then why do anything? We all know the first rule of problem solving: When in a hole, quit digging.

We like Wayne Farrellis analysis. At a meeting last week of representatives of business groups with large stakes in the housing industry, Farrell, also a partner in Southwest Florida Homes Inc., spelled out the affordable housing issue and a solution with two triangles (see the diagram below).

If demand for a good is high and the market is unrestricted, i.e. no government regulations, the supply will be filled at all price levels. But if an artificial (governmental) barrier is imposed that restricts supply, the suppliers will gravitate to the areas where they make the greatest profits. iI learned that in Economics 101,i Farrell said.

Simple.

But, say the county commissioners and county staff, competing interests of neighbors want the government to step in to stop development next door, not to let the asphalt plant build down the street, impose height restrictions so the NIMBYs views are preserved, ad infinitumO

As soon as they did that, they created destiny: higher cost of housing. So now they want politically palatable escape routes. And typically, those best routes involve dinging business because business cannot vote.

Which brings us to Nov. 10, the day the Sarasota County Commission will discuss the possibilities in the Scott-Arnold memo.

The commissioners need to hear the voice of business. But heretofore it has been rather mute. Not only that, there is no single voice of business. So hereis one idea: Every business association in Sarasota County and every chamber should consider taking a position on housing affordability. The question each group might consider answering is this: Do you want the county commission to create a matrix of incentives, taxes and subsidies that will force builders to build low- to moderately priced homes? Or would you rather advocate that the county commission take steps to reduce dramatically the regulatory burdens that limit the supply of buildable land?

Consider a process similar to that of the constitutional convention. The Founding Fathers asked their constituents back in their colonies to weigh in on the Declaration of Independence and the U.S. Constitution and then the representatives vetted their views to create the final document. A similar approach might do well among Sarasotais business groups.

To remain silent and disparate, however, would bring a costly result.

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