PROVINCE FUNDS AFFORDABLE HOUSING IN VERNON
At the above posting it is indicated that the 2.348 acres of land that was contributed by the city was valued at $900,000. This would make each acre worth $383,304. The 40 units of affordable housing would make each unit's land cost to the city's taxpayers to be $22,500. (Sounds like a good deal because City is leasing this land to this project and will retain ownership and any further capital appreciation !) (The city will provide a 60-year lease to the society for a nominal amount)If the same cost per acre was used this would set a value of $26,448,040 for the 69 acres that the City of Vernon has turned over to their 100% owned subsidiary Hesperia Corporation for their use in attainable housing development.
Hesperia has recently hired an economist and hopefully more refined cash flow projections will be forthcoming and the actual gross subsidy that the taxpayers will be providing and the number of units of attainable houses that will be realized will be released to the Council and to the Public.
A Public Input meeting on this business plan and the agreement to provide the subsidy is not a legal requirement and since over a $1 million dollars has been already authorized to be drawn down by Hesperia to start the ball rolling I don't expect that we will see any such meeting called.
Basically the taxpayer of the City will receive a total of $22,578,000 ($19,578,000 in 'dividends' and $3,000,000 for Land). (Present value of this deal in 2008 $'s is $19,970,649). (Dividend present value at 2% is $17,253,457 at 3% is $16,212,881 Land Present value at 2% is 2,717,192 at 3% is 2,587,826.)
The net subsidy for the Hesperia project using the land values of the above sewer plant project will be $26,448,040 minus the present value of the dividends and land appraisal cost of $19,970,649. This indicated subsidy amount of $6,477,391 will provide 125 attainable housing units (based on a calculation obtained from DCC's in cash flow statement.) or $51,819 per unit.
Naturally when we are informed of the real value that these lands would realize on the open market if sold to developers and the number of units of attainable housing that are projected for the Hesperia Development, we can stop this speculation and be in a position to make an informed decision about whether this project should proceed.
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A viewpoint from a real estate agent about this project can be found at : Hesperia - Why is the City involved in developing attainable housing and just what is attainable housing?
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