Friday, March 14, 2008 | There is one huge bit of information missing from this story on “affordable” vs. market-rate housing.

I looked at the deal the city was offering for a one bedroom at La Boheme maybe a year or so ago. I read the paperwork, then ran as fast as I could from that dog of a deal. I’m going to try to recount what I can remember but please forgive me if the exact numbers or details are off by a bit.

This is not a special price for low-income buyers, it’s not down payment assistance or a grant that gets forgiven after a period of time. This is a loan for the difference between the list price and the “affordable” price, and once you pay that loan, you will have paid the same price as the market-rate units. In fact, you probably pay more because at least other buyers get to negotiate; your price is set.

See, you’re not really getting the unit for $185,000. You are also taking out a loan for $300,000 that you must begin paying in 30 years or, if you sell it, at the time of the sale. Personally, I would be in my 70s in 30 years, and coming up with $300,000 might be a slight problem. I don’t remember what interest rate applied; it might have even been zero, but that still doesn’t make it a good deal.

As for selling, you are not going to share in very much equity because the city will set the price to a similar “affordable” price. Compounding matters is the stipulation that you must find someone else in the same income bracket to buy it and they must come up with a down payment (I think it was 5 percent but it may have been 3 or 4).

Can’t find such a buyer, but need to move to Oshkosh for a few years? There were also restrictions on when and if you can rent your place out. In fact, the document even mentioned that you won’t be able to bequeath your home to your heirs.

So what do you have for your troubles? Basically, you are renting. With the exception of a tax deduction, you’re not enjoying the benefits of homeownership, and you’ve got this $300,000 bill getting closer to coming due every year. You even pay the same HOA dues as your neighbors who can afford market-rate prices. I don’t recall the policy on special assessments, but I’d bet there’s no break for the low-income units.

I do hope this program has been re-evaluated and improved, because it was just a terrible deal.

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