Editorial : Voters must answer
The West Tisbury planning board has decided correctly that modifications of the sales contracts between the nonprofit developers of affordable housing and their customers must be presented to town voters for approval. It's a discrete question that is part of a much broader issue.
The proposed modifications came before the planning board because the developers need to satisfy bankers who will hold the mortgages on these properties that in extreme circumstances - for instance, foreclosure - the possibility for the bank to sell the house at market will survive. The changes include mechanisms that will allow the developer to short circuit foreclosure, but those mechanisms do not guarantee perpetual affordability.
The town voted several hundred thousand Community Preservation Act dollars to support the housing development known as 250 State Road. Doing so, the town required that the housing it was helping to fund would be absolutely and forever affordable. To accept the proposed changes is to step back from that condition, and the voters must decide whether they will do so.
How is it possible to guarantee perpetual affordability of such projects, when banks require the freedom to sell at market value properties they've taken mortgages on, should the borrower default? It's not easy, and perhaps not even possible. And this presupposes the determined efforts of the non-profit developer to avoid at all cost relinquishing a property to the mortgage holder for resale at market. It also presupposes the determined good citizenship of the bankers in a community such as this one. They want to fund housing efforts, but there is risk attached. Increasing the cost of financing for housing encumbered by perpetual affordability restrictions might help, but it would raise the costs to developers and beneficiaries. The costs for the kind of affordable housing built here is already way too high, and the subsidies per unit simply astonishing.
And, of course, private non-profits come and go, their financial fortunes wax and wane, as we have seen recently in the case of the Island Affordable Housing Trust. The decision concerning what to do with any particular defaulted property some years ahead, when the current board members have been replaced, is not entirely predictable.
Of course, the town itself, or some other entity with taxing authority may be prepared to put its full faith and credit behind the lending. Such an intervention might indeed guarantee perpetual affordability. Town ownership of the underlying ground lease, now commonly held by a private non-profit, together with mortgage guarantees by the town might accomplish the same thing. Going forward of course, a fresh collection of town leaders and town voters - or the same old ones who simply change their minds - could at any time reject future guarantees. Nothing is immutable. The town could decide it will give its money and live with the slim possibility that some housing it thought would be permanently affordable will in fact not be. Or, the town could decide that it will support only rental housing of more modest pretensions, which it will own, finance, and lease.
Certainly, affordable housing supporters, private or public, and West Tisbury voters must accept that building affordable housing - especially the rather splendidly subsidized sort we build here, with public funds and private donations - cannot come with absolute guarantees. Especially when it is to be sold at below-market rates to low and modest income owners, but funded by commercial lenders that are disciplined by the market.
A durable though not absolute assurance of perpetual affordability requires a financially powerful third party guarantor. And West Tisbury voters - maybe voters in other towns - may decide that they and their taxes are willing to stand behind the mortgages given by affordable housing property owners. It's a consequential decision that must pass town meeting examination.