The Wall Street Journal reports on the Gordian Knot of Stupid that is Denver’s plan to subsidize low-income residents who rent luxury apartments in the city.
Denver has a plan for its glut of sparkling new, high-end rental apartments with amenities like gyms, roof decks and sometimes even pet spas: It will use them to house teachers, medical technicians and others who can’t afford the city’s soaring rents.
Under a program to be unveiled later this month, the city, along with employers and charitable foundations, will pay the difference between what a lower-income resident can afford and the market rent of an apartment.
Like other cities across the country, Denver is grappling with a shortage of affordable housing for middle-class workers. “Instead of having these units sit vacant, if we can create opportunities to help some of our employees, our residents get into those units, that’s an immediate response,” said Denver Mayor Michael Hancock.
What a great idea. Rather than allowing the market to punish developers who built too many units, which would help far more people than whatever plan the city implements, Denver will use taxpayer money to give to families who wouldn’t have had the resources to rent such apartments in the first place.
While the city is selling this as a way to help lower-income families get affordable housing, it is really the developers who made bad business decisions who will get bailed out.
While there is a severe affordable housing problem in cities across the U.S. However, there are many actions cities could take, including loosening zoning and building requirements, that don’t require taxpayer money. And let’s not forget the Federal Reserve’s role in creating money, which makes it that much more challenging for those with fixed incomes to maintain their standards of living.
In the meantime, don’t be surprised if more cities implement similarly idiotic schemes like this one.