Monday, September 21, 2009

Affordable Housing Sits Vacant In Queens

For all the talk about affordable housing, or the lack of same, housing units sit unfilled in Queens because people think that the prices have more room to fall. The developers who front the money to build them based on what they believe market conditions will be, are getting hammered in the process.
A growing number of newly built homes in southeastern Queens are sitting vacant, halting a nonprofit group's effort to revive a rundown neighborhood and putting a developer in financial jeopardy.

Nearly two dozen affordable homes in Jamaica, built under the auspices of the Housing Partnership Development Corp., are still vacant six months after construction was completed.

"I'm just trying to hang on," said Bob Starzecki, 44, owner of Guy Brewer Development Corp., which built the homes.

"I'm already in the hole," he said, adding that he's not sure how much longer he can keep making payments on the construction loans he took out to build the 21 two-family homes around Guy R. Brewer Blvd. and 108th Ave.

The Housing Partnership works with the city, state and other private groups to build affordable housing throughout the five boroughs. The purpose is not only to revive struggling neighborhoods, but to provide homes for low-income families.

The current state of the housing market, however, has made it difficult for the group to sell the homes, even at a price 20% to 30% less than the actual value. And it's developers like Starzecki who are feeling the pinch.
That last paragraph has it wrong. If the houses aren't selling at the discounted prices, it is because the market has more room to fall. The government has attempted to keep the prices propped up to give sellers some breathing room, but it keeps those seeking affordable housing on the sidelines because they know that the prices aren't reflecting what the market conditions should be.

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