March 26, 2003 – More than 900 affordable homes and home sites have been made available to families of low and moderate incomes in the territory since the V.I. Housing Finance Authority was created in 1981.
But rising construction costs and clients' "stagnant income" has made producing affordable housing difficult, the authority's executive director, Clifford Graham, told members of the Senate Housing Parks and Recreation Committee on Tuesday.
The authority must generate 70 percent of its annual operating budget through the sale of housing units or face a budget deficit, Graham said. The authority's primary source of income, he said, is the sale of land acquired from the government for little or nothing which typically accounts for $10,000 of the purchase price of an affordable housing unit.
"The authority must produce and sell an average of 100 units per year to break even," Graham said.
To be affordable to clients, he said, units must be subsidized. The Housing Trust Fund was set up in the early 1990s to make $10,000 per unit available toward construction costs and enable the authority to sell the units at affordable prices.
By law, Graham said, any property taxes in excess of the initial assessed value of each parcel developed by the authority are to be deposited back into the fund to replenish it. However, he added: "To this date, no property taxes have ever been deposited to the trust fund, and the fund has had a zero balance since the late 1990s."
An analysis of the 2001 property tax assessments shows that about $190,000 for St. Thomas-St. John and about $120,000 for St. Croix should be deposited into the fund for that year, he said.
On St. Croix, the last piece of suitable affordable housing property is under development, Graham said, and to continue the program, additional property must be acquired. The Property and Procurement Department has agreed to exchange three parcels of land on St. Croix for one property on St. Thomas and another on St. Croix that are owned by the authority so the Police Department can construct communication towers.
Also on hand at the hearing were representatives of several area banks, invited to testify about programs intended to assist people in becoming homeowners.
Educating potential homeowners is an important part of the process, Paul Gourieux, a FirstBank vice president, said. "We have counseled over a thousand V.I. residents in a vast array of financial areas. We believe education to be a critical component in shaping the homeowner of tomorrow."
Juliette Kean, a vice president at Banco Popular, said its mission is to help people retain their homes, assist in difficult times and provide financial counseling.
Of particular concern, Kean said, are government employees who retire but then have to wait four to six months before receiving their first retirement check. "This is causing their credit records to be blemished and causing the threat of losing their homes," she said.
Laurence Bryan, Government Employees Retirement System administrator, said GERS is the last in a series of steps in the process of an individual's retirement. Paperwork, he said, must go through several government agencies first, and employees should prepare for retirement beforehand and get the paperwork on its way to GERS before they leave their jobs.
Bryan was invited to testify about the plausibility of reselling the agency's $25 million mortgage portfolio in the secondary mortgage market to raise money for housing development and mortgages. He said the high interest rate of GERS mortgages would dissuade the secondary market because interest rates nationwide are low right now.
Committee members present were Sens. Emmett Hansen II, the chair; David Jones, Luther Renee and Raymond "Usie" Richards. Sen. Celestino A. White Sr. was not present. Also present was Sen. Ronald Russell, a non-member.

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