Houston Mayor proposes tax payers pay bad consumer debtSubmitted by mikiloe on Thu, 02/26/2009 - 00:25
The country's march toward socialism continues... from the houston chronicle: http://www.chron.com/disp/story.mpl/front/6277344.html
Mayor Bill White yanked a controversial plan Tuesday that called for the city to use taxpayer funds to pay off some personal debts for first-time homebuyers, following a flood of outrage and criticism from across the city and beyond.
“I don’t think we ought to be in the business of paying off someone’s debt so they can buy a house,” White conceded during an impassioned City Council meeting. “Paying off people’s credit cards is ridiculous.”
Many council members expressed “embarrassment” over the idea, which received national media attention after the Chronicle wrote about it in Tuesday’s editions. The story appeared to strike a nerve among taxpayers already angry over the recession, the housing meltdown, and federal bailouts of banks and automobile companies.
“Everybody’s outraged about this,” said Councilman Ron Greene, adding that a constituent e-mailed him a copy of a bill and asked him to pay it. “This was not well reasoned.”
The “Credit Score Enhancement Program” would have given up to $3,000 in grants to individuals who are trying to qualify for mortgages through the city’s homebuyers assistance program. City officials had said some applicants fall short of eligibility by only 10 or 20 points on their credit scores, and paying off some debt balances can quickly improve their numbers.
Councilwoman Pam Holm waved a thick stack of e-mails from angry residents.
“I do not understand how we can ever justify spending taxpayer dollars to pay somebody’s credit card,” she said. “I don’t understand how it can be even considered to come up. I am truly embarrassed. I think it shows poor leadership.”
Kris Errickson, a stay-at-home mom from northwest Houston, appeared before council to voice her indignation.
“This proposal is a slap in the face for the average Joe who is trying to get ahead,” Errickson said. “The government should not punish taxpayers and bail out those who cannot buy homes.”
Errickson said later that she and her family moved recently from the Heights to a less-expensive home near Timbergrove. “We adjusted our living so we could afford to live in a house,” she said.
“If you can’t afford it, and you can’t qualify, then you shouldn’t have it,” she said.
Councilwoman Anne Clutterbuck said news of the plan had hit a nerve across the country.
“Giving people the ability to increase their credit score artificially because we’re allowing them to pay off their credit cards is exactly what got us into this (national economic) crisis in the first place,” she said.
Hoped to curb crime
Councilman Jarvis Johnson said the $3,000 grants were not a good idea but said the city needed to promote home ownership because it increases the tax base and lowers crime.
“If you look at where the money was going to be put, into Houston Hope areas, they are areas that are typically underdeveloped — where there is crime because of a lack of home ownership,” he said.
The $3,000 grants — and accompanying down-payment assistance, which can be as high as $37,500 — would have been available only to those who agreed to buy a home in a Houston Hope area. Those neighborhoods, which the city is trying to revitalize, include Sunnyside, Denver Harbor, Fifth Ward, Trinity Gardens and Acres Homes. Applicants cannot earn more than 80 percent of the area’s median income.
While the mayor is responsible for what appears on the council’s weekly agenda, White placed the genesis of the idea with the city’s Department of Housing & Community Development. He said the staff member’s intentions were good.
“As the mortgage markets are collapsing, banks are no longer buying mortgages, then people who can afford a house are not able to buy a house and that’s what the staff was trying to address,” White said.
The $444,000 proposed for the program was leftover money from a $1.5 million appropriation the city made for emergency home and roof repairs after Hurricane Ike. Councilwoman Wanda Adams said the money should be spent on those still in need of home repairs.
Housing Director Richard S. Celli said that the plan would only have been able to help applicants pay off installment debt like student loans, and not revolving debts, such as credit cards.
“This program was never intended to pay off someone’s flat-screen plasma TV,” Celli said. “This program was intended for hardworking, credit worthy low- to moderate-income individuals who needed a helping hand in paying off some debt like a medical bill or a student loan.
The city has provided down payment grants and closing costs for 872 families since 2005. Only one family has ever had a foreclosure, Celli said.