Off Topic: Cost for US Trooper in Afghanistan? $1 Million a Year.

I did the math after I heard an estimate yesterday on the tube, and the story HERE confirms my calculations.

(I suspect that this may still not completely reflect long term costs per soldier for disability, health care, veterans benefits etc).

Originally created and posted on Oregon Housing Blog. cites NY Times confirming the million a year cost estimate.

LIHTC Debate at SF ULI Fall Conference on Nov.4th.

Information about luncheon debate is HERE.

Debate Topic:
Resolved, to make best use of scarce Federal dollars, the LIHTC should be superseded by a cash grant program.”

Originally created and posted on the Oregon Housing Blog.

First Ever Breakout of $1.4+ Billion in Oregon State Tax Breaks for Housing: Home Owners Get 91% of State Housing Tax Breaks.

I began this blog shortly after my retirement last year on July 4th, my independence day after 37 years of federal service. I wanted to make my 1st. anniversary post special, presenting Oregon housing data that hasn't before been publicly highlighted.

So, I First Constructed a Report In Excel Showing ALL Oregon STATE Tax Expenditures.
I constructed a one of a kind Excel workbook HERE that details ALL projected Oregon tax expenditures for 2005-2007 and 2007-2009 as extracted from reports from the State Revenue Office. Two worksheets show ALL state tax expenditure items. One worksheet lists the tax expenditures by a reference number and the second sorts those same expenditures in descending order by $$ during the 2007-2009 biennium. (Revenue Department source material in PDF format that I used to construct the workbook can be found HERE for 2007-2009 and HERE for 2005-2007).

I Then Constructed the First Ever Oregon State HOUSING Tax Break Report, Separating State Housing Tax Breaks Into Home Owner and Rental Categories.
In the workbook you also will find two separate worksheets of housing related state tax expenditures. The first worksheet groups tax expenditures into home ownership and rental housing expenditures. The second worksheet takes that data and ranks housing tax expenditures in descending order by $$ and also includes a simple pie graph showing the % of all housing tax expenditures split between home ownership and rental housing.

Some key points about Oregon HOUSING tax expenditures for the 2007-2009 biennium:

1. Home ownership related state tax expenditures total more than $1.29 Billion.
2. Home ownership state tax expenditures account for 91% of all Oregon tax expenditures while rental tax expenditures account for 9% of state housing tax expenditures.
3. Renter households were 35.2% of all Oregon households in 2006. If renter households received 35.2% of state housing tax breaks instead of 9%, housing tax breaks for renters would have increased by nearly $330 million during the 2007-2009 biennium [increasing from $132.8 to $462.5 Million].
4. Two deductions--The home mortgage interest deduction and the property tax deduction for homeowners-- account for 86% of the total of Oregon HOUSING tax expenditures.
5. In contrast, the largest rental housing tax expenditure, for accelerated rental housing depreciation, accounts for only 3% of ALL Oregon HOUSING tax expenditures.
6. The total for Oregon HOUSING state tax expenditures grew by nearly $165 Million from the 2005-2007 biennium; a growth in projected home mortgage interest deductions accounted for $123 million of that growth.

Some caveats and notes:

1. Tax expenditures for the 2007-2009 biennium are projections only, as the biennial legislative session was not completed at the time the Revenue Department issued this report. Changes made during the 2008 special session to tax expenditures are also not included in this report.
2. I necessarily made some classification judgments for housing expenditures to assign them to the rental or home ownership categories.
3. Note these are biennial expenditures--As I have had to remind myself sometimes, be sure to divide by 2 to get annual expenditures!

Earlier Post on Federal Home Ownership Expenditures
Earlier this year I did a post HERE reporting on federal expenditures for home ownership. That post projected that federal tax expenditures for home ownership will cost $1 Trillion from 2008-2012 and in 2012 will be reach the rate of $250 Billion annually.

Total Projected Federal Expenditures in Oregon PLUS State Expenditures for Oregon Homeownership: $4.145 Billion Annually.
If Oregon accounts for 1.5% of those federal home ownership expenditures the additional Oregon federal home ownership costs would be $3.75 Billion annually in 2012, or $7.5 Billion for a biennium.
Adding the 07-09 state tax expenditures of $1.29 billion to a projected 2012-2013 federal expenditure of $7.5 billion for Oregon yields a projected 2012-2013 state AND federal expenditures for Oregon home ownership of $8.29 billion, or $4.145 billion annually. (This estimate is low as the projected state tax expenditure estimate uses the earlier 07-09 time period).

Comments Invited:
The 2009--2011 version of the state tax expenditure report will be likely issued by the Revenue Department later this year or early next. Before I produce a similar report next year I am inviting your comments on what you found interesting, illuminating, confusing, questionable, or missing in the first Excel Oregon State Housing Tax Breaks report I did this year.

You can add a comment below this post or email me at housepdx@gmail.com

Portland Metro: 15,000+ HUD Vouchers Support $144 Million Increase in Property Value; Rents to Landlords Increased by $9.3 Million Every Year.

[Revised to correct posting time].
This is the 365th post on this blog; that's more than a post a day since i started the blog last July 7th. (HERE was the first post).

I wanted to make this a special post so I did a little digging to show how an increase in HUD Housing Voucher Fair Market rents increases rent payments to property owners on a ongoing basis and how property values are also increased in the entire Portland Metro area.

[Tease...There will be an even more substantial anniversary post covering state spending for housing during the week of July 7th]

In a prior post I alerted that HUD had published proposed FY 2009 Fair Market Rents; for the Portland metro area the new 2 Bedroom Fair Market Rent is $809, an increase of $52 per month.

This upcoming FMR change provides a good opportunity to estimate the property value supported by the increase in Fair Market Rents for HUD vouchers in the Portland metro area and the increase in rent/subsidy paid to property owners.

Finding the number of vouchers for all the housing authorities in the Portland Metro area took a bit of digging , but with that count in hand the calculation can then be done fairly simply.
My estimates can be found in the PDF file HERE: Some highlights showing the impact of the $52 monthly increase for the 15,012 HUD Vouchers in the Portland Metro area:

1. The increase in the 2 BR Fair Market Rents support an increase of $144 million in property value, using a 6.5% Cap Rate.
2. On a per unit basis, the increase in the 2 BR Fair Market Rents alone will support an increase of $9,600 in property value.
3. The 2 BR Fair Market Rents increase means that rent payments/subsidies to owners of voucher units will now increase every year from now on by more than $9.3 Million. [I.E. Don't think of a FMR increase as a one time bonus, it is the proverbial "gift that keeps on giving"].
   

Oregon Economic Forecast Quietly Drops Changes in Oregon House Price Index Forecast by 25%-32%.

An examination of the details of the Oregon Economic Forecast reveals that expected changes in Oregon house price have been scaled back significantly.(My earlier December 07 post questioning the house price index projections then being made can be found HERE).

The December 2007 forecast predicted that the change in the Oregon house price index from March of 2007 to March of 2008 would be 3.94% and from March 2008-March 2009, 2.84%. The new May 08 forecast drops those expectations by 25% from March 07-March 08 and by 32% from March 2008-March 2009. (All comparisons used here track changes from the March of one year [1st quarter] to March of the next year).

Actual Index Change 07-08 Was 19-39% Below Forecast
Since new data on actual changes in the index through March are now available, it is now possible to assess the accuracy of both 07-08 forecasts. The December 07 forecast for that period overstated the actual change in the index by 39%. Even the new forecast, released in May 08 , continues to overstate the actual change in the index by 19%.

PDF Table Shows Side by Side Comparisons
The one page PDF table I have constructed HERE shows the forecast changes, the actual changes, and the variations from the forecasts.

Oregon Economic Forecasts can be found HERE; the Freddie Mac actual state changes used for the Oregon House Price Index can be found in the the Excel document HERE.

Cross Post: Copenhagen Consensus Rates Vitamin/Mineral Supplements as Top Priority.

Cross post from my Oregon Open Government News and Issues Blog HERE.

Update: First Of a Kind Estimator Compares HUD Voucher Costs to Military Basic Allowance for Housing Costs.

Update: The estimator has been updated to version 1.1 to correct a data entry error for one or more BAH areas. The link in the post has been changed to link to version 1.1; and the prior version of the estimator has been deleted.

The short version of this post: I have constructed the first-of-a-kind Excel estimator that allows, for virtually any area of the country, an easy comparison of the 2008 federal government costs of HUD vouchers to military basic allowance for housing [BAH] costs. This new Excel estimator is available HERE and at initial opening it shows the comparative costs for the Portland Oregon BAH area and the Multnomah County FMR area. The estimator requires only two SIMPLE steps to see instant comparisons: 1.Select the BAH area from a list, and 2. Select the Fair Market rent area from a list. The comparison results are immediately displayed in both a table and a graph. (Results for the Portland area are that federal government costs for HUD vouchers are 35% to 48% lower than BAH costs).

The long version of this post: I'm always curious about relative cost for programs that serve similar needs. It occurred to me that I had not previously looked at the relative costs of HUD vouchers compared to what the military costs are for the basic allowance for housing [BAH]. (Wikipedia has much more about the BAH HERE, but in general it is the amount the government provides to a military family if they do not provide housing for that family). The BAH uses an annual survey to determine housing costs, and while there is a "Non Locality" BAH there are also a number of geographic specific BAH's that are similar but not identical to HUD Fair Market rent areas. The BAH uses anchor rates that are tied to bedroom sizes and housing types, so it is possible to extract 2008 BAH costs by housing type and bedroom size and to then relate those costs to HUD Fair Market Rents which vary by bedrom size.

The challenge is to use technology below the surface to calculate, extract and and compare several thousand possible cost variables. Above the surface, at the user level, the key is to keep things simple. I think the new Excel estimator HERE does a good job of keeping the complexity of the task hidden, requiring only two simple inputs from the user, and then showing results in a understandable tabular and graphical formats. (To avoid inadvertent errors, the workbook is protected so that only the inputs for the two areas can be changed).

I hope this new estimator sparks the interests of others in developing similar tools to make cost and other comparisons. I'm always looking for feedback; please add comments to this post or email me at housepdx@gmail.com .

Cross Post: GI Educational Benefits Now 54% Below Vietnam Era Inflation Adjusted Benefit Level.

Cross post from my Open Government News and Issues, Oregon Blog HERE.

CBO Director Blogs on Cost of H.R. 5830--It's $2.7 Billion Over 6 Years.

Correction: Earlier post indicated five year estimate, 2008-2013 is six years, not five.

Turns out that the Congressional Budget Office (CBO) Director has a blog, and a recent post HERE summarizes the CBO cost estimate for H.R. 5830, the FHA Stabilization bill recently approved by the House Financial Services Committee. Post says total cost of bill is $2.7 Billion over 6 years and that 500,000 families would be helped over that time period.

The CBO blog post includes a link to the detailed 10 page CBO cost estimate, in a PDF file HERE.