Planning and paying

May 22, 2006

Aproposal by Baltimore City Council President Sheila Dixon to create a new affordable-housing trust fund has merit, but it should not be done through a city charter amendment as Ms. Dixon proposes.

Under her plan, the fund could be used to build and renovate affordable housing for senior citizens, disabled people and low-income renters, or even to provide rent or mortgage assistance to city residents. The proposal does not specify how this housing account would be funded, although Ms. Dixon wants to model it on a District of Columbia program financed by recordation fees collected on home and property purchases.

While the housing boom of the last few years has produced a windfall in fees collected, accounting for most of Baltimore's current $61 million budget surplus, recordation fees are an unreliable long-term funding source. The housing market is uncertain and is showing signs of cooling. Home sales declined more than 13 percent last month, and price appreciation fell to its lowest rate in more than two years.

More important, a charter amendment would permanently tie the hands of future mayors in deciding how to pay for housing, and it would force the city to spend whether or not the money is there.

This is not an effective way to make spending decisions.

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