In November, Sheridan County residents were notified that the city of Sheridan and Sheridan County had created a housing council to operate a housing land trust. The council will be seven people from the private sector who will decide the land purchase and issue the RFPs for contractors to build the houses.
The land will be government trust land and the homes will not include the land. The homes could be mortgaged to Habitat for Humanity, HFH. HFH mortgages are created with no down payment and no interest on the loan. HFH has the right to retain the home should the party, under the mortgage, need to exit the mortgage. High yield mortgage companies will buy HFH mortgages at a discount, these mortgage bond companies then sell the bonds as long-term investment.
This type of activity contributed to the disastrous 2008 mortgage market crash. At the moment, there is no cheap money for high yield bond markets to borrow to buy HFH mortgages.
Does the housing trust council have any appointed member with investment experience in bond markets? Mortgages are high-risk investments.
Finally, at a time when most Sheridan County residential homeowners have had steep increases in their property taxes, our city and county elected officials have decided to support through this land trust low-wage workforce housing. This is to provide various employers in Sheridan with low-wage workers. They are calling this "economic development."
I spoke with the Teton County assessor since Teton County has a land trust. I asked the assessor how she evaluated the property tax on the land trust properties. She said she did not evaluate these structures. The land trust did by using the mortgages as the taxable value. I said this sounds like acquisition value, or Prop 13, and she said, "you're right."
At a recent SEEDA meeting in Sheridan, the chairman referenced this housing concept as trailer park housing. I agree, because the mortgage holder is not building wealth with property ownership. The property is not available on the open market. The deed-restricted mortgages are not recorded with the county clerk because they are only taxed on the improvement (structure).
The rest of us residential homeowners will be subject to fair market tax evaluation. Again, this is not the taxation method for attainable housing of the land trust. This is unbalanced taxation, a special niche, supported by your local elected government.
