GLENN ZARING: A (financial) sign of the times

By GLENN ZARING
Guest Columnist

There are a number of metaphors that fit the current discussion in Manistee concerning affordable housing, senior housing, low-income housing and all of the rest of the “housing” issues. The metaphor that comes to mind is that this is, “the tip of the iceberg!”

There is no denying that we have seniors who could really benefit from low-income, senior housing. The reason that we are seeing this plethora of demands is that, plainly stated, these same seniors do not have the income to afford anything else.

Either through a lack of a pension, death of a spouse, poor decisions made or extraordinary medical costs, many of our seniors simply do not have the money saved up to provide a comfortable living standard like the one they had when they were part of the work force.

As was recently pointed out in a PBS documentary, this situation has created a fertile field for developers to shop for grants, federal and state funds and local government “support” i.e. tax cuts. These self-same developers then come into cities such as Manistee and use the found money to put up questionable low-income, senior housing complexes.

In the short view, this sounds like a good thing. Using available funds to help a challenged demographic group is arguably a “nice” thing to do.

However, the voice of reason says that the money must come from somewhere. Very little of it is in the form of a builders’ investment or even a grant which doesn’t need to be repaid. Most of it will be either in the form of a loan or a deferred payment offering. All of which means, it needs to be paid back at some point.

If you take the proverbial long view of things in America right now, we have a whole lot of notes and loans coming due very soon. If you ever read any of our news sources such as the Manistee News Advocate, you will have read dire predictions about the national debt, which is at approximately $20 trillion! It’s a whole lot of money of which we all owe a part!

That national debt exists because our nation has been borrowing against the future for a long, long time … all while hoping that there would be enough money sometime to pay for the whole debt. We have been like gluttons who descend on the feast and devour more than they need. Evermore not realizing that we are going to need to eat tomorrow and should save some food.

The actions of the Manistee City Council to not kowtow to the developer and obligate the city to long-term very low or non-existent tax payments were our “tip of the (financial) iceberg.” More and more cities, towns, states and yes, even individuals are going to have to put a brake on the borrowing against the future, as has Manistee.

The City Council offered a reduced PILOT which had better, more acceptable terms (10 percent with a 35-year term) but were met with the statement that the project would probably die since they would not give a 2 percent/45-year term. The Council has been reasonable. They have not however caved to public opinion and obligated the city to something that would cause serious harm in the future.

While this action does not address the problem of necessary senior housing, it addresses at least one major problem which has dire, long-term consequences for any municipality including Manistee. Over-obligating future available funding simply means that a total collapse will occur, we just don’t know quite when.

More and more governments are going to have to take the same action as has Manistee, because the “tip of the iceberg” is showing and if we do not steer clear of it, we will wreck our ship of state.

Glenn Zaring is a published columnist and retired government public affairs director. He may be reached at tpa2.guru or publicaffairsadvisor@gmail.com.

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