Editor,
Regarding your guest column by City Manager John Pietig, I rush to his support and the support of the other participants in the city housing support program he describes.
Perhaps an outside party can shed some much-needed light on the unfair accusations hurled at the city and these participants. I am proud that the city has stepped up in this fashion, to provide assistance to key city employees with housing in our very expensive city. This is one of the things that makes Laguna Beach “Mr. Rogers’ Neighborhood for Grownups” and one of the key reasons I moved here 20 years ago.
As a retired businessman who has seen utilization of many creative ways to solve financial issues, I can safely say that this method is one of the more responsible I have seen in nearly a half-century of involvement with creative financing. Leave it to a “creative” city like Laguna Beach to solve a problem in a unique and quite sensible fashion. To critics, I would say that you overreacted, way too quickly. It’s a bit like having a trigger finger. Shoot first. Ask questions later. Before you “shoot” next time, think: first, the so-called benefactors of this program put a lot at risk. They risk the possibility of interest rates climbing above conventional mortgage rates over a period of time. Next, they never own their homes by themselves, but share ownership with an outside entity, thereby assuming obligations that independent homeowners may not have. Last, they share in the profit from sale.
This third item, in a state where folks appear to use home appreciation as a key method of family equity-building, places an immediate 50% downward push on those participants for family equity assumption upon sale of the property. John and his other city associates must some day share this likely appreciation with the city. That’s a big giveback in a city whose property acquisition costs are the highest in all of Orange County.
I commend the city and those who have chosen to participate in this program, and I hope that other communities do the same in order to hold key personnel close to home. To those who criticize, I would like to know how you would feel as a participant who knows that one day, when your residence is finally sold, you have “given away” a great deal of your equity to the city you have so proudly served over those years.
Jason Paransky, Laguna Beach
Jason, when you only pay for 50% of your house, why should you be entitled to 100% of the profit? These shared-equity owners share in profit to the exact percentage of their contribution. They have “given away” nothing. Meanwhile, they enjoy 100% use of the property while only owning 50% of it. Sounds like they’re getting free rent from the city for the half they don’t own. Somehow I doubt that the City is properly recording the free rent as compensation. Plus their adjustable-rate mortgage is set below market rates. Another compensation perk that I doubt is being recorded as such.
Jason and Margaret,
I see, feel and understand both sides of the issue before us taxpayers.
But I take notice of the fact that Laguna Beach educators, from Morro to Thurston to Laguna High, got a MEASLY 3% raise for the dedication and their perceived importance in Laguna Beach…..why not some city perks for these IMPORTANT individuals..???? Are the educators of Laguna not as crucial?