By Dave Anderson:
Last summer, I asked a very simple question concerning C-Street rents and the possibility that several Congress-critters (including my own, Mike Doyle (D-PA-14)) were receiving tangible benefits that were not be declared on their disclosure forms via discounted rents:
Several other people are asking the same question. CREW and a group of Ohio pastors are raising the below market rate rent as unreported gifts/income to the IRS. CREW is arguing that the appropriate comparison is hotel rates, which I think is wrong as the appropriate comparison is other non-Congress-critter rentals in nearby buildings in similar shape.the rent payments seem ridiculously low. The cost of the house was reported to be $1.1 million dollars in 2003. The six occupants are reported to pay $600 per month in rent... that works out to be about $43,000 per year in total rent payments for the house. In an arms length transaction rent payments are expected to cover the capital cost (the mortgage) as well as the operating costs (utilities, maitenance, taxes etc). That is not always the case, but it is a rough guesstimate of what the rent should be.
...divide the cost of the house by annual revenue streams which produces a current back of the envelope cap rate of more than 25 years. 25 years would be how long the current revenue stream for the house would pay off the capital of the mortgage if there was absolutely no interest AND no operating costs for the house. A typical commercial property cap rate is between 8 to 12 years as the owners need to pay interest on the mortgage and cover operating costs as well.
With that quibble, their complaints are getting an interesting reaction from one of the C-Streeters; asking about finances is religious intolerance and persecution evidently. TPM Muckraker has the whine of Rep. Jerry Moran (R-KS):
Moran said he continues to live at the house and alleged that complaints about the accommodations were rooted in an "a national effort to exclude matters of faith by public servants."
"I don't think that my interest in studying the Bible with other colleagues of mine in Congress ought to be seen as anything but good or at least personal � whether you think it's good or bad it ought to be a decision I make as a member of Congress, as a human being," he said.
Interesting, very interesting in that a legitimate question about finances is deflected by an appeal to the majority identity aspect of our culture being persecuted.
Interesting, very interesting in that a legitimate question about finances is deflected by an appeal to the majority identity aspect of our culture being persecuted.
ReplyDeleteSo no reply on the substance of the question was possible. Isn't that all a properly bred press hound would need to catch the scent and follow the trail?