Why "affordable" housing is so expensive to build

[cawacko]

Imagine living in a $700K subsidized housing unit. Not a bad gig. Nor a sustainable one. A lot of calls for more affordable housing in big coastal cities but current approaches aren't coming close to meeting demand.



Why is “affordable” housing so expensive to build?


The high price of affordable housing

It’s a problem that isn’t going away:* the so-called “affordable” housing we’re building in many cities–by which we mean publicly subsidized housing that’s dedicated to low and moderate income households–is so expensive to build that we’ll never be able to build enough of it to make a dent in the housing affordability problem.* The latest case in point is a new affordable housing development called*Estrella Vista in Emeryville, California (abutting Oakland and just across the bay from San Francisco).* A non-profit housing developer just broke ground on a new mixed use building, about three-quarters of a mile from a local BART transit station, which will include 84 new apartments.* The project also houses about 7,000 square feet of retail space.* The total cost:* $64 million.* Assuming that 90 percent of the building is residential, that means that the cost per apartment is something approaching $700,000 per unit.* While the complex provides many amenities for its residents (proximity to the BART station, a Zen garden and sky deck), its inconceivable that we have enough resources in the public sector to build many such units.

Policy makers are beginning to realize this problem.* As we wrote earlier this year, California Governor Jerry Brown made that point his state budget. He’s said that he’s not putting any new state resources into subsidizing affordable housing until state and local governments figure out ways to bring the costs down. Last year, opposition from labor and environmental groups blocked the governors proposal to exempt affordable housing from some key regulatory requirements. *Brown had offered $400 million in additional state funds for affordable housing if that proposal was adopted. Brown took that money is off the table.

“We’ve got to bring down the cost structure of housing and not just find ways to subsidize it,” Brown said in is budget speech.

And the costs are substantial. In San Francisco, one of the largest all-affordable housing projects, 1950 Mission Street, clocks in at more than $600,000 per unit. *That number isn’t getting any lower: new units in that city’s Candlestick Point development will cost nearly $825,000 each, according to recent press reports. Brown’s point is that at that cost per unit, its simply beyond the fiscal reach of California or any state to be able to afford to build housing for all of the rent-burdened households.*And while the problem is extreme in San Francisco, it crops up elsewhere.* In St. Paul, affordable housing–mostly one bedroom units– in a renovated downtown building cost $665,000 per unit.

More broadly, the case has been made that much publicly subsidized *affordable housing costs much more to build that market rate housing. *Private developers are able to build new multi-family housing at far lower cost. One local builder has constructed new one-bedroom apartments in Portland at cost of less than $100,000 a unit, albeit with fewer amenities and in less central locations that most publicly supported projects.*In Portland, local private developer Rob Justus has proposed to build 300 apartments and sell them to the city for $100,000 each on a turn-key basis to be operated as affordable housing. Another possible cost savings measure: off-site construction. The University of California, Berkeley’s Terner Center has a report that explores the possibility for pre-fabricated, off-site construction to reduce construction costs.

Portland Mayor Wheeler voices the same concerns as California Governor Brown:

“We’ve added a lot of programs to affordable housing that may be socially desirable. But when the goal is to create the maximum number of new doors, we have to reduce costs and get more supply on the market as quickly as possible.”

In the Twin Cities, Myron Orfield has pointed out that the allocation of tax credits and the concentration of community development corporations in urban neighborhoods has tended to produce more housing in costly urban locations. Orfield also blames the high overhead costs of CDCs.

. . . central city development programs are inefficient, spending much more per unit of new affordable housing in the central cities than comparable housing costs in more affluent, opportunity-rich suburbs. Many of the leading developers working in the poorest parts of the region also pay their managers very high salaries. As a result, the funding system incentivizes higher cost projects in segregated neighborhoods over lower cost projects in integrated neighborhoods.

Perhaps the central problem of housing affordability is one of scale: the number of units that we’re able to provide is too small. *That’s true whether we’re talking about through Section 8 vouchers (that go to only about 1 in 5 eligible*households), or through inclusionary zoning requirements (which provide only handfuls of units in most cities).*The very high per unit construction costs of affordable housing only make the problem more vexing: the pressure to make any project that gets constructed as distinctive, amenity-rich and environmentally friendly as possible, means that the limited number of public dollars end up building fewer units. And too few units–scale–is the real problem here.

The combination of very limited public funds for affordable housing, even in the most prosperous and liberal cities, and the tendency for publicly subsidized housing to be nearly as costly as new, market rate housing, is a recipe for failure. Ultimately, we’ve got to find ways to make housing (whether built by the public sector or the private sector) less expensive.


http://cityobservatory.org/why_affordable_so_expensive/

[Stretch]

Sounds like containers might be the answer here as well.

They are extremely easy to build into a home. Storage containers usually stand superior in the face of building codes.
Properly insulated, they can make for a warm and cozy home in the winter. There are also effective ways at making them resistant to excessive heat.
Since they are originally built for transport, they can be easily moved when they need to be.
They can withstand practically any extreme weather, such as hurricanes, tornadoes and earthquakes. Standing alone, an ISBU can handle 100 mile per hour winds. Securely anchored, it can take winds up to 175 miles per hour. You can also rest assured that it will never collapse during an earthquake. By far, they make for the safest storm shelters.

ISBUs are made of 100 percent Corten Steel, and there are a range of different sizes for them. However, the popular choice for shipping container houses are former sea containers that come in two standard sizes:
20 feet long, 8 feet wide and 8 feet tall, equaling to 160 square feet.
40 feet long, 8 feet wide and 8 feet tall, equaling to 320 square feet.

Alone, these can be suited as a tiny house. Even so, some people put multiple containers together for a bigger house. Others have even built entire commercial marine ports out of shipping containers, as well as big company headquarters, student housing and homeless shelters.

How Much Do Shipping Containers Cost – Shipping Container Prices

For a used 20-footer in good condition, the cost can range anywhere from $1,400 to $2,800. A 40 foot shipping container will cost $3,500 to $4,500. Depending on where it is bought, some containers come with building kits and plans for personal customization.

There are also a growing number of manufacturers that are designing prefabricated shipping container houses for $15,000 and up. Bigger shipping container homes cost as much as $215,000, which is still only a fraction of the price of some conventional homes.

Those who buy a shell and opt to hire a contractor for the rest of the technical work are looking to spend $50 to $150 an hour. This can run the whole bill up to $15,000 or more. On the other hand, those who are experienced with construction can completely finish and furnish a home of steel for less than $10,000. Some handy folks even manage to do it for less than $4,000!

Now, more than likely the container will need to be transported to you. The price of delivery varies considerably depending on how many are being transported and far it has to travel.

http://www.hometuneup.com/the-ultima...ntainer-homes/

[Getin the ring]

Affordable housing,
suppose an alien came down from space and asked you to explain what that was.
Would you be able to reply honestly? like "well, it's housing that I pay for so someone else can live cheap"

could you manage to get that out of your face?
probably not huh?

[TheDonald]

Sounds like containers might be the answer here as well.

They are extremely easy to build into a home. Storage containers usually stand superior in the face of building codes.
Properly insulated, they can make for a warm and cozy home in the winter. There are also effective ways at making them resistant to excessive heat.
Since they are originally built for transport, they can be easily moved when they need to be.
They can withstand practically any extreme weather, such as hurricanes, tornadoes and earthquakes. Standing alone, an ISBU can handle 100 mile per hour winds. Securely anchored, it can take winds up to 175 miles per hour. You can also rest assured that it will never collapse during an earthquake. By far, they make for the safest storm shelters.

ISBUs are made of 100 percent Corten Steel, and there are a range of different sizes for them. However, the popular choice for shipping container houses are former sea containers that come in two standard sizes:
20 feet long, 8 feet wide and 8 feet tall, equaling to 160 square feet.
40 feet long, 8 feet wide and 8 feet tall, equaling to 320 square feet.

Alone, these can be suited as a tiny house. Even so, some people put multiple containers together for a bigger house. Others have even built entire commercial marine ports out of shipping containers, as well as big company headquarters, student housing and homeless shelters.

How Much Do Shipping Containers Cost – Shipping Container Prices

For a used 20-footer in good condition, the cost can range anywhere from $1,400 to $2,800. A 40 foot shipping container will cost $3,500 to $4,500. Depending on where it is bought, some containers come with building kits and plans for personal customization.

There are also a growing number of manufacturers that are designing prefabricated shipping container houses for $15,000 and up. Bigger shipping container homes cost as much as $215,000, which is still only a fraction of the price of some conventional homes.

Those who buy a shell and opt to hire a contractor for the rest of the technical work are looking to spend $50 to $150 an hour. This can run the whole bill up to $15,000 or more. On the other hand, those who are experienced with construction can completely finish and furnish a home of steel for less than $10,000. Some handy folks even manage to do it for less than $4,000!

Now, more than likely the container will need to be transported to you. The price of delivery varies considerably depending on how many are being transported and far it has to travel.

http://www.hometuneup.com/the-ultima...ntainer-homes/

You are a retarded f-wad, the cheapest shipping container home sells, uninstalled and without land for 45,000 dollars, and that is the cheapest, one can easily spend a hundred grand for just the container. Then you need to ship it to your land and install it, easily doubling the price, what is affordable about this?

https://www.curbed.com/2017/6/21/158...e-for-sale-buy

[Sailor]

You are a retarded f-wad, the cheapest shipping container home sells, uninstalled and without land for 45,000 dollars, and that is the cheapest, one can easily spend a hundred grand for just the container. Then you need to ship it to your land and install it, easily doubling the price, what is affordable about this?

https://www.curbed.com/2017/6/21/158...e-for-sale-buy

Here we go again! Mr. Does not know shit putting in his less than 2 cents worth.

[SmarterthanYou]

One of the main reasons that the FDR administration and Congress chose to exercise so much control over the economy was to make housing 'affordable' to more of the middle class. One would have to wonder and actually ask, 'why is some property so much more expensive than other places', before proceeding further with any debate.

[cawacko]

Where's BAC? He got on before about this claiming liberals build way more public housing. How do you justify this?

[bhaktajan]

How prescient.

Mayor Bill de Blasio announced on Tuesday that his affordable housing plan would reach its goal of building or preserving 200,000 below-market-rate apartments by the end of 2022, two years ahead of schedule.

Because of the program’s success, the mayor said he was adjusting the housing plan, aiming to deliver an additional 100,000 affordable units by 2026. He said he expected the program to be so successful and popular that future mayors would want to continue it beyond 2021, when Mr. de Blasio’s second term, if he is re-elected as expected, would end.

Of the 200,000 units promised in the original plan, 80,000 are to be new construction. The remainder will be existing affordable units that will be kept from switching to market rate through subsidies or other arrangements between the city and landlords. Of the 100,000 units that will be delivered after 2022, Mr. de Blasio said that 40,000 would be new construction, and the rest preserved.

At a news conference in Brooklyn, the mayor said he had disproved critics who had suggested that the plan was not realistic.
https://www.nytimes.com/2017/10/24/n...ars-early.html

[Bill]

cowacko-FYI if you missed this one:

INVESTIGATIONS (AUDIO)
How The Affordable Housing Crisis Is Playing Out In One Dallas Neighborhood

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October 23, 20175:26 PM ET
Heard on All Things Considered
Laura Sullivan - Square 2015
LAURA SULLIVAN
Twitter
Only 25 percent of people who need government help to pay for housing get it. In collaboration with The FRONTLINE Dispatch, NPR looked at what can happen to the other 75 percent and how the affordable housing crisis is playing out in one Dallas neighborhood.

ARI SHAPIRO, HOST:

We're about to meet a man who some say is a champion for the poor. Others say he's a slumlord. And that split says a lot about the country's affordable housing crisis. There are fewer places where people can afford to live. Rents are soaring, but the conditions of rentals are not improving.

ROBERT SIEGEL, HOST:

There are government programs to help - for example, Section 8 vouchers. But those programs only reach a quarter of the people who need help. The rest wind up in the country's poorest neighborhoods where the issue of how to provide adequate housing is fought over by cities, landlords and tenants.

SHAPIRO: NPR's Laura Sullivan partnered with PBS's "FRONTLINE" and their new podcast The FRONTLINE Dispatch and followed this crisis as it unfolded in one Dallas neighborhood.

(SOUNDBITE OF MUSIC)

UNIDENTIFIED WOMAN: HMK - how can I help you?

LAURA SULLIVAN, BYLINE: There are two ways to describe the man called Khraish Khraish in West Dallas. He's either a landlord saving the poor from homelessness, or he's one of the city's worst slumlords.

KHRAISH KHRAISH: Hi.

SULLIVAN: Hey, Khraish.

KHRAISH: So sorry I'm late.

SULLIVAN: No problem.

KHRAISH: Come on in.

SULLIVAN: Khraish works out of a small West Dallas office where he manages about 300 homes he and his dad own in the neighborhood. They're mostly crumbling 1940s one-story wooden houses, but at 400 or 500 a month, they're some of the cheapest in the city.

KHRAISH: Twelve-hour days, six days a week. We're still open six days a week.

SULLIVAN: They've made a good business out of it, but Khraish isn't flashy. He drives a 10-year-old car and lives in a middle-class neighborhood. He says he feels a kinship with many of his renters, who, like his parents, are immigrants. They came from Lebanon.

KHRAISH: I learned a tremendous amount from my dad, primarily a work ethic. He didn't give me advice about girls. It was work hard. Study hard. And your word is everything you have.

SULLIVAN: Which made what happened last fall confusing.

KHRAISH: I remember one evening sitting with my wife. And you know, I'd just come home from work. And we were watching the 6 o'clock news. And the broadcaster literally opened up the newscast saying - like this. He goes, they call him the most unpopular man in the city of Dallas.

(SOUNDBITE OF ARCHIVED RECORDING)

JOHN MCCAA: Well, he could be the most unpopular man in the city tonight. The...

KHRAISH: And I looked at my wife. I said, they're talking about me.

(SOUNDBITE OF ARCHIVED RECORDING)

BRETT SHIPP: The owner, Khraish H. Khraish, in the past few days...

KHRAISH: And it was just this horrible story about me and the business. I've been proud of what I've done in providing housing to the lowest-income households in Dallas, and now I was getting this smear campaign about what a horrible person I was.

(SOUNDBITE OF TRAIN HORN)

SULLIVAN: West Dallas has had it rough for half a century. It's been home to a lead smelter yard, an EPA Superfund site, and much poverty. But five years ago, the city built a bridge - the Margaret Hunt Hill Bridge - connecting West Dallas directly into the city center. And now the place seems to be booming.

(SOUNDBITE OF BACK-UP BEEPER)

SULLIVAN: Look at all this construction.

NPR producer Meg Anderson and I recently drove past huge new apartment complexes as we went to find one of Khraish's most dependable tenants, 81-year-old Pearlie Mae Brown.

MEG ANDERSON, BYLINE: Here, found it.

SULLIVAN: The siding of Brown's house is popping out, and the whole place seems to be listing. Inside, cardboard is hiding a huge hole down to the dirt below the house.

What kind of a floor is this?

PEARLIE MAE BROWN: It's supposed to be a wooden floor.

SULLIVAN: Many of the outlets don't work, and cockroaches run across the floor. Still, Pearlie Mae Brown's house is constantly bustling.

(SOUNDBITE OF TELEPHONE RINGING)

BROWN: There it go again.

SULLIVAN: Neighbors stop by. So does her daughter. Pearline Brown Harper wastes no time when I ask her about Khraish.

PEARLINE BROWN HARPER: (Laughter) It shouldn't come out of anybody's mouth what I think about him.

SULLIVAN: Really?

HARPER: Yeah. He didn't come fix nothing. He just told the tenants that they would have to take care of stuff theirselves. He's just a slumlord. And these people out here have made him the, you know, rich man that he is.

SULLIVAN: Harper is right about at least one thing. The homes have brought in a lot of money. With 300 homes at 400 or 500 a month, Khraish could be collecting as much as $150,000 a month in rent. But Khraish isn't the only one to see the investment potential here. Across the country, mom-and-pop landlords are on the decline, and studies show owners with dozens or hundreds of properties are on the rise. The less a landlord has to spend on repairs, the more money he or she stands to make. In Brown's house, a neighbor pops in to see what's going on.

Hi there.

BENNIE KILSON: Hello. How you doing?

SULLIVAN: Bennie Kilson is 71. She says her house is in bad shape, too. She does all the repairs herself. And right now, leaning against Pearlie Mae's broken screen door, she's about to put her finger on the root of the entire problem.

KILSON: OK, my husband died back there in 2008. My husband didn't have no whole lot of Social Security.

SULLIVAN: Yeah.

KILSON: What I get now is $632. Now, where in the world can I move with that? You can't.

SULLIVAN: And she's right not just in West Dallas but in cities all across the country. Median rent has increased 70 percent over the past two decades while housing conditions haven't improved. And according to government data, the majority of poor families are spending more than half of their already small incomes just to cover rent. In Dallas two years ago, the city decided it was going to get serious about living conditions in West Dallas. Assistant City Attorney Melissa Miles and others went into dozens of Khraish's homes.

MELISSA MILES: Houses falling off their foundations - I mean, literally - walls that don't connect anymore, rooms where you look through in the seams of the walls. You could see light from the outside.

SULLIVAN: They sent Khraish a binder with hundreds of citations. He said it was devastating.

KHRAISH: It was just bankruptcy. And they want me to bring them to a standard that these houses cannot attain. It's like, how do you make a 1930s engine meet modern-day emission standards? You cannot.

SULLIVAN: But from the city's standpoint, that was Khraish's problem.

MILES: I don't have a ton of sympathy for someone who got away with something to their benefit, to the detriment of other people who weren't in a good negotiating position.

SULLIVAN: But the bigger question looming over all of this is not why the city intervened but why they intervened now. And Khraish had a theory.

KHRAISH: The city of Dallas does not want low-income households in the city.

SULLIVAN: Khraish's theory goes like this. The city wants him to renovate his homes because if he renovates, he'll have to charge more to recoup the costs. His tenants can't pay more, so they'll go live somewhere else, somewhere other than revitalized West Dallas or maybe all of Dallas.

KHRAISH: Their affordable housing policy is not to have one.

SULLIVAN: So we went to city hall to ask the mayor if that was true. Dallas Mayor Mike Rawlings said, of course not.

MIKE RAWLINGS: I think you have to make those decisions based on principles. And that is the principles of making sure that people live in safe environments, OK? Safe and clean environments is not asking too much.

SULLIVAN: It took the city decades to ask that much. But Rawlings says he hopes poor people, middle-class people and wealthy people will all live together in the new West Dallas.

RAWLINGS: We're going to have people live in good housing, and we're going to keep pushing this thing. So we're going to find better and better answers.

SULLIVAN: But the answer Khraish came up with was not what anyone was expecting. Last spring, he decided he wasn't going to renovate his homes. Instead, he said he was going to tear them down and evict the tenants.

(SOUNDBITE OF ARCHIVED RECORDING)

MARIE SAAVEDRA: The largest junk property landlord in the city is threatening to evict most of his tenants.

SULLIVAN: Suddenly Pearlie Mae Brown and Bennie Kilson and hundreds of others were facing homelessness.

KHRAISH: When I shut down my rental business and 300 households were facing imminent displacement, you know what the real panic was? It wasn't that they had to leave. It's that there was no place to go to. There was not 300 units in the city of Dallas - affordable housing units in the entire city of Dallas.

SULLIVAN: Melissa Miles could only throw up her hands in frustration. She and the city wanted people in better conditions, not homeless.

MILES: I understand there's blame to go around. There's blame for the city. I think there's blame right up the ladder of government and sort of everyone in between, from national policy to the owner of a particular property not caring enough, not being humane enough, not being willing to be a little less personally greedy to do something about it.

SULLIVAN: So what is a city to do, enforce code, force landlords to pay for repairs and proper upkeep so that people live in decent conditions but know that rents could go up and the poor may have no place to live, or let the properties go and face a reality that in 2017, in the wealthiest country in the world, some of its most vulnerable residents live in squalor? Now, cities could avoid this choice by never letting properties go into disrepair in the first place. But that costs money. You have to take landlords to court, staff an office, stay on it.

Meg and I took a walk around the broken sidewalks and chain-link fences of West Dallas with prominent housing civil rights lawyer Michael Daniel.

MICHAEL DANIEL: You look at downtown. There's a lot of tax money that comes in from downtown. It wouldn't take a lot of it to make some differences. But you can't shift it...

SULLIVAN: You can't. You can't take money from downtown.

DANIEL: ...'Cause it's already set for every place else. And if you start telling people, your potholes are going to last a year longer because we're going to do code enforcement in West Dallas, their council members will say, I'll lose; I can't do that.

SULLIVAN: As he said this, we stopped in front of a lot where Khraish had already demolished the house that was on it. I told him city officials said they were stunned he was tearing houses down.

DANIEL: They weren't stunned. [Expletive]-damn the city.

SULLIVAN: Yeah.

DANIEL: (Laughter) No, that's not being stunned. Those are crocodile tears at best 'cause the city will do it if the landlords don't.

SULLIVAN: You're saying the city looks at this and is secretly happy.

DANIEL: Yeah. And the fact is the landlords paid the money. And the city didn't have to spend the money. I mean, it's the solution.

SULLIVAN: It's the solution that goes to their endgame.

DANIEL: Yes.

SULLIVAN: Which is what?

DANIEL: You bring it all down, and you bring it back as something that rises from the ashes.

SULLIVAN: Except in those ashes, he says, only wealthy people get to live, and you don't even need to do code enforcement. And that could have been the end of the story, except Khraish had one more coda to add. A few months ago, he announced he was sparing half his tenants from eviction. Instead, he says, he's making them homeowners.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER: Some West Dallas tenants on the brink of eviction are getting the chance at homeownership.

SULLIVAN: He's going to loan the tenants the money to buy the houses from him. Seller-financed deals are often controversial and can sometimes leave buyers with less-than-favorable terms. For example, Khraish's contract says if buyers miss one payment, he can demand that they pay off the entire house immediately or lose it. Whether or not that happens, Khraish will collect payments but will no longer have to worry about repairs.

Pearlie Mae Brown signed a similar contract with Khraish. She can't afford to fix the house, but she told us she has no choice. She has nowhere to go. When we asked Mayor Mike Rawlings about this, he said it was a happy ending. More than a hundred people will get to stay in West Dallas.

RAWLINGS: It's not my job to lawyer to the papers, OK? And I don't think that he's got any motivation to outright defraud individuals.

SULLIVAN: So we asked him, does he?

KHRAISH: I was never a slumlord, but I'm certainly not going to trade the slumlord moniker for the predatory lender moniker. I'm trying to do the right thing. I believe I am doing the right thing. I believe that the community trusts me that I'm doing the right thing.

SULLIVAN: And that's where we've landed. Millions of Americans are living in poverty without any government help. The future of these residents, at least, comes down to trust, trust that this landlord will do what's in the best interests of his tenants. With Meg Anderson, I'm Laura Sullivan, NPR News.

[USFREEDOM911]

Here we go again! Mr. Does not know shit putting in his less than 2 cents worth.

He's never heard of finding one close to where you live or having a friend deliver it for you and then doing the refurbishing yourself.

So sad

[USFREEDOM911]

Zombie apocalypse ready.



Or you can invite your friends and build this.

[PostmodernProphet]

that means that the cost per apartment is something approaching $700,000 per unit

it would be a lot cheaper to build them retirement housing in Florida.......

[cancel2 2022]

Luxury house in Dallas built entirely from shipping containers.



http://www.dailymail.co.uk/news/arti...ontainers.html

Sent from my Lenovo K8 Note using Tapatalk

[blackascoal]

Where's BAC? He got on before about this claiming liberals build way more public housing. How do you justify this?

I'm not really interested in your every biased rant against liberals.

If you believe conservatives are the champions of ANYTHING for the poor, feel free to believe that bullshit.

[cawacko]

I'm not really interested in your every biased rant against liberals.

If you believe conservatives are the champions of ANYTHING for the poor, feel free to believe that bullshit.

The article speaks for itself. Do you support the action? Do you believe these costs are sustainable?

It's ok to discuss policy on here right?