Zoning incentives to construct some BMR (Below Market Rate) housing is one area that is a promising tool to help ensure housing affordability across a range of income levels,
if implemented correctly
.
Right here is where you lose my vote. You are burdening the new owners of market rate housing unfairly. If you want to fee, demand and tax you way into building affordable housing, then you have to extend it to all housing transactions, not just the new ones. See how far that gets you.
The cost of affordable housing isn't "cheaper" than building a new home because it is affordable. In high income-housing-cost markets, most affordable housing units are built at a negative value, given all of the costs, and those negative values are rolled into the price of the market rate houses. The common misconception is that developers are "made" to incur those costs. They are a bit, in less overall profit, but the real cost is passed on to those who bought their homes at market rate in that subdivision. When you buy a home in a subdivision that has affordable units, you and your neighbors are very much subsidizing those units. The neighbors across the street in existing housing? It did not, nor will it ever cost them a dime, in terms of their mortgage payment.
It is simple economics. If you want housing built, you have to get investors to front the money. Those investors will demand a return on their money, or no money gets invested. those investors are either stockholders or family offices,
Source: I am a developer in the Bay Area, CA (and LA, Denver, Sacramento) and I currently have 19 subdivisions in process in those markets (over a dozen sold/built/ executed in the last 5 years)
chiefdanfox16 karma
Right here is where you lose my vote. You are burdening the new owners of market rate housing unfairly. If you want to fee, demand and tax you way into building affordable housing, then you have to extend it to all housing transactions, not just the new ones. See how far that gets you.
The cost of affordable housing isn't "cheaper" than building a new home because it is affordable. In high income-housing-cost markets, most affordable housing units are built at a negative value, given all of the costs, and those negative values are rolled into the price of the market rate houses. The common misconception is that developers are "made" to incur those costs. They are a bit, in less overall profit, but the real cost is passed on to those who bought their homes at market rate in that subdivision. When you buy a home in a subdivision that has affordable units, you and your neighbors are very much subsidizing those units. The neighbors across the street in existing housing? It did not, nor will it ever cost them a dime, in terms of their mortgage payment.
It is simple economics. If you want housing built, you have to get investors to front the money. Those investors will demand a return on their money, or no money gets invested. those investors are either stockholders or family offices,
Source: I am a developer in the Bay Area, CA (and LA, Denver, Sacramento) and I currently have 19 subdivisions in process in those markets (over a dozen sold/built/ executed in the last 5 years)
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