What affordable housing actually means

From the blog post:

Many don’t realize that this is subsidized housing often reserved for low and very low income households that can only be acquired by waitlist and public financing (or extraction from elsewhere) to build. A.K.A. modern quasi-public housing. The buildings themselves often are indistinguishable from market-rate complexes to people unfamiliar with development, done on purpose to prevent stigmatization the public housing of old faced. Oftentimes anti-gentrification activists confuse modern 100% low-income housing complexes for luxury condos.

…

In a market system, unless you’re living in the home you build, few would bother developing homes unless they make a profit. This is where co-housing comes in. Co-housing is a type of social housing to solve the developer profit-seeking problem by eliminating the for-profit developer altogether. A community of people pool money together to build housing for themselves and rent or mortgage their units at the cost of construction there after. In simple Marxist terminology: the worker (and consumer) is commandeering the means of production.

…

It’s a great idea but in Northern California, co-housing projects in Berkeley, Fremont and Sacramento, while remarkable, haven’t produce low cost housing. The Berkeley homes are projected to span between $900,000 to $1.5 million in a market where median home prices are $1.5 million. In Fremont, it’s $800,000 to $1 million in a market median of $1.3 million. And in Sacramento, it’s $400,000 to $600,000 in a market median of $500,000.

…

Affordable low rent, subsidized housing often exceeds the already high costs of market-rate housing construction, due to differences usually in labor standards, difficulty in acquiring a accumulation of time-sensitive financing, and the higher level of scrutiny publicly-subsidized projects receive than private. This, on top of all the regular housing cost burdens exacerbating private development costs. In the Bay Area, low income, subsidized housing is often three-quarters to $1 million per one unit in a complex.

…

UC Berkeley’s Terner Center for Housing Innovation does a lot of work explaining housing finance. In their report on construction costs, things like land costs are only contributing 12% of total project costs and can’t be blamed for high construction costs. In their model assuming 0 affordable housing requirements and 0 environmental mitigation, your average East Bay housing unit will cost $570,000 to build. That’s the bare minimum before additional soft costs are imposed, and each additional cost pushes that $573,000 minimum sale or rental value further up.

Something’s seriously wrong with the construction market nationwide. But note that if East Bay per unit cost are reaching $1 million for subsidized developments, that gap between $573,569 and $1 million is entirely being filled by excessive administrative delays, zoning and permitting costs.