TE
TechEcho
Home24h TopNewestBestAskShowJobs
GitHubTwitter
Home

TechEcho

A tech news platform built with Next.js, providing global tech news and discussions.

GitHubTwitter

Home

HomeNewestBestAskShowJobs

Resources

HackerNews APIOriginal HackerNewsNext.js

© 2025 TechEcho. All rights reserved.

Why Is 'Affordable' Housing So Expensive to Build?

135 pointsby misnamedover 7 years ago

25 comments

IkmoIkmoover 7 years ago
I was expecting something else...<p>Let&#x27;s be frank, affordable housing typically isn&#x27;t expensive. Construction costs around the country and indeed the developed world aren&#x27;t too far apart. In the US it&#x27;s about $100-200 per square foot, in Western-Europe it&#x27;s €1000-1500 per square metre.<p>The problem isn&#x27;t really in construction, typically. Of course, there&#x27;s always room for improvement everywhere, in construction too. But the big culprit are land prices. Take the Mission, they quote units costing $600k each, not affordable housing. But you&#x27;re talking about a place where you need to pay $1.5m to just buy the piece of land on which you then build three small $100k units, for an average of $600k each.<p>Completely different story from the $100k unit in &#x27;Portland&#x27;, which was actually Gresham, east of Portland, where the average square foot price to buy land+home is &lt;$200. Oh and the units were 375 square foot... $100k is expensive, if anything. The author completely ignores the market realities, again, mostly of expensive land prices.<p>And this creates the debate as to whether we should subsidise such housing. After all, if you put the same quality house in another city with cheaper land, you could build 4x as many homes, or twice as many that are twice as big or twice as luxurious. Why should we subsidise a fraction of our poor people to live in the most expensive place on the planet with public money that could go towards helping a larger fraction of people?<p>That&#x27;s a though question to answer, I find... and I struggle with it, especially because I&#x27;m one of those guys who&#x27;s in favour of these subsidies. Economic segregation is damaging in many ways, plenty of sociological studies have shown. It&#x27;s important to keep our cities accessible to everyone and create a healthy mix of people from all socioeconomic backgrounds, as opposed to rich enclaves and poor ghettos. But, finding the balance is hard. I don&#x27;t live in the US but we have similar problems here in Western-Europe with subsidised housing, at the end of the day it&#x27;s an issue of land prices skyrocketing, it doesn&#x27;t have as much to do with construction costs as we tend to think. And it&#x27;s really hard to find the right balance of using public money to buy expensive land for a small group of people.
评论 #16088520 未加载
评论 #16088782 未加载
评论 #16088548 未加载
评论 #16088524 未加载
评论 #16088651 未加载
评论 #16088696 未加载
评论 #16089486 未加载
评论 #16088624 未加载
评论 #16089122 未加载
评论 #16088540 未加载
评论 #16088779 未加载
评论 #16088774 未加载
评论 #16088449 未加载
评论 #16088485 未加载
评论 #16088650 未加载
评论 #16091909 未加载
评论 #16088464 未加载
评论 #16089630 未加载
评论 #16088498 未加载
评论 #16088836 未加载
评论 #16088568 未加载
wpietriover 7 years ago
I was expecting more to the article than I got. It doesn&#x27;t really answer the question. I don&#x27;t even think it asks the question well.<p>E.g., is the question really &quot;why is affordable housing so expensive?&quot; or is it &quot;why is housing so expensive?&quot; They hint that publicly funded housing might be more expensive, with a mealy-mouthed &quot;the case has been made&quot;. But they give just one apples-to-oranges comparison, and, worse, one hypothetical comparison. Where&#x27;s the statistical data?<p>It also doesn&#x27;t look at all at <i>why</i> we need affordable housing. E.g., with rapidly spiking inequality (in the US generally, and especially in SF), demand for affordable housing is going up.<p>In talking like we can&#x27;t afford it, it doesn&#x27;t put numbers to that, either. For example, in 2015 the US spent $71 billion on the mortgage interest tax credit, 90% of which went to households making over $100k&#x2F;year. If we stopped subsidizing the housing of rich people, could we afford to subsidize the housing of poor people? And might that giant subsidy be part of why housing is so expensive?<p>So A+ title, D+ content.
评论 #16088679 未加载
lj3over 7 years ago
There&#x27;s a great reddit post where an LA architect specializing in multifamily residential units explains why all of the new units being built in LA are luxury condos instead of low cost housing.<p>tl;dr: city specific zoning laws.<p>To be fair, the post is specific to LA, but it makes me wonder what legal hoops developers have to jump through to build in other cities and how expensive those hoops are.<p><a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;LosAngeles&#x2F;comments&#x2F;6lvwh4&#x2F;im_an_architect_in_la_specializing_in_multifamily&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;LosAngeles&#x2F;comments&#x2F;6lvwh4&#x2F;im_an_ar...</a>
schmidtcover 7 years ago
I was expecting this article to provide some insight in regards to the title. It does not. The article should be titled, “Here Are Some Examples of Expensive ‘Affordable’ Housing Projects”.
pdx6over 7 years ago
In Brown we trust, along with Scott Wiener; these are the only two politicians doing anything to address housing prices. In San Francisco, the Mayor&#x27;s Office of Housing (SFMOH) has created a complicated program of silent second liens to enable &#x27;low&#x27; and &#x27;moderate&#x27; income residents purchase regular condos at below market rate. Units built strictly for income bands and subsidized, or &#x27;affordable units&#x27;, run into a problem of funding; it is either developers who elect not in include below market rate units (BMR) and pay into the fund or churches building their own structures such as Mercy Housing.<p>But what about the land? I don&#x27;t think that has to be the major cost, at least in San Francisco. There are a plenty of vacant lots owned by the city, and in a recent case the feds sold land for $1 to the city for pre-fab condos near the court house for &#x27;formerly homeless&#x27;. Indeed, if you have an apartment, you are no longer homeless.<p>And this is where we start talking about the real expense -- union labor. The pre-fab units clock in at under 250k each, but they are built over in Vacaville with non-union labor. Anything else needs highly paid craftsmen which goose a market rate unit over 700k+. If the lot needs to be abated for pollution, usually for former gas station sites, the price goes even higher plus delays. Want steel framing for going over 7 stories? The price goes up. Not that SF Planning&#x27;s zoning will allow 7 stories, even near BART.<p>The solution to affordable housing is to just build more housing -- just regular housing. Built it tall, 100 stories or more, and right on top major transportation lines like BART stations -- on all 4 street corners. We&#x27;ll need to overcome labor costs and zoning before we can get there.
notadocover 7 years ago
$700,000 per unit? Or even $100k? For &quot;affordable&quot; housing?<p>Meanwhile, in Mississippi.... regular brand new houses (not &quot;affordable&quot; housing) are actually affordable at $150k, or less than a down payment in any west coast US city.<p><a href="https:&#x2F;&#x2F;www.zillow.com&#x2F;ms&#x2F;new-homes&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.zillow.com&#x2F;ms&#x2F;new-homes&#x2F;</a><p>Or check out a brand new 2200sq ft house in Indiana for $200,000 that would sell for about $2.5 million in the Bay Area, or about $1.5 million in Seattle or Portland<p><a href="https:&#x2F;&#x2F;www.zillow.com&#x2F;community&#x2F;harrison-lakes&#x2F;2095745355_zpid&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.zillow.com&#x2F;community&#x2F;harrison-lakes&#x2F;2095745355_z...</a><p>Sometimes I wonder why people aren&#x27;t more willing to move to new states. I realize that Indiana and Mississippi aren&#x27;t particularly &quot;cool&quot; and certainly not trendy, but what matters more in life? Being in a trendy spot, or actually being able to afford a reasonable lifestyle?
评论 #16088724 未加载
评论 #16088734 未加载
beagerover 7 years ago
It seems to me like one of the big problems with &quot;affordable&quot; housing in desirable areas is that everyone who has bought an &quot;unaffordable&quot; house is now in on the con, and &quot;affordable&quot; housing threatens to correct (read: deflate) the value of the very expensive thing that they have bought.<p>I&#x27;m not a homeowner, but being near NYC, if I manage to get myself into buying a home, I would probably be inclined to support any measure that ensures that the demand for my home—and therefore its price—continues to rise at as great a rate as possible to make sure that I wasn&#x27;t on the hook for a large depreciation on my mortgaged property. This is the reverse of my current desire, which is for housing to be affordable enough for me to get into so I don&#x27;t have to rent and can provision that part of my income toward building wealth and not someone else&#x27;s wealth. The moment I become a homeowner, those motivations flip.<p>If the median home price were closer to the median income in a given area, I surmise that the desire from homeowners for increased demand and value would abate, because homeowners would stand to gain or lose less in their house vis a vis their income. Instead, you have folks who may gain more value in their homes in one year than they would make in salary. And conversely, price correction at such a great disparity to median income would mean that you now owe the bank a year or more&#x27;s salary more than what your home is worth.
评论 #16088977 未加载
评论 #16088949 未加载
评论 #16089382 未加载
评论 #16088961 未加载
boulosover 7 years ago
Because it hasn&#x27;t been mentioned yet, here in California &#x2F; San Francisco there&#x27;s finally a bill being put forward to mandate higher density near transit: <a href="https:&#x2F;&#x2F;sf.curbed.com&#x2F;platform&#x2F;amp&#x2F;2018&#x2F;1&#x2F;4&#x2F;16850000&#x2F;transportation-near-housing-bonus-wiener-ting" rel="nofollow">https:&#x2F;&#x2F;sf.curbed.com&#x2F;platform&#x2F;amp&#x2F;2018&#x2F;1&#x2F;4&#x2F;16850000&#x2F;transpo...</a> .<p>The challenge really is that people block this kind of development. Most of San Francisco is 2-3 stories with 3-6 units per building. Given the value of the land beneath, that sets a floor on pricing greater than $200k per unit. Then you have to pay for all the legal and development fees to push this through the planning process, and work with the community. The reason developers make small buildings is that they don&#x27;t stand a chance at getting larger buildings through community input, discretionary reviews and so on.<p>It&#x27;s not clear to me that this new bill attempts to address that angle. FAR (floor area ratio) isn&#x27;t nearly the burden the article makes it sound like, but DR (discretionary review) from neighbors certainly is, and often rightly so. Presumably having a transit bonus on the books will encourage planning to tell people &quot;tough shit&quot; if they&#x27;re trying to oppose larger projects in transit dense areas. Expect bigger projects in SOMA and the Mission :).
ivmover 7 years ago
In Chile we have an incremental building program: you get half a house constructed and finish the other half by yourself. The cost per unit was less than $10k in 2002.<p><a href="https:&#x2F;&#x2F;99percentinvisible.org&#x2F;episode&#x2F;half-a-house&#x2F;" rel="nofollow">https:&#x2F;&#x2F;99percentinvisible.org&#x2F;episode&#x2F;half-a-house&#x2F;</a>
CharlesMerriam2over 7 years ago
I think &#x27;Affordable Housing&#x27; is one of the topics where people gloss over the basics.<p>* Affordable Housing returns are always below market-rate housing. * Requiring a percentage of building to be affordable housing is a tax. Builders have an interest in avoiding taxes. * Acquiring an affordable housing unit is a long term benefit. Those advocating for housing have an interest in acquiring benefits. * Long term housing prices are driven by regional economics. * Short term housing prices are can be manipulated. Solving manipulations like the simultaneous remodeling of large complexes; raising rates with too little notice to effectively move; or jumping rates by high percentages in a year have different solutions.<p>Thinking in these terms separates concerns of equity in society; the high cost of service workers in congested areas; the rise of empty buildings; the gouging of existing tenants; and subsidized housing for some workers.<p>Recognize this debate has been going for a while. On could argue that providing cheap housing for the Phoenician immigrants would make Athens better for Athenians, or that people like Plato need an affordable place to live to make our city-state great!
octaveguinover 7 years ago
A solution to the housing a problem never mentioned is intentional communities. They seem to solve a good portion of the problems.<p>Here&#x27;s why they make sense:<p>1. They can be cheap because they can be built in places with low land prices and low regulations. These are the chief factors in why housing is so expensive.<p>2. They can solve desirability by building together that stuff that makes a city desirable - other people, businesses, walkability, modern design.<p>3. They&#x27;re more feasible than ever because remote work is so practical that you don&#x27;t have to live in the middle of a city for a job.<p>4. A model for bringing people who have this goal together has been recently validated on a large scale (kickstarter type systems).<p>So I&#x27;m left wondering - am I just not seeing the projects or why have I not heard of them?
评论 #16088569 未加载
评论 #16088600 未加载
评论 #16088777 未加载
评论 #16088708 未加载
评论 #16088611 未加载
评论 #16088669 未加载
agrarianjusticeover 7 years ago
As a thought experiment, what would happen if a city like San Francisco required you to own the home or condo you lived in, and provided financial guarantees. So any non-owner occupied residence was illegal.<p>And then the city paid a variety of contractors to build studio apartments which would rent for $500&#x2F;month without any commitments, deposit or credit score. With 2-4BR for families.<p>The thought is the city, community &amp; companies build up immense value for real estate owners. It&#x27;s somewhat unfair to create this fantastic system we have in the Bay Area, where all these smart hardworking people gravitate to work on new, sometimes transformative ideas but then we channel lots of the profits to early real estate holders who effectively got lucky. While unnecessarily adding a ton of stress to people&#x27;s lives.<p>Of course, it would never be implemented. But the basic idea is that all apartment rentals would be through an open system via local government and all condos &amp; homes would require the owner to live in them.
评论 #16088725 未加载
评论 #16088796 未加载
EADGBEover 7 years ago
This really does stems down to the lack of building something affordable, even in affordable cities. Most people have it in their heads they need something much better&#x2F;bigger than they actually do.<p>Every new house built is larger than traditional smaller&#x2F;starter homes. My 30-year-old 1200 sqft home isn&#x27;t produced anymore here. I&#x27;d say, on average this has turned into a 1600 sqft, 3-car, multi-level (or more) home. New starter homes (in traditional terms) are really just for senior-age targeted clientele which forgo more bedrooms for a larger bedroom size (empty nesters target possibly?).<p>We&#x27;re having fewer and fewer kids (on average - I&#x27;ve got 3, which presents its own issues in the house hunt), but we&#x27;re needing more and more square footage for everything. There&#x27;s a slight adjustment for this by what seems to be a reduced lot size, but this is only marginal, and allows maybe one or two houses on the street than previous standard lot size 40-50 years ago.<p>Every apartment complex that goes up has to be &quot;posh&quot; and include shopping underneath. (There&#x27;s very little multi-family units going up, most are 30 years or older). Most of the rents for a 1 or 2 bedroom in these developments in already the cost of my 15-yr mortgage.<p><i>This is just what I experience, but it seems relatively the same, in every suburb surrounding my relatively large city, including inside city limits itself.</i>
nautilus12over 7 years ago
Increase taxes to build affordable housing. Hand the contract over to a developer. Developer builds $700,000 units. The model is not economically sustainable. Increase taxes. Rinse repeat. Now even the middle income people can&#x27;t afford to buy a $300,000 house, and have to move into the affordable housing. Housing developers are living like kings.<p>Welcome to the USA, where taxes are spoken for before they are even levied.
coldcodeover 7 years ago
Housing is often not an issue so much as land is. Even billionaires have trouble finding land in the Bay Area, but there are many cities in the center of the country with lots of land where building basic housing would be cheap. The other issue is having the land and housing near enough to a supply of jobs. Look at Detroit, you can get incredible deals but the jobs are no longer there.
评论 #16089429 未加载
评论 #16088546 未加载
CapitalistCartrover 7 years ago
We can build affordable housing easily here in Florida; we rarely choose to.<p>We can build 800sq. ft. (75 sq. m.) apartments in 3 story buildings for about $40,000, not counting land.<p>But we don&#x27;t. Because most Americans don&#x27;t want to live in 800 sq. ft. and most builders want to cater to the middle standard deviations of the population. They make more money selling to people who make more money.
pcurveover 7 years ago
I&#x27;m sorry, charging $700k for units like pictured here isn&#x27;t anything out of ordinary considering some units will have up to 4 bedroom.<p><a href="https:&#x2F;&#x2F;www.eastbaytimes.com&#x2F;2017&#x2F;10&#x2F;11&#x2F;emeryville-affordable-housing-project-breaks-ground&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.eastbaytimes.com&#x2F;2017&#x2F;10&#x2F;11&#x2F;emeryville-affordabl...</a><p>It&#x27;s not exactly located in cheap area either.<p><a href="https:&#x2F;&#x2F;www.google.com&#x2F;maps&#x2F;place&#x2F;3706+San+Pablo+Ave&#x2F;@37.8322188,-122.2799415,16.42z&#x2F;data=!4m6!3m5!1s0x80857e11bbfaf877:0xbbaa197891b68995!4b1!8m2!3d37.828093!4d-122.278539" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;maps&#x2F;place&#x2F;3706+San+Pablo+Ave&#x2F;@37.832...</a><p>Building up makes sense, but considering complete lack of undeveloped land in this area, that&#x27;s not really feasible.<p>In some countries, residents of a city block can work with real estate developers to build-up, and as long as 80%-85% agree, the project proceeds. Not sure if equivalent mechanism exists in CA.
ksecover 7 years ago
A few things to add and few already mentioned in other comments.<p>1. We need to compare price per Square Foot or Square Metre. Not One &#x2F; Number Bedroom housing that (Strong Words Deleted) used when comparing. I pointed this out in the previous Founder salary article when they mention New York has a slightly more expensive One Bed Room Flat rent then Hong Kong or Tokyo. Well, the NY One Bed room flat&#x27;s bathroom is properly bigger then the actual one bed room flat in Hong Kong.<p>2. When we say building cost, i tend to separate building and finishing. As mentioned in other comment, construction costs around the world isn&#x27;t that far apart. After all metals, cements, etc are pretty much the same level of pricing everywhere. The Cost of material dont differ much, it is the labour cost that has higher variation, but even so the difference in labour cost of developed countries Vs the differences in total cost of the apartment &#x2F; housing is negligible.<p>3. While we have tech and Automation to make building cost cheaper, finishing cost scales linearly with the area you are selling. Floors, Electric Wires , Waters, Pipes, etc all these are still labour intensive. And we have no way of bringing this cost down.<p>4. Not that any of the above matters, because when we have limited supply of land due to politics, prices of land will shoot up. The only places I know that is immune to this blood sucking property investment bubble is either Germany or places where population density is very low.<p>5. Take Hong Kong for example, you could literally buy up every single Flat on sale in the market, protest on every government land proposal due to environmental concern or what ever, and you have a Housing Market that only goes up.<p>The creation of fiat currency and money supply with limited land means in some places in the world we are forever slave of rent or mortgage.
notatoadover 7 years ago
I don&#x27;t see an answer in the article, but are there any comprable unsubsidized housing projects that can be compared to? Is housing simply that expensive to build, or is this a problem of beaurocracy or other inefficiencies specific to subsidized housing?<p>The quote about reducing the regulatory burden for but only for affordable housing to cut down on the cost seems telling - essentially admitting that at least some portion of the regulations in place aren&#x27;t necessary and are simply a waste of money.
评论 #16088608 未加载
monkeypizzaover 7 years ago
Check out this video explaining why you can buy new detached homes in Tokyo for about 300k usd.<p><a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=iGbC5j4pG9w" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=iGbC5j4pG9w</a><p>* Land owners have an absolute right to develop their own land - neighbors can&#x27;t block you. * You can build a 60 m^2 x 3 floor house on 100m^2 of land, or more.<p>So basically they build way denser, and reduce opportunities to block&#x2F;rentseek.
bostonscottover 7 years ago
The central problem is the motive. Low income individuals do not have such a powerful lobby that they&#x27;re able to compel States to create laws that require affordable housing. It&#x27;s the real estate&#x2F;development&#x2F;construction lobbies. They are very powerful and affordable housing is a big business. Everyone has to get their cut.
ggmover 7 years ago
How much of the build cost is land cost? How much of the build cost is local compliance costs? How much of the cost is market adjusted price, and not actually cost per se?
hbglover 7 years ago
The bottom line is that affordable housing is expensive because it is provided by a central planner.
bluedinoover 7 years ago
Land is cheap. Even in high priced areas there are always parcels ripe for redevelopment.<p>There are two reasons: one is that the units are built out more luxurious than they need to be. At least 30-40% higher.<p>The second is union labor (or prevailing wage) you&#x27;re spending three times the amount on labor as hiring local, cheaper labor.
评论 #16088727 未加载
评论 #16088792 未加载
conanbattover 7 years ago
The best way to increase worker&#x27;s income, reduce housing costs and eliminate all the ridiculous laws around housing regulation and property taxes is to replace sales tax and prop taxes for land value taxes.<p>As soon as the political gain to block construction dissapears, developing anything will be much cheaper and changes into policy will come with popular demand both by renters and landlords.