Why It Costs So Much to Build Affordable Housing
The New York Times’dives into the math of California’s housing shortage.
Over the past few months, Google, Facebook and Apple have pledged to invest a total of $4.5 billion in land and loans toward stimulating the production of affordable housing in California. Our article looks at how those efforts, laudable as they are, won’t amount to much unless the state enacts land-use reforms that make it easier and cheaper to build.
The piece goes through the math of California’s housing shortage — and the comical sums of money it would take to fix it. In comments on the article and on Twitter, a number of readers were shocked by one statistic in particular: It costs about $450,000 a unit to build subsidized affordable housing in California, according to the Terner Center for Housing Innovation at U.C. Berkeley. That’s higher than any state, and while the precise numbers differ, the Government Accountability Office has also called out California for having exceptionally high subsidized housing costs.
Mind you, that’s not the cost of building a single-family home in a coastal city. It’s the average cost of building a subsidized unit — a modest-sized apartment with bargain finishings in a four- to five-story building — across the state. And that’s actually a lowball figure: In expensive and housing-starved cities like San Francisco, the price tag for a single unit of affordable housing is heading toward $1 million.
Read more here.