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Los Angeles is spending up to $837k to house a single homeless person

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Re: Los Angeles is spending up to $837k to house a single homeless person

#101

Post by mikeg8 »

sjg007 wrote: post #55
mikeg8 wrote: post #39

I'm finishing construction next month an 1,100 sq/ft single family home in the north bay area; a very high cost-of-living region. We started construction in Sept 2021, after an intentional delay of a couple months to let lumber prices drop after peaking in May-June. My home will be built for about $350k (less land acquisition). I'm acting as contractor and have connections in the industry so very few can build at my…

So you are saving ~30% right? Plus the land at probably <250k means $600k max net cost. I imagine the area you live in has $800k-$1m houses.

About right, might be saving closer to 35%.

Land cost was $500k in 2018, but its 3 acres, had existing utilities, and I can re-build another existing structure on the property what was red-tagged and will be 2 bed 2 bath, ~1800sq/ft primary dwelling. The one currently under construction is technically the accessory dwelling unit, but it really is a stand-alone house.

With just the new ADU, we will be in ~$850k but appraised value is expected to be $1-1.3m. When we spend another $350-$400k re-building the primary dwelling, it will probably be worth $1.6-$2m with ability to rent one unit.

The metric I care most about is my sq/ft build cost which will be around $300/ft. This is incredibly low for a custom home which ranges in the $400-650 ft range for a decent quality custom and $1000+ ft for higher-end residences.

The sqft size of units in LA is not mentioned, but based on the video, they are between 400-600 ft. $837k / 600 sqft = $1395 ft. Wayyyyyyy too high for "affordable" housing.

Re: Los Angeles is spending up to $837k to house a single homeless person

#102

Post by b112 »

Dylan16807 wrote: post #60
Kalium wrote: post #30

Earlier quoted context omitted.

San Francisco had a similar problem in recent years, where trying to build housing for the unhoused was running a cost of about a million a pop. It's perhaps possible that this isn't a deliberate display of incompetence, but a set of systemic problems that make housing in California very expensive to build.

They can choose anywhere to build, the government controls zoning, and they're making apartments. Doesn't that get past all the big systemic cost problems? Though the article doesn't actually say anything about average costs or cost per type of unit, and since this is a professional news outlet they don't link their sources...

The people control zoning, and thus, where things are built.

Re: Los Angeles is spending up to $837k to house a single homeless person

#103

Post by haroldp »

daenz wrote: post #21

Is there any way to fix incentives with government contracts, so that the product that is purchased is the lowest price for the highest quality? In the free market, there are generally incentives for that because companies have a brand, and if you deliver poor quality, consumers eventually catch on, your brand suffers, and you lose business to your competitors. How does this work in the government? Where is the disin…

That mechanism is totally absent.

https://en.wikipedia.org/wiki/Public_choice

That is precisely why these things happen.

Re: Los Angeles is spending up to $837k to house a single homeless person

#104

Post by long_time_gone »

mwint wrote: post #98
legitster wrote: post #66

In the last 50 years, cities across the country closed down over 1 million SROs ( https://en.wikipedia.org/wiki/Single_room_occupancy ) in an effort to remove slums or just neglect at increasing property value. There are now over half of a million homeless. It's honestly impressive the number is not more. For the 1.2 billion dollars they are spending, if all of the apartments were built to the spec of a roadside mote…

Basically, we’d be better off if the government had done nothing. Seems like that happens a lot.

More like, we'd be better off if voters didn't demand short-term actions with negative long-term effects.

Re: Los Angeles is spending up to $837k to house a single homeless person

#105

Post by b112 »

vkou wrote: post #89
scantron4 wrote: post #67

Earlier quoted context omitted.

Not if it gets trashed by the residents.

In a world where housing prices grow in an unbounded, absolutely detached from reality manner, it is.

It's actually the land which goes up in value. Houses go down in value, like a new car.

Sometimes this is masked, by regular maintenance, retrofits, and repairs. But if left to pot, a house is eventually worthless, then even a cost, for the new owner has to tear it down and rebuild.

Land appreciates. A house costs.

Re: Los Angeles is spending up to $837k to house a single homeless person

#106

Post by josephcsible »

chillingeffect wrote: post #27

This is such sloppy journalism: > one project under development expected to hit as much as $837,000 for each housing unit, How typical is that? where is it? how long is it expected to last? what other features does it have? Does that include one-time architecting costs that make future developments cheaper? > HHH project includes 8,091 housing units — most with connected services for mental health and substance abuse…

> so how much of the $800k goes to the mental health etc services?

Is it clear that any of it is meant for those services, or could they all be extra costs above and beyond it?

Re: Los Angeles is spending up to $837k to house a single homeless person

#107

Post by legitster »

mikeg8 wrote: post #39

I'm finishing construction next month an 1,100 sq/ft single family home in the north bay area; a very high cost-of-living region. We started construction in Sept 2021, after an intentional delay of a couple months to let lumber prices drop after peaking in May-June. My home will be built for about $350k (less land acquisition). I'm acting as contractor and have connections in the industry so very few can build at my…

The problem is the government bidding system is completely borked. Especially in a state like California.

The government would do better if it only acted as a buyer. "We will pay for any new units that are constructed that meet these qualifications" and let the thousands of independent developers and contractors do what they do.

Re: Los Angeles is spending up to $837k to house a single homeless person

#108

Post by wolverine876 »

tempnow987 wrote: post #97
wolverine876 wrote: post #86

Earlier quoted context omitted.

It's not the cost of the unit, per the article: 14% of the units build exceeded $700,000 each, and one project in pre-development is estimated to cost almost $837,000 per unit.

OK, so units may cost $837K. Is that all inclusive of all necessary services (maintenance, supportive services, utilities etc for the life of the unit)? Or are those going to be extra. I ask because the housing department housing in SF is mind boggling expensive just to operate even after they did the build piece especially if you do all in costs vs revenue (ie, tax base is low -> govt owned often exempt and service…

> OK, so units may cost $837K.

That's not what it says: It say only 14% cost 700K+ (i.e., 86% cost less than 700K), and one project might cost 837K. In other words, the 837K are a small number of outliers (unless it's a really big project, of course) and based on a projection.

> Is that all inclusive of all necessary services

Yes, I agree that should also be considered, and I think those services are essential. However, it's important to keep down construction costs too.

Re: Los Angeles is spending up to $837k to house a single homeless person

#109

Post by jvanderbot »

long_time_gone wrote: post #104
mwint wrote: post #98

Earlier quoted context omitted.

Basically, we’d be better off if the government had done nothing. Seems like that happens a lot.

More like, we'd be better off if voters didn't demand short-term actions with negative long-term effects.

Precisely this. In LA there are constant referendums about homelessness, in CA massive budget increases, and yet, nobody will allow a shelter or multi-family unit to be constructed in their neighborhood, lest their soaring land value peak.

In CA, it's my firm belief that people have a tad too much power over the minutae of government operations. What did we even elect people for if we are going to try to solve everything with referendums and protests?

Re: Los Angeles is spending up to $837k to house a single homeless person

#110

Post by andechs »

Dig1t wrote: post #78
nimbius wrote: post #17

the fact that any housing is getting built is frankly a refreshing turn of events. for people unfamiliar with los angeles, is very much a city of landed gentry. republican legislation designed to curtail rising taxes for elderly residents 40 years ago wound up creating a cloistered elite of land-owners that pay nearly nothing in tax and resist any attempt to create additional housing. They coast on a bubble of six-fi…

I think you're talking about this in pretty black/white terms and the partisan framing doesn't do much. Prop 13 is a double edged sword IMO. It does have the problem you describe of landed gentry not getting hit with high property taxes, but also it does protect middle class people from getting kicked out of their homes due to the popularity of the area they live in. My parents are the perfect example of this, my dad…

> If their property taxes had risen with the rate of the area that they bought a house in as we grew up, we would have been unable to continue living there and forced to leave. The same thing goes with my grandparents.

We're ensuring stability for the older generation, at the expense of a younger generation who couldn't possibly afford the same neighbourhood they grew up in.

Those with millions in real estate equity can use that equity and financial engineering to defer the property tax increases until their death.

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