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Building affordable housing

urbankchoze.blogspot.com

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Re: Building affordable housing

#51

Post by sokoloff »

aplomb wrote: post #50

One angle to make housing affordable is to outlaw mortgage products beyond 15 years (along with ARMs), require 20% down, and eliminate the tax deduction on interest - of course you can't do this overnight. Housing is a basic necessity and we need to get the rampant speculation and financialization out - we're all stuck in this game of musical houses waiting for the music to stop.

I believe that would decrease upward financial mobility. It still might be a good idea, but that would be a dramatic drag on home buying, which means anyone who currently owns rental property would see a sustainable uptick in demand, keeping a lot of middle class from ever leaving the world of renting.

Mortgage interest deduction being eliminated for owner-occupied housing I would support a transition to. Loan interest for business expenses [to include a loan secured by property, aka a "mortgage"] should continue to be a valid business deduction, meaning that renters would live in buildings that had tax deductible mortgage interest while owner-occupants wouldn't. If you're trying to pull the tax support for house prices, this won't entirely do it. I strongly oppose taking away business loan interest deductions as that harms a LOT of businesses.

I don't see anything wrong with ARMs. Most of Europe has ARMs as the standard/normal mortgage product. Interest-only, NINJA/liar loans, ARMs with introductory discounted rates are more problematic, but there's nothing wrong with a mortgage being adjustable, IMO.

Re: Building affordable housing

#52

Post by baursak »

maxsilver wrote: post #48
baursak wrote: post #26

Earlier quoted context omitted.

In places were housing is expensive, land will be the majority of the cost. In places where land is cheap, housing is already not expensive. The way to affordable housing is high density, mid-to-high rise condos.

> The way to affordable housing is high density, mid-to-high rise condos. How though? Density sounds good on paper, and has tons of side benefits, but (as the blog post explains) the cost of land + construction jumps significantly. I know here in the US, there basically is no such thing as "affordable high density condos". High density urban housing is expensive, by definition. So much so that there isn't a single un…

> the cost of land + construction jumps significantly

Per person? I don't see how. For a 16-floor building, you can easily fit 120 comfortable condos on a plot of land that would otherwise only fit 2-4 single family homes. Yes, the building cost would definitely be higher, but not per household. On top of that, it would be made of steel and concrete, and not plywood, which generally rots and needs to be torn down every 50 years or so.

> High density urban housing is expensive, by definition.

By definition? I'm not sure about that. There must be some middle ground between glitzy new condo projects and "the projects", which were also high-rise and affordable.

Much of Eastern Europe, lots of Western Europe, former USSR, etc., all have relatively affordable housing.

Re: Building affordable housing

#53

Post by ek750 »

tejohnso wrote: post #46

Most people talk about land being the main cost barrier, but there are plenty of other costs that add up to the point where you're better off buying a standard resale home. Having acquired land and being accustomed to living in ~600sqft all my adult life I thought I could build a reasonable living space for about $50,000. Once I started looking into it I ran into: - land clearing / prep ~$10,000 - utility hookups and…

I'm curious if you would share the additional costs you found beyond the land/clearing. And what area of the country are you looking at?

Re: Building affordable housing

#54

Post by kchoze »

baursak wrote: post #52
maxsilver wrote: post #48

Earlier quoted context omitted.

> The way to affordable housing is high density, mid-to-high rise condos. How though? Density sounds good on paper, and has tons of side benefits, but (as the blog post explains) the cost of land + construction jumps significantly. I know here in the US, there basically is no such thing as "affordable high density condos". High density urban housing is expensive, by definition. So much so that there isn't a single un…

> the cost of land + construction jumps significantly Per person? I don't see how. For a 16-floor building, you can easily fit 120 comfortable condos on a plot of land that would otherwise only fit 2-4 single family homes. Yes, the building cost would definitely be higher, but not per household. On top of that, it would be made of steel and concrete, and not plywood, which generally rots and needs to be torn down eve…

The construction cost of steel and concrete buildings is significantly higher per square foot of floor space than that of low-rise timber-framed buildings. In Canada, the cost of concrete and steel buildings is around 80% more per square foot than the cost of timber-framed walk-up low-rise buildings, and the cost of condos in skyscrapers is a whooping 150% higher than low-rise walk-ups.

Here is a source for construction costs for major metropolitan areas in Canada: https://t.co/18FwgkSlWY

And here are some figures.

For Toronto:

House (medium quality): 120-240$/sf

Walk-up low-rise apartment (medium quality): 100-150$/sf

Residential condos (medium quality): 180-240$/sf

Point towers, 40-80 stories (medium quality): 230-310$/sf

For Vancouver

House (medium quality): 165-225$/sf

Walk-up low-rise apartment (medium quality): 155-180$/sf

Residential condos (medium quality): 205-250$/sf

Point towers, 40-80 stories (medium quality): 270-355$/sf

For Montréal

House (medium quality): 125-180$/sf

Walk-up low-rise apartment (medium quality): 100-155$/sf

Residential condos (medium quality): 150-180$/sf

Point towers, 40-80 stories (medium quality): 250-355$/sf

So if you can afford a 400 000$ housing unit, and you assume half of it goes to pay for the land, you could get a house with about 1 500 square feet of space, a similar sized condo in a low-rise, a 1 000 square foot condo in a concrete mid-rise or a 650 square foot condo in an high-rise.

Yes, high-density housing options lower the amount of land per unit, but at the same time, zoning for higher density tends to rise the cost of land. A lot zoned for an high-rise building will be worth many times what a lot zoned for single-family houses is worth even if the two lots are adjacent, since the land value is proportional to the potential revenue of development, so the bigger the development, the higher the potential revenue, the higher the land value.

Re: Building affordable housing

#55

Post by maxsilver »

baursak wrote: post #52
maxsilver wrote: post #48

Earlier quoted context omitted.

> The way to affordable housing is high density, mid-to-high rise condos. How though? Density sounds good on paper, and has tons of side benefits, but (as the blog post explains) the cost of land + construction jumps significantly. I know here in the US, there basically is no such thing as "affordable high density condos". High density urban housing is expensive, by definition. So much so that there isn't a single un…

> the cost of land + construction jumps significantly Per person? I don't see how. For a 16-floor building, you can easily fit 120 comfortable condos on a plot of land that would otherwise only fit 2-4 single family homes. Yes, the building cost would definitely be higher, but not per household. On top of that, it would be made of steel and concrete, and not plywood, which generally rots and needs to be torn down eve…

> Per person? I don't see how. Yes, the building cost would definitely be higher, but not per household

It really is, in every market I've looked at. /u/kchoze goes into this for Canada, but I'll add numbers for my own area in the Midwest US

-- Suburban House (Poor, Damaged) : ~$80/sqft

-- Suburban House (Average Quality) : ~$100/sqft

-- Suburban House (New Construction) : ~$130+/sqft

-- Suburban Townhouse (New Construction) : ~$130+/sqft

-- Semi-Urban (Gentrifying) Townhouse (New Construction) : ~$170/sqft

-- Urban Condo (Average Quality) : ~$180-$230/sqft

-- Urban Condo (New Construction, Low-Rise) : ~$280+/sqft

-- Urban Condo (New Construction, High-Rise) : ~$290-340+/sqft

It's not uncommon to be able to afford a brand new suburban sprawl home here, but no livable permanent housing in the dense urban area, regardless of age.

> By definition? I'm not sure about that. There must be some middle ground between glitzy new condo projects and "the projects"

I want that to be true, but I've never seen a single instance of this in the real world, and I'm drowning in thousands and thousands of examples where this is not true.

Can you point to any real-world examples in the US?

> "the projects", which were also high-rise and affordable.

They were directly heavily subsidized. No one is arguing that government subsidization doesn't reduce those particular residents cost. But the article assumes governments won't be willing to subsidize housing for middle-class residents.

Re: Building affordable housing

#56

Post by Thrillington »

CapitalistCartr wrote: post #39
erentz wrote: post #28

Earlier quoted context omitted.

Where is this? In Seattle the cost of construction is around $250-300 per sqft assuming mid-range quality of materials and a flat(-ish) site. You'd need to spend between $200-$500k to buy a lot in Seattle. So a reasonable 2,000 sqft house is going to be anywhere from 70-50% of the cost.

That's a new house. The weird thing is how often old houses don't sell for much more than an empty lot in single-family home neighborhoods. Although I'm not familiar with Seattle. I've lived in various parts of Florida, Denver (long ago), Michigan, Texas, etc. Mostly Sunbelt.

There's not many vacant residential lots within city limits in Seattle, but the ones out there are definitely cheaper than buying a lot with a home, new or old, on it.

Re: Building affordable housing

#57

Post by baursak »

maxsilver wrote: post #55
baursak wrote: post #52

Earlier quoted context omitted.

> the cost of land + construction jumps significantly Per person? I don't see how. For a 16-floor building, you can easily fit 120 comfortable condos on a plot of land that would otherwise only fit 2-4 single family homes. Yes, the building cost would definitely be higher, but not per household. On top of that, it would be made of steel and concrete, and not plywood, which generally rots and needs to be torn down eve…

> Per person? I don't see how. Yes, the building cost would definitely be higher, but not per household It really is, in every market I've looked at. /u/kchoze goes into this for Canada, but I'll add numbers for my own area in the Midwest US -- Suburban House (Poor, Damaged) : ~$80/sqft -- Suburban House (Average Quality) : ~$100/sqft -- Suburban House (New Construction) : ~$130+/sqft -- Suburban Townhouse (New Const…

Wait, do these numbers include the cost of land in the package or are these just the construction costs? Otherwise, I'm confused about this. My experience is that if there's a single family home sitting next to a tower of condos, the cost of single family home will always be higher than the cost of a single condo of similar quality in the tower, due to the cost of land alone. In fact, many times a 100-year old wooden SFH would still be more expensive than a brand new concrete condo.

Re: Building affordable housing

#58

Post by baursak »

kchoze wrote: post #54
baursak wrote: post #52

Earlier quoted context omitted.

> the cost of land + construction jumps significantly Per person? I don't see how. For a 16-floor building, you can easily fit 120 comfortable condos on a plot of land that would otherwise only fit 2-4 single family homes. Yes, the building cost would definitely be higher, but not per household. On top of that, it would be made of steel and concrete, and not plywood, which generally rots and needs to be torn down eve…

The construction cost of steel and concrete buildings is significantly higher per square foot of floor space than that of low-rise timber-framed buildings. In Canada, the cost of concrete and steel buildings is around 80% more per square foot than the cost of timber-framed walk-up low-rise buildings, and the cost of condos in skyscrapers is a whooping 150% higher than low-rise walk-ups. Here is a source for construct…

> So if you can afford a 400 000$ housing unit, and you assume half of it goes to pay for the land

Why would half of your cost be for land in a high-rise condo? If understand your link correctly, these numbers are construction costs only. My argument always was that value of land is what makes SFHs expensive, not their construction cost.

> A lot zoned for an high-rise building will be worth many times what a lot zoned for single-family houses is worth even if the two lots are adjacent

If a developer buys a plot of land and rezones it for high-rise, they maybe gaining some value from the mere fact of rezoning, sure.

But as a consumer, say in Toronto, if I'm looking for housing right now (and I actually took a brief look at Toronto RE market in the past), available SFHs are as a rule significantly more expensive than condos, especially in the same neighborhoods.

In addition, if you're looking for something not older than 20-30 years, many SFHs force additional extra space on you (an extra bedroom or two) even if you don't need it -- it's very difficult to find a newish SFH with only 2 bedrooms for example.

So yes, in many cases, I'm forced into an apples-to-oranges comparison of a 3-4 bedroom SFH and a 2 bedroom condo, but as a consumer these are the only choices at times.

Re: Building affordable housing

#59

Post by scaryspooky »

_m8fo wrote: post #10
ghaff wrote: post #9

Earlier quoted context omitted.

So what land is your tiny one story home going to sit on (and be connected to utilities)? Of course, if you're flexible where you live such things exist and are called mobile homes.

There's plenty of land in the United States. Maybe it'll sit on some of that?

Many counties prohibit this use via land use regulations defining this activity as camping and providing for a maximum time you may camp on your land. So it is likely not something you can do in a large part of the US.

Re: Building affordable housing

#60

Post by erentz »

ksec wrote: post #47
erentz wrote: post #28

Earlier quoted context omitted.

Where is this? In Seattle the cost of construction is around $250-300 per sqft assuming mid-range quality of materials and a flat(-ish) site. You'd need to spend between $200-$500k to buy a lot in Seattle. So a reasonable 2,000 sqft house is going to be anywhere from 70-50% of the cost.

Is that the cost for house? Do you have any data on building prices per sqft for High rise building?

Yep that's for a house. I don't have any costs for high rises.
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