Next Victim in Crashing Market: Affordable Housing

Montrose;

Overwrought prose!

If life is so tough in this city for those at the lower end of the economic ladder, would you please explain why millions of immigrants continue to stream in??

Affordable housing subsidies are another form of a government lottery. They benefit the lucky winners of this lottery, and the bureaucrats who administer it.

If the city were truly interested in making housing more affordable in this city,they would focus on two areas( as outlined in a recent report by the Manhattan Institute):

a) streamlining the Byzantine regulatory process that adds to the cost of building.

b) freeing up land for residential use. There are thousands of acres of land laying fallow in this city, because it is still zoned for manufacturing in the delusional hope that companies will once again locate factories here.

Posted by: benson at November 12, 2008 12:08 PM

Montrose (and others too, like BRG);

One more point. It has become almost a daily staple of Brownstoner to feature a "fugly" house put up by a private builder in moderate-income areas like Bed-Stuy or Sunset Park, followed by scores of posts expressing outrage at the aesthetics.

I would love for these same folks to present a realistic proposal for provisioning affordable housing in this city. Many of you provide daily condemnation of practical and economic realities. Let's throw the ball in your court, for a change.

In a city that already houses 600,000 folks in public housing projects (complete with free parking in Manhattan), that is currently subsidizing the construction of 160,000 units of "affordable" housing, and yet has one of the highest tax burdens in the country (that is driving out the working class), WHAT do you think should be done? Spare me the platitudes - offer up a realistic proposal.

It's great sport to write posts every day telling us that you are shocked, SHOCKED at what those in the arena are doing. How about taking the ball and running with it?

Posted by: benson at November 12, 2008 12:36 PM

BRG;

Wow: Greece- lucky you.

Did you read the report I sent to you? If you did, you would have seen that it stated the following:

-the "hard costs" of building a "wood and stick" building in the outer boroughs is from $125 to $150/square feet.

-the "soft costs" are 25% of the hard costs.

Hence, even if we take the low end of the hard cost range, we are talking about a total cost of $156/square feet, plus land costs, plus the developers profits - if you believe that they are entitled to any.

Unlike many folks in this space, I back up what I say with references.

As I said, I await your practical proposal on the topic.

Posted by: benson at November 12, 2008 1:09 PM

Montrose;

Aw come on, a little criticism never did anybody any harm!! I still think highly of you - you seem to be one of the few serious posters left on Brownstoner (recently alot of threads have degenerated into chat lines).

I'm not asking you and others to supply blueprints. I'm asking you to take a step back and apply some perspective here.

Your post above is too moralistic - and as Dittoburg points out - you are too ready to characterize anyone who criticizes these programs as callous folks who have no regard for the less fortunate.

As I stated above, this City spends an awful lot of resources on housing for low-income folks. SIX HUNDRED THOUSAND folks alone are housed in projects - 8% of the city's population. When is enough enough?? At what point should the private markets take over? Moreover, any attempt by the private market to build moderate-income housing is roundly criticized by you and others on this site, yet you forget that only 10 years ago, folks would have been doing cartwheels at the thought of any private investment in these areas. Why do folks insist on portraying these small-scale developers in simplistic, moralistic terms - yet no judgements should me made about folks who receive housing subsidies from the state? I ask you: what are the obligations of the folks who receive these housing subsidies?

I am also not moved by the argument that working folks may have to commute for -gasp! - an hour to get to their jobs. So what??? As I mentioned in a recent e-mail, I travel often to Japan, where it is the norm for middle-class folks to travel 1.5 hours to work. Why is there such a sense of entitlement in this city? Where is it written in our Charter that everybody should be guaranteed a place to live, at a price they can afford, within 1/2 an hour of work?

Too much utopianism on these threads!!

Have a great day.

Posted by: benson at November 12, 2008 4:07 PM

CMU;

BRG and I were discussing "fedders-style" 3 family housing. Typically these homes have three apartments, each at 1000 square feet. Total space is 3000 square feet. Let's assume the land cost is $70/square feet - which is about right for non-prime Brooklyn neighborhoods- and the developer's profit is 25%. So, now we are up to $260/square feet, which comes out to $780,000 - which is exactly what many of these homes were selling for (or at least they were selling for this amount prior to the crash).
Prior to the crash, someone in the working class could have put down 10% and swing the mortgage with the help of the two rental apartments.

As to why these type of homes are not built more in "infill" sites closer in, you need to remember three things:

-we are talking private development here. In closer-in areas like Park Slope, the developer can fetch a higher price, and will build more upscale housing, accordingly.

-the land prices are much higher in these prime areas, which throws off the affordability equation above.

-the cost above is for "wood and sticks" construction, which in NYC means Fedders-type homes. Can you imagine the uproar in park Slope if such a home were built??

See this report for further details:

http://www.manhattan-institute.org/html/rdr_04.htm

Posted by: benson at November 12, 2008 4:24 PM