Publish to Newswire
Add an EventFrom the Open-Publishing Calendar
From the Open-Publishing Newswire
Indybay Feature
Berkeley Shows San Francisco How to Address Inclusionary Housing
On Wednesday July 12, the San Francisco Board of Supervisors Land Use Committee will consider long delayed reforms to the city’s inclusionary housing ordinance. The most recent hearing on May 10 was continued pending the completion of a Planning Department/Mayor’s Office of Housing study of the current law, a report whose production has delayed the passage of a stronger affordable housing law for several months. Two weeks ago, the city of Berkeley revised its inclusionary law---long more stringent than San Francisco’s ---in a way that is so smart that one wonders why San Francisco does not follow its lead. The Berkeley reform won unanimous support in a city whose commissioners rarely agree on anything, and if applied in San Francisco would greatly increase new affordable housing units without increased cost to developers.
Berkeley’s inclusionary housing law has always been stronger than San Francisco’s, with the East Bay city requiring developers to provide 20% on-site affordable units compared to its neighbor’s paltry12%. The law also applies to projects of five units of more, which is one of San Francisco’s proposed reforms. But Berkeley Housing Director Steve Barton has come up with an even better idea to increase affordable units---a reform of the law that also decreases developers’ costs.
Barton’s plan works as follows. Assume a developer could sell a condo for $700,000 but under the inclusionary law is limited to a sales price of $200,000. This means that the developer is spending $500,000 so that Berkeley gains a single affordable unit.
That’s quite an inefficient use of scarce housing funds.
To remedy this, Barton proposed that the developer would pay 62.5% of the inclusionary cost (62.5% of $500,000 is $312,500) into the city’s affordable housing fund. This $312,500 would be used by a nonprofit to create three or four new or substantially rehabilitated affordable units.
In other words, Barton’s approach will at least triple the number of affordable housing units produced by the city’s inclusionary law.
More
http://www.beyondchron.org/news/index.php?itemid=3469#more
Barton’s plan works as follows. Assume a developer could sell a condo for $700,000 but under the inclusionary law is limited to a sales price of $200,000. This means that the developer is spending $500,000 so that Berkeley gains a single affordable unit.
That’s quite an inefficient use of scarce housing funds.
To remedy this, Barton proposed that the developer would pay 62.5% of the inclusionary cost (62.5% of $500,000 is $312,500) into the city’s affordable housing fund. This $312,500 would be used by a nonprofit to create three or four new or substantially rehabilitated affordable units.
In other words, Barton’s approach will at least triple the number of affordable housing units produced by the city’s inclusionary law.
More
http://www.beyondchron.org/news/index.php?itemid=3469#more
Add Your Comments
Comments
(Hide Comments)
What Randy is not telling you is that the REAL cost of "affordable" housing is much higher prices for everyone else. Do you actually think the builder is going to lose money? Of course not! He's just going to raise the price of all the other units to pay for the "affordable" units. Under this logic, you might as well move a poor person into every residential building in town. Then, at the first of the month, the poor person can just knock on everyone else's doors and demand a check to pay the rent. That's what "affordable housing" does now. It's a ridiculous scam, and it's costing the rest of us hundreds of thousands of dollars in necessary housing costs. If you want to build housing for the poor, fine. But stop making everyone else pay hugely inflated housing costs to fund it.
Your line of thinking about prices is similar to, but not identical to the 'labor theory of value'. In socialist countries, prices were often set to reflect the number of hours going into the production of a product or service.
However, prices largely determined by what the market is willing to pay. Factors like minimum cost of production would factor much less in a location where the labor price of building a new house or building is already so much lower than the sales price. Prices for houses are driven by the marginal rate of apartment/house vacancy - so the Bay area has extremely high prices because there are enough wealthy people willing to take the vacant units. If the market could bear a higher price, owners already would be asking and getting the higher price. So the median resale of a house in San Mateo County is now nearly $800,000, even though the price of buying stucco and paying construction workers is only slightly higher than in Houston where the house would be $175,000. An owner could not jack of prices due to the cost to him for the vacant unit, because potential buyers would just move on.
However, prices largely determined by what the market is willing to pay. Factors like minimum cost of production would factor much less in a location where the labor price of building a new house or building is already so much lower than the sales price. Prices for houses are driven by the marginal rate of apartment/house vacancy - so the Bay area has extremely high prices because there are enough wealthy people willing to take the vacant units. If the market could bear a higher price, owners already would be asking and getting the higher price. So the median resale of a house in San Mateo County is now nearly $800,000, even though the price of buying stucco and paying construction workers is only slightly higher than in Houston where the house would be $175,000. An owner could not jack of prices due to the cost to him for the vacant unit, because potential buyers would just move on.
We are 100% volunteer and depend on your participation to sustain our efforts!
Donate
$215.00 donated
in the past month
Get Involved
If you'd like to help with maintaining or developing the website, contact us.
Publish
Publish your stories and upcoming events on Indybay.
Topics
More
Search Indybay's Archives
Advanced Search
►
▼
IMC Network