4 ms·
> Many people still balk at the investment required by a CLT — in Houston, the city puts in roughly $105,000 per home. I wonder why $105,000. Looking at Zillow
by wahern 7y ago
> Many people still balk at the investment required by a CLT — in Houston, the city puts in roughly $105,000 per home.
I wonder why $105,000. Looking at Zillow a quarter acre of land in the Acres Home area sells for ~$50-$75,000, and substantially less if you buy a bigger lot. And per the article, banks are providing home mortgages, thus substantially financing construction. Unless they're selling the houses for significantly less than the cost of construction, it doesn't make sense. Even if you had to heavily subsidize risk premium on the mortgage, a $105,000 expense per home seems exorbitant and not sustainable.[1]
I bet costs could come way down if there was some serious money put behind a project like this to scale it up. Singapore, Hong Kong, and other places around the world (often former British colonies, because of smart U.K. housing policies immediately before decolonization) build affordable housing using similar schemes (99-year property lease, transfer covenants, etc), but on a much larger scale. San Francisco could (and should) do this, rather than spend years negotiating over developer exactions for every tiny project.
[1] It would make more sense if most of that $105,000 was recovered on the first sale. But the article calls it a "subsidy", and other context suggests the $105,000 isn't directly recovered.
- thebradbain 7y agoI agree that $105,000 is too high for the area from a cost point of view, but when compared to California’s affordable housing up front capital cost, it looks much more promising ($1 million per unit in this, extreme but unfortunately not too extreme for this state, case): https://www.bisnow.com/los-angeles/news/affordable-housing/affordable-housing-in-california-could-cost-1m-per-unit-according-to-la-times-study-103838#ath https://www.bisnow.com/los-angeles/news/affordable-housing/a... At that rate, Houston metro could get 100 homes for the same price it takes to produce 10 affordable homes in the San Diego metro area!
- cat199 7y agono expert in the topic, but this comparison is only meaningful if compared to the local cost per unit of raw land - land prices in SD metro are probably way higher, esp. compared to this particular part of houston won't try to categorize - take a streetview tour: https://goo.gl/maps/9sEyR9YRRR2EDFND8 https://goo.gl/maps/9sEyR9YRRR2EDFND8 what is clear is that this area is mostly empty fields or pretty poor, with vastly more expensive gentrifying houses popping up in the greenspace. a large area land trust can buy large chunks, preventing speculation on the greenspace from completely removing the existing community subsequently, since community members are part of the trust, they would defacto own all of the local land, guarding against future speculation and ensuring a like-minded voting block w/r/t local property tax policy (which is huge in TX and in practice what serves as the state income tax) so to me the topic is basically like rent control for real estate. whether or not this is the state's business is another topic - interesting that our free market, 'classless' republic is in effect building up a hereditary landowning class though.
- imtringued 7y agoI'm not sure how this is rent control for real estate. The policy only applies to land that the government owns.