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I have always wondered my community (Park City, UT) is spending money to build affordable housing rather then just paying subsidies to make existing housing mor
by jwarden 4y ago
I have always wondered my community (Park City, UT) is spending money to build affordable housing rather then just paying subsidies to make existing housing more affordable. The estimated cost for the last development under consideration was something like $600,000 dollars for one unit, and that was a few years ago. I bought my market-rate condo at under $300,000 a few years before.
There are plenty of lower-cost units available, and subsidizing rent/purchase of these would allow a small benefit to be realized by a large number of qualified people, rather than a huge benefit to a small amount of lucky people who win the lottery that is used to allocate the small number of inits that exist.
- mrep 4y agoPrices are a little higher lately though. I paid $850k for my 650 square foot condo back in march. How big those $600k units?
- Macha 4y agoBecause the population has grown more than supply in most of the western world, leading the existing housing supply as a shortfall situation versus demand that exists. Therefore by subsidising purchases and thereby increasing the purchasing power of each buyer, you just end up removing one limiting factor on sellers increasing prices, and most of the subsidy ends up pocketed by the sellers in the form of increased house prices, which is both inflationary and not the policy goal of these programs.
- jwarden 4y ago> most of the subsidy ends up pocketed by the sellers in the form of increased house prices This is true if the housing supply is inelastic. But the long-run supply of housing services is very elastic[^1]. Also spending money to build housing is inflationary. [^1]: https://www.rand.org/content/dam/rand/pubs/reports/2009/R2846.pdf https://www.rand.org/content/dam/rand/pubs/reports/2009/R284...