Rob Zaleski’s Cap Times article yesterday called Downtown Quickly Becoming a Land of Luxury
was one of those articles where you read the headline and think, “duh” or “where have you been?” But it was a good article.
The Tenney Lapham and Marquette neighborhoods have been trying to push back on developers and ask them to build “workforce housing” in our areas. Build the units smaller but with efficient use of space, use green building techniques that help the occupants save on energy costs and have a variety of housing options so young single workers can live downtown as well as families. Less luxury, more practicality. But I have to say, it seems impossible and there seem to be several factors contributing to the high priced housing.
Is it the cost of the land? Sometimes, but sometimes not. If they’re paying $3o,000 – $50,000* per unit for the cost of the land, that’s cheaper than out in sprawl land ($50,000 – $78,000*). Granted, some developers overpay, but who’s fault is that? If the developers refused to pay ridiculous prices, what would happen?
Is it the parking? Underground parking stalls, depending upon how deep into the ground you go, can cost $20,000 – 35,000* or even more. In many cases that probably costs more than the land does since very few, if any, developers will only build one parking space per unit.
Is it TIF? One of the ways for the City to have to give the developers less money, is to make them sell the units for more money. Or at least predict that they will sell for more money. Unfortunately, that means then the developer has to figure out how to get more money out of the units and there goes any hope of affordability.
Affordability isn’t easy, even when you’re working with a developer who is trying to do it. I’ve seen some folks try, but we still end up with $200,000 1-bedroom condos. At those types of prices, few young families are ever going to be able to move into these units, because the three bedroom units end up being around $350,000.
And, it seems to make IZ all the more important. The current prices for owner occupied homes are as follows:
1 bedroom: $113,000 (70% AMI) or $130,000 (80% AMI)
2 bedroom: $136,000 (70% AMI) or 156,000 (80% AMI)
3 bedroom: $157,000 (70% AMI) or $180,000 (80% AMI)
(Remember: these prices are for houses, if its a condo, you need to adjust the price for the condo fee, so the price would be even lower than these if there are condo fees.)
Seems the IZ ordinance is serving a purpose, to make housing more affordable than the market will provide, despite all the criticisms.
*The numbers I used above are based on discussions with some developers, who may or may not have had an incentive to skew the numbers one way or the other.
