A recent article in the Wall Street Journal titled “Private Developers Reject Public Funding for Affordable Housing” discussed some costs associated with the construction of affordable housing The general takeaway was that it was less expensive to build housing without the government’s help. The article focused on California.
Some interesting numbers from the article:
- One company is building an “affordable” housing project for $291,000 per unit without government assistance.
- In Los Angeles, approximately 4,500 “affordable” housing apartments have been constructed, with public funding, for about $600,000 per unit. This is more than twice the amount per unit constructed without public (taxpayer) funding. Doesn’t such a stark difference in costs raise questions about the affordability of public-funded housing?
- Last year in San Jose, it cost $939,000 to construct an affordable housing unit. This is more than three times the amount per unit constructed without public (taxpayer) funding. According to Redfin™, the median price of a home in San Jose in February 2024 was $1,290,000. And this is for a house. With land. Huh?
Why the differences? Public (taxpayer) funding adds numerous layers of onerous burdens on the process that significantly increases the cost. The process is like Audrey II from Little House of Horrors, who constantly cries, “Feed me, Seymour.”
In addition to these, the Public (taxpayers) will also foot a significant portion of the rents that subsequent tenants will pay, via tax credits, direct payments, etc.
And this is considered “affordable?” For whom?
As Ronald Reagan said, the nine most terrifying words in the English language are “I’m from the government, and I’m here to help.”