Very Expensive Affordable Housing
In my post Affordable Housing is Almost Pointless, I highlighted how point systems for awarding tax credits prioritize DEI, environmental features, energy efficiency, and other secondary goals far more than low cost. A near-comic example comes from D.C., where so-called affordable housing units now cost between $800,000 and $1.3 million dollars each!
One such unit includes a “rooftop aquaponics farm to produce fresh fruits and vegetables for its tenants.” Another boasts “a fitness room to encourage physical activity, a library, a large café with an outdoor terrace, a large multi-purpose community room with a separate outdoor terrace, an indoor bike room, on-site laundry, lounges and balconies on every floor.”
The issue isn’t that the poor are getting better housing than many working-class D.C. residents. It’s that, with finite resources, the city could fund twice as many units at $400,000 than at $800,000. Secondary goals have overwhelmed affordability.
“There’s the desire of policymakers to ensure that affordable housing meets lots of other goals,” said Carolina Reid, an associate professor at the University of California at Berkeley who studies affordable housing costs. They tend to be worthy goals, she said, but they drive up costs, which results in fewer affordable housing units being built for those in need.
A report released in April by the nonprofit research organization Rand similarly said “unprecedented cost increases” in recent years have been due “in large part to the adoption of policies that prioritize factors other than the efficient production of affordable housing units.”
Of course, as costs rise, various groups along the way also get their slice of a bigger pie.
The kicker? Market-rate housing is cheaper to build than affordable housing!
Next door, the same developers built the Park Kennedy, for mostly market-rate tenants, at a per-unit cost of about $350,000, records show.
This is one reason I much prefer housing vouchers, aka Section 8, to government subsidized “affordable” housing.