California housing crisis may lead to economic one

[Elt1]

Madison Park Properties builds high end Class A rentals. No BMRs or affordable housing. The idea that new housing can be built for low income people paying low rents is asinine. Affordable housing is an oxymoron. The poor will have to live in class C housing. Forcing builders to build for them just means fewer housing units will built.

[LbJW]

There is plenty of city or county owned land that could be donated to builders, eliminating 3/4 of the cost to build. Once completed, the homes can be sold to income limited buyers with a lease to make whole the city/county who can wait 30+ years to be reimbursed for the cost of land. If strong resale restrictions are in the lease, you eliminate the speculators and investor class who will try to buy these properties. Since most “affordable housing” are multi-story units and no one wants these in their neighborhood, selling off reasonably sized parcels for "real SFR’s - even SFR Site Condo’s - is possible.

If the city/county for example was to purchase this lot:

https://www.redfin.com/CA/Oakland/0-Ascot-Ln-94611/home/185104900

Waive plan and permit fees, allow up to 10-12 SFR/Detached Condo’s at 1200-1500 SF the deal pencils if your cost to build is $300 PSF ($360k to $450k cost to build, reselling at $500-$600k per unit) you’d end up homes looking something like this:

https://www.redfin.com/CA/Oakland/905-Myrtle-St-94607/home/824948

I’m sure for a 2024 new build in this area, even after adding a $100 per month lease and $100 per month HOA, the numbers work for government, builder, and home buyer. At 5% down at a bought down rate to 4% the cost to own is less than comparable rent for a similar 3/2 SFR

It’s not rocket science to build, but the obstacle is governmental graft (IMHO) that’s stopping any real progress on “affordable housing”.

[Elt1]

Costs are out of sight. $300/sf is ancient history. HOAs are $400 and up. Free land isn’t free. The develop cost of land is a least $100k per lot for utilities cut and gutter drainage streets … not including all the fees like for sewer connections water meters underground work.
I just turned down an investment costing $750/sf.
$200/hr plumbers and electricians. $125/hr for carpenters. Try to find anyone under 30 that wants to work in the trades…

[LbJW]

I’ve seen plenty of HOA’s for SFR/Site Condo’s in the $100-$200 range as it’s all about amenities and insurance. Curious, was that $750 PSF a new build from land or rehab of a pre-existing unit?

As for infrastructure, many infill lots already have single unit water, sewer, and power, and need only to have that pre-existing system expanded. Most new construction here in SoCal is “courtyard/shared driveway” construction which also reduces infrastructure expenses. Here’s a listing in my neck of the woods. Click on Street View as an example of the kind of “streets” these are.

https://www.redfin.com/CA/Irvine/43-Splendor-92618/home/28932551

Yes, $1.29m for a home that backs to what is for all intents and purposes a freeway is insane. Such are property issues here given the amount of off shore $$$ coming in. That’s for another thread of course…

At $400 PSF construction costs using a 1200 SF home, it’s about $480,000 to build. These are simple homes and shouldn’t be all that complex to build. Add another $75k for infrastructure plus $50k per unit profit (8-9% ROI) and it’s still a reasonable way to approach “acceptable” Affordable Housing that is not going to have as much pushback from the neighbors as a 30 unit stacked condo would.

Since sales are going to be done through a housing authority, not Realtors, commissions will not be paid by the city/county reducing expenses. I know once a sign is planted in the ground, the properties practically sell themselves. The buyer can always pay realtor commissions… but I digress…

[marcus335]

I’m updating my kitchen. Contractors are paying $50/hr for cabinet installers. Anything lower and they get idiots that damage the cabinets while unboxing them. That’s not even a skilled trade that requires a license.

[Terri]

@maluka

I thought the proposal is to create a university (or extension of an existing university) in DTSF, not have the students live in DTSF and commute to other places to go to school. It actually makes some sense, if there is enough will to build a new university campus in DTSF. It’s going to need lots of $$$ from the state to get this idea going and it’s a very high bar.

But nobody likes the homeless, drug addicts, and the mentally ill, regardless of what they say about how much compassion they have. Students don’t like them either. As long as these people are still out there roaming freely, there is no coming back.

As a mom who just went through college admissions, this is great idea. Too many college applicants, not enough spots - I’m hearing a lot of BA families are starting to apply abroad.

Not that my son would’ve chosen to go to SF and live there for college, but he did grades 6-12 in SF, so he’s done his time… That said, he will likely end up working in SF.

[Elt1]

I paid $75/hr 20 years ago for a skilled finish carpenter. People that think construction can be built cheap are clueless. We are not in Kansas anymore.