High Cost of Government Housing

This article discusses San Diego ’s efforts to supply subsidized housing, and it focuses on the cost problem. The article discusses projects financed by a combo of the LIHTC and other programs, which is apparently called a “funding lasagna.” But a “subsidy lasagna” might be more accurate.By any measure, the city government ’s efforts to help low-income families are far behind the demand for subsidies, and losing ground.High cost has been a major factor. In recent years the public has paid luxury price tags for a handful of subsidized construction projects, draining money to build more apartments.“They are building Cadillacs,” said Alan Nevin, director of economic and market research at Xpera Group, a building-industry consulting group.This outcome flows from a system that evolved over years to build projects whenever public money pops up, and isn ’t necessarily focused on reducing costs or producing the maximum number of apartments.…The most extreme example of high-end cost is found in Barrio Logan, according to figures provided by the San Diego Housing Commission.Operating under a city contract, developers spent $46.2 million from federal, state and local sources to build 92 apartments at the Estrella del Mercado on National Avenue, which was completed in 2012. That works out to $502,000 per apartment.…Setting aside the Mercado project, price tags of $400,000 per subsidized unit in new complexes are the rule lately, particularly downtown. This places pu...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs