
Building affordable housing - JSoet
http://urbankchoze.blogspot.com/2016/08/building-affordable-housing-where-has.html
======
patrickyeon
The most novel part of that article for me was all the way at the end:

> But what about the existing starter homes built after WWII, aren't they
> still affordable?

> Well, no. The big problem of a starter home is that it's only cheap when it
> is first built, because it is barebone. Once the owners start making the
> house theirs to accommodate the growing needs of the family, the house gets
> bigger and more luxurious. Every addition to the house results in higher
> market value because of increased desirability. So once the original owners
> are ready to move out, the house is no longer a starter home, but a big,
> well-furnished home from which the owner will expect to recover the costs of
> remodeling.

> That is the issue of the "starter home" or "grow home" idea. That home is
> only affordable once, for its first owners. So for every generation to get
> its "starter home", every generation has to build entirely new neighborhoods
> in greenfield areas, where land is cheap. When a metropolitan area matures,
> this ideal no longer works, the greenfield areas are just too far and are
> disconnected from the city. So, what can be done?

Not only is it expensive to buy a home, you can't even buy one cheap that
somebody else got for cheap because they've (likely) made it more valuable by
making it more liveable for themselves!

~~~
elihu
What was novel to me but seemingly obvious now that it's been pointed out is
how the introduction of cars and highways created a vast oversupply of usable
land that previously wasn't practical to build on because workers had no way
to get to their city jobs, and that's a big part of why housing was so cheap
after WWII.

Perhaps the lesson here is that if we want affordable housing, we need better
forms of high-volume transportation that can move people rapidly between city
centers and distant under-developed outskirts.

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CapitalistCartr
In every American city I know, 80%-90% of the cost of an existing home is the
lot, not the house. I don't know how to overcome this, but I understand it is
caused by politics, suggesting it needs a political solution.

When Florida was abuilding like crazy after WWII for the next 25 years, the
lot was usually about 10%.

~~~
verg
If only there were some technology that would allow multiple homes to exist on
a single lot...

~~~
cylinder
That would just be priced into the lot.

People are going to spend 35-50% of their incomes on housing.

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athenot
One thing that I've seen quite a bit in Europe is people buying "unfinished"
homes. They pay a builder to build a concrete structure with a tile roof, and
get it plumbed and wired up to code. But then all the interior finishings (and
sometimes even the doors/windows) are done by the owners, by trading a couple
years of spare time for substantial cost savings.

~~~
tuanx5
I heard about something similar in Chile on a 99% Invisible podcast.
[http://99percentinvisible.org/episode/half-a-
house/](http://99percentinvisible.org/episode/half-a-house/)

------
TamDenholm
I think the lack of entry level housing is a massive reason the tiny house
movement has become so popular. I think people are willing to reevaluate the
space they require to live in so as not to spend a life paying off debt.

~~~
ghaff
Discussion of tiny houses and pod apartments has become popular (not so much
the things themselves) because they offer this tantalizing hope that reducing
living space size will decrease rent/mortgage proportionately.

It doesn't for all sort of reasons.

Basic functional blocks like bathrooms and kitchens can only be made so small.
And once one graduates from college, shared spaces seem a lot less attractive.

------
aplomb
One angle to make housing affordable is to outlaw mortgage products beyond 15
years (along with ARMs), require 20% down, and eliminate the tax deduction on
interest - of course you can't do this overnight.

Housing is a basic necessity and we need to get the rampant speculation and
financialization out - we're all stuck in this game of musical houses waiting
for the music to stop.

~~~
sokoloff
I believe that would decrease upward financial mobility. It still might be a
good idea, but that would be a dramatic drag on home buying, which means
anyone who currently owns rental property would see a sustainable uptick in
demand, keeping a lot of middle class from ever leaving the world of renting.

Mortgage interest deduction being eliminated for owner-occupied housing I
would support a transition to. Loan interest for business expenses [to include
a loan secured by property, aka a "mortgage"] should continue to be a valid
business deduction, meaning that renters would live in buildings that had tax
deductible mortgage interest while owner-occupants wouldn't. If you're trying
to pull the tax support for house prices, this won't entirely do it. I
strongly oppose taking away business loan interest deductions as that harms a
LOT of businesses.

I don't see anything wrong with ARMs. Most of Europe has ARMs as the
standard/normal mortgage product. Interest-only, NINJA/liar loans, ARMs with
introductory discounted rates are more problematic, but there's nothing wrong
with a mortgage being adjustable, IMO.

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tejohnso
Most people talk about land being the main cost barrier, but there are plenty
of other costs that add up to the point where you're better off buying a
standard resale home.

Having acquired land and being accustomed to living in ~600sqft all my adult
life I thought I could build a reasonable living space for about $50,000. Once
I started looking into it I ran into:

    
    
      - land clearing / prep ~$10,000
      - utility hookups and equipment ~$15,000
      - impact fees & permitting ~$5,000
      - foundation ~$5,000
    

Then comes the actual house construction. I was hoping for a company that
would provide a livable shell that I could then improve upon while living in
it. Long story short, it just didn't work out at the price I was hoping for.

~~~
ek750
I'm curious if you would share the additional costs you found beyond the
land/clearing. And what area of the country are you looking at?

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twelvechairs
Of course the other option is rebuilding low scale areas around existing train
stations as high density apartments.

The game has changed for most big cities since post wwii mass housing. Jobs
are more focussed in fewer places and cities are much larger so getting into
the city can be very hard from outer suburbs.

The UK is a good example for thr models discussed. It has been building small
houses for a long time (like 150sqm lots) and have a minimum density
requirement across the country to make this happen (which is also about
retaining farmland in the longer term). Too many too far from jobs though its
exacerbating englands divide between haves (in london and some other places -
large and small) and have nots (in towns and accretions to towns with more
people than jobs)

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elihu
Something I've been thinking about on and off since YC announced their "New
Cities" research project [1] is whether you could create more affordable
cities from scratch in undeveloped land as a sort of speculative public-
interest investment.

Suppose you begin with a large lump of money sufficient to buy at least
several square miles of rural land and to pay for some basic infrastructure
(roads, power lines, sewer, etc..).

At first, you practically give plots of land away to anyone willing to build a
house. (Since it's rural, there's little reason to be there unless there's
some critical mass of people already there.) Then, as people start moving in,
you can raise the price of the lots to recover some of your initial investment
and pay for additional infrastructure. Eventually, you should be able to sell
lots at far more than the original land cost and recover your investment. This
might also spare residents from having to pay taxes until the city is fully
grown and there are no more lots to sell.

Some thoughts:

The new city should ideally be near at least some neighboring town with
schools, stores, a hospital, and so on to make bootstrapping easier.

This would be an easier sell both to county government and prospective
citizens if it were managed by a non-profit institution that is contractually
obligated to re-invest profits back into the city. This could be similar to a
normal city government, except that in this case the city starts off by owning
all the buildable lots.

Partnering with a University that wants to build a new campus on cheap land
would be ideal.

Figuring out the right amount of land to buy up-front would be difficult. Too
much and it's too expensive and you never sell it all, too little and you'll
end up having to buy more adjacent land later at steeply inflated prices or
let some other developer buy it and let them absorb all the profits without
re-investing it back into the city.

[1]
[https://news.ycombinator.com/item?id=11987032](https://news.ycombinator.com/item?id=11987032)

------
tabeth
Tiny homes are 150 to 250 square feet homes that that can be built anywhere
from ~$20,000 to ~$50,000. The person who figures out how to mass produce
these houses (each one is only about maybe the size of two RVs) for ~$10,000
will change this world.

~~~
baursak
In places were housing is expensive, land will be the majority of the cost. In
places where land is cheap, housing is already not expensive.

The way to affordable housing is high density, mid-to-high rise condos.

~~~
maxsilver
> The way to affordable housing is high density, mid-to-high rise condos.

How though? Density sounds good on paper, and has tons of side benefits, but
(as the blog post explains) the cost of land + construction jumps
significantly.

I know here in the US, there basically is no such thing as "affordable high
density condos". High density urban housing is expensive, by definition. So
much so that there isn't a single unsubsidized affordable high-density urban
housing unit in my entire state.

The only place I'm aware of that has affordable urban housing is Japan. And
that's mainly due to a combination of having no meaningful population growth,
and having excellent public transit literally everywhere. Two things the US
simply can't have in our lifetime

~~~
baursak
> the cost of land + construction jumps significantly

Per person? I don't see how. For a 16-floor building, you can easily fit 120
comfortable condos on a plot of land that would otherwise only fit 2-4 single
family homes. Yes, the building cost would definitely be higher, but not per
household. On top of that, it would be made of steel and concrete, and not
plywood, which generally rots and needs to be torn down every 50 years or so.

> High density urban housing is expensive, by definition.

By definition? I'm not sure about that. There must be some middle ground
between glitzy new condo projects and "the projects", which were also high-
rise and affordable.

Much of Eastern Europe, lots of Western Europe, former USSR, etc., all have
relatively affordable housing.

~~~
kchoze
The construction cost of steel and concrete buildings is significantly higher
per square foot of floor space than that of low-rise timber-framed buildings.
In Canada, the cost of concrete and steel buildings is around 80% more per
square foot than the cost of timber-framed walk-up low-rise buildings, and the
cost of condos in skyscrapers is a whooping 150% higher than low-rise walk-
ups.

Here is a source for construction costs for major metropolitan areas in
Canada: [https://t.co/18FwgkSlWY](https://t.co/18FwgkSlWY)

And here are some figures.

For Toronto:

House (medium quality): 120-240$/sf

Walk-up low-rise apartment (medium quality): 100-150$/sf

Residential condos (medium quality): 180-240$/sf

Point towers, 40-80 stories (medium quality): 230-310$/sf

For Vancouver

House (medium quality): 165-225$/sf

Walk-up low-rise apartment (medium quality): 155-180$/sf

Residential condos (medium quality): 205-250$/sf

Point towers, 40-80 stories (medium quality): 270-355$/sf

For Montréal

House (medium quality): 125-180$/sf

Walk-up low-rise apartment (medium quality): 100-155$/sf

Residential condos (medium quality): 150-180$/sf

Point towers, 40-80 stories (medium quality): 250-355$/sf

So if you can afford a 400 000$ housing unit, and you assume half of it goes
to pay for the land, you could get a house with about 1 500 square feet of
space, a similar sized condo in a low-rise, a 1 000 square foot condo in a
concrete mid-rise or a 650 square foot condo in an high-rise.

Yes, high-density housing options lower the amount of land per unit, but at
the same time, zoning for higher density tends to rise the cost of land. A lot
zoned for an high-rise building will be worth many times what a lot zoned for
single-family houses is worth even if the two lots are adjacent, since the
land value is proportional to the potential revenue of development, so the
bigger the development, the higher the potential revenue, the higher the land
value.

~~~
baursak
> So if you can afford a 400 000$ housing unit, and you assume half of it goes
> to pay for the land

Why would half of your cost be for land in a high-rise condo? If understand
your link correctly, these numbers are construction costs only. My argument
always was that value of land is what makes SFHs expensive, not their
construction cost.

> A lot zoned for an high-rise building will be worth many times what a lot
> zoned for single-family houses is worth even if the two lots are adjacent

If a developer buys a plot of land and rezones it for high-rise, they maybe
gaining some value from the mere fact of rezoning, sure.

But as a consumer, say in Toronto, if I'm looking for housing right now (and I
actually took a brief look at Toronto RE market in the past), available SFHs
are as a rule significantly more expensive than condos, especially in the same
neighborhoods.

In addition, if you're looking for something not older than 20-30 years, many
SFHs force additional extra space on you (an extra bedroom or two) even if you
don't need it -- it's very difficult to find a newish SFH with only 2 bedrooms
for example.

So yes, in many cases, I'm forced into an apples-to-oranges comparison of a
3-4 bedroom SFH and a 2 bedroom condo, but as a consumer these are the only
choices at times.

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kevinburke
Here's one proposal for affordable housing in San Francisco: modular units
that are extremely cheap to assemble and can be combined into a much larger
building.

The developer can have them here instantly and wants to build on a plot near
Cesar Chavez and rent to the city. The city's not interested because the
buildings are not built here and they'd be a little more expensive than
existing SRO's.

[http://sf.curbed.com/2016/10/31/13481254/micropad-tour-
patri...](http://sf.curbed.com/2016/10/31/13481254/micropad-tour-patrick-
kennedy-prefab-homeless)

~~~
jseliger
The problem in SF is not the cost of physical building itself. The problem is
zoning, permitting, legal, harassment lawsuits, etc.:
[http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o...](http://www.theatlantic.com/magazine/archive/2007/11/a-tale-
of-two-town-houses/306334/). Or see [https://techcrunch.com/2014/04/14/sf-
housing](https://techcrunch.com/2014/04/14/sf-housing).

Fixing the problem is almost entirely about regulatory / legal issues.

~~~
kevinburke
I guess that's why I left that comment: solutions exist, the problems are more
about political will.

------
nextos
We need more industrial solutions to housing. Cheaper, more efficient and
better quality. Something like
[http://www.kodasema.com/en/](http://www.kodasema.com/en/)

~~~
Kluny
That website is awful. Is it yours? A bunch of links are dead and the auto-
playing video made me seasick. I was trying to figure out whether there's a
model with a double bed or you're just supposed to stay single forever, but
gave up.

~~~
nextos
No, it's not mine!

I agree it's quite broken. But I still love their house design and concept.

