Building Houses Means Fewer Affordable Houses

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• Also give a Bronx cheer to the notion that compelling a developer to give stuff away, as a condition for exercising his rights, creates wealth or lowers the average price.

• If a developer has to sell some of the development at a loss, won’t that mean he will charge more for the other units in the development to make up for it thereby making them less ‘affordable’?

  And isn’t the point of buying houses in a certain price band to ensure your neighbours aren’t riff-raff povs?

  • The affordable units are usually included in a density bonus. If a lot is zoned for 10 units per acre then the developer might get a 20% density bonus to build 12 units with two affordable. This, of course, actually acts to diminish the value of the market rate (errr "unaffordable units"). The project is denser, the units are smaller, and as you suggest, some prospective buyers might perceive the presence of the affordable unit occupants as lessening desirability.

    The developer doesn't really have a lot of ability to simply increase the price as they wish to sell their market rate units. Some projects might pencil out and get built, but many marginal projects or projects that might be ok without the affordable requirement but unprofitable with it are never built. That loss of the lesser projects (which do add housing) is what acts to restrict supply and might push up or support prices of those albatross burdened units that are built.

    As much of what is now permitted to be built are apartment and condo projects, the supply of single family homes remains static, and as those are what many people aspire to live in despite the wishes of planners, they continue to increase in price no matter how many affordable apartments are built because in many areas they just ain't making them no more.

• The galling thing about "affordable housing" is the same as about "fair trade" coffee -- it is anything but fair. In the coffee case, a chosen person gets to sell his coffee beans at above-market prices. In the housing case, a chosen person gets to buy (or rent) her house at a below-market price. Everyone would like to have those benefits, but only the chosen few get them. Who selects the lucky winners?

  • Oh man, it's a process, but basically in order of application assuming their income qualifies them. In addition to factoring in whether it is a one, two, three or more bedroom unit, there are also tiers of what is called affordable: Moderate Income, Low Income, Very Low Income, an of course, Very Very Low Income. The tiers are based on bands around Area Median Income as published for each county, again varying with family size. Believe me, the first time you have to encounter this nonsense and have to deal with it, it's like going through the looking glass. And the people who've developed this are so proud of it. What they don't really appreciate is that their vision for the residents who are lucky enough to be selected is a lifetime of cheap apartment living where they'll never garner a lick of equity of their own. A cynic might call it the progressive keep Mexicans out of nice neighborhoods policy (once the cleaning or gardening is done).

• @TW

  Also, any builder who has one entrance for flat buyers and another for 'social housing' flats is castigated by BBC/Groan

  @TD

  You omitted "illegal immigrants/refugees" go to top and immediately housed

• Presumably, these "unaffordable" houses will just sit there unpurchased, because they're like, unaffordable.