Why Is 'Affordable' Housing So Expensive to Build?
I was expecting something else...<p>Let&#x27;s be frank, affordable housing typically isn&#x27;t expensive. Construction costs around the country and indeed the developed world aren&#x27;t too far apart. In the US it&#x27;s about $100-200 per square foot, in Western-Europe it&#x27;s €1000-1500 per square metre.<p>The problem isn&#x27;t really in construction, typically. Of course, there&#x27;s always room for improvement everywhere, in construction too. But the big culprit are land prices. Take the Mission, they quote units costing $600k each, not affordable housing. But you&#x27;re talking about a place where you need to pay $1.5m to just buy the piece of land on which you then build three small $100k units, for an average of $600k each.<p>Completely different story from the $100k unit in &#x27;Portland&#x27;, which was actually Gresham, east of Portland, where the average square foot price to buy land+home is &lt;$200. Oh and the units were 375 square foot... $100k is expensive, if anything. The author completely ignores the market realities, again, mostly of expensive land prices.<p>And this creates the debate as to whether we should subsidise such housing. After all, if you put the same quality house in another city with cheaper land, you could build 4x as many homes, or twice as many that are twice as big or twice as luxurious. Why should we subsidise a fraction of our poor people to live in the most expensive place on the planet with public money that could go towards helping a larger fraction of people?<p>That&#x27;s a though question to answer, I find... and I struggle with it, especially because I&#x27;m one of those guys who&#x27;s in favour of these subsidies. Economic segregation is damaging in many ways, plenty of sociological studies have shown. It&#x27;s important to keep our cities accessible to everyone and create a healthy mix of people from all socioeconomic backgrounds, as opposed to rich enclaves and poor ghettos. But, finding the balance is hard. I don&#x27;t live in the US but we have similar problems here in Western-Europe with subsidised housing, at the end of the day it&#x27;s an issue of land prices skyrocketing, it doesn&#x27;t have as much to do with construction costs as we tend to think. And it&#x27;s really hard to find the right balance of using public money to buy expensive land for a small group of people.