I was listening in to some proposals for building Section 42 Low Income Housing Tax Credit housing the other day. I heard three proposals: the construction cost per unit being proposed was between 400K to 500k.
It is expensive to build in LA, but downtown has luxury condos selling for less than 400K right now. The median price of a house in Southern California is around $275,000. I am all for providing poor people with good housing, but we could do it a lot more cheaply by buying existing houses and renting them out then building new units whose prices are beyond what a median income household in LA could ever expect to afford.
The reason this sort of thing bothers me is because I do think there is a role for government to do things, such as provide education, health care and networks (roads, sewers, etc.). But for this to happen, government must demonstrate that it spends money well. Building "low-income" housing for $400K a unit does not inspire confidence.
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I understand the economics. However, if the lot next door where you currently live was used to build those luxury condominiums before the crash, would you still advocate selling those units to a low-income provider? Or would you rather have these low-income units built somewhere else with a higher tab?
Bob, the NIMBY effect will always be a hurdle, but in this case I don't think it really pertains to the issue. If you have to build low-income units in a location where neighbors won't mind, then wouldn't the real estate values already be depressed?
I'm a conservative who worked for the state for ten years, and my issue has never been that the State shouldn't take my money. My issue has always been that the State already has enough money, they just need to use it wisely. The way our government currently works, money is often allocated based on it's political effect rather than it's real world effect.
Just dump the non safety zoning regs, and the private market will quickly build sub $100k homes that low income citizens can afford. Its keeping build-able land off the market, insisting that only McMansions be built, and forcing builders to construct nearby parks, schools, etc... that make home unaffordable for low income citizens.
Stop the madness already. The taxpayer is broke, and CA taxpayers are more broke than most.
I don't know how long these government policies are going to stay. Even in market, government is creating an artificial uplift of market.
A nice article which explains,how the government spends money in a very unrealistic manner.
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