A Los Angeles Times journalistic investigation revealed that as affordable housing demand in California is rising, some subsidized projects in the Northern region cost over $1 million per apartment to build. Moreover, although the value for low-cost constructions in Greater Los Angeles has not reached that high-priced level, the newspaper says it's becoming more expensive.
So, it will be harder to house the growing numbers of low-income Californians who need to pay rent in the short or medium term.
According to the #LATimes, some housing developments, mainly in the Bay Area, received state funding in the past two years to build homes for more than 600 families, but if prices were lower, taxpayers could subsidize more constructions.
The newspaper's investigation shows it is urgent to reduce the cost of building affordable housing while the new low-priced homes should be available in the shortest term possible. The Los Angeles Times emphasized that low-income housing has more stringent environmental and labor standards than private developments, like high parking requirements, lengthy local approval processes, and a "byzantine bureaucracy" to secure financing.
Worker shortages and construction materials prices that soared during the Covid19 pandemic have also contributed to the inflation rate in real estate developments. Furthermore, the “14% of the price tag for California’s affordable housing projects was made up of consulting fees and other administrative costs — the highest in the country and more than developers spend on land,” the newspaper said.
Consequently, the current financing model is not sustainable. Assemblyman Tim Grayson (D-Concord) has proposed various legislation bills to simplify state affordable housing financing, but they are not approved yet. 🏡