"Affordable Housing": how developers are fooling you...
Nobody in their perfect mind would be against the idea of affordable housing ! OBW too believes in inclusion and diversity ! But...
Here is the reality: if we allowed, for example, two units to be developed where there used to be one single-family house before what would happen? First, nobody would ever argue that each of the new units would be sold for more money than the unit that was demolished. Let's say that the first property - the "old" house - cost 600K. Therefore the land cost to the developer in the new ones would be 300K per unit. if the new units were 2,500 sq. ft each at a constructions cost of $200/per sq. ft, then each unit would cost 500K. With these figures - cost of building and cost of land - each unit would now cost 800K. But wait: this is not all. Of course not! if the developer adds a nominal profit of 15% (very conservative estimate), then each unit would be priced at $875.
Is this really affordable housing ?
Read More: "Selling Density and a means to affordability is Vancouver's Myth" (Globe and Mail - April 17,2015)
Here is the reality: if we allowed, for example, two units to be developed where there used to be one single-family house before what would happen? First, nobody would ever argue that each of the new units would be sold for more money than the unit that was demolished. Let's say that the first property - the "old" house - cost 600K. Therefore the land cost to the developer in the new ones would be 300K per unit. if the new units were 2,500 sq. ft each at a constructions cost of $200/per sq. ft, then each unit would cost 500K. With these figures - cost of building and cost of land - each unit would now cost 800K. But wait: this is not all. Of course not! if the developer adds a nominal profit of 15% (very conservative estimate), then each unit would be priced at $875.
Is this really affordable housing ?
Read More: "Selling Density and a means to affordability is Vancouver's Myth" (Globe and Mail - April 17,2015)