A bit of a follow-up to my questions from a few weeks ago about the cost of affordable units, and whether 40k per unit was a reasonable reflection of the value of these units in the developer’s proposed pay-out to the city…
Durham is partnering with a developer to build 240 affordable units at the former Police HQ site. The development agreement seems to be collapsing because the developer’s requested subsidy from the city has ballooned by about $17 million since they were awarded the project.
The part that was really interesting to me though is that their requested subsidy for the affordable component is 175k-195k per unit (the higher number includes parking). 40k vs 195k is drastically different, and I wonder if that 40k metric needs to be updated to more accurately reflect the cost of building affordable housing.
On the other hand, I think this number is unusually high because the units are proposed in a standalone 12-story high-rise with its own parking podium, which really goes to show the impact/importance of incorporating units into a mixed-income building that can offset some of the baseline costs, especially if it is a more expensive construction type. It also seems like if you’re going to go higher than 7 floors, you need to go much higher, like we discussed here, because it makes zero economic sense to do a 12 story building like this.