Yup. That’s probably why the Chicago Housing Authority has been demolishing all off its stock of mid-twentieth century, high-rise, gallery-style public housing.
I can’t speak for all the AH communities, but Raleigh Housing Authority does a great job with Capital Park.
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JJ Walker would agree. Even an 80’s sit com spoke to the lack of maintenance to these buildings. It’s not just the initial investment that must be committed to, ongoing costs must be committed to.
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Here’s an example of an entire building dedicated to affordable housing. Notice that it’s a mix of ways to describe what affordable housing means. Of the 160 units, 11 are considered public housing while the others are “affordable” or “workforce” housing.
This building is clearly being built in a more affordable manner when you compare it to the new, oftentimes over-the-top, luxury towers. Its form is more mainstream high density Miami construction. Also note that the building is being built on county land. In the end, this is an example of taking a public land resource and engaging one of the most prolific luxury residential developers in south Florida. Maybe this was a part of deal that the city/county made with Related in exchange for something that they wanted to do elsewhere? I can imagine that the city/county offered to approve another development if the developer committed to developing an AH building for them elsewhere. As to the location, this building is being built along the Miami River in a gentrifying area: assuring that 160 units will be available to those who might otherwise be displaced from their community during the gentrification process.
Picked from the comments is this nugget of info. that would seem to be important to understand.
“Affordable” means affordable for a family making <60% AMI and “workforce” means affordable for a family making between 60% and 140% AMI"
FWIW, Miami’s average incomes are much lower than Raleigh’s, while Miami’s market rate housing is much more expensive.
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I was wondering if there were any recent examples of innovative public-private partnership for affordable housing. I never would have thought one would come out of Miami!
I moved to Raleigh from Miami in the midst of the 2006 housing insanity. Despite growing up there, I realized at that time that I’d never be able to afford to buy a place in a neighborhood with the quality of life I was looking for (I’d have to trade walkability for a hellish commute), so it was time to leave. It’s nice to see a tiny bit of progress, especially in a place that has little use for people with lesser means.
I’m interested to learn the mechanism behind making this happen, because there had to be some form of carrot/stick.
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Agreed. The article, and what I know about Related and local development in Miami, reeks of some sort of carrot/stick backstory. I’ll see what I can find out.
Miami has been a huge surprise to many people in the last ten years. After the housing bust/financial collapse, Miami was left for dead by many, many people. The narrative was that Miami wouldn’t see any development for at least 20 years. 2008-2012(ish) was rough for Miami as buildings sat dormant and vacant as all of the financials were hashed out. However, once the floodgates were open post 2012, and these distressed luxury buildings were put on the market in a fire sale, the development floodgates were opened. It’s been nuts ever since.
If I were Related, I’d be pretty happy with that deal. Only $400k as a one time payment, $40k a year in property rent. Say rent per month on average is $1,000, that’s $160k in income per month against $40k in, net of $120k or ($1.5M ish per year, over 75 years). Let’s say it costs $50M to build and the rent is increasing at 4% a year. Once it’s finished building, the net present value on that income stream, assuming a 5% discount rate, is ~$73M, a profit of ~$20M off an investment of $50M that’d payoff in however long it takes to build and sell (probably 3-4 years?). That looks pretty good. This is also not counting the significant tax benefits that they (or whoever ends up owning the property long term) probably will be receiving as part of doing this.
First of all, if you could live in new construction in that location for only $1000 a month in rent, you’d kiss the feet of the person who gave it to you. Miami’s rental market is VERY expensive, especially given its low average incomes. What’s saved by not paying state income tax is more than made up in higher rents for residents. More expensive construction types (concrete, hurricane glass) drive up costs of housing, and non-homesteaded property taxes get passed along to renters. Whatever mechanism can be put in place that benefits working class families and the poor, I’m all ears.
Plus, you can’t even imagine the feeling of security that being in a newly constructed building with ones residence above flood levels can bring to people during hurricane season.
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True, so the math could look even better than assumed for the developer if rent can be charged even higher.
It could be, but if rent needs to be affordable based on the “affordable” and “workforce” metrics previously provided, the rents will have to remain much, much lower than the current market.
Sure, but even at $1,000 the math looks great, and the if affordability measures are actually higher than that. Then it’s even better. The key is really the underlying land cost and lease terms, they are getting it at a cost of a rounding error. When it comes down to it, it really is a simple concept, you offer to make the valuation / discounted cash flow equation look attractive, developers will build. Now the political environment / will to execute that, that’s a completely different story.
Very well said. That thought has run across my mind reading threads here. @daviddonovan @dtraleigh have some good ideas for moving the discussion forward. Interested to see where it goes
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Really interesting/crazy stuff on affordable housing came up in the GNR committee today. Essentaily DHIC wants to build affordable senior housing units, but needs to rezone the land to get the units for it to make sense.
This was to be done in David Cox territory and he did not like what he was seeing. There were two people giving comments who actually were okay with a gas station instead of affordable housing for seniors…
Then Cox did not like the buffer set up and asked that it be kept 100 feet instead of 70 feet with parking making up the last 30 feet. The planned said they could not do that because they would either need to take away fire truck access to all the building or reduce the affordable units. Cox decided they should just go figure that out. Mendell and Crowder seem reasonable then just give into him.
So affordable housing is REALY IMPORTANT until it rubs up against something else that the “community” wants.
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I like how Cox says that the 100’ buffer is reasonable given “the area hasn’t changed that much” yet fights for “relief” for the neighbors because there has been so much growth here.
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Look at all that growth around 5001 Spring Forest Road.
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Yeah. That site is near my home. There was initial talk years ago about it being a Kroger. Then, nothing.
My concern would have been about that area being a speedway on Louisburg Road. Heaven help any senior that would want to cross Spring Forest to go to the Food Lion.
But, it’s illustrative about the established neighboring housing stock. Lots of 1970’s-era ranch homes all zoned R-4. Try to move something higher density next door, then the complaints come rolling in.
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That first speaker form the video…
I saw a RPD squad car cream a pick-up truck that was pulling out of that food lion onto 401 a few years ago. Cop was probably going about 70 mph in the right lane, T-boned the truck on the driver’s side. I hope that driver or his family got a nice settlement from the city.
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WRAL has posted an article on this as well. It appears this tower will include less affordable housing than Kane’s phase III?
“The affordable housing would be 20 units or 10 percent of the total number of residential units in the tower, whichever is greater, and would target households earning 80 percent of the area’s median income. The units would remain at below-market rates for at least 15 years.”
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