If the units cost $250k each, which it seems like everything does these days, then 20 units is Is $5M. DHIC, RHA or someone is financing the new construction of their projects. I just wonder if affordable housing is something that’s better to lease than buy.
The inventory of rentable units is always changing, but it’s there. Planning approvals and construction of a new affordable development can take years. There are new units coming online all the time if you’re using the open market. The other thing I like is that it’s scaleable. If the number of units goes up or down you can adjust what you’re leasing more easily than dealing with a City owned property.
My thought with the long term lease, is that you could lock it in for a decade or more because the prices are always rising. That helps make the units more affordable because the City is getting them at a premium. If it was a new development it could be a major benefit to a developer’s financing to have signed leases for a certain percentage of their new apartment building.
I agree that it would be expensive, but it doesn’t have to be all or nothing. They could add this approach as an affordable housing plan and keep doing what they’re doing. Maybe a pilot program with one of the new buildings coming online. I think that developers might be more open to leasing units to the city for affordable housing than to have to administer the affordable rates themselves and try to get tax credits or eat the difference.
It’s kind of like Kane said, he didn’t know if the pro forma would work with a percentage of affordable housing. Let the City take the debt burden if they want affordable units in a building, and they can help fund it by an affordable housing development fee on the building they’re leasing the units from.