How to Make Housing Affordable

Avi Friedman has some ideas of how to make housing more affordable. He says that the focus is too much on the mortgage and subsidies side and not enough on lower building costs.

Friedman was interviewed on Smart City Radio:
"For example, homebuilders can leave sections of finished homes without partitions. This lowers the purchasing price and allows buyers flexibility to expand their living space when they can afford it and when they need it."

"We've become very efficient at building developments - subdivisions - but we failed to know how to build communities," said Friedman."

Thanks to Eric Nusbaum

Full Story: Avi Friedman on Affordable and Sustainable Housing Innovations



Making housing more affordable...

In expensive cities like San Francisco and Seattle, focusing on lower construction costs won’t make an appreciable difference. (It could actually drive up the final cost, as leaving out interior walls, for example, are likely to end up more expensive when installed later.) Leaving out walls or going cheap on fittings and appliances probably won’t result in huge savings to the buyer in any event.

High prices for houses in these cities are in the cost of land. It doesn’t cost a whole lot more to build a house in San Francisco than it does in Kansas City, but a typical 25x100-ft. San Francisco lot, if you can find an empty one, will cost no less than $500,000 in most neighbourhoods, and can easily cost $750,000, $1million or (much) more in the most desirable neighbourhoods.


yes its land cost, but other things as well

SF is a really poor example since our building code is so influenced by extra attention to seismic safety which invariably adds costs

apart from that, time from application to sale adds a significant amount of costs. one part can be attributed to the revisions and costs that come as part of the public review process. another to the fact that investors require returns of more than 20% on their equity contributions, which when combined with the long timelines really drives up the final price.

another point, as far as california goes, is that our home prices capitalize the lower tax rates made possible by Prop. 13 since local governments try (and but seldom succeed) in "making growth pay for itself." all capital improvements that are associated with growth are ostensibly rolled up in mitigation impact fees and paid up front by the developers who, to the extent that the market allows, pass those costs on. i suppose those costs can be set apart from the price of the home and paid through "community benefit district" assessments paid by the property owner, but they have to paid either way whether its the total mortgage payment or through rent.

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