In the conversation about the lack of housing supply, and more importantly the lack of affordable housing supply, in the Bay Area and Alameda the common refrain from folks who would rather not see any development at all, but want to appear to be empathetic to the plight of the overextended and underhoused is that all housing development should cease unless it is of the affordable variety.
Of course that sounds great on paper, but when you drill down to specifics like “how are you defining affordable?” Or “who is going to pay for the affordable housing?” The soundbites are a bit less forthcoming.
But one of the solutions I’ve read and heard recently is that for profit developers should pay for building affordable housing and they can, if they are willing to take smaller profits. Now that may be true in regions that have way less regulations and red tape as well as cheaper land prices and construction costs than Alameda and the Bay Area in general, but mostly that supposition is based on nothing more than someone’s gut instinct.
Very recently there was a study done by the Joint Center for Housing Studies at Harvard University which performed a much needed case study on for profit housing development of affordable housing. Affordable housing is defined as for families earning less than 60% AMI. Th big takeaway was it’s really complicated to build affordable housing for both non profit and for profit developers, but even for for profit developers there is a need for significant public and private resources.
In fact in the case study of a large for profit affordable housing developer this was the conclusion:
More on the study later.