>Average US household income is under $3000 after taxes
>Average rent price in America is over $1000
/biz/, could you take a break from laughing at underemployed non-STEMmers for like 10 minutes to build them affordable housing?
I feel like this is a massive market opportunity. A shitload of college grads every year are taking shitty jobs and have too much pride to live with their parents so they pay upwards of 40% of their monthly income to rent a nice metro apartment so they don't have a long commute.
I feel like we could relieve some of that by buying up plots of land still within a reasonable distance but maybe a little further along but not making them luxury condo hyper luxo expensive faggot shit.
So what do you say, /biz/? Affordable housing for recent grads? Could it be done?
*I don't know jack shit about development
Google "tiny homes" , now. The floorplan doesnt work if you just stack em up. It goes from cutesie alternative to suburbs to janky prison cell.
But if you did little "mini neighborhoods" toss like 4 to 6 on an acre and give them a little yard. Boom
Sounds like a favella to me.
Why can't we just not speculate on real-estate prices?
There already are thousands of apartment complexes sort of close to metro areas that aren't luxury at all. They just happen to charge $2k/month because that's the value of having a not-too-long commute.
Your idea's already been done for decades and they're charging premium rates.
I work for a development firm in DC and this idea has actually been tossed around a lot by millennials and there are a few glaring problems from a development standpoint.
1) Its cheaper to build luxury, expensive apartments in most metro markets (Highest expenditure is land. Labor is a high cost as well but the difference in luxury vs basic when contracting a construction firm is not as drastic as you would think).
2) There are still building codes and the practicalities of stacking numerous small apartments on top of each other. Some cities (like DC) have height limits, some projects have architectural limitations, building high also doesn't always translate into saving money in the aggregate.
3) going back to #1, the "its cheaper to build luxury" is based off of the tenants you can attract. Currently in most metro markets we are seeing younger people who shun home ownership and want something sleek and nice. Its easy enough to add granite countertops and a marble awning with a 2 foot deep community pool to attract buyers that will spend 40-60% of their income on rent.
4) demographic shifts: in metro markets almost all construction firms are pursuing up-market projects in the 50,000-100,000 income bracket, whether that be new complexes or renovations. As long as the demand is there (plenty of young college grads moving to the city) than it isn't really a concern whether or not tenants like paying 50% of their income, its more a concern of will they (and believe me, most will).
Lack of affordable housing is abundant, not just because it isn't being built, but because the few units that remain have rent being pushed up because of the insane competition for affordable units. Even if every luxury apartment complex needs to include a few affordable units, the competition to get into these units is fierce.
So if you wanted to build affordable small apartments (I won't consider tiny houses because Im talking about metro-area dwellings), there are a few routes that I could see:
1) Housing project (tower style): probably wont work because we tried this in the 80s when inner city poverty was much bigger. It left a bad taste in the governments mouth
2) Converted industrial zoning to residential: Has worked in a lot of cases but these typically are warehouses converted to lofts and become hip pretty fast so rent rises exponentially
3) Cut costs in maintenance: I'm not a engineer or a scientist but there has got to be ways for a creative person to cut costs in building maintenance. Right now luxury apartments bear the brunt of maintenance costs much more efficiently than affordable housing (especially if its a lot of units) but the cost of maintenance is a big reason a lot of developers don't like the idea of a shitton of small affordable units.
4) More government affordable housing ordinances: I think this is almost always a bad way to go. It forces developers to set aside a percentage of units below market rate but what it encourages is avoiding construction projects, paying fees to not include affordable units, and in my experience actually raises the cost of rent in areas (other income brackets usually end up eating the cost).
All I know is that house prices in metro markets are going to get worse before they get better. The demand for metropolitan housing is getting out of control and with millennials it will get worse. I would suggest living cheaply in areas that younger people shy away from (boring suburbs with access to decent job market, maybe even rural areas).
My personal opinion is that if you can think of a really great idea to fix this problem go for it, but the idea that millennials have that they NEED to live in a metro area is in my opinion very cyclical and could easily change, bursting the bubble on luxury condominiums.
You are right in assuming that most young people want to live close to job opportunities so they don't have a long commute, but what if the commute becomes easier to deal with? I see cities working on better transportation grids, companies making more efficient cars, and the eventual proliferation of driverless cars and to me that indicates that people are going to be willing to deal with a longer commute in the future, not a shorter one.
This opens up more options for an affordable style community where land is cheap yet there is enough going on to attract young people. I like the tiny house neighborhood idea and think that it could realistically work in some key suburbs with enough residential or converted agricultural/industrial acreage.
>senior in uni
>look over at girl next to me in class on her laptop
>she's looking at apartments in NYC
>4500 a month for a 2 bd
>mfw I am considering living with a roomie in a 800/month rental (different city) to pay off my student loan faster
>we have the same major from the same uni, probably in for similar salaries
Normies are just retarded with money, is all. There's plenty of affordable housing, and even so, just minimize all your other expenses like phone bills, insurance, eating out, etc. I live pretty well on less than 10k a year.
You don't HAVE to live in one of the most expensive cities on the planet. 99% of the country has affordable rentals. NYC/SF whining about rent is just another entitlement complex. So move somewhere cheaper. (Actually don't, please stay contained in your megapolis shitholes.)
Multiple one bedroom studio apts (with your own bathtub)/with common areas to substitute for living rooms. I'm thinking something similar to sad Japanese apartments that have a mini fridge and two stovetop burners. Too bad all it will attract are poors and not college grads. Theres rent discrimination laws, isn't there.
>there has got to be ways for a creative person to cut costs in building maintenance.
You do that before the building is constructed, during the design phase. Buildings with simpler design have lower maintenance costs. Pic related is a good example: all areas of the building are easy to access without the need for scaffolding or tall ladders. Easy access equals easier maintenance.
Anon there is a reason why no new shit gets built.
It's in none of the existing people's interest to see more housing built. Nobody on any of the boards you need approval from gain a thing from you building more houses. They in fact lose value in their houses they paid out the ass for or are heavily invested in. Every single bureaucratic step along the way requires paying a lot of people a lot of money to get anywhere, at which point your affordable housing is either a total loss for you or no longer affordable.
This anon has it exactly right.
Housing is expensive primarily because of location, not because of the building put there. If you want that prime location housing to be affordable you have to build more appealing housing elsewhere and mitigate the value of the location. As mass transport services get better and better you'll start seeing more people realize they can live nicely in the suburbs and commute to the center of a city with minimal hassle.
Hi developer anon, I'm also working for a developer but in Asia. Can I ask your background, position and income range? I'm looking to move back to the US and have no idea if I am in demand.
Architect with urban planning and sustainable dev background, Msc X 2 and less experienced than my age suggests. Any info on your background and how you got into the job and/or what your daily tasks are would be much appreciated.
FYI, your spot on the issues are economics of land premiums, construction costs and often regulations. Internationally this is an issue as well. We only do mass market when we have too much land in rural areas and build a fucking city, never on infill metro area land.
im surprised rents in DC are decreasing, it's amazing though that no one will live in PGC, despite the fact it's dirt cheap and has lots of metro access.
IT somehow manages to combine the worst aspects of suburbia with the worst aspects of "urban" environments (poor people) and serve it up on a platter covered in shit
Isn't DC a terrible place to live with high crime outside of the places where cops are on every corner?
I'd not want to live there for the costs with the potential to get capped in the city with the strictest gun laws in the nation.
On a more relevant note to address your surprise at decreasing rents, I think a lot of places are trying to capitalize on internships. Students move down there for internships and a lot of them pay their internship's time period's worth of rent up front.
that true, I used to live in DC proper in my summers inbetween semesters and it's a great liveable city if you're under 40, no more than one kid, and make minimum 60k. It's one of the few cities I would walk around at 3 am by myself with no care in the world, crime increased this year, which is a bit troubling, however money + yuppies + rich gays pretty much ensure the whole city won't go completely down the shitter one day like baltimore did (I hope)
the upper end of the renting market is pretty cheap considering you can rent a 4br rowhouse in a maturely gentrified neighborhood thats less than a half mile from the city core for less than 4k.
for 6 people, it's a steal, however I realize most people don't want roommates past 30, but for someone who's 25 like me, the city is great.
desu I plan on moving back as soon as I can get a job there, I go for weekend visits to visit friends every 3/4 weeks
I'm pretty sure payoffs, crackdowns, and other sorts of counterprotest tactics would be enacted viciously if what happened in Baltimore tried to happen in DC.
Politicians have money, and they really don't like poor people throwing rocks at them.
DC Resident here. If you've lived in the area for a decade or more, so much shit has basically changed and the condo sprawl is fucking crazy. I'm in walking distance to at least 10, if not more. I want to move out, but then I'd have to factor in transportation on top of rent and utilities, so it's easier for me to just stay at home, which is a few blocks from work.
But surely there must be a limit to how many luxury apartments you can fill? Luxury apartments are ALL that are going up where only a minority of consumers can actually afford them.
Is it really more profitable to let units sit empty while you wait for trust fund babies to trickle in?
>*I don't know jack shit about development
I have been actively pursuing this idea for about two years and let me tell you something.
The biggest reason this can never happen is city governments. They want the poor OUT. No matter how much federal money is available to build low income housing nothing will ever compare to the property tax income that cities get from that luxury housing.
They will refuse to approve your designs if they arent up to their incredibly arbitrary and costly "design guidlines" which include gabled roofs and forward facing windows. It costs 20k in fees just to break growd in the bay area with out even talking about the cost of setting up plumbing and electricity for an apartment building prior to getting started with construction.
TLDR: cities dont want poor people/collegestudents living in their cities. They bring crime and other costly shit while paying zero property taxes on their favella.
I'm working on developing property in London, a city where a shoebox in an iffy part of town will sell for half a million. You don't let them sit empty at all, most new-build properties are sold off-plan to investors from Hong Kong and Singapore a good year or more before completion. Even if you did wait until they were built, why would you sell them at a lower rate? The profit margin on most developments is a third at best, often less. In a (dirt cheap) £400000 property, that equates to maybe £100000 of profit. Sell it for £350000 and you halve that. Would you slash your margin that much, especially considering that it'll sell like hot cakes at the higher price anyway? What would be the point?