What is a Housing Bank and Why Do We Need One?
How Would a Housing Bank Be Funded?
What Will It Cost?
What Will It Cost?
Current costs:
We are presently looking at a cost of $83K to $96K for
land per home plus improvements (assuming favorable zoning). Assuming
that we can build a 1500 sq ft, 3BR, 2BA home for $100 to $125 per sq
ft, land plus improvements plus structure will cost $250K to $288K, within
the range for middle income, but out of range for moderate and below.
Removing the cost of the land reduces these prices to a level that is
within the reach of some low income and all moderate income households.
These are optimistic numbers and, at best, represent what we can do today.
By the time real estate excise tax money becomes available for use, these
costs will be higher.
Real estate excise tax projections: If
we do nothing more than buy land, the real estate excise tax money for
2005 (based on 2004 sales) would allow us to build 16 to 19 homes. But,
even though the cost of land somewhat tracks real estate excise tax income,
it doesn't keep up. Just three years ago, we would have been able to build
between 20 and 23 homes. The numbers will be worse than this in the future
since the cost of construction is going up too. Even with the full one
half percent and modestly increasing real estate excise tax income, the
number of homes that we can build each year will decline. Realistically
speaking, the best that we can expect to do, if we do nothing more than
purchase land with this money, is 12 to 16 homes per year or approximately
60 to 80 homes over 5 years. While this would meet the need for moderate
income infrastructure jobs, it falls short of the total need for moderate
income housing by half and is far short of the total need when low income
housing is included.
Can we do better? Possibly! We
have consistently argued that the real estate excise tax is only part
of the solution; an important part, but only part. There is potential
availability of land from employers and the county. There are also additional
sources of public and private funding. We have assembled two teams, one
to address creative approaches to financing and another to address creative
approaches to the design and construction of affordable housing. In addition,
we have existing organizations that are committed to providing affordable
housing; the various community land trust organizations as well as organizations
pursuing alternative approaches. Finally, our county planning and permitting
department has a mandate to accommodate affordable housing. We should
give these organizations a bold objective. We suggest that this objective
should be to find a way to provide 120 housing units (not including rentals)
covering the spectrum of need from low income to middle income over the
next 6 years. With such a specific goal, perhaps we can focus on achieving
economy of scale in every aspect of addressing this problem.