By Robert Field
LNP reports today “Long Crest senior housing project wins state funding.” (Sorry, once again a leading article isn’t posted on LNP’s web site nor can it be found by its search engine.)
LNP reports that $1.2 M grant in tax credits towards the $17.8M cost for 52 senior units.
$17.800,000 comes to $342,000 per apartment. If built conventionally in the free market, it should cost between $100,000 to perhaps, at most, $120,000 per apartment.
When ‘yours truly’ was building several decades ago, we were producing upscale apartments at about 80% of the cost of government subsidized units of far less space and appointments. Now the ratio appears to be about 40% of conventional cost.
Of course the whole idea of subsiding apartment development is nonsense. Section ‘8’ programs provide rent subsidies that make up the difference between what a person or family can afford to pay and the apartment’s market price. This gets the government 100% value for the buck and spurs more construction.
But there is no deep government troughs to feed all of the hangers on. Hence Section “8′ is minimized, often made impractical through regulations.
Meanwhile taxpayer money flows for subsidized housing to lawyers, consultants, brokers, appraisers, architects, engineers, sponsors, contractors and other.
A virtual feast! But the tax payers aren’t invited. Yet we get the bill.