Given the scarcity of land, the cost of construction, and the price of labor, I am often asked "how is it we can build so affordably?" Well, the simple answer is we can't, and we don't.
Just like commercial developers, when we begin a project, we seek out and bid for land, we pay market rate for materials and we vie for a pool of much-sought after contractors. In fact, because we rely on a mix of public and private capital to fund our projects, along with those challenges, we face even more.
For example, when The Davis-Bacon Act comes into play, we pay federal prevailing wages and to score highly enough to secure low income housing tax credits (LIHTC), we must show "proximity" to certain amenities. That means a project site must be close to schools, near a bus route and recreational opportunities, and be in the vicinity of hospitals, grocery stores and public parks. Unfortunately, when a site has all of those desirable attributes, not only does it score highly for tax credits, it's usually similarly highly priced.
In addition to those proximity requirements, to secure public and LIHTC funding, our projects must include community rooms, play areas for children, be adaptively designed for seniors and the disabled, and be environmentally constructed often above and beyond building code requirements. While there is no question that many commercial developments are also well-designed, often set amid attractive landscaping, and conveniently located, they very rarely come with amenities such as professionally staffed learning centers, dedicated social workers, or accommodate ready access to an extensive network of community resources.
These site-based services are the reason why Peoples' Self-Help Housing communities have negligible eviction rates, experience virtually no crime, and since opening our after school programs can boast an almost 100% high school graduation rate for students in the program and zero teen pregnancy. This relieves pressure on public agencies like our police, hospitals and schools and enriches the community with a skilled workforce.
For nearly five decades, we have helped families flourish, provided welcoming environments for the disabled and the formerly homeless, and at communities like the soon to be constructed Sierra Madre Cottages, created spaces for seniors to age in place with dignity.
So, with all of these extra services and construction costs, how can we possibly describe our housing as 'affordable' to build and develop? Well, that adjective can only apply after a ribbon cutting when residents have been warmly welcomed into their new homes. When rent is determined by ability to pay, typically 30% of income, then a benefiting resident can call it affordable.
ffordable housing isn't affordable to build, it only becomes affordable once someone moves in.