Mel Gregerson wrote about CVI's cost: Cost per square foot 25,300 square feet of apartments Plus or minus 2,000 sq.ft. per store. This equates to $187.71 cost per sq.
Robert Anderson responded: By conservative estimate, that's little more than twice the cost of construction (excluding the 4-5 bedroom units). Very interesting stats. [GDL] Again, they may be interesting stats but they really have no true meaning or context other than being interesting. Comparisons have to be made on comparable properties and development, which I have yet to see. Some points to remember (garnered from a study out of California finding nonprofits generally less expensive): 1. Nonprofits generallly build housing for larger families with a higher percentage of three and four bedroom units. Private developers generally build smaller-- i.e. one to two bedroom units. A per unit cost ignores this difference (and Robert Anderson noticeably excludes the 4-5 bedroom units of CVI from comparison, with these units making up 6 of the 20 units). 2. Nonprofits generally include service facilities such as daycare or counseling--costs that should not be used in a per unit comparison unless the private developer is also providing such services. 3. Nonprofits usually have to assemble financing from a number of sources, increasing the cost of staff and development, whereas private developers have one or two sources of investment. 4. Because of nonprofit funding sources, nonprofit developers must abide by the Davis-Bacon federal regulations that require payment of prevailing wages during construction. Private for-profit developers escape these costs. 5. Nonprofits include developer fees up front. For-profit developers often make most of the profit after development (cash flow, sales, management fees) and these fees are typically passed on to tenants or buyers (obviously impacting affordability to the end user). 6. Nonprofit development at high-density and inner city locations is generally more expensive than for-profit development at lower-density sites at the surburban edge. That is, what's being compared? 7. Nonprofit developers typically design with an eye toward longevity, increasing initial costs. For-profit developers who sell the development after five years are more interested in short-term profitable investments, lowering initial costs. 8. Nonprofit developers must overcome neighborhood stereotypes about low or moderate income neighbors and must spend more to create attractive developments to dispel the misconceptions. CVI is a prime example. So, taking these things into account, can I take a look at the for-profit orange and peel away its cost? At the same time, feel free to slice up the nonprofit apple as well and, in keeping with the List Manager's rules, let's compare CVI or other Minneapolis projects on a true contextual comparison basis. Gregory Luce N. Phillips (work) _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
