Just a couple of comments on subsidies in development projects in the central cities vs the ability to build and sell high price housing in the burbs.
Though building affordable housing is a noble goal in development the economics of the market also makes it at times the only development that is possible in the central city. The high costs of land acquisition in the city, even in poorer neighborhoods, and ever increasing construction costs makes it almost impossible to sell units at market rates and still pay your costs. Consequently, developers look to the City for assistance to make the development possible and the City then looks to the "public purpose" of the development, which becomes affordability. Of course selling the units at "affordable" levels then means less per unit and more density or more subsidy is needed to cover costs. With me? Simple example: Out in the ex-burbs you can still buy someone's old house on 40 acres for a million dollars. Sounds like big money, but when you sub-divide it into one acre lots your per lot cost is $25,000. Having recently put together an acre for redevelopment on the East Side that consisted of one cement block run down commercial property and two small marginal homes, our land costs were a little over $600,000. Now, seeing that there isn't a market for a million dollar house on the corner of White Bear and Maryland the project is going to need subsidy and density in order to break even. To justify the subsidy it will need affordability. Back to the burbs, having the ability to market big homes on one acre lots where the land cost was 1/25 of what the same amount of land costs in the city, there isn't a need for the developer to look to the government for assistance, thus no need for subsidy, thus no need for public purpose and no requirements for affordability and no need for density. So, back to the Midway project - I am guessing the economics of the project has driven the size of the project and if the neighbors issue is that it is to big, someone has to figure out how to pay for anything smaller. Chuck Repke _____________________________________________ To Join: St. Paul Issues Forum Rules Discussion Email: [EMAIL PROTECTED] _____________________________________________ NEW ADDRESS FOR LIST: [EMAIL PROTECTED] To subscribe, modify subscription, or get your password - visit: http://www.mnforum.org/mailman/listinfo/stpaul Archive Address: http://www.mnforum.org/mailman/private/stpaul/
