A few of the new all-affordable housing projects in San Francisco have units that cost $600,000 or more. Portland, Ore., and St. Paul, Minn., also have affordable housing that costs several hundred thousand dollars.
CityLab reports that publicly subsidized affordable housing often costs significantly more to build than market-rate housing. Publicly-funded buildings tend to feature more elaborate designs, contain nicer amenities and public spaces, and have higher overhead costs.
The main issue may be scale, though. Too much money is being pumped into too few units.
The very high per-unit construction costs of affordable housing only make the problem more vexing: the pressure to make any project that gets constructed as distinctive, amenity-rich and environmentally friendly as possible, means that the limited number of public dollars end up building fewer units. And too few units—scale—is the real problem here.
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