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Join me today on a thought experiment: Kansas City’s Affordable Housing program presents the idea of finding $75,000,000 for an Affordable Housing Fund, and the need to create 5,000 new homes in the next 3 years… (1/7)
Some developers are presently building new two-bedroom, market-rate homes for as little as $175,000. Until we invest a lower cost of building (and I challenge you to do so), that’s essentially the cost of entry for new construction. (2/7)
If we had $75,000,000, we could give housing developers $125,000 for every new home they build, making those homes affordable at around $500/month. We could give them more to drive the cost per month down even further. (3/7)
The point being, at $125,000 per home, $75,000,000 would create 600 new homes. That’s far short of the 5,000 homes we need by 2023. Unfortunately, we can’t currently deliver new construction for homes less expensively, even with help of government subsidies. (4/7)
We must focus on a different lever to solve this problem. I know a local entrepreneur in Kansas City who is acquiring dilapidated homes through a Legal Aid program, and rehabbing them into quality 2-/3-bedroom homes for about $50,000 to $75,000 without public incentives. (5/7)
Some community builders are proactively making arrangements with local service organizations to make sure the homes are rented to deserving families in need. With a $25,000 subsidy for every home renovation, they would cost renters $500/month. (6/7)
In this case, $75,000 would create 3,000 new homes. Still short of our goal, but not bad. (7/7)
That’s all I got for today. Shoot holes in it if you want @EricWBunch @QuintonLucasKC @KCMO @johnstamm @KCMOPlanning
