Does the need for more housing that is affordable mean simply low-income housing? Projects that are being proposed focus on building small condos as the path to creating more affordable housing. That does not address what most residents want. If you look at the price growth of condos vs. houses, you will see that the price of houses has been growing faster than condos. In fact, the price of condos has been essentially flat since 2018. The increase in mortgage interest rates would imply that recent condo buyers have higher payments but the demand vs. supply for condos is less than the demand vs. supply for houses, judging by price trends.
Recently the Mercury News reported that The Core Companies changed their plan for building a 25-story, 300-unit, complex that was approved in 2016 to a 15-story, 220-unit, complex. The new plans propose 39 studios, 107 one-bedroom, 72 two-bedroom apartments, and two manager’s units.
Are these studio and one bedroom apartments going to become extended stay hotel rooms? If you lean towards conspiracy theories you might think the government is directing tax dollars and housing mandates to provide housing for mental health and drug treatment programs. More likely it is probably simply the reality of getting voter approval. Would you vote for a politician who said he is going to make housing more affordable by forcing everyone to live in a condo?
Reducing government fees and regulations is rarely done. Adding more fees and regulations is unfortunately the path our different governments take. Programs for “more affordable housing” sound better than more “subsidized housing”, but making housing more affordable is about removing costs, not adding them.
If our governements simply changed regulations to allow higher density housing, builders would probably mostly ignore studios and one-bedroom units and instead build three or more bedroom units. Doing that would make it easier to recover the building costs and would actually drive down the cost per square foot. (Kitchens and bathrooms are much more expensive to build than bedrooms.) Regulations that encourage building larger homes sounds like the government is helping those who are better off at the expense of those who are less well off, but is a studio condo or even a one bedroom condo appropriate housing for a family?
Is adding more regulations and spending more tax dollars on small housing units creating more housing that is affordable for families?