Mixing Low-Cost with Market Rate Housing
From: Sharon Villines (sharonsharonvillines.com)
Date: Thu, 29 Apr 2021 08:57:05 -0700 (PDT)
I’ve discussed my concerns about mixing groups of people needing low-cost 
housing with those wanting market rate housing. In the design and construction 
the needs of both groups are most likely to be conflicting. One group wants to 
find out how to get the best price on granite countertops and the other wants 
to minimize countertops as expensive in materials and space. It’s two 
conversations with little in common.

Every group starts out wanting income diversity but as time goes by the costs 
go up and not down.

Zoning severely limits what can be built so the result is higher cost 
construction, and often large lots. I wonder what happens if a group has two 
design planning groups, one planning low cost options and the other doing the 
standard cohousing thing. Would zoning boards (and neighbors) be more 
welcoming? They don’t have to be clustered separately as some communities have 
said is required of subsidized units. 

It might be easier to get zoning approval if the whole project needs a larger 
construction loan the size the bank feels comfortable with. I had a friend who 
wanted to build a geodesic dome for $24,000 in the early 1970s. The bank said, 
“You can’t build a house for that amount of money and we won’t finance it. It 
will fall down.” So she borrowed $100,000, built her house for $24,000, bought 
a new car, and gave the rest of the money back. 

A developer told me recently that banks still won’t loan small amounts because 
they lose money even on a $100,000 mortgage — too much paperwork attached. A 
small unit still requires the same paperwork, approvals, permits, etc. The same 
way it takes just as much time to paint a small painting as it does a large 
painting. And the large one can sell for tens of thousands more.

Mobile or manufactured homes, often below $100,000, have separate financing 
institutions and are treated more like personal loans, although the FHA and VA 
do insure loans on manufactured homes.

My opinion is still that once a household is ready to settle owning a home, 
singly or cooperatively, still provides the greatest amount of security, 
stability, control, and quality of life. And with good planning, builds wealth. 
That is the primary way the middle class got to be middle class and more. 

What do people think of that idea? The small units would have to be small. As 
small as 400-500 SF. 

Does anyone know if zoning typically requires minimum sizes for condo units? In 
Manhattan a developer built a stack of condos of 200 SF. Each floor was one 
apartment, ten or so floors. The building was ~14’ x 14’ with an exterior 
elevator. He had a waiting list for the apartments before they were even built. 
When asked how he got the idea, he said that was all the land he could find. He 
could have built a town house — one unit — but single apartments were needed to 
pay construction costs.

The zoning thing is so big and so locally unique that it is hard to even 
discuss without a specific site in mind. Rural areas have less if any zoning 
limitations but with infrastructure costs it becomes impractical to build a 
community there. And living in rural areas and working in the city is not 
pleasant. Commuting is expensive, grinding, and environmentally wasteful. 
Cities have more resources so life is richer and can be less expensive than 
living in the country.

Sharon Villines
affordablecohousing [at] groups.io
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