“Untenable”: Calif. low-income housing projects busting $1 million per unit to build

More than a half-dozen low-income housing developments underway in the Golden State have seen housing unit costs spiral beyond $1 million each.

More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, a Times review of state data found.

The seven subsidized housing developments, all in Northern California, received state funding within the last two years and are under construction or close to breaking ground. When completed, they will provide homes for more than 600 families.


“That is untenable,” said Assemblyman Tim Grayson (D-Concord), who is writing legislation aimed at simplifying state affordable housing financing. “That is not a sustainable model. We have got to do something to reduce the cost.”

In comparison with private sector development, low-income housing is often saddled with more stringent environmental and labor standards. Affordable housing projects also frequently face high parking requirements, lengthy local approval processes and a byzantine bureaucracy to secure financing.

Despite promises by Gov. Gavin Newsom and other state officials to rein in costs, they haven’t made comprehensive changes to address the factors cited by The Los Angeles Times, whose findings are similar to those of auditors and academic researchers in recent years.

“We haven’t seen any relief on any of those [cost] drivers,” said Elizabeth Kneebone, research director for UC Berkeley’s Terner Center for Housing Innovation, which published one of the reports. “We’ve only seen more challenges piling on top of each other. There’s been nothing to bend the curve. It just rises further upward.”

To support housing for low-income residents, federal, state and local governments provide direct financing and tax credits, which reduce what banks and other large investors owe theInternal Revenue Service and the state treasury if they help pay for housing projects. The funding requires developers to cap what tenants pay in rent.

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