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Re: [carfree_cities] Status Anxiety

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  • J.H. Crawford
    ... Let s be sure not to confuse cost and price. At 206 units, the COST of the land is about $50,000 per unit. A small 2 BR condo ought to cost $200,000 or
    Message 1 of 14 , Jul 1, 2004
      Continuing, TJ said:

      >I don't know offhand the price of developable rural land, but yes, ten
      >times is probably in the ballpark. A three-and-a-half acre (1.42 hectare)
      >site downtown sold last year for $10.5 million ($3 million per acre). This
      >is a site which still requires clearance of several (unsalvageable)
      >structures, substantial infrastructure upgrades, possible groundwater
      >intrusion and underground contamination issues. 206 units are planned for
      >the site. The price of a small 2-bedroom condo here is about $500,000.

      Let's be sure not to confuse cost and price. At 206 units,
      the COST of the land is about $50,000 per unit. A small 2 BR
      condo ought to cost $200,000 or less to build, so the cost
      would be only $250,000 per unit (plus clearance and infrastructure
      upgrade, which shouldn't affect the issue all that much). So,
      somebody is going to be putting nearly $250,000 per unit in his
      pocket. The only reason this is possible is the tremendous demand
      for urban housing in the area. (I wonder what the profit on
      sprawburbia is?) Even at $500,000 a unit, this is still fairly
      inexpensive by CA standards, no?

      >Rick mentioned that dense urban housing is selling well in Downtown LA, as
      >is the case in many cities across the US. These condos, lofts and
      >apartments are commanding HIGH prices. This type of development conserves
      >resources, and is highly desirable for many reasons which are familiar to
      >all of us here, but it ain't cheap to build, or purchase.

      Well, as I say, it shouldn't cost more to build than auto-centric
      construction. What it actually sells for may not have much to do
      with the cost. (I heard not long ago that you could buy a rancher
      in Brownsville TX for something like $5000 (not new, of course),
      because nobody wants to live there.) Cost can also be higher than
      price in some markets, which means, of course, that there is no
      new construction.

      Housing prices in California are so far off the map of "reasonable"
      that it might be better to focus our attention on other parts of
      the country.

      Regards,


      -- ### --

      J.H. Crawford Carfree Cities
      mailbox@... http://www.carfree.com
    • Matt Hohmeister
      In Tallahassee, population around 250,000, a 2000 sf, 3BR, single-family, 1960s sprawlburb house would sell for around $150,000, and would be pretty solidly
      Message 2 of 14 , Jul 2, 2004
        In Tallahassee, population around 250,000, a 2000 sf, 3BR, single-family, 1960s
        sprawlburb house would sell for around $150,000, and would be pretty solidly built: brick
        exterior, drywall interior.

        At $200,000 for a 1000 sf, 2 BR condo, are we assuming a very high quality of building
        here? I'd hope that we're talking about a 2-4 story buildings with fire sprinklers, masonry
        exteriors (I don't care if it's brick, cinder block, or stucco--diverse sidings would actually
        be nice), concrete separating all units (walls, floors, and ceilings), butcherblock wood
        doors in steel frames, and mortise locks (as opposed to putting a new $15 Kwikset
        deadbolt on the door every time it changes hands). I'd hope that any buildings in a carfree
        area would be built to last 200 years or more. We should also make buildings easy to
        remodel inside, so if someone wants to replace a shabby-looking 50-year-old bathroom
        counter, it can be done with a miniimum of collateral damage. This would provide
        disincentive to razing buildings after 25 years.

        If we build carfree areas large enough to accomodate the demans, pricing should drop. I
        feel that the reason "urban" property is so expensive is that, in many areas, it's illegal to
        expand urban areas--the law requires sprawl. Thus, even if relatively few people WANT to
        live downtown, they're still battling over a limited supply, since development code has put
        the stop on any new development like it.

        > Let's be sure not to confuse cost and price. At 206 units,
        > the COST of the land is about $50,000 per unit. A small 2 BR
        > condo ought to cost $200,000 or less to build, so the cost
        > would be only $250,000 per unit (plus clearance and infrastructure
        > upgrade, which shouldn't affect the issue all that much). So,
        > somebody is going to be putting nearly $250,000 per unit in his
        > pocket. The only reason this is possible is the tremendous demand
        > for urban housing in the area. (I wonder what the profit on
        > sprawburbia is?) Even at $500,000 a unit, this is still fairly
        > inexpensive by CA standards, no?
      • T. J. Binkley
        ... That would be nice. Fire sprinklers are required in all new construction here, and standards for energy conservation are high, but alas, there s a huge
        Message 3 of 14 , Jul 2, 2004
          >At $200,000 for a 1000 sf, 2 BR condo, are we assuming a very high quality
          >of building
          >here? I'd hope that we're talking about a 2-4 story buildings with fire
          >sprinklers, masonry
          >exteriors (I don't care if it's brick, cinder block, or stucco--diverse
          >sidings would actually
          >be nice), concrete separating all units (walls, floors, and ceilings),
          >butcherblock wood
          >doors in steel frames, and mortise locks (as opposed to putting a new $15
          >Kwikset
          >deadbolt on the door every time it changes hands).

          That would be nice. Fire sprinklers are required in all new construction
          here, and standards for energy conservation are high, but alas, there's a
          huge local disincentive to much masonry construction: earthquake
          codes. These make even simple concrete block construction quite a bit more
          expensive than wood. Nonetheless, when I acquire my own little patch of
          dirt, I fully intend to build as you've described.

          >I'd hope that any buildings in a carfree
          >area would be built to last 200 years or more.

          Yes. Here's a proven way to provide affordable, dense, urban
          housing: build structures that are still habitable, serviceable, highly
          desirable for several generations of users, long after the high costs of
          new construction have been paid (Jane Jacobs covered this well).

          In The Baltimore Rowhouse, an interesting review of nineteenth century land
          lease laws describes how developers were more willing to spend money on
          solid construction and elaborate ornamentation of some rowhouses there, in
          order to maximize the ongoing land rents they could expect.

          >If we build carfree areas large enough to accomodate the demans, pricing
          >should drop. I
          >feel that the reason "urban" property is so expensive is that, in many
          >areas, it's illegal to
          >expand urban areas--the law requires sprawl. Thus, even if relatively few
          >people WANT to
          >live downtown, they're still battling over a limited supply, since
          >development code has put
          >the stop on any new development like it.

          Yep. It couldn't possibly be worse anywhere than here, where so-called
          progressives conflate environmentalism with "no-growth".

          Cheers,

          TJB
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