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"Affordable" housing just the same as "market rate" housing?

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"Affordable" housing just the same as "market rate" housing?

Post by km1125 » Tue Oct 20, 2020 11:08 am

Was thinking of posting this in chatterbox, but figured the discussion would devolve to politics. Don't really care about the politics of it though, as that's well known.

Saw the news the announcement about three new projects in the City for "affordable" housing. One of the guys promoting it said something like "you shouldn't be able to see a difference between affordable housing and market-rate housing". Do you agree with that??

The three developments average around $300,000 for each unit. Seems like they're going to charge between $0 and $700 for rent depending on your income. Not really sure how that math works out financially, but wouldn't it make more sense to build twice as many units - more modest units - at $150,000 each?? Why do they really need to be "just as nice as market-rate units"?? If you look at a lot of the entry-level housing in a lot of foreign cities like Seoul or Tokyo, they have VERY small but functional apartments at a very "affordable" price located in those cities.

Here's one link to the housing projects, but you can find others in any of the papers or stations ... nd-gratiot

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Re: "Affordable" housing just the same as "market rate" housing?

Post by TC Talks » Tue Oct 20, 2020 4:51 pm

Affordable housing as a term is been evolving into accessible housing.

The developer usually is in a 10 to 20 year agreement with the state of Michigan to provide the housing at a subsidized level in exchange for property tax credits.

Once that 10 to 20 year agreement has been satisfied, the property can be market rate. Since the developer is having between 40 and 90% of the cost of those properties in a tax credit swap, it's good economics to build a nice unit.

It's quite an ingenious strategy that works well in Michigan when the economy isn't so hot that building million dollar townhomes is the only thing that's happening.

Look at it this way, now you won't have to complain about homelessness.

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