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I work in the housing industry for a private company who does develop affordable housing. The cost to do business in Portland is pretty outlandish compared to here in Atlanta, but Atlanta and GA in general and many southern states do have lower requirements in regards to standards than other areas. We do have to pay "prevailing wages" which they alluded to via the article as a "union wage" but since we build primarily low rise units, the rate for a laborer is only a little more than $10 and most contractors pay their workers more than that anyway so we don't have any additional cost.
In regards to standards though, I personally feel that here in GA we have very low standards in regards to building new structures. My company also manages property and after only 5-10 years many of the new buildings that were developed need substantial rehabilitation that cost tax payers more dollars. I wonder if they have had this sort of issue in Portland and other areas where there are more building regulations and oversight? I honestly doubt that they do. Contractors didn't even need to be qualified to be a builder here until 2007 so many of the older structures were really poorly constructed.
In regards to the quote from the article below:
Quote:
He proposes a special pared-down building code. This secondary code would
require low-rent buildings to meet minimum safety and liability standards, but
forgive a lot of the extras that current building code now requires of new
structures.
I honestly don't think it is a good idea to build buildings for the poor that have lower standards than other buildings. To me that just does not make sense. If they are going to pare down the code, they should do it for everyone. They didn't specifically mention what the code would be, other than UFAS (uniform federal accessibility standards, AKA - handicapped accessible) bathrooms/kitchens. The federal government does not require that all affordable units have ADA or UFAS compliant bathrooms and kitchens, only a certain percentage needs to comply with those standards. Local regulations in OR may be more stringent and in that case they would have to follow the more stringent requirements, but on the whole, federal requirements for LIHTC and other housing grants are not all that laborious or expensive depending upon the prevailing wages in the area where construction is taking place. None of the units that we have constructed here in GA cost over $100K for affordable housing and these are newer units with the newer, more stringent building regulations that just conform to industry trends in building.
Also, the federal government would love to get out of the business of building and financing affordable housing. The housing industry has had significant cuts over the past 5 years especially and no one expects the government to up funding in regards to affordable housing. If anything, I do think that OR should relax their own regulations if it is true that they require UFAS bathrooms/kitchens in all affordable housing units. UFAS units do cost more to build and for the state to just go with the 10% (or 15% can't remember) of newly constructed units being UFAS, that would save a ton of money in affordable housing. I also think they should encourage more builders to do what this builder is doing. As long as the units comply with building code, are safe, and aren't in slum areas then I think it is a good idea. But many people fail to realize that "affordable housing" is not always affordable for the poor and that these units are actually built to primarily house market rate tenants so that local housing authorities and government development agencies can make money off of the traditional housing market. I think that if not managed correctly, that this man just may be building private project units, ones that in the future may concentrate poverty and cause blight and crime to rise if not properly managed. They didn't mention who manages the properties either. Here in Atlanta even our public housing units are managed by private firms so that they don't have the feel of "public housing." They also have programming for residents to improve the resident's quality of life. Many people don't realize that the working poor have other needs besides just affordable housing and that not having adequate resident services for the children of single moms who live in those units via after school programming especially may cause that community to just be the new "project" location.
Last edited by residinghere2007; 02-07-2014 at 08:52 AM..
Reluctantly, Murphy decided he had to help solve his employees’ housing
problem. He spent $14 million to buy seven apartment complexes that had been
built using public money and carried contracts that allowed the U.S. Department
of Housing and Urban Development to set the rents. Just managing those buildings, Murphy says, became untenable. He insists that he had to spend an
inordinate amount of time working to meet all the special federal and local
regulations governing the buildings, rather than spending his time maintaining
the actual buildings
The bolded section to me is very scary in that it seems to me that he does not know how to manage a property. There aren't any overtly special requirements related to subsidized LIHTC housing, only traditional public housing has more labor and is more expensive due to federal regulations. If he had purchased affordable buildings, then he wouldn't have to do anything special to manage them other than rent them to people within specific income guidelines. Those buildings do not have to follow any special procurement rules or anything.
So that portion makes me think that he does not know how to manage properties. All apartment communities have lease renewal procedures and if they are smart, perform regular maintenance via a work order system and keep track of their inventory and of work done in specific units, etc. My company also manages high end market rate communities in major markets and the procedures to manage those buildings are the same as the developments funded via LIHTC.
I hope he has hired a property management company to manage the property for him. That by itself would have alleviated any sort of "untenable" managing tasks. This man admitted that he didn't have any experience in affordable housing and as such he wouldn't have experience managing apartment communities. He also mentioned, what I mentioned above, that many people who utilize affordable housing have lots of personal issues. For our market rate units and especially for affordable communities, we have resident services teams. Having people and programs in place who know what they are doing makes managing the property easy.
But I hope he can convince the powers that be in Portland, that one can build cheaper units. I primarily deal in contracting and compliance and saving money is always a goal, but quality is very important in building new developments. One doesn't have to be LEED certified to have a great unit, but in the long run, that will save the development money in regards to maintenance cost for major mechanical systems especially. But I hope his model can work there and they can tweak it a bit and if needed, maybe spend a bit more to ensure that they have a good solid community that will last for at least 25-30 years and sustain itself financially.
This probably belongs in the Portland forum, but it is very interesting topic that does need to be addressed. I can see something passing in Portland, but not without regulations to prevent developers from building micro units just to charge higher rents.
This is also where the light rail comes into play because affordable housing like this should be built close to light rail stops.
$70K a unit is a good deal if the quality of building isn't lacking, I don't think building requirements should be reduced for affordable housing when it comes to what is required with market rate housing.
But then Goveernment would not have control. This is a nice litmus test to see what a "progressive" Government like Portland really wants- control or affordable living for working people.
I bet Government overwhelms this business with all sorts of red tape to get him to stop competing with publicly funded housing. It is all about control.
God, you righties are really paranoid. This is not about "control". This is corruption and kickbacks, that's all! There isn't some conspiracy theory to control your life, for ****'s sake
“We’re three times as cheap as what is being built for publicly funded affordable housing,†Justus says.
Justus founded nonprofit JOIN, one of the city’s most respected homeless agencies, before transforming himself into a developer of low-income housing. He says he could build hundreds more low-income housing units without public funding. But he’d need more cooperation from the city Bureau of Development Services. He has all sorts of ideas for inexpensive dwellings, including micro apartments with kitchenettes, that could cheaply house the growing number of Portland’s working poor.
“Do I think the city of Portland BDS is going to let us do something like this? No,†Justus says.
He basically wants to build a bunch of efficiency studio apartments.
Which is good, since too much public housing puts emphasis on families with children and not single people, who are more likely to commit property, drug, and theft crimes to keep their head above water
Which is good, since too much public housing puts emphasis on families with children and not single people, who are more likely to commit property, drug, and theft crimes to keep their head above water
This actually is not true at all.
And FYI, public housing is not "affordable housing" it is confusing, but the affordable housing that is being spoken about in the article is new developments that are built as a result of a private developer obtaining tax credits from the government in exchange of setting income limits at market rate (private, not public housing) apartment communities.
The trend across the nation is to demolish public housing. You may not like him but Obama has instituted a new program called Rental Assistance Demonstration that is encouraging local public housing authorities to demolish all their public housing units and then build new market rate (regular) apartment communities that will house both former public housing residents and higher income individuals in the same communities.
Here in Atlanta we were the first to do this and had great success where poverty, crime, and school performance at specific former public housing community locations have all gotten better. Many people who move to these locations are unaware that they used to be public housing due to how nice they are and the amenities that they have.
Public housing today is currently aimed at senior citizens and disabled individuals. There are specific ones that target seniors who are raising grandchildren as well.
If anything, this man building small communities with no amenities for market rate individuals is only building a future slum in many ways. If not properly managed and without the investment in resident services, then his locations will eventually be a target for only poor and poverty stricken people. Unfortunately, an area that is dominated by poverty always has worse statistics in regards to crime and educational achievement so in many ways he is not forward thinking. It would be better to build these cheap apartments but have them be in sought after neighborhoods where you can entice higher income people to move there too in order to have some demographic diversity.
“We’re three times as cheap as what is being built for publicly funded affordable housing,” Justus says.
Justus founded nonprofit JOIN, one of the city’s most respected homeless agencies, before transforming himself into a developer of low-income housing. He says he could build hundreds more low-income housing units without public funding. But he’d need more cooperation from the city Bureau of Development Services. He has all sorts of ideas for inexpensive dwellings, including micro apartments with kitchenettes, that could cheaply house the growing number of Portland’s working poor.
“Do I think the city of Portland BDS is going to let us do something like this? No,” Justus says.
i assumed this would have to do with the city of portland, before i read the article
but in reality it's about the FHA and the federal "low income housing" bureaucracy. i don't pretend to understand it, but i can tell it's a friggin' mess, and probably should be 'reformed' rather severely.
i read a survey recently about federal employee job satisfaction, by agency. IIRC the FHA was at the bottom.
God, you righties are really paranoid. This is not about "control". This is corruption and kickbacks, that's all! There isn't some conspiracy theory to control your life, for ****'s sake
You did not realize where I was coming from. I was in now way insinuating Government wants to control my life (sans NSA). The insinuation was exactly what you are stating; Government wants control so those who hold office enjoy the little perks that come with setting up projects such as this.
There is absolutely no reason Government should take over this venture unless they enjoy the benefits of corruption.
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