To come back to your earlier points about Solidarity - I can vibe with how these changes can help make alternative housing starts much more financially viable.
What's the carrot for existing homeowners? Most of them are locked into their fixed density homes, don't want their property tax mill rates to increase, and see the building of MORE housing (6-story or 20 story dwellings) as intrinsically detrimental to their future.
I always emphasize that the housing shortage is bad for everyone, including older homeowners. We all depend on the healthcare system. When younger people can't afford to live here, hospitals have a hard time finding nurses, and the entire healthcare system is under steadily increasing strain.
This is actually true across the board, for both private-sector and public-sector employers. Housing scarcity results in high prices and rents, which translates directly into low real salaries and shortages of workers.
And of course those of us who are parents have a direct stake in our children being able to find a place to live!
Very curious how quickly they move on any of these. We’re still in the permitting stage for 2 multiplexes, and these density bonus charges amount to 100k+ on each project.
The biggest issue with these charges is the bank won’t finance them up front, which increases the amount of up front capital you need to purchase the land + get the project to the construction stage.
Some nerdy financing math for a 4plx on the west side:
Land: 3 million
Total Construction: 3 million
Bank: ~4 million, with 1.5 million up front to help with land purchase
Equity: 2 million
The issue here is that you can’t draw from the construction loan to pay for the engineers, development charges, or bonus density fees that come up before starting the project. In this example, that amounts to over 500k (350k which is city fees), and you still need to pay to get the first 10% of actual construction done (250k) before you can draw on the loan.
What this means is you actually need is 2.25 million in equity to do the project (all contributed up front), which is ~10% more than the banks are calculating. This 10% gap forced us to back out of a recent project, as we couldn’t figure out how to get that last bit of equity. It’s a big reason why most applications right now are triplexes where the density charge is $3/ft instead of $65 (along with permitting time being twice as fast, which is another issue in and of itself).
One way to bring things in line is reducing the amenity charges (100k+ in this example with the $65 rate), the other is to allowed delayed payment until project completion for smaller builds like they’re doing with the larger ones.
To come back to your earlier points about Solidarity - I can vibe with how these changes can help make alternative housing starts much more financially viable.
What's the carrot for existing homeowners? Most of them are locked into their fixed density homes, don't want their property tax mill rates to increase, and see the building of MORE housing (6-story or 20 story dwellings) as intrinsically detrimental to their future.
I always emphasize that the housing shortage is bad for everyone, including older homeowners. We all depend on the healthcare system. When younger people can't afford to live here, hospitals have a hard time finding nurses, and the entire healthcare system is under steadily increasing strain.
This is actually true across the board, for both private-sector and public-sector employers. Housing scarcity results in high prices and rents, which translates directly into low real salaries and shortages of workers.
And of course those of us who are parents have a direct stake in our children being able to find a place to live!
Very curious how quickly they move on any of these. We’re still in the permitting stage for 2 multiplexes, and these density bonus charges amount to 100k+ on each project.
The biggest issue with these charges is the bank won’t finance them up front, which increases the amount of up front capital you need to purchase the land + get the project to the construction stage.
Some nerdy financing math for a 4plx on the west side:
Land: 3 million
Total Construction: 3 million
Bank: ~4 million, with 1.5 million up front to help with land purchase
Equity: 2 million
The issue here is that you can’t draw from the construction loan to pay for the engineers, development charges, or bonus density fees that come up before starting the project. In this example, that amounts to over 500k (350k which is city fees), and you still need to pay to get the first 10% of actual construction done (250k) before you can draw on the loan.
What this means is you actually need is 2.25 million in equity to do the project (all contributed up front), which is ~10% more than the banks are calculating. This 10% gap forced us to back out of a recent project, as we couldn’t figure out how to get that last bit of equity. It’s a big reason why most applications right now are triplexes where the density charge is $3/ft instead of $65 (along with permitting time being twice as fast, which is another issue in and of itself).
One way to bring things in line is reducing the amenity charges (100k+ in this example with the $65 rate), the other is to allowed delayed payment until project completion for smaller builds like they’re doing with the larger ones.