And my 2,000 square foot home, with 4 bedrooms, 2.5 bathrooms, 2 car garage, some hardwood floors and a fireplace and usable basement cost us $187,000. OK, so it would have cost slightly more to build brand new – but then again, it would have been much higher quality too.
Here is the latest disaster in American low-income housing:
Developers Rochester Cornerstone Group and Ibero American Development Corporation are putting up 23 new homes and renovating a vacant home for $7.3 million. That averages out to $304,000 per home.
Well, maybe they are building swanky homes on some swanky real estate?
The houses – most of them single-family – are attractive, but they are modest. Built on vacant lots purchased from the city for $425, the houses are between 1,200 and 1,700 square feet.
The project is called El Camino Estates, and it’s intended for low-income residents.
At $210 per square foot, not only are these homes more expensive than anything in Rochester, they are certainly far more expensive than the best homes in the Berkshires where we used to live. Again, per square foot pricing is misleading, but if anything, it should be biasing values in the downward direction in poor neighborhoods, not the other way around. So what is causing this high price? Not exactly high demand.
They said the level of bureaucracy and scrutiny required for this kind of project doubles the cost.
The project received $435,000 from the city and $3.3 million in federal stimulus funds. El Camino also got $2.2 million from the New York State Housing Trust Fund. The project was also financed through tax credits.
Because they accepted these grants, the project had to follow rules specific to each provider. For example, federal stimulus funds require the use of labor that is paid federal wages. That added $1 million to the project’s cost, said Brandt.
I cannot even begin to tell you how many ways this is absurd. But an extra million dollars in labor costs because of Davis Bacon? Think of how many more homes could have been built and think of how many more people could have worked on this project had the wages been competitively determined.
This is the best part of it all:
Eugene Hryhorenko, a 40-year resident of the neighborhood, said the project can’t be measured in dollars and cents.
“We need renewal and maybe this will be the lynchpin that will do it for us,” he said.
We need renewal? And overspending by a factor of three for these homes (BTW the median home in the area is $50,000) is the way to do it? Let me put it differently – if “we” needed renewal and “we” had $7 million to dedicate to it, where on the list would building 24 new houses be? You could have provided grants of $10,000 a pop to seven hundred home owners to renovate their homes with that money. But then you could never guarantee that union workers and favored developers would get those projects. Hell, with $7 million, you could have paid for about one-thousand four hundred kids to attend a private school for a year. I’m not sanctioning the use of $7 million – but I’d remind you that this is the kind of work that happens every single day brought to you in the name of high minded Progressives. What a bunch of scummy looters. And this happens during the worst economic crisis (for states and localities) in a very long time.
More on the concept of “pricelessness” in a future post. I need to take some Pepto Bismol before I write anything serious. HT to Chris M.