Home Coalition working to ensure that people in Southwest Florida have access to housing and transportation that costs less than 45% of their income
In high school economics we learned about supply and demand. Supply is the amount of a specific good or service that’s available in the market. Demand is the amount of the good or service that customers want to buy.
Today this applies to our housing situation. Currently, we don’t have enough homes priced where most people can afford them, so we have a problem. Some call it a crisis. Why do we keep seeing housing developers building luxury homes instead of homes that families can afford?
It’s complicated.
First, rising construction costs translate into rising rent and mortgage costs. According to Fannie Mae, the average cost of constructing a building stands at $192 per square foot for apartment buildings. The costs of land, lumber, windows and walls are not the only problem right now. We also have the cost of sky-high insurance and interest rates. Profit margins are thin. Crunch the numbers and you will see how difficult it is to keep a project affordable.
Adding to this challenge are the complicated building policies and regulations including zoning and permitting that change from one city or county to the next. Navigating these rules requires a balance between compliance and efficiency. How do we get enough density to get efficiency in development and provide a sense of place that people want to call home and still be attainable? The complexity of these regulations often results in project delays and increased costs.
There are government tax incentives and subsidies that are put in place to try to make building homes more affordable, but they are also complicated, can take years to get, and the reporting requirements are often a burden. Streamlining these processes and ensuring transparency would undoubtedly encourage more developers to engage in affordable housing initiatives, ultimately benefiting communities in need.
