I saw a website once but can’t find it now, the author basically claimed if you could build walk up micro apartments in San Francisco, the total cost would be about $50,000 each for a ~300 sq ft studio. Considering that in SF I think a micro studio costs $1500 a month, that is a pretty good deal and a mortgage would only be $500/month or so at those costs.
Does the math work out? I recall he had a breakdown, and the cost of land was far and away the number 1 cost. But what would be the cost of building a walkup studio apartment complex?
Is part of the reason nobody does this because having bunches of low cost housing all packed together tends to attract undesirables (homeless, mentally ill, criminals, etc) and it ends up like a housing project, just decrepit and crime infested until it gets torn down?
According to this, land is $2100 a square foot in midtown manhattan. I have no idea how many square feet you need for an apartment building of micro apartments above and beyond the ~300 square feet per apartment, but if you only needed 400 square feet per tenant (300 per apartment, 100 feet for hallways and other non-living space anemities) and it was a 5 story building that works out to 168k per resident just for the land. However this is land right next to the empire state building, I’m sure it is cheaper elsewhere.
There’s no factual answer to this that wouldn’t be localized. Land prices to start with, labor costs, building code, permits and taxes, the list goes on. As a rough estimate I can say it cost me $23k in materials to rebuild a 600 ft[sup]2[/sup] apartment that burned down in 2004, so I reused the old foundation (a big cost savings). This is in a rural backwater whose only amenity is being close to an interstate.
$50k per 300 ft[sup]2[/sup] in San Francisco … I’d say that’s low balling … even if SF doesn’t require adequate parking facilities.
Screwing around on realtor.com, the cost per square foot of land in San Francisco is about $400-500. If $500 per sq. ft, and you have a 5 story walkup at 400 square foot total space per tenant, that means 80 sq ft per tenant of land which is $40,000.
I doubt you can hit that price in a city like SF with any regularity, or without subsidies. The fact is that micro apartments often cost more per square foot to build since the expensive parts (eg. kitchens, bathrooms, plumbing, electrical, appliances, etc.) are present and of roughly similar cost regardless of the size of an apartment. Obviously some expense can be spared, but the fixed costs are high.
Further, even if you can build/sell a micro apartment for that, you can build a apartment 2-3 times that size for less than 2-3 times cost, and you can sell it for more than $150k or whatever price you were gonna charge for 2-3 mircos. It doesn’t make any economic sense to do such a thing when your capital can make more building normal apartments, or doing something else.
I recall reading about micro-condos in NY City a while ago, saying that there were zoning laws against them. Someone had gotten permission to build a building of them but it involved some special exemption from the zoning regulations. (Sorry no time to find cite right now.)
Again, depending on location, rents can be based on number of bedrooms, not square footage. One could literally throw up a partition wall in a bedroom, making two bedrooms, and charge $100 or $200 a month more. It would take less than a year to recover the original investment of a few 2x4’s and drywall.
Much of the reason that costs are high in high COL cities is that there are political barriers to building more housing. San Francisco has some of the most restrictive zoning and development policies in the country, and it’s not an accident. There are powerful local lobbies trying to keep it that way.
Trying to solve this problem by making smaller apartments isn’t really going to work, because the political opposition is trying to stop additional housing primarily to (1) keep their own property values high and (2) keep the population in their neighborhoods lower.
Doing some math on the details of this co-housing project in Syracuse, it looks like $50k would work there so I doubt you could do it in SF for that amount.
The article says it will cost around $1.2 million and have 20-22 units. That’s already $54545 per unit, and it says he was expecting a $225k subsidy, which raises the per unit cost another $10k or so. That’s assuredly above our target even with a shared kitchen to cut costs.
Agreed. As mentioned in the second link, the guy in Syracuse is going for the rental market. He already has a multi-city business called “CoWork” providing space for startups and the like. Extending the concept to housing is not surprising.