I was listening in to some proposals for building Section 42 Low Income Housing Tax Credit housing the other day. I heard three proposals: the construction cost per unit being proposed was between 400K to 500k.
It is expensive to build in LA, but downtown has luxury condos selling for less than 400K right now. The median price of a house in Southern California is around $275,000. I am all for providing poor people with good housing, but we could do it a lot more cheaply by buying existing houses and renting them out then building new units whose prices are beyond what a median income household in LA could ever expect to afford.
The reason this sort of thing bothers me is because I do think there is a role for government to do things, such as provide education, health care and networks (roads, sewers, etc.). But for this to happen, government must demonstrate that it spends money well. Building “low-income” housing for $400K a unit does not inspire confidence.