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The Affordable Housing Disaster

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The average live-work loft in San Francisco costs about $180,000 to build, not counting the cost of the land under it. Such lofts are aimed at an upscale clientele -- composed mostly of the widely mocked class known as young urban professionals -- with income of well above $100,000 per year.

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  Sister Amy Bayley, community relations director for Mercy Housing California Inc.

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  Sister Amy Bayley, community relations director for Mercy Housing California Inc.

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  Sister Amy Bayley, community relations director for Mercy Housing California Inc.

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  Sister Amy Bayley, community relations director for Mercy Housing California Inc.

Details:

Read the feature story sidebar: The High Cost of Housing.

The average unit in the developments meant to replace Geneva Towers is costing about $240,000 to build, excluding land costs. Such units are aimed, by and large, at families with incomes of less than $44,000.

In other words, luxury housing in San Francisco is being built for 25 percent less than our housing bureaucracy pays for apartment/town houses for the poor.

Comparing the costs of affordable and market-rate housing is a very inexact science; the nonprofits that produce low-income housing have overhead costs -- hiring expensive consultants to broker the complex financing, for example -- that market-rate developers do not. And for-profit developers are not a quick and dirty answer to affordable housing shortages, says national housing expert Judy Reed, president of a Seattle-based consortium of lenders.

"Affordable housing cannot just be left to capitalism, even though private developers tend to build it more quickly and for less money," she says.

Still, Reed does suggest that San Francisco's nonprofit developers begin to partner with generally more efficient for-profits. In that way, the nonprofits can focus on their strengths -- accessing government money and grappling with neighborhood politics -- while for-profits manage the design, construction schedules, and, above all, budgets of affordable housing projects.

There are, of course, exceptions to the general failure of San Francisco nonprofits to build affordable housing efficiently. The Tenderloin Housing Development Corporation, another arm of the Roman Catholic Church, appears to be getting a housing bang for the city's bucks. The Mission Housing Development Corporation has its community supporters, and some for-profit developers, such as the Emerald Fund, are piggybacking affordable apartments into fair-market developments.

But it seems to be time to begin holding the public-private housing bureaucracy accountable for its longstanding failure to perform, and to begin acknowledging that nonprofit organizations -- even those sponsored by people of God -- may not always be the best way to minister to the housing needs of the disadvantaged.

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