Terner Center Blog: No Limits

Author Archives: Sara Draper Zivetz

Announcing New Terner Center Series: The Cost of Building Housing

Posted on by Terner Center for Housing Innovation

In recent years, the housing affordability challenges faced by high-cost regions have gone from bad to worse. A number of factors, including shrinking public subsidy, explosive job growth, wage stagnation, and a severely constrained supply of housing have all been widely cited as drivers (with each region facing a unique set of circumstances).

Another factor that is compounding the housing affordability issue is the actual amount of money it takes to build a housing unit. In recent years, the cost of building has skyrocketed in places like San Francisco - in some cases increasing by up to 50 percent -  making new housing development increasingly difficult to finance and produce.

Why is this? What is it about building homes that has become so expensive, what interventions might be most effective at controlling these costs?

These are the questions at the heart of our new research series: The Cost of Building Housing. We will be diving into quantitative and qualitative evidence that helps us better understand which elements of building housing has become so expensive (is it land? materials? labor? fees?), the drivers of these increases, and what practitioners and policymakers might do to address these elements individually, and collectively, to bring down costs for homebuyers and renters.

To begin, the Terner Center will be releasing two studies, due out later this month:

A paper examining the role of development fees - assessed at the local level to offset infrastructure impacts and pay for services related to new development - in overall housing development costs

A brief sharing results from focus groups and interviews with development practitioners offering their perspective on the drivers of rising costs of construction and potential policy interventions to be considered at the city and state level.

Future publications will include, for example, a comprehensive quantitative analysis of the costs of construction, using a database of actual projects in California in recent years, and a comparison of costs between housing developments generating market-rate units, those generating affordable units, and those using Low Income Housing Tax Credit financing. Additional resources, including webinars, slide decks, and other materials will supplement our writing on these topics, and future studies on the various elements that shape the cost of building are also under development.

If you are interested in being notified about future publications from The Cost of Building Housing Series, sign up for our mailing list. If you are a housing developer and have faced cost increases in recent years, we would welcome your participation in our study. Please contact ConstructionCostStudy@berkeley.edu. And if you have questions, feedback, or ideas about this effort, please contact us at ternercenter@berkeley.edu.


ADU Update: Early Lessons and Impacts of California’s State and Local Policy Changes

Posted on by David Garcia

A multi-pronged approach to alleviating the shortage of housing in California and other high-cost regions is urgently needed. As we have discussed in past research, Accessory Dwelling Units (ADUs) - built with a small footprint predominantly in under-utilized single family neighborhoods - can offer much needed naturally-affordable supply to the market. In the fall of 2016, the California State Legislature passed a set of bills intended to clear the way for the proliferation of ADUs  in California. Even before these changes were adopted, many leaders at the local level were pioneering policies to make it easier for residents to build…


New State Policies Aim to Boost Access to Opportunity through Housing

Posted on by Elizabeth Kneebone and Carolina Reid

In California, the Tax Credit Allocation Committee (TCAC) plays an important role in determining where and how Low Income Housing Tax Credits (LIHTC) get allocated for the production of affordable housing. On Wednesday, TCAC adopted a series of policy changes aimed at increasing the development of affordable housing options for families in higher opportunity communities, signaling a commitment to advancing fair housing goals amid the state’s broader agenda to address California’s housing crisis. The regulations seek to respond to a growing body of evidence that communities that provide low-income families access to good schools and safer, lower-poverty, and less segregated…


Lessons for the Future of Public Housing: Assessing the Early Implementation of RAD

Posted on by Carolina Reid

In its 2018 budget, the Trump Administration is proposing to slash public housing funding by $1.8 billion. This cut represents a 29 percent decline from 2017, and will compound a longstanding trend of underinvestment in public housing and worsen an already dire situation. Over time, these shortfalls in federal funding have resulted in a $26 billion backlog in needed repairs, leaving many residents in public housing units across the country with untenable living conditions and a precarious housing future. In addition, every year we lose valuable units of public housing to demolition because of this lack of investment: HUD reports…


Rowing in the Same Direction? Aligning Sustainability and Housing Policies, Strategies and Goals

Posted on by Sara Draper Zivetz

Access to quality housing in stable neighborhoods is increasingly recognized as a fundamental building block for individual and family outcomes. Where you live, how much you spend on your housing, and how stable a place it is for you and your family has well-documented effects on economic prosperity, educational attainment, and health and well being, among others. Meanwhile, the location, design and affordability of housing is also deeply tied to issues of environmental justice and climate change. As related but distinct segments of the environmental field, housing and housing policy play an important though often under-discussed role in both issues:…


Building Affordability by Building Affordably: the case for Off-site Multifamily Construction

Posted on by Carol Galante and Sara Draper-Zivetz

To remain relevant and successful over time, every industry must modernize and adapt to changing demands and opportunities in the marketplace. The housing development industry is no exception, and over the years, has experienced its fair share of evolutions and revolutions in business model and product design. Today, as housing developers face rapidly changing consumer preferences, population demands, technological advances, and an ever- rising cost of construction, the adage “innovate or perish” may be timelier than ever. How will the housing industry adapt to these new realities? As a recently released report from McKinsey & Company points out, the construction…


Federal Policy Outlook: 2017 and Beyond

Posted on by Terner Center Team
Filed under: Informing the Dialogue,

Since November's federal election, many have been considering what the incoming Administration portends for housing policy and practice in the next four years. Last Tuesday, California Housing Consortium and the Terner Center for Housing Innovation welcomed over 100 people to a panel discussion in Oakland intended to explore this question. The event brought together housing experts Michael Novogradac of Novogradac & Associates, Chris Gouig of Alameda County Housing Authority, Matt Schwartz of California Housing Partnership Corporation, and our Faculty Director, Carol Galante. CHC Policy Director Marina Wiant moderated the conversation, asking questions about tranistions in federal leadership in housing, the nature and implications of impending tax reform,…