Making It Pencil: the Math Behind Housing Development – 2023 Update

This brief explains the basics of how developers build new housing in California, aiming to serve as a resource for policymakers and stakeholders who want to know more about what goes into project costs, how financing is obtained, and how rents are determined.  This brief updates our original case study development pro formas with numbers based on current market conditions to illustrate how the costs have changed across key regions of California, and the challenges those costs pose to new housing production.

In addition to a written brief, we are also excited to roll out an interactive project page. This page provides a visual walkthrough of the brief and includes an interactive activity that allows the user to walk through the high-level decisions for new market-rate real estate development projects.

Read the full brief Making It Pencil: The Math Behind Housing Development (2023 Update) here.

Authors:
David Garcia, Terner Center
Ian Carlton, MapCraft
Lacy Patterson, MapCraft
Jacob Strawn, MapCraft