$1.2 billion housing bond was approved 3 years ago. Not a single unit has been produced. Costs have overrun by $100k per unit over past predictions. At an average cost of $531,373 per unit building costs of many of the homeless units will exceed the median sale price of a market-rate condominium. In the city of Los Angeles, the median price for a condo is $546,000.
Prices rose dramatically because of higher-than-expected costs for items other than actual construction, such as consultants and financing. Instead of the 10,000 apartments touted by city leaders as the goal of the bond issue, the city measure known as Proposition HHH is now projected to provide a total of 7,640. The hope is that the new apartments, combined with dormitory-style shelters and other facilities, can make a dent in the city's unsheltered homeless population.
Part of the problem with costs is that some of the projects are being built in some of the most-expensive areas of the city. More apartments could be built at a lower cost, the study found, if they were resituated in lower-cost, outlying areas.
The city also could promote lower-cost alternatives to traditional apartment buildings. Some 975 apartments will be in six projects in which the cost will average $351,965, with some as little as $200,000 a unit.