Dive Brief:
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Builders who specialize in affordable multifamily housing are finding it harder to keep costs under control as the cities that offer housing tax credits to build the units are requiring add-ons like parking and energy-efficient building products.
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A yearlong study in California found the average apartment built with low-income housing tax credits cost $288,000 between 2001 and 2011.
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Costs push upward when higher-quality construction and energy-efficiency improvements are required. Still, the larger the developer and the larger the project, the study notes, the lower the cost per unit.
Dive Insight:
Another contributor to the escalating cost of building affordable housing: Opposition from neighbors. The report found costs at the most unpopular projects tend to be 5% higher than others. And when local governments require design changes as a result of community pressure, costs can escalate by 7%.