Sticker Shock

Creighton Court in Richmond         Photo credit: NBC12

By Dick Hall-Sizemore

I will be the first to admit that public housing policy is beyond my area of expertise. But, I am often amazed and befuddled at the cost of what is supposedly “affordable” housing.

Creighton Court is a traditional public housing complex in Richmond. The Richmond Redevelopment and Housing Authority has decided to raze the complex and replace it with a mixed-income development. RRHA earlier informed the public that some of the units would be houses “affordably priced” and marketed to first-time home buyers. So far, so good.

Today’s Richmond Times-Dispatch reports the projected price of these “affordable” homes: $400,000. People are reeling from the sticker shock. Even with a $50,000 down payment, the monthly mortgage payment would be over $1,400. For whom is this “affordable”? I had a decent paying state job and there was never a time at which I could have afforded a $1,400 mortgage payment.

RRHA officials are blaming the unusually high cost of building materials for the costs exceeding what had been expected. I can understand this dilemma. I recently had my roof and gutters replaced. My contractor told me that she spent most of her time trying to find materials for her subcontractors. When she came by to pick up my check, we chatted and she told me that, right then, manufacturers were not producing shingles.

But I still cannot understand these high costs. After all, RRHA owns the land. The infrastructure, streets, water, sewer, etc. is already in place.

There is one factor that contributes to the cost of the houses and is a reflection of modern times — their size.  According to the RTD, the square footage of the new homes will range from 1,700 to 2,150. Many years ago, I tried my hand at selling real estate  (The foray was a brief one; I discovered that I am not a good salesman.) At that time, a 2,000 sq. ft. new house in what was then considered the Far West End in Henrico was considered fairly high-end. Now, it seems that 2,000 sq. ft. is almost considered the minimum size.

There are homes in my neighborhood that are selling for considerably less than $400,000. (There are also some that are selling for more.) It is true that many of them are 40 and 50 years old, but I would bet they are better made and more substantial than what will be built by RRHA. They are also smaller than what RRHA is building. They generally are in the 1,500 sq. ft. range. Families with several kids have lived in those houses.

There are also areas close by in which the houses are selling for less. The only drawback is that these neighborhoods, including mine, are not conveniently located near a bus line. However, it seems to me that anyone who can afford a $400,000 house can afford a car as well.

Wouldn’t it be a better idea for RRHA to try to help some of their clients buy existing houses in these neighborhoods at a substantially lower cost? After all, they are looking for mixed-income neighborhoods.