The High Cost of Building in the Bay Area
Why Does It Cost So Much
to Build in the Bay Area?
Multiple factors layer together to influence
the cost of building housing…
Land
+
Materials
+
Labor
+
Fees
+
Financing
+
Consultants
+
Tax, Title, Escrow
=
Total Cost
And those factors are influenced by multiple
forces
Local Policies and Land Use
State Priorities and Regulations
Federal Policy and Regulations
Market Forces
TERNER CENTER FOR HOUSING INNOVATION
UC BERKELEY
It all adds up and makes building in the Bay
Area particularly expensive
Total Cost of a Prototypical 100-Unit Market Rate Building in the East Bay:
$59,931,628 ($599k per unit)
11%
67%
22%
Source: Terner Center pro forma analysis
Please welcome…
Andrew Cussen
— Development Manager, RAD
Urban
Elizabeth Kuwada
— Senior Project Developer,
Eden Housing, Inc.
A
77%
23%
70%
30%
B
Total Cost of Two Affordable Projects in the East Bay:
A: 60-Unit (2019)
at $36,189,000
($603k per unit)
B: 90-Unit (2017)
at $35,910,000
($399k per unit)
Change title?
Multiple factors such as land, materials, labor, fees, financing, consultants, and tax regulations contribute to the high cost of building in the Bay Area. Local policies, state priorities, federal regulations, and market forces also play a role. As a result, construction projects in the Bay Area can be significantly more expensive compared to other regions. The total cost of building a 100-unit market-rate building in the East Bay is estimated at nearly $60 million. Affordable housing projects in the area also face cost challenges, with two examples showing costs per unit ranging from $399k to $603k.
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Presentation Transcript
Why Does It Cost So Much to Build in the Bay Area?
Multiple factors layer together to influence the cost of building housing Land + Materials + Labor + Fees + Financing + Consultants + Tax, Title, Escrow = Total Cost
And those factors are influenced by multiple forces Local Policies and Land Use State Priorities and Regulations Federal Policy and Regulations Market Forces
It all adds up and makes building in the Bay Area particularly expensive Total Cost of a Prototypical 100-Unit Market Rate Building in the East Bay: $59,931,628 ($599k per unit) 22% 67% 11% Source: Terner Center pro forma analysis TERNER CENTER FOR HOUSING INNOVATION UC BERKELEY
Please welcome Andrew Cussen Development Manager, RAD Urban Elizabeth Kuwada Senior Project Developer, Eden Housing, Inc.
Total Cost of Two Affordable Projects in the East Bay: A: 60-Unit (2019) at $36,189,000 ($603k per unit) B: 90-Unit (2017) at $35,910,000 ($399k per unit) 23% 30% 77% 70% B A
