While there were redevelopment dollars used in the project (a $3 million agency loan) the overwhelming source was low income housing tax equity (approx. $17.5 million) along with conventional financing, state grants, enviro remediation grants, etc. As a resident of the neighborhood (and someone who is now desperately searching for these $60k nice apartments) i applaud the work of SHRA and the developer who has a very successful track record building and managing these projects.

Yes, where are these $60K Midtown apartments? The cheapest things on Metrolist are two condos for $120K and $160K at 10th and P, for one-bedroom condos of about 350 and 550 square feet, in a 30 year old building. Comparing new construction built to high LEED standards to 30 year old two-story stucco condos is a bit out of whack. Powell uses a very common manipulation here of not including the retail space in the unit cost, artificially increasing the unit price.

William, if $650K is a "common manipulation", then please share your calculation of the per unit cost (including financing).

I see an 8 unit complex at 2411 T Street for $700K. $88K per unit. No matter how you measure it, several times cheaper than the SHRA boondoggle units. LEED standards and age are complete red-herrings. I live in a 75 year old non-LEED home without any negative impact on my life, so why would this be unacceptable for low-income tenants?

http://www.loopnet.com/xNet/MainSite/Listing/Search/SearchResults.aspx#/95816/Multifamily/For-Sale/c!ARUIBQAAAQ

That $700K is before financing costs--so call it more like $200K a unit. They're all one-bedroom units, the La Valentina project is a mix of studios, 1, 2, and 3 bedroom units, mostly 2 and 3 bedrooms. LEED standards aren't a red herring when the units are so energy efficient the difference in utility bills will add up to millions over the building's life. The building age is applicable too--the building at 24th and T looks like one of those 1950s-60s "dingbat" apartments, pretty much the nadir of construction quality and energy efficiency. Fixing up a building of that era to comparable energy efficiency would be difficult--more difficult, in fact, than your 75 year old home, as pre-WWII homes were often more energy efficient than building from the postwar boom--only in the last decade or two have building standards risen to the point where they are comparable to prewar construction. So your 60 year old building, fully financed and with insulation/systems upgrades, would probably cost at least a quarter-million each, but it doesn't add a single unit to the overall number of central city housing units, nor does it substitute adequately for the two and three bedroom units included in this project. So, no, your example fails.

Construction method also matters--the La Valentina project is a four-story project on a concrete podium, not a stick-built drywall/stucco two-story building. Higher-quality construction methods cost more. Building today also costs more than it used to--materials, labor, etcetera have all gone up since the 1950s. I'm sure you have plenty of anecdotes about how you used to be able to buy a candy bar for a nickel, but it's not the 1950s anymore, so no, the price of a 50+ year old building isn't directly comparable to brand new construction.

I am probably about the same age as you, so you will not get horseless carriage anecdotes from me.

I have no reason to doubt that this project was built with the best windows, insulation, HVAC, foundation, interior and architects that money could buy, and is much better in every regard than the units on T Street.

The problem is that the free-market value of low-income housing is about 25% the cost of this SHRA Taj Mahal. You can diss the "dingbats" on T St, but that is the kind of housing where hundreds of thousands of Sacramentans live. Spending $27M for 81 families is ridiculous by any measure. To top it off, you will now fill these rent controlled units with tenants whose cardinal motivation is to never earn an extra dollar ever again.

The idea of needing to add more low-income housing around Sacramento is another empty myth. You can buy currently vacant houses all over Sacramento for under $100/sf. You could give the poor a house, throw in a car, and still spend half of what was dumped into the Valentino boondoggle.

The intent is not to "diss" the dingbat but to clarify the difference between the price of older housing stock and new construction. I suppose we're just going to have to agree to disagree about the need for low/mid-income housing, and the idea that the people who move into those units will never earn an extra dollar--the income range for the apartments at La Valentina will vary from $20K to $60K a year. Unlike the stereotyped assumption that this housing is solely for those on public assistance, it also means a place for working folks, or people like Sergio's friend who moved in last month.

There is plenty of vacant housing "around" Sacramento--but not all that much within Sacramento's downtown core. That is one of the issues housing like this is meant to address. I realize some don't recognize that need and don't want their taxes to pay for it, but don't agree with their conclusion.

The dingbats and the Victorians definitely have their appeal and uses--it is generally cheaper (and always greener) to fix up an old building than to demolish it and replace it with a new one. The fact that many have stood for a century or more says all that is necessary about their seismic stability. Even the unlovable buildings of mid-century construction (like dingbats and tilt-ups) are generally cheaper, allowing new, creative businesses and cultural uses to flourish--every event at the recent LAUNCH festival took place in either an adaptively-reused old building or an actual historic landmark! The dingbat apartments are a valuable part of central city housing stock because they provide reasonable rents and population density throughout our historic central city neighborhoods, allowing those who can't afford a Victorian or Bungalow to live among them at a reasonable price. But in the long run, we'll need a lot more housing alongside the supply we already have!

Projects like La Valentina have value because they fill long-vacant lots that would otherwise provide no housing, other than the tents and shanties of those who couldn't afford to move to the "low-cost" housing in underwater subdivisions on the suburban fringe. New infill is a necessary component of urban repair, and it doesn't happen automatically, nor does the "free market" fill in when there is so much subsidy for outward suburban sprawl.

What is the market rate for new construction in a central city neighborhood of similar size and scale?