IN PROGRESS: Angell Way (K. Gibbs School site)

[Garris]

some time ago i posted a link to an article about how a for-profit developer in chicago was MAKING MONEY on affordable housing sans incentives or subsidy.

[Cotuit]

Of course, as developers are learning there isn't quite as much demand for the $400K units as they thought. But that just means they would stop building.

[pete11]

Why, I'd rather take less profit than no profit at all.

[Lone Ranger]

So wouldn't the builders. They're a lot like sharks. If sharks stop swimming they die, if builders stop building..... This happens at the end of every cycle the margins get so high at the top that the efficient builders just build cheaper and eat away at margin, until there's none to be had, and some of the public ones even continue into a loss (after filing BK of course) since builders build. This really hurts those sitting on inventory, but really helps with the affordability problems.

Garris, those numbers are not even in the same stratosphere as affordable (using FHA 28% guidline). Prices will become more affordable (either through skyrocketing incomes, price degradation, inflation or some combination of the 3) Its hard to see it now, but it has to happen. Unless the U.S. were to adopt some sort of caste sytem.

[pete11]

Congratulations, pete. With the exception of your final sentence, that post was almost sane.

[eltron]

I don't believe that for a second. I just read in an article today that San Jose has added 10,000 new affordable units in the last decade. San Jose being in the Bay Area/Silicon Valley real estate market. Affordable housing can and has been built as new construction time and again.

[eltron]

Sure but a lot of that is done through subsidy and IZ. Since the IZ wasn't attached to any of this developers other products (I'll admit I haven't looked up what else they've done) then you can't expect them to build affordable out of the goodness of their hearts. And if you tell them they are only getting permits if they build affordable, then you will be left with an empty lot since they will walk away.

I thought someone here posted that the price for new construction of a 750 sq. ft. unit (or so) was $150K in material and acquisition. So you can spend $150K to build a 750 sq. ft. place to sell for $175K (a $33/s.f gross profit), or you can spend $250K to build a 1000 sq. ft. place to sell for $450K (a $200/s.f. gross). No developer I know is going to choose the former. Of course, as developers are learning there isn't quite as much demand for the $400K units as they thought. But that just means they would stop building.

[dgreco]

There are at least 8 developers (non-profits) actively working in Providence that would jump at the opportunity to develop on that scale. I guarantee if the city stepped in and put restrictions like that on the parcel and numbers worked, someone would build. YES, out of the goodness of their hearts (and a slightly diminished profit).

[DaveRPI]

i think some people were smoking their fruit loops in this thread...

affordable housing, i think people need to realize what the government and developers are actually saying when that word gets thrown around.

~affordable housing~ is a specific real estate asset class. affordable doesnt mean "low to mid market prices" or "something reasonable" which the adjective 'affordable' suggests. the same people who would live in affordable housing are not even close to the same people who would be normally buying at market rate

zoning ordinances and other similar laws are a main culprit here, they are a means of keeping the "status quo" developers would jump at the chance of building more volume [which would mean softer pricing] if the ordinances allowed for it. ive been saying for years that this is a problem. it is a main root of NIMBYism.

[brick]

There are at least 8 developers (non-profits) actively working in Providence that would jump at the opportunity to develop on that scale. I guarantee if the city stepped in and put restrictions like that on the parcel and numbers worked, someone would build. YES, out of the goodness of their hearts (and a slightly diminished profit).

[Cotuit]

Unless the U.S. were to adopt some sort of caste sytem.

[eltron]

"and the numbers worked" is really the key phrase here. Honestly if there are 8 non-profits aching to do this kind of work, then where were they when the parcel was sold?

[jencoleslaw]

RI 8th most expensive state for housing

[pete11]

"and the numbers worked" is really the key phrase here. Honestly if there are 8 non-profits aching to do this kind of work, then where were they when the parcel was sold?

So, what are the restrictions at this location?

1) High land acquistion cost

2) Low density due to neighborhood restrictions. Maybe I am wrong about this, but basically you are looking at something where you aren't going to get approval for less than 800 s.f. per unit, and with that in mind you are only going to put three stories so that becomes, what, 24 units here at the most? I don't know the site layout well enough.

3) Existing structure not suitable for rehab into residential. This is an assumption I am making, perhaps they could have used it. If so, then change my estimate above since this was a 2 story building, and say 16 units. Or maybe they add a floor, whatever.

I hate that we are getting into the generalization of affordable housing since we do it over and over again and it basically becomes zealotry, and I apologize for my part in that discussion. However, in general, the argument has to take the current building climate into account. Ignoring the microeconomics of the region and the obstacles of the planning code in Providence is nice when talking about an ideal world, but not that useful in discussing real development.

What I would like to see is for someone to tell me how you would get affordable housing to work in this location without subsidy or IZ. I will in turn say that housing is a huge issue for the city and state and that subsidies and IZ's should be applied intelligently to encourage affordable housing (and that the HTC probably should have included more affordable housing in its charter). But, again, for this location under its current restrictions, how would you do it?

[Garris]

Apparently, groundbreaking is going to be on June 12th.

- Garris

[Garris]

Apparently, groundbreaking is going to be on June 12th.

[mental757]

any renderings??

[Garris]

I guess we can move this one to "In Progress?"

I was at the groundbreaking this morning (an affair complete with flute player, Seven Stars catering, the Mayor, and several other prominent figures). Nothing in the way of news, but they did have a brouchure with the complete price list.

The least expensive of the 11 units (all 2 bedroom) is $750,000, and 5 out of the 11 are over 1 million dollars (with 4 of them at about 1.2 million, and one that is already sold at 1.7 million).

Their marketing seems to be a laser-like focus on retired empty nesters selling large, expensive homes in RI who are looking to "downscale" to luxury condos, pocket the difference, and live on the East Side. Considering the number of people I've met who are looking to do this, I actually think it's a strategy that could work.

I'll post a scan of their render later on.

- Garris

[gregw]

http://www.pbn.com/stories/26033.htm

There's a rendering.

[Liamlunchtray]

http://www.pbn.com/stories/26033.htm

There's a rendering.

[gregw]

Planet Dullsville.

[Cotuit]

I think it fits in and that's fine. It could have been wrapped in vinyl with garage doors facing the street.

Is this still called "Angell Way" or are they just calling it "77 Angell" now?

[jencoleslaw]

If it is still called Angell Way I am so totally not buying a condo there.

[Cotuit]

If it is still called Angell Way I am so totally not buying a condo there.

[Garris]

Thanks for posting the link. That indeed is the render (no need to scan it in tonight now!).

All of the marketing seems to say "77 South Angell." All of the initial documents we were shown said "Angell Way," but perhaps that name has (thankfully) gone by the wayside.

As to the look of the building, I think it's fine... Certainly nothing progressive, but it fits the character of the neighborhood and looks sufficiently "upscale" (whatever that means anymore). It'll also make a nice presence as the first substantial building drivers pass coming across the Henderson Bridge. The Armory folks seem very concerned about having top building materials and the landscaping plans look good, so I think it'll have a tight, quality look.

It's built almost as close to the sidewalks as zoning will allow in that spot and all of the parking is underground. The entrance is a major one right to the sidewalk on the main road, so good urban principles are being addressed here (the Vista Blah Blah folks doing the Atwells Parcel should look closely here...)

My only concern real is the back of the building facing our condos, which will not be bricked... We'll see... Then again, the ugly backside of my condos were obviously never meant to be seen to be seen by the general public either, so at least this new building were spare the residents of Providence from having to be "mooned" by the back of my building while stuck at the Butler/S. Angell intersection...

- Garris