Cost to Build Affordable Housing

Some articles suggest $21bn will not be enough to construct 12,000 subsidized units due to complexity of this project. So how much will it cost per unit? and is that a reasonable use of capital?

So 1.7 million per unit.

It seems like there is more than just housing, so not quite $1.7M per unit. But I’m guessing there just can’t be that much non-housing from the rendering to make a reasonable dent on that insane per-unit price for affordable housing.

Does the govt employ any economists? That can divide one number by the other and tell the mayor that this is insane?

What do you think is a reasonable amount to pay per unit of subsidized housing?

“Does the govt employ any economists?”

The answer to that would be no. A better question is does the government employee any people who can do basic math and have any common sense. Oh, I forgot, many schools now claim math is racist so the answer to both questions is no.

"What do you think is a reasonable amount to pay per unit of subsidized housing?"

Manhattan Plaza, 1974: 1,689 units, ~3,500 tenants. $95 million mortgage. Land was free (eminent domained), so ~$ 52,246/unit or ~27,142/body. Apply your increase multipliers over the years for cost of construction (labor, materials, etc.) and there's roughly your answer. There's some income producing stuff on the ground floor and cellar, but the overall costs are as above. Up for debate: Whether the number of people/interests with their hands out is larger or smaller than in 1974.

This country could have built one or two of these in every affordable-housing-crunched city over the last 5 years if we weren't so interested in blowing brown people into pink mist.

Land, materials and transportation are already expensive. I’d hazard a guess that the proliferation of regulations—covering safety, environmental protection, minority hiring, and union labor—plays a role. And who could oppose any of these goals? Who doesn’t want safer workplaces, a cleaner environment, or thriving minority-owned businesses? Who wants workers exploited or forced into inhumane conditions?

But all of these protections come with a price tag.

Roughly 4% inflation. More precisely 6.6 muliplier for 50 years. Then add 1% genuinely higher standards of construction such as sprinklers, fire alarms, smoke detectors, energy efficiency, better windows, elevator etc. 1% per year increased safety standards and pure regulation. So we are talking about 5% per year increase. 12x over 50 years. Makes it $600k per unit which is what the cost of 2 bedroom unit and one bath 900 sq ft is ex land.

Sorry 4+1+1 is 6%, which is 18 multiple. So may be the total is 5.5%. 14.5 multiple. At $700k per unit.

Thank you for some current ballpark numbers.

So if a modern unit similar to M.P. costs $700k (and I've seen the M.P. units, and they're fine), and the estimate for this new project is $1.7m/unit, who, exactly, is getting the additional $1m/unit? It's either an explainable difference in accounting methods and actual costs, or it's going into the pockets of special interests or funding their agendas.

Before you can start building, you need land. And the “land” here costs $14B to construct. Because you have to put a platform over rail yards, and that platform has to be able to support high-rises. They could go higher on the high-rises, but that’d require a stronger (and more expensive) platform.

The actual units proposed atop the platform cost “normal” amounts.

Ah. That makes sense. Costly land. And the project makes no sense. There is land available at $100 per square ft in crime prone areas in NYC.

I know this because I had a conversation with Gemini about it this morning. God help you if you try to extract it from the materials on Sunnyside Yards’ website.

Gemini identified criticism of the cost but said proponents point to the fact that we are getting “land”. Seems like vacuous reasoning. Can’t we get “land” by buying some 2-story properties? Another proponent point was that we’d spend more than $20B on affordable housing in the next 50 years, and that this would somehow deal with that, in some even more vacuous logic. How about you give me $20B today, I give you $50B in 50 years, and we call it even?

Ha. I have to start paying for Gemini.

sorry for all the rage bait, but something is not adding up in this article

https://nypost.com/2026/03/03/us-news/taxpayers-will-fork-over-more-than-36k-per-child-under-nyc-free-2-k-pilot-program/?

1) the state plans to spend $36,500 per kid
2) "Families pay about $23,400 for market-rate day care centers, the report released last year states"

Maybe it is time for the administration to hire an economist

What does Gemini think?

from personal experience, 23,400 is not a Manhattan price, but does seem potentially realistic in other boroughs

One simple explanation may be - Gov employees get healthcare and pensions. That is at least $25 k per teacher. Then for each teacher, there may add an admin staff / management vs say 0.25 in private day care. 5 students per teacher. That is roughly 10k per student.

Then you can ignore the fact it is NYPost. So the actual difference may be less.

Then you can’t ignore the fact it is NYPost. So the actual difference may be less.

>> Ha. I have to start paying for Gemini.

You're allowed to do some w/o paying if you log into Google. I think they give you an unlimited amount of "Fast" mode (never exhausted it personally) and limited amounts of "Thinking" and "Pro" which reset after several hours. It's enough for my personal screwing around, but not for (my) work, where I use the company portal (for reasons well beyond just who's picking up the bill).

'nada: Thanks for the info on the land. I hadn't read the 'official' project docs on the web site (didn't know there was one). I agree w/ 300 -- there certainly is land for much cheaper.

>>>One simple explanation may be - Gov employees get healthcare and pensions. That is at least $25 k per teacher. Then for each teacher, there may add an admin staff / management vs say 0.25 in private day care. 5 students per teacher. That is roughly 10k per student.

So they are not building or hiring, for the pilot they are primarily contracting existing providers. Maybe the extra cost is to bring up these providers up to a higher standard.

What do you mean contracting existing providers? As you know, many existing providers in private work on cash basis. With govt, that is not happening. And I suspect NYC has some minimum requirements for benefits of contractors. NYC construction contacts have to use union workers.

Daycares? I don’t know if daycares work on cash basis. I think most are above the table

I think you're right - they need all kinds of authorization. Maybe in some forgotten corner of the Bronx nannies send their own kids to under-the-table daycare.

Makes sense. Govt would want records of how many workers per 5 or 10 children and if they are paid as a proof that they actually are working.

Talking about Bronx.
https://www.nbcnews.com/news/us-news/bronx-daycare-providers-sentenced-25-life-prison-fentanyl-death-toddle-rcna261772

Wow - horrific.

With these kinds of costs they should build luxury and market rate housing. This will free up cheaper units for everyone else. As long as overall supply is increasing it works out for everyone.

https://research.upjohn.org/up_workingpapers/307

@Krolik - that might work.

They can't do anything cheaply. It cost them 3.5m to put a potty in a park. I think it's largely to do with union labor and the restrictions that come with it.

https://www.thecity.nyc/2026/03/16/public-bathroom-fort-washington-park-construction-cost/?utm_medium=email&utm_campaign=SCOOP_031626&utm_source=1&utm_source=ActiveCampaign&utm_medium=email&utm_content=%243%205%20million%20prefab%20potty%20is%20stalled&utm_campaign=SCOOP_031626