Quote:
Originally Posted by para transit fellow
What the city does when it owns the building is:
A) lease out the majority part of the building units at market rent
b) lease a portion of the units at subsidized rent to qualified individuals.
...with the goal that the total revenues from ALL rents collected are sufficient to maintain the building costs.
The practice is called cross-subsidization: the income from the market rent suites cover the subsidize the sub market rent. Best part of the strategy is that after the initial acquisition costs, the subsidies are sustained without annual taxpayer dollars.
the disadvantage is that the tenant needing a subsidy can't move to another apartment if their situation changes.
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The other disadvantages are:
The city has to put up a huge amount of money initially to build the building.
The city has to manage it. I just about bought a house from Calgary Housing once, and the deferred maintenance was unreal. The city isn't good at this, imo.
If the city wanted to put $40MM plus the value of some land into affordable housing, probably the best thing they could do would be invest the money and use the returns to provide subsidies.