In last month’s episode of results from the Rockridge Housing Study, we learned that land cost can be an important part of overall housing cost. Because Rockridge is such a desirable place to live – with pleasant tree-lined streets, convenient walking access to shops selling food and clothing as well as a drug store, hardware store and lots of other things, and convenient access to public transit, freeways, and major surface streets, land costs are higher here than almost anywhere else in the East Bay. That’s not good news if one hopes to build affordable housing in Rockridge.
The analysis that housing consultant Darin Smith volunteered to do for the Rockridge Housing Study, based on figures available in the 2018-2019, gave us some unpleasant news about how easy it would be to build affordable (or even market rate) housing here in Rockridge. (The results of that analysis were posted on the old Rockridge.org website, and have now been re-posted on the new website.) Here’s a short summary of what the analysis said.
The average per-acre cost of for-sale housing in 94618 at that time was about $11 million per acre. That means a developer seeking to replace an 1,800 sq.ft. single-family home on an average 5,300 sq. ft. lot would have to pay about $1.4 million. If you built two homes on the lot, the land cost would be about $700,000 each.
Let’s assume each new unit is 1500 sq. ft. – at $500/sq.ft. construction cost, that’s $750,000 per unit, for a total cost of $1.45 million per unit ($700k for land and $750 for vertical construction). That comes out to a cost of $967 per square foot, which is pretty high for a duplex unit – and that doesn’t take into account tear-down cost or the developer profit. The results don’t come out much better if one builds a fourplex instead. Because of the high land cost in Rockridge, it still doesn’t pencil out.
The figures don’t look any better for trying to buy a commercial lot, say the Levant Rug Store parcel, where, based on 2020 assessed value, the land cost would be even higher, $15 million per acre. The price per acre of commercial property here is generally every bit as high as for residential property. The only Rockridge lot that looks at all feasible would be the Davita Dialysis Center on Claremont Ave, where the large amount of parking space brings the land cost down to about $4 million per acre.
The next article will talk about how incentives might affect the feasibility of affordable housing.
