2014-006 - Santa Ana General Plan Housing Element and Public Safety Element Updates

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HOUSING CONSTRAINTS CONSTRUCTION AND REHABILITATION COSTS Construction costs are the largest component of costs associated with new and rehabilitated housing. Construction costs include labor, materials, site improvements, and developer profit. The cost will vary by project type, quality of materials, location, height, and whether underground parking is required. The following provides a range of estimates that can be used to estimate costs. Construction Costs Various construction cost - estimating firms provide developers and jurisdictions in the Southern California region with cost projections for residential development. For example, R.S. Means provides construction cost manuals for calculating the average cost per square foot of residential construction throughout the Southern California region. Region wide numbers, however, tend to be diluted by lower cost areas and may not accurately reflect the higher costs of building in Orange County. According to R.S. Means multiple - family housing ranges from $124 to $173 per square foot, which translates to approximately $136,400 to $190,300 for an 1,100 square -foot unit. Residential development with limited ground preparation, simplified architectural features, and standard quality of interior materials would be in the lower range of these estimates. However, construction costs would be higher for more luxurious buildings and projects with underground parking. Rehabilitation Costs The City was actively involved in funding the acquisition and rehabilitation of multiple- family projects during the prior housing element planning period. Based on a sample of 2009 projects in Santa Ana, the rehabilitation cost ranges from $55,000 to $85,000 per unit. However, projects involving acquisition, rehabilitation, and reconfiguration (to remove or combine smaller units to create larger units) can cost from $75,000 to $120,000 per unit. Other indirect and direct costs associated with rehabilitating housing (e.g., relocation, replacement ofunits, removal of asbestos or lead -based paint, etc.) can add substantial costs. In other cases, private property owners may initiate rehabilitation projects. To assist property owners in improving housing, the City offers below- market -rate loans to qualified applicants for up to $75,000 per single - family or multiple - family unit. Mobile home owners can receive $5,000 to $10,000 per unit for rehabilitation. The Housing Framework describes these programs in greater detail. JA& CITY OF SANTA ANA GENERAL PLAN HOUSING ELEMENT B -3