One idea is an expansion of a law already on the books in many cities. When you create a new building / housing complex (which will be 100% in a new city), you require X% of units to be "affordable housing". I could see the city just increasing the required % and then giving tax credits to developers to offset the lost revenue to them. Given that this city would be built in stages, it will give them time to hone in on the desired percentage.
The problem is "affordable housing" isnt actually affordable for many. I qualify for it in the city I live in, and despite working full time for significantly above minimum wage, the rent on a 1bd apartment through this program would be about 75% of my take-home income.
Only in the late twentieth century has a private 1br apartment for single people become something people feel they're entitled to.
I've been in your situation, and you know what I did? I got a roommate. Really cuts on costs, and getting married makes the situation permanent.
At no time in history have the poorest been able to afford one bedroom apartments alone. Remember the stories of huge families crammed into apartments from 100 years ago? The fact that you only need one roommate instead of eleven to get by is progress.
Would you be willing to state what city this is and your profession? I think it would go a long way towards showing how real this problem is to skeptics.
In practice I don’t think this works for an green field city. Filtering takes decades to occur. In the meantime new housing will always be more expensive than a low-income worker can afford. If the city wants service workers they’re going to have to subsidize their initial housing.
One alternative is to pay workers enough to afford housing. It’s surprising how rarely people mention that idea. It’s very likely thee d of “worker+housing shortage” which is just a very roundabout way to say “massive inflation.”
Probably becayse the inflation has been disproportionately in housing only. Less true now since covid of course, but housing is still a separate problem to be dealt with.
If there are more houses built than people who want to live in the city, housing will be affordable for everybody, because an unhoused worker will just buy the vacant unit next door for less if a developer tries to gouge them.
The reason new construction never works like this is because developers only build housing when there's already a severe shortage of housing in the metro area. They respond to price signals, and the price only starts going up when you have multiple bidders bidding for the same home. And why wouldn't they? If they built housing in places that already had an abundance of housing, they're making an economically foolish choice and will go bankrupt. When you observe that developers never build affordable housing, you're observing the effect of selection bias: in a region where there are enough houses for everyone and hence they're affordable to the average worker, developers aren't going to build even more new houses.
You can observe this throughout the Rust Belt: there are more homes than people, so prices are very affordable, but developers would need to be insane to build even more houses (outside of specific neighborhoods or suburbs that are locally hot). Also when you get a macroeconomic crash in the middle of a housing boom: the houses get completed, they sell for dimes on the dollar, but nobody has jobs anymore so they can't afford to buy them,
Raw cost of housing is essentially the cost of the land + the cost of the building.
In established cites the cost of land is high and developers tend to build expensive buildings on that land. Low-income workers than move to older buildings as they're cheaper (expensive land, cheap building).
In a new greenfield city the land will be very cheap (for whoever established the city) so that can keep the cost of housing down (cheap land, expensive building).
The point is that no matter how much housing you reserve to be "affordable housing", it will still be scarce and thus unaffordable to most. And this kind of well-intentioned red tape often ends up shrinking the supply of housing as a whole, which only makes it even less affordable.
The original question was "How do you get teachers, garbage collectors, plumbers, nurses, all sorts of manual workers ?" Those people all have some amount of money they can afford to pay their bills. Since a city needs some percentage of those workers, having housing they can afford is a big step towards attracting them.
But where is the line? Rampant development can completely alter the feel and culture of a neighborhood and city. It can take away from those things the existing residents enjoy. Sure more supply can accommodate more humans but they won’t necessarily be the same humans if current residents leave, and it won’t necessarily be the same place afterwards. Desirability (demand) creates scarcity but scarcity can also be desirable in itself for some things. At some threshold, the answer isn’t build more but locate people elsewhere and build a more distributed economy rather than a few concentrated powerful cities or states.
If "affordable housing" means "under market price", in practice AH means that it goes to the connected at that price. If they can, they resell at market later, if they can't, well, they just got subsidized housing.
Remember, housing prices in high-priced areas are driven by location, location, location, location, location (yes, two more locations than ordinary housing), so "it's small" doesn't translate to "the market price is low." (It's just less expensive than big.)
When the "market price" exceeds the cash price, the folks who get to buy are the ones who have some way to pay outside the system.
Some countries have what's called "buyer-funded development". Property buyers invest into shares of the development company which then uses the funds to buy land and build housing.
Investors get much cheaper prices, developers get easy liquidity. The downside is that you have to wait a year or two before moving in, and some theoretical risk. (Which can be managed with proper legislation.)
But the scheme works if you want affordable housing.
No, that scheme doesn't do what you think it does (and that scheme is occasionally done in the US, especially for luxury residences).
Suppose that the residences will be worth $1000 when built and it costs $500 to build them.
The pay-in-advance price will be around $1000 - interest.
The pay-in-advance price won't be significantly less than $1000-interest because the builder can borrow the $500, and sell for $1000 when built, repaying the bank and pocketing the rest.
The pay-in-advance price won't be significantly more than $1000-interest because if it is, folks who want to buy will wait and pay $1000 when the units are built (forcing the builder to borrow $500).
In other words, pay in advance doesn't result in below market prices.
If you add in some units which would sell for $500 but you're forcing the builder to sell them for $250, the question is "who gets them?" The answer to that question does not depend on when the payment is made.
In the US, the vast majority of the "below market" units will be split between friends of the local govt and the developer.
Yes, it would be nice if that wasn't true, but it is absurd to behave as if it isn't true (in the US).
With "buyer-funded development" the developer gets free liquidity, with no interest and no obligation to pay anything back. (Just an obligation to build something.) Obviously more profitable than having a bank take a cut for a loan.
The property is cheaper for the buyer because there are obvious risks involved for those in on the scheme at an early time. (And yes, it can be significantly cheaper, both because of the risk and due to opportunity cost while the property becomes attractive on the second-hand market.)
Note that this strategy is a bit regressive. The law usually only applies to multi unit housing, and exempts single family housing. But those who live in single family housing are usually are richer than those in multi unit housing, so this essentially makes housing more expensive and difficult to build for the lower income people.
