potential reductions in market rate apartment cost
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inputs in boldbaseline scenarioaggregate low-cost scenariocheap developers scenariocheap architects scenariofast permits scenariolater SDCs scenarioliberalizing R5 zoning scenario
skinflint construction scenario
low parking scenariolow property taxes scenario
low-return investors scenario
cheap land scenario
savings for low-cost scenario
notes from low-cost scenario
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line items that differ between the scenarios in yellow
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developer fee and overhead ($)$1,650,033$1,237,525$1,237,525$1,650,033$1,650,033$1,650,033$1,650,033$1,650,033$1,650,033$1,650,033$1,650,033$1,650,033$412,508
developers paid like the average OR elementary school teacher ($65k)
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architecture and legal fees ($)$1,788,072$1,245,021$1,788,072$1,676,318$1,788,072$1,788,072$1,788,072$1,788,072$1,788,072$1,788,072$1,788,072$1,788,072$111,755
consultants & lawyers paid like the average OR elementary school teacher ($65k)
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early capital expenses total$3,438,105$2,482,546$3,025,597$3,326,351$3,438,105$3,438,105$3,438,105$3,438,105$3,438,105$3,438,105$3,438,105$3,438,105$955,560
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$0
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months between early capital and building permit application ("planning")242424242424242424242424$0
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annualized cost of capital during planning (%)25%15%25%25%25%25%25%25%25%25%15%25%$0
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cost of early capital during planning ($)$1,719,053$744,764$1,512,799$1,663,175$1,719,053$1,719,053$1,719,053$1,719,053$1,719,053$1,719,053$1,031,432$1,719,053$974,289
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$0
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days to process building permit1942819419428194194194194194194194$166
based on 15-year average of large apartment building permit processing times in Portland and longest building permit time for any commercial project in Houston 2014-2017
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annualized cost of capital during building permit and construction process (%)25%15%25%25%25%25%25%25%25%25%15%25%$0
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cost of early capital during building permit process ($)$456,844$28,566$402,031$441,995$65,936$456,844$456,844$456,844$456,844$456,844$274,106$456,844$428,278
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$0
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up-front SDC per unit$21,500$0$21,500$21,500$21,500$0$21,500$21,500$21,500$21,500$21,500$21,500$21,500
SDCs collected after operation begins, so capital required for SDCs doesn't accrue interest during permitting or construction
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up-front SDCs for building$2,902,500$0$2,902,500$2,902,500$2,902,500$0$2,902,500$2,902,500$2,902,500$2,902,500$2,902,500$2,902,500$2,902,500
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$0
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land cost per square foot$250$13$250$250$250$250$250$250$250$250$250$13$237
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square feet on site30,60030,60030,60030,60030,60030,60030,60030,60030,60030,60030,60030,600$0
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land cost$7,650,000$397,800$7,650,000$7,650,000$7,650,000$7,650,000$7,650,000$7,650,000$7,650,000$7,650,000$7,650,000$397,800$7,252,200
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$0
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title and closing$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$200,000$0
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$0
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construction per square foot - gross rentable & common space$175$140$175$175$175$175$143$172$175$175$175$175$35
unit is instead built in a two-story wood apartment building because we liberalized R5 zoning; these estimates are from EcoNW
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construction cost per square foot - underground parking$120$120$120$120$120$120$120$120$120$120$120$120$0
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units135135135135135135135135135135135135$0
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rentable sqft per unit667667667667667667667667667667667667$0
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ratio of common to rentable space25%25%25%25%25%25%25%25%25%25%25%25%$0
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gross sqft rentable & common space per unit834834834834834834834834834834834834$0
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parking ratio0.630.20.630.630.630.630.630.630.20.630.630.63$0
auto ownership needs are dramatically reduced
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gross sqft per parking space260260260260260260260260260260260260$0
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parking spaces8527$85$85$85$85$85$85$27$85$85$85$58
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$0
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construction cost per unit$145,906$116,725$145,906$145,906$145,906$145,906$119,226$142,988$145,906$145,906$145,906$145,906$29,181
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construction cost per parking space$31,200$31,200$31,200$31,200$31,200$31,200$31,200$31,200$31,200$31,200$31,200$31,200$0
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$0
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construction cost for living spaces$19,697,344$15,757,875$19,697,344$19,697,344$19,697,344$19,697,344$16,095,544$19,303,397$19,697,344$19,697,344$19,697,344$19,697,344$3,939,469
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construction cost for parking garage$2,653,560$842,400$2,653,560$2,653,560$2,653,560$2,653,560$2,653,560$2,653,560$842,400$2,653,560$2,653,560$2,653,560$1,811,160
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construction cost total$22,350,904$16,600,275$22,350,904$22,350,904$22,350,904$22,350,904$18,749,104$21,956,957$20,539,744$22,350,904$22,350,904$22,350,904$5,750,629
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$0
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construction loan (land + construction + pre-construction SDCs)$32,903,404$16,998,075$32,903,404$32,903,404$32,903,404$30,000,904$29,301,604$32,509,457$31,092,244$32,903,404$32,903,404$25,651,204$15,905,329
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$0
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construction loan APR5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%$0
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construction and lease-up term (months)202020202020202020202020$0
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interest accrued during construction and lease-up$2,741,950$1,416,506$2,741,950$2,741,950$2,741,950$2,500,075$2,441,800$2,709,121$2,591,020$2,741,950$2,741,950$2,137,600$1,325,444
includes savings from post-construction SDCs, and from lower construction costs
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construction loan fee$590,749$590,749$590,749$590,749$590,749$590,749$590,749$590,749$590,749$590,749$590,749$590,749$0
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$866$0
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cost of early capital during construction and lease-up$1,432,544$620,636$1,260,666$1,385,979$1,432,544$1,432,544$1,432,544$1,432,544$1,432,544$1,432,544$859,526$1,432,544$811,907
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total cost of early capital from planning through lease-up$3,608,441$1,393,966$3,175,496$3,491,149$3,217,533$3,608,441$3,608,441$3,608,441$3,608,441$3,608,441$2,165,064$3,608,441$2,214,474$79
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$0
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lease-up marketing$150,000$150,000$150,000$150,000$150,000$150,000$150,000$150,000$150,000$150,000$150,000$150,000$0
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miscellaneous soft costs$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$1,000,000$0
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SDCs paid as operation begins per unit$0$21,500$0$0$0$21,500$0$0$0$0$0$0-$21,500
SDCs collected after operation begins, so capital required for SDCs doesn't accrue interest during permitting or construction
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SDCs paid as operation begins per building$0$2,902,500$0$0$0$2,902,500$0$0$0$0$0$0-$2,902,500
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$0
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capitalized costs at end of construction$44,632,649$27,134,342$43,787,196$44,403,603$44,241,741$44,390,774$40,730,699$44,205,873$42,670,559$44,632,649$43,189,273$36,776,099$17,498,307
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capitalized costs per unit at end of construction$330,612$200,995$324,350$328,916$327,717$328,821$301,709$327,451$316,078$330,612$319,921$272,416$129,617
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$0
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necessary annual cash flow as a share of capitalized costs at end of construction
5.8580.0%5.8580.0%5.8580.0%5.8580.0%5.8580.0%5.8580.0%$0
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necessary annual cash flow$258,869,364$157,379,185$253,965,737$257,540,899$256,602,099$257,466,489$236,238,054$256,394,065$247,489,242$258,869,364$250,497,782$213,301,374$101,490,179
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necessary annual cash flow per unit$1,917,551$1,165,772$1,881,228$1,907,710$1,900,756$1,907,159$1,749,912$1,899,215$1,833,254$1,917,551$1,855,539$1,580,010$751,779
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necessary monthly cash flow per unit$159,796$97,148$156,769$158,976$158,396$158,930$145,826$158,268$152,771$159,796$154,628$131,668$62,648
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annual property taxes for building$361,869$232,500$361,869$361,869$361,869$361,869$361,869$361,869$361,869$232,500$361,869$361,869$129,369
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average annual property taxes per unit$2,681$1,722$2,681$2,681$2,681$2,681$2,681$2,681$2,681$1,722$2,681$2,681$958
property tax millage reduced to Roseberg's
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average monthly property taxes per unit$223$144$223$223$223$223$223$223$223$144$223$223$80
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$0
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annual operating cost for building (not including property taxes)$398,250$398,250$398,250$398,250$398,250$398,250$398,250$398,250$398,250$398,250$398,250$398,250$0
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parking space rent per month$175$175$175$175$175$175$175$175$175$175$175$175$0
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building parking revenue per year$169,675$53,865$169,675$169,675$169,675$169,675$169,675$169,675$53,865$169,675$169,675$169,675$115,810
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annual operating cost for building net of parking (not including property taxes)$228,575$344,385$228,575$228,575$228,575$228,575$228,575$228,575$344,385$228,575$228,575$228,575-$115,810
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average annual operating costs per unit (not including property taxes)$2,950$2,950$2,950$2,950$2,950$2,950$2,950$2,950$2,950$2,950$2,950$2,950$0
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average monthly operating costs per unit net of parking (not including property taxes)
$141$213$141$141$141$141$141$141$213$141$141$141-$71
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$0
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average occupancy rate (units and parking)95%95%95%95%95%95%95%95%95%95%95%95%$0
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$0
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necessary annual rent per unit$1,825,828$1,111,543$1,791,321$1,816,480$1,809,873$1,815,956$1,666,571$1,808,410$1,746,561$1,824,918$1,766,917$1,505,165$714,286
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necessary monthly rent per unit$152,152.36$92,629$149,277$151,373$150,823$151,330$138,881$150,701$145,547$152,076$147,243$125,430$59,524
80
monthly rent savings below baseline scenario$59,524$2,876$779$1,330$823$13,271$1,452$6,606$76$4,909$26,722
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cost contribution from...building annualbuilding monthlyunit monthly
possible savings per unit per month
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developer fee and overhead$9,570,191$797,516$5,908$1,477
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architecture and legal fees$10,370,819$864,235$6,402$400
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sdcs$16,834,500$1,402,875$10,392
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land cost$44,370,000$3,697,500$27,389$25,965
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title and closing$1,160,000$96,667$716
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residential construction cost$114,244,594$9,520,383$70,521$14,104
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construction loan fee$3,426,344$285,529$2,115
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construction loan interest$15,903,312$1,325,276$9,817$4,745
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early investors$20,928,956$1,744,080$12,919$7,928
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lease-up marketing$870,000$72,500$537
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misc soft costs$5,800,000$483,333$3,580
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property taxes$361,869$30,156$223$80
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operating costs net of parking not including property taxes$228,575$19,048$141
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total$150,660$54,700
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simplified monthly rent contribution from...todayhow to cut costslow-cost scenariocosts cut
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broker, marketing & misc$48$48$48
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(pay developers like elmentary school teachers)$15$15
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