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August 1, 2006
Fair fees for rich developers
A report to the San Francisco Board of Supervisors's Land Use committee may shed some light on some local issues associated with Bruce Ratner's Atlantic Yards: developers' profit margins and construction of affordable housing.
This report yielded an editorial in the San Francisco Bay Guardian (emphasis added):
According to a new city report, private developers will not even consider going forward with a big housing construction project unless the profit margin is at least 28 percent.
Think about it: Without a guaranteed profit about three or four times larger than what most normal businesses strive for, the developers won't pour an ounce of concrete. And they still complain that the city wants them to build more affordable housing.
As housing activist Calvin Welch pointed out at the hearing, it used to be illegal in most states to charge that much interest on loaned money. The word for it was usury.
NoLandGrab: Brooklynites have been trying to learn more about Bruce Ratner's margin for Atlantic Yards. If it is close to the 28% cited in the Bay Area study, that would undermine many of Ratner's justifications for the massive subsidies and extreme density that is planned for the project.
Posted by lumi at August 1, 2006 9:18 AM