Arlington Greens have been complaining for the past 4-5 years about the exorbinant cost of the subsidized “affordable housing” apartments (“committed affordable units” or CAFs) which have been averaging about $400,000 each in actual construction costs. For example, the APAH project at the former Arlington Presbyterian Church site now being constructed close to Columbia Pike and S. Glebe Road entails about 173 units (about 60 percent of the units (105) are studio or one-bedroom units) and cost $400,000 per unit. Arlington County Government is providing about $18 million total or $100,000 per unit in subsidy.

Why does it cost a nonprofit housing developer (APAH) $400,000 per unit to build these subsidized units? The government, both the county and the Federal Government HUD, are providing roughly $300,000 in subsidies per unit. The church supposedly sold its land for under-market value; the nonprofit does not earn profits. Yet, these units the majority of which are studio or one bedrooms cost $400,000.

Just about 1/2 mile south of this new project which will probably take another year or more to complete, is the for-profit Trafalgar Flats Apartments that are nearly complete. These condo apartments are listed for sales “starting at the low $200,000s,” for a studio or junior one bedroom apartment http://trafalgarflats.com/

Apparently the for-profit developer is able to sell units for below $300,000 and still make a good profit. How can a for profit developer put up luxury apartments in the same area of Arlington for $100,000 per unit less than a subsidized nonprofit developer?

The answer is of course competition: there was no competitive bidding for the $18 million in county funds.