A Concrete Problem: Middle-Income HousingBy
The soaring price of cement is having a disproportionate effect on lower-middle to middle-income families. Why? Because the denser housing that tends to get built for them uses lots of concrete, which is made from cement, sand, gravel, and water. Designs with lots of concrete are becoming so expensive to build that they're getting out of the potential buyers' price range, says Tim Sullivan, president of Sullivan Group Real Estate Advisors. Pictured here is Avenue One, a project by K.Hovnanian in Irvine, Calif. It has 60 units per acre, wrapped around a concrete, above-ground parking garage. The design works financially in Irvine only because land is fantastically expensive, with median single-family homes going for over $1 million. Sullivan Group says the price of the smallest Avenue One unit, a 725-square-foot one bedroom, is just under $420,000, which passes for affordable middle-class housing in Irvine.
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