The Housing Authority of Portland (now called Home Forward) proudly announced that it's been awarded $18.5 million toward demolishing Hillsdale Terrace, a dilapidated housing project near SW Capitol Highway and Vermont Street, and replacing it with 129 new units and a 6,000 square foot early education center (childcare facility). The Tribune article notes that the project is receiving $28.8 million of other money, making the total cost $46.5 million. This does not include the land value, which Home Forward already owns.
The cost to demolish the existing buildings shouldn't be more than $2 million. If the childcare facility costs $300/square foot to build and furnish, that's another $1.8 million. That leaves $43.5 million as the cost of the new units. That's $337,000/unit, well down from the $400,000/unit that the project was supposed to cost only a few months ago. Part of the decrease -- most of it, actually -- is because Home Forward is putting in 129 units instead of only 100.
To pay $337,000 per unit for new apartment construction seems high, particularly when the median price of houses in west Portland and eastern Washington County is only $340,000.
Let's check out the competition: here's a 35-year-old condominium for sale for $350,000 -- about the same price as the cost of the new units proposed by Home Forward -- with 2 bedrooms, a deck, and 1170 square feet. The picture at left shows the neighborhood, which looks at least as desirable as Hillsdale. And it's going to have great public transit: if you look closely, you'll see the track for the Portland-Lake Oswego streetcar.