Hi Connie,
I'm not sure why people try to throw this in but it's not so much a socio
economic thing as it is the willingness to put in the hard work, have good
credit, have a down payment, and a willingness to take some risk as things
needed to own a 4plex. This isn't a class thing and hopefully that isn't what
people are trying to make it out to be. I've helped many couples and families
buy 2-4 unit multi family homes to live in and have an income stream to offset
their mortgage and I don't think you could characterize any of them of being
anything but middle class.
Carol's premise that it takes $1,000,000 to build a 4plex is not based on using
real numbers if you are talking a decent but not custom/upgraded 4 plex. To
build a middle income 4 plex of 2 bed/1 bath with about 800 sq feet which is
the average 4 plex that is available throughout Minneapolis, you are looking at
about $550-600,000. That's between $170- $190/sq ft. Add about $100,000 for
a lot if you can find one. I talked to a friend who is a realtor and looked on
the MLS and found only 15 empty lots in Minneapolis available for sale that
were not luxury.
Every other figure used in the argument is a phantom number because they are
based on a $1,000,000 cost but I will point out that even if you don't use that
inflated price, the other costs included in the post are inaccurate.
Taxes are not $333/month on a $1,000,000 4 plex and Carol knows that since she
was elected to the taxation board, it should be easy for her to calculate the
actual cost of taxes which would be closer to $1300/month. I'm not trying to
make an argument one way or the other, just would prefer to see accurate
figures.
She didn't include water, sewer, and trash which an owner has to pay. Again,
I'm not making an argument for or against whether someone should build a 4 plex
but they should understand what goes into renting one.
Her mortgage payments are inaccurate as well and you can use an online mortgage
calculator to get the correct numbers. She states that the mortgage on the
$800,000 loan is $1650. At 5% interest, that mortgage payment would be almost
$4300/month. 4 unit owner occupied 4 plexes can have a mortgage for 30 years,
not 20 as was stated.
My main response was if people share fact and figures, they need to be accurate
and not just a way to justify a position. In this case, it's a fair criticism
since almost all of the figures were inaccurate. I think it's great that
everyone can comment on what they think, I just believe it needs to be done
with some research so we can believe what people are writing.
You could spend $1,000,000 on a 4 plex if you wanted to. I'm guessing you'd
build it for higher income/luxury market but I think most people are looking
for housing they can afford.
That being said, this is what I do believe in.
I believe we will need multiple avenues to help solve the housing scarcity so
we need to have people who have an open mind to finding solutions. We can't
just fall back to being against "more housing", because it doesn't fit an
individuals ideal of what they want to live in or what they want to exclude
from their back yard. Allowing more options like 2, 3, and 4 unit apartments
or new ADU's that don't have to be owner occupied in neighborhoods that have
typically been off limits to a lot of people because they can't afford to buy,
would be a good first step. They are good options because we already have a
lot of these types of housing in our neighborhoods but our zoning prevents us
from building new housing in these places.