"To address the housing shortage, the city should make it cheaper for landlords to build new units. A public-private partnership where the city builds the shells of new apartment buildings and leases the interiors to landlords, who in turn develop and rent them to tenants, can increase supply and lower rents. Some estimate that the city needs 500,000 more housing units by 2032 to keep up with demand. Rental prices are skyrocketing because of this high demand and limited supply."
"As crazy as it sounds, one way to address the problem is by the city taking on the cost of building new apartment buildings and entering into vertical ground leases with landlords. This would allow landlords to charge tenants less and still turn a profit. The city could use a mix of public funds and mortgage financing to pay developers to construct the exterior and base structures of the buildings. The expense of building the interiors is left to landlords (more below)."
The city faces a severe housing shortage and may need roughly 500,000 additional units by 2032 to meet demand. Rapidly rising rental prices reflect high demand and constrained supply. Lack of affordable, plentiful housing fuels homelessness, wealth inequality, substance abuse, and the displacement of artists and cultural workers. A municipal strategy could reduce costs by funding and constructing building shells and base structures while leasing interior development rights to private landlords under long-term vertical ground leases. The city would own structures, use public funds and mortgage financing, and maintain profit-oriented design, while landlords build interiors, operate properties, and charge lower rents.
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