The state of Utah is trying to build 35,000 starter homes over the next five years. Last year, $300 million was allocated to something known as the Utah Homes Investment Program (UHIP). The initial idea was that these funds would be provided as low-cost deposits to financial institutions so that they could, in turn, offer low-interest loans to homebuilders who committed to building single-family starter homes.
But this didn’t go as planned. Apparently, the low-cost deposits weren’t low enough to compensate for the perceived lending risk. So Governor Cox asked if the funds could instead be directed to the Utah Housing Corporation. Enter the Condominium Construction Loan Program. The way this newly created program works is that UHC can now provide low-cost loans — up to 100% LTC — directly to developers.
The state of Utah is trying to build 35,000 starter homes over the next five years. Last year, $300 million was allocated to something known as the Utah Homes Investment Program (UHIP). The initial idea was that these funds would be provided as low-cost deposits to financial institutions so that they could, in turn, offer low-interest loans to homebuilders who committed to building single-family starter homes.
But this didn’t go as planned. Apparently, the low-cost deposits weren’t low enough to compensate for the perceived lending risk. So Governor Cox asked if the funds could instead be directed to the Utah Housing Corporation. Enter the Condominium Construction Loan Program. The way this newly created program works is that UHC can now provide low-cost loans — up to 100% LTC — directly to developers.
However, there are some stipulations:
Warrantable projects
: The projects must be warrantable to the Federal Home Loan Mortgage Corporation, meaning the property and the individual condominium units need to be eligible for conventional mortgage financing.
Owner-occupancy requirement: The individual condominium units must be sold to an owner-occupant, with a recorded deed restriction in place for a period of not less than five years. This is obviously to stop investors from buying and reselling.
Equity sharing: The equity appreciation on the condominium unit is shared between UHC and the first owner-occupant. The homeowner earns 75% of the equity appreciation (15% per full year of occupancy, through five years), with the balance going to UHC upon sale of the unit.
So it’s a trade-off: buyers get access to new homes at below-market pricing (because the developer’s cost structure is reduced), and in exchange, they give up some of the potential upside. Will it work and help Utah achieve its starter home goal by 2030? I don’t know. But it’s clear recognition that if you want to deliver below-market housing, you need to provide subsidies.
L'immeuble Molitor is an 8-storey, 15-unit (copropriété) apartment building in the wealthy Paris suburb of Boulogne-Billancourt. It was designed by Le Corbusier and his cousin Pierre Jeanneret, and was constructed between 1931 and 1934. Today, it is one of 16 projects designed by Le Corbusier that are designated as a UNESCO World Heritage Site. And so if you've at all studied architecture of the 20th century, you know this project. It's canonical. It's also where Le Corbusier and his wife Yvonne Gallis lived for most of their lives until their deaths in 1965 and 1957, respectively. But what they don't teach you in architecture school — and I think it's a shame they don't — is how the project was developed.
The building was developed by la Société Immobilière de Paris Parc des Princes and two promoters (developers) named Marc Kouznetzoff and Guy Noble. They acquired the site right on the border of Paris and Boulogne in 1931 and then asked Le Corbusier and Pierre to design it. But they struggled to obtain the necessary financing and eventually asked the two architects to work their social circles for people who might want to pre-buy apartments in the building. They also wanted to show that avant-garde architecture, of which this firmly was at the time, could be more attractive than traditional architecture.
To that end, here's a marketing poster from that period (which I think is super interesting):
Like the emailers you'd see today, it shows a rendering of the building (with fancy rich-looking people out front), it touts the project's unique location and views, it mentions the architects (by the 1930s, Le Corbusier would have already been an internationally recognized figure), and it promises that the payment structure will be easy. So all in all, not much has changed over the last century when it comes to marketing new apartments: "Move-in today with only 5% down. Don't miss this unique location in the heart of X, with incredible views of Y."
Construction on the project started in February 1932, but it was slow-moving due to financing constraints and a lack of apartment pre-sales. The project was eventually finished in 1934, but then in 1935 the developer went bankrupt. This precipitated a lengthy legal battle in which the ownership of Le Corbusier's own apartment was even called into question. The dispute was not settled until 1949. During this time, the building not surprisingly fell into disrepair, and it would not be until 1950 that a proper renovation would be undertaken. Once again, this is not the story that is typically taught in architecture schools.
Having visited the building this week during Paris Design Week, I can tell you that the common areas feel tired. There's paint peeling in the lobby and the exit stair — which you're required to take to visit Le Corbusier's penthouse apartment — isn't in the best condition. There are tiles missing on the stairs, and the inner courtyard feels a tad grim. At the same time, there are some very nicely appointed apartments in the building that sell/list for over €14,000 per m2. That feels pretty good to me. And so I guess all is well that ends well in the world of architecture and development.
I started thinking about this the other night. For the first 18 years of my life, in other words, up until I moved away to university, I lived for the most part in a detached single-family house in the suburbs of Toronto. But since then, I have almost exclusively lived in apartments/condominiums ranging from converted houses to high-rise buildings.
This was true when I was at the University of Toronto and it was true when I lived in Philadelphia for grad school. In my first year of grad school I lived in a converted house in a questionable area of West Philly. In my second year I lived in a high-rise brutalist building. And in my third year I lived in a small three level walk-up apartment above a pet store and a really great deli. This perhaps not surprising given I was a student.
But since moving back to Toronto, the same has been true. I initially invested and lived in a single-family house, but then decided I preferred living in a condominium and so I have done that ever since. Maybe this changes with kids or maybe it doesn't. But it's interesting to think about the housing types we have chosen or were handed. Location and other factors certainly play a role.
What housing type have you lived in the most throughout your life? Let us know in the comment section below.
: The projects must be warrantable to the Federal Home Loan Mortgage Corporation, meaning the property and the individual condominium units need to be eligible for conventional mortgage financing.
Owner-occupancy requirement: The individual condominium units must be sold to an owner-occupant, with a recorded deed restriction in place for a period of not less than five years. This is obviously to stop investors from buying and reselling.
Equity sharing: The equity appreciation on the condominium unit is shared between UHC and the first owner-occupant. The homeowner earns 75% of the equity appreciation (15% per full year of occupancy, through five years), with the balance going to UHC upon sale of the unit.
So it’s a trade-off: buyers get access to new homes at below-market pricing (because the developer’s cost structure is reduced), and in exchange, they give up some of the potential upside. Will it work and help Utah achieve its starter home goal by 2030? I don’t know. But it’s clear recognition that if you want to deliver below-market housing, you need to provide subsidies.
L'immeuble Molitor is an 8-storey, 15-unit (copropriété) apartment building in the wealthy Paris suburb of Boulogne-Billancourt. It was designed by Le Corbusier and his cousin Pierre Jeanneret, and was constructed between 1931 and 1934. Today, it is one of 16 projects designed by Le Corbusier that are designated as a UNESCO World Heritage Site. And so if you've at all studied architecture of the 20th century, you know this project. It's canonical. It's also where Le Corbusier and his wife Yvonne Gallis lived for most of their lives until their deaths in 1965 and 1957, respectively. But what they don't teach you in architecture school — and I think it's a shame they don't — is how the project was developed.
The building was developed by la Société Immobilière de Paris Parc des Princes and two promoters (developers) named Marc Kouznetzoff and Guy Noble. They acquired the site right on the border of Paris and Boulogne in 1931 and then asked Le Corbusier and Pierre to design it. But they struggled to obtain the necessary financing and eventually asked the two architects to work their social circles for people who might want to pre-buy apartments in the building. They also wanted to show that avant-garde architecture, of which this firmly was at the time, could be more attractive than traditional architecture.
To that end, here's a marketing poster from that period (which I think is super interesting):
Like the emailers you'd see today, it shows a rendering of the building (with fancy rich-looking people out front), it touts the project's unique location and views, it mentions the architects (by the 1930s, Le Corbusier would have already been an internationally recognized figure), and it promises that the payment structure will be easy. So all in all, not much has changed over the last century when it comes to marketing new apartments: "Move-in today with only 5% down. Don't miss this unique location in the heart of X, with incredible views of Y."
Construction on the project started in February 1932, but it was slow-moving due to financing constraints and a lack of apartment pre-sales. The project was eventually finished in 1934, but then in 1935 the developer went bankrupt. This precipitated a lengthy legal battle in which the ownership of Le Corbusier's own apartment was even called into question. The dispute was not settled until 1949. During this time, the building not surprisingly fell into disrepair, and it would not be until 1950 that a proper renovation would be undertaken. Once again, this is not the story that is typically taught in architecture schools.
Having visited the building this week during Paris Design Week, I can tell you that the common areas feel tired. There's paint peeling in the lobby and the exit stair — which you're required to take to visit Le Corbusier's penthouse apartment — isn't in the best condition. There are tiles missing on the stairs, and the inner courtyard feels a tad grim. At the same time, there are some very nicely appointed apartments in the building that sell/list for over €14,000 per m2. That feels pretty good to me. And so I guess all is well that ends well in the world of architecture and development.
I started thinking about this the other night. For the first 18 years of my life, in other words, up until I moved away to university, I lived for the most part in a detached single-family house in the suburbs of Toronto. But since then, I have almost exclusively lived in apartments/condominiums ranging from converted houses to high-rise buildings.
This was true when I was at the University of Toronto and it was true when I lived in Philadelphia for grad school. In my first year of grad school I lived in a converted house in a questionable area of West Philly. In my second year I lived in a high-rise brutalist building. And in my third year I lived in a small three level walk-up apartment above a pet store and a really great deli. This perhaps not surprising given I was a student.
But since moving back to Toronto, the same has been true. I initially invested and lived in a single-family house, but then decided I preferred living in a condominium and so I have done that ever since. Maybe this changes with kids or maybe it doesn't. But it's interesting to think about the housing types we have chosen or were handed. Location and other factors certainly play a role.
What housing type have you lived in the most throughout your life? Let us know in the comment section below.
