# How 20% affordable can impact development pro formas

**Published by:** [Brandon Donnelly](https://brandondonnelly.com/)
**Published on:** 2022-10-15
**Categories:** community-amenity-contribution, development, development-economics, development-math, development-pro-forma, domus-homes, economics, housing, housing-policy, housing-supply, planning, richard-wittstock, vancouver, volodya-gusak
**URL:** https://brandondonnelly.com/how-20percent-affordable-can-impact-development-pro-formas

## Content

This Twitter thread by Richard Wittstock of Domus Homes (developer out in Vancouver) is a timely follow-on to yesterday's post about housing supply, land-use regulations, and specific policies such as inclusionary zoning. What Richard clearly describes in his thread is the economic impact of a Community Amenity Contribution (CAC) that requires developers to provide 20% social housing.https://twitter.com/rwittstock/status/1581061030540873728?s=20&t=EGty0SC2Fk6AYt3qk3IE5g The thread will walk you through all of the specific numbers, but I think there are three important takeaways:Everything has a cost. It is entirely disingenuous for anyone to refer to inclusionary zoning or other similar policies as a mechanism for "no-cost" affordable housing. Even if you believe it is the right public policy approach, there is still a cost. Social housing doesn't just appear out of thin air.In Richard's thread, the remaining market rate condominiums end up needing to be sold for $1,750 psf in order for the entire project to pencil. This is a significant number. But in this case, it is a result of these homes needing to shoulder the cost of the social housing. It is basically saying "housing is too expensive, so let's make it more expensive so that we can use some of the incremental proceeds to finance less expensive housing."If the math doesn't work, developers will not build new housing.P.S. Thank you Volodya Gusak for pointing out Richard's thread to me.

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