We trace the rent on a lease back to the rules, capital and construction that produced it, and show the arithmetic at every step.
Rent is not a number someone picks. It is the sum of every input a building needs in order to exist, divided by the homes that share it.
One development, priced line by line, with every figure labelled for what it is.
We build an illustrative 120-unit apartment project on paper, line by line, and show where every dollar of the rent it requires comes from.
Required revenue
$1,996 / month
Construction Costs
Interest Rates
Regulation
Development
Public Finance
Parking
Each piece takes one obstacle to housing production and prices it.
Construction Costs
Cheaper cabinets and counters move the required rent of a new apartment by about $34 a month. Land, parking, building type, fees, time and interest rates move it far more. Here is the scale of each lever.
Interest Rates
A one-point rise in the loan rate adds about $93 a month to the rent our illustrative 120-unit project requires, before investors and construction lenders reprice. We show the arithmetic and the second-order effects.
Regulation
Nothing about the building changes when construction start slips a year. The land loan, the taxes, the consultants and the contractor's price keep moving. We add it up and convert it into rent.
Data explainers, and the tools that let you change the assumptions yourself.
Price a requirement, set the financing assumptions, and see the monthly rent a building needs to cover it. The same arithmetic our analysis uses.
Development
Is rent high because developers take too much? We trace every dollar of "developer profit" in a $30,000,000 apartment building and find the fee explains $68 of a $2,415 rent, while the cost of capital explains far more.
Public Finance
Tax-exempt bonds, public land, patient equity, revolving loans, grants and tax abatements each lower required rent on a modeled 120-unit building. Each also has a payer. Here is what every model is worth per month.
The pieces to read first if you are new to how housing gets built and priced.
The Housing Breakdown
Analysis
Housing 101
Housing 101
A short note when a new analysis is published. No lists sold, no spam.
Every input that decides what a home costs, tracked one at a time.
