Providing enough affordable housing is a significant challenge across the country. For low-income households, high housing costs can lead to frequent moves that interfere with children’s school performance or force families to live in unhealthy or substandard housing. In order to identify the factors that are contributing to increased costs in Oregon, the legislature engaged the Blue Sky Consulting Group to study tax credit financed affordable housing projects developed in the state over the past two decades. The resulting analysis identified the important benefits of affordable housing while also shedding light on the factors that can influence costs, such as larger projects that benefit from economies of scale or local factors such as labor costs, system development charges, or community opposition that may add to costs. 

Working in partnership with the City’s Controller and Chief Economist, the Blue Sky Consulting Group analyzed the effects of alternative inclusionary housing policies on production of market rate and below market rate housing in San Francisco. The foundation for this work was a regression model that predicts a change in housing production based on changes in prices, production costs, zoning changes and other factors, while taking into account parcel specific data such as maximum building size, setback requirements, and parcel size. Our work was used to inform the decisions of a Technical Advisory Committee that advised the City’s Board of Supervisors about the optimal inclusionary policy.

In 2014, the Blue Sky Consulting Group completed an affordable housing cost study for the state of California’s housing agencies (The California Department of Housing and Community Development, the California Tax Credit Allocation Committee, the California Housing Finance Agency, and the California Debt Limit Allocation Committee). The study measured the factors that influence the cost of building affordable rental housing in California, analyzing data from hundreds of multi-family projects. The study utilized a regression analysis model to identify factors that are correlated with raising or lowering the costs of developing affordable housing in California. The analysis evaluated how factors such as parking requirements, economies of scale, community opposition, local design-review requirements, developer characteristics, and many others influenced the cost of developing affordable housing. In addition to the empirical analysis of multi-family housing development costs in California, this study also examined the social and economic impact of affordable housing to better understand the indirect benefits from the investment in subsidized affordable housing.

In 2007, Blue Sky Consulting Group was chosen by the California Building Industry Foundation to analyze the fiscal impact of residential housing in California. Specifically, we addressed the question of whether new residential housing "pays its own way" at the state and local levels. We conducted the first of its kind analysis of every local jurisdiction in the state to determine whether revenues generated by new housing were sufficient to cover the costs of increased service demands from new residents.