Kitty Wallace

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LOS ANGELES—Affordable housing developers and investors face amyriad of obstacles when trying to build new projects even as theneed for affordable housing grows stronger year after year. Namely,there are three specific obstacles developers must overcome beforeground breaks, says Kitty Wallace, executive vicepresident with Colliers International.

"The majority of the costs goes towards labor," she tells "Then there's the friends and family entitlementand finally, increased material costs."

Increased Labor Costs

A lack of labor stems from the last economic downturn when a lotof construction workers left the state of California and never cameback.

"If you want to build new construction and don't have theestablished relationships or contacts, it's hard to find good,reliable contractors and sub-contractors," says Wallace. "Of coursewith such a high demand for workers, they are able to charge higherprices for services rendered. These workers charge a lot for theirservices."

Not in My Backyard

Builders jump through the appropriate hoops to get the requisitepermits and regulatory paperwork in order to start building theirmultifamily projects. In some areas however, neighbors and businessowners have adopted a "not in my backyard" mentality.

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