Factors Affecting Maintenance and Operating Costs in Federal Public Housing Projects

A study of costs in New York City public housing, using multiple regression analysis to investigate price inflation, productivity of inputs, standards of service, deterioration, economies of scale, tenant wear and tear, project design, and project location as hypothesized causes of cost variation. From 1939-1967, 91 percent of maintenance and operating (M&O) cost variation resulted from price inflation, project aging, changes in service, project size, and average unit size. M&O expenses have increased 5 percent per year since the 1940s; this means that housing rents must increase faster or new kinds of subsidies must be found. Project aging increases maintenance costs. Larger apartments are more expensive to run, but the increase is less than proportional to the increase in size. Observed cost savings in larger projects seem to result from larger M&O organizations, not from physical size.