San Francisco could eliminate all affordable housing requirements for developers, severely jeopardizing the city’s housing affordability — and making most market-rate projects unaffordable on the market today, according to a new study.
San Francisco needs 84,000 new units over the next eight years, according to a study by the city’s economist and an outside real estate firm, the latest evidence that the state’s housing mandate is more than a fantasy.
The report was presented to the Inclusionary Housing Technical Advisory Committee, a group of developers and affordable housing experts who meet regularly to discuss the city’s basis for requiring market-rate developers to include below-market-rate units in their projects.
The study, You can see here (Or at least you can see the presentation notes) The financial feasibility of both market price apartments and condos for sale are analyzed, based on the current land price, permit, affordable housing payments and construction.
of Cron’s article on the study He suggests affordable housing affordability is the main reason nothing is being built.
San Francisco’s quotas for new construction affordable housing projects are the main reason most of them are economically unviable, according to a study by the city’s Housing Policy Center.
But when you read the research in detail, that’s not what it shows. Although the inclusion criteria have been completely lifted, many future projects are still not penciled in, as one developer noted:
We’re so underwater here, I don’t know what to say to be productive,” said Eric Tao, who reviewed the analysis with members of the House Technical Advisory Committee, which was put together two weeks ago. According to the study by the real estate investment firm, “the city should be paying developers to build housing,” Tao, managing partner of developer L37 Partners, said during the review. “I mean, it’s funny.
In other words, forget about affordable housing: without city subsidies, very few of the market-based projects will go to work.
We can fix it. We can cut red tape and do residency “right”. Nothing will happen. SB 9 is a failure.
I asked Eagan if I was right. The data showed that market conditions, even without city requirements, were preventing new homes.
“What the data is showing is in terms of where the market is today,” he said. “The RHNA target is about 10,000 units per year for 8 years, and according to planning, the city has never built more than 5,000 in one year. So it will be a challenge at the best of times to double our highs for 8 years continuously, these are not.”
And I don’t believe anyone at City Hall is ready to hand over taxpayer cash to write off the profits of private developers (though I’ve been wrong before).
I spoke with Fernando Martin, a longtime affordable housing advocate and executive director and task force member of the Council of Community Housing Organizations.
Even if we remove all inclusives, 100 percent market rate projects are still unfeasible except for low- and mid-rise condos. … The most negative land balance is for rental elevations. Those only make sense as the tech industry continues to grow and/or global investors seek piggy banks to park their capital.
The analyzes assume “targets” of adjusted profit returns. This may or may not be a reasonable assumption, but it is important to clarify that one of the only variables that is completely fixed in all of this is developer profit. The policy discussion should bear that in mind.
of Housing is important. Now it’s a joke.
When it comes to Supes, I’d love to see someone from the Mayor’s Office and City Planning ask a simple question:
Is there a reasonable, even remotely possible scenario in today’s market where developers would meet the target of 84,000 homes, 46,000 of which would be affordable?
If not, why do we approve of a plan that is based on imagination and will never happen? Shouldn’t we be creating a real plan, one that includes real investment in off-market homes?
I think it’s time for an answer.