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Good News: There Are Hundreds of New Condos in SF. Bad News: You Probably Can’t Afford Them

How you doing, Oakland?

The Lumina building

The Lumina building 

 

In the past 12 months, 775 new condo units have been built in San Francisco, according to data from the Mark Company, a real estate marketing and sales firm. That’s not quite enough to carry the city all the way to the 30,000 new units that Mayor Ed Lee has proposed building or rehabilitating by 2020, but the journey of a thousand miles begins, etc., etc., etc.

That 775-units figure encompasses the fourteen new condo buildings finished in 2014, and it represents a massive increase in supply since 2013, which saw just 104 new condo units come onto the market. That increase in supply should make a small dent in bringing down housing costs from where they would be otherwise.

Not that San Francisco is suddenly an affordable place to live. Oh goodness no. Of those new condos, the average price is $1,178 per square foot. That translates into high total costs. For example, at the Lumina building, which contributed 656 of the 755 new units, condos run from $675,000 to $2,675,000. That’s downright a steal compared to the Amero building on Filbert and Van Ness, which has units starting at $1.5 million and reaching past $3.5 million at the high end. So—more or less—we won’t be able to afford any of them on our writer salaries. Yet again, the world crushes our Carrie Bradshaw dreams.

To be fair, though, there’s a silver lining to the high-end construction. First of all, it alleviates pressure on the market (many of the people buying these condos would have bought elsewhere had they not been around, according to the best research on the subject.) And thanks to the city’s affordable offset regulations, market rate developers have to either build affordable units themselves or kick in money for them to be built by others. Taking the building option generally means at least 12% of market units are matched by onsite below-market units—so these 755 new units probably yielded at least 93 below-market-rate ones. That's a low-end estimate: The city often negotiates for a higher rate or mandates one in specific zoning areas. It would also be higher if developers chose to build new units off, rather than on site.

If, on the other hand, the developers paid the offset fee to have another organization build new units, they would have to kick in from $199,000 per unit to $522,545, depending on the number of bedrooms. According to a city report released last week, in 2014, those funds—not just from condos but from all new development—raised $29.9 million earmarked for affordable housing. 

So remember when you were on shrooms that one time in college, staring at the plants and bugs and sunlight, and realized that everything was a single interconnected whole—a breathing, scintillating, beautiful singular being of light and music? You might have been tripping balls, but when it comes to housing, you were actually right, you dirty hippie.

 

  

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