Housing creation lagging even as demand booms 

click to enlarge Even as a growing tech boom lured waves of residents to The City and drove housing prices skyward, San Francisco gained only 269 units of new housing last year — less than 8 percent of the houses, condos and rental units constructed in 2009. - S.F. EXAMINER FILE PHOTO
  • S.F. Examiner File Photo
  • Even as a growing tech boom lured waves of residents to The City and drove housing prices skyward, San Francisco gained only 269 units of new housing last year — less than 8 percent of the houses, condos and rental units constructed in 2009.

The economic downturn hit San Francisco homebuilding hard in 2011, choking off construction of new housing to the lowest level in at least 20 years, a new city report shows.

Even as a growing tech boom lured waves of residents to The City and drove housing prices skyward, San Francisco gained only 269 units of new housing last year — less than 8 percent of the houses, condos and rental units constructed in 2009, according to data from The City’s Planning Department.

“We should be building between 3,000 and 5,000 units a year,” said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association. “And if we want to actually be making this city more affordable for the middle class, we need to be producing more at the upper end of that range, for a sustained period of time.”

Until last year, more than 1,200 housing units were built in The City every year since 1999 — an average of more than 2,100 units per year. As recently as 2009, 3,454 units were completed.

“I was actually surprised at how low the number was,” said Olson Lee, director of the Mayor’s Office of Housing.

“Part of the slowness, in terms of completions, is really related to decisions made three or four years ago. On the market-rate side, obviously they took a dive when the market crashed.”

According to data from the website Trulia, San Francisco’s average rent has increased 13.2 percent since last year. The website RentBits says rental prices have surged almost 26 percent just since December.

The City’s housing goals are set by the Association of Bay Area Governments, which calls for nearly 31,200 new units — 60 percent affordable — to be built between 2007 and 2014. Through 2011, only about 12,330 units had been completed. And just 37 percent were affordable.

In fact, the amount of affordable housing built last year sunk 63 percent.

Ted Gullicksen of the San Francisco Tenants Union called the number “paltry,” noting that other affordable units have been lost to demolition, evictions and condo conversions.

Funding for new affordable housing hit a wall last winter with the elimination of redevelopment agencies and federal cuts.

“We can’t meet any of our goals without the adequate resources,” Lee said.

Still, officials stressed the cyclical nature of the housing market. Lee said market-rate developers began work on some large projects last year, including condominiums in Mission Bay and two large downtown projects.

The Planning Department approved 57 projects in 2011 that propose to add more than 15,000 units to The City’s housing stock, including the Treasure Island redevelopment and the Park Merced project.

Lee said The City has 9,000 more units of affordable housing “in the pipeline,” but when they will be completed is uncertain because of funding uncertainties. Mayor Ed Lee hopes to create a housing trust fund to assist renters and home buyers.

Metcalf said the housing shortfall is partly responsible for skyrocketing rents. He warned that San Francisco is in danger of becoming “a playground for the rich … unless we add much more to the housing supply.”

aburack@sfexaminer.com

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Ari Burack

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