San Francisco's housing boom

As many as 60,000 new housing units could be built within San Francisco in the next 15 to 20 years — development that will have deep-rooted implications for The City’s appearance, culture and politics.

The residential building boom will spread across San Francisco’s east side — from Treasure Island to Candlestick Point — increasing the number of housing units in The City by more than 16 percent, according to figures in redevelopment plans and rezoning documents.

Assuming the number of residents per home remains unchanged at approximately 2.1, the housing growth would lift the number of people living in San Francisco from 765,000 to 890,000.

Roughly one-third of the potential new homes are planned in bayfront redevelopment projects that could reinvigorate The City from AT&T Park to the Brisbane border.

Another one-third is planned in high-density projects that will dramatically alter the skylines of Treasure Island and The City’s South of Market area.

A different and sizable portion of the potential new homes is expected in already-developed neighborhoods — the Central Waterfront, Potrero Hill, Mission and parts of SoMa — through new building rules that will replace sprawling light industry and empty land.

Many of the developments will alter The City’s skyline, since a substantial portion of the homes — particularly in SoMa — are planned within high-rise towers under new or proposed rules that will increase building heights. Plans for a new 1,000-foot Transbay Tower and several surrounding buildings have proposed heights that will pass the current 550-foot height limit.

The growth is needed to fight against spiraling housing prices — and to help preserve San Francisco’s character — said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association.

“What would change the character of The City the most is not building housing — that’s how we stay on the path to becoming a place for only the ultrarich,” he said. “What will preserve the character of The City is adding enough supply of housing so that normal people can still live here.”

There were 1,914 homes built in San Francisco in 2006 and 2,286 new homes built in 2007, according to The City’s annual housing inventory reports, although Mayor Gavin Newsom’s office says The City approved the construction of 5,701 new homes in 2006.
The major housing projects will also provide substantial homeownership opportunities.

Currently, San Francisco has a high percentage of renters — 60 percent of occupied housing units in 2006 are renter-occupied, compared with a national average of 33 percent, according to U.S. Census Bureau data.

Ted Gullickson, a tenant activist, said increasing homeownership will have a gentrifying effect on San Francisco neighborhoods that will encourage property owners to turn their rentals into condominiums and co-purchase opportunities called tenancies-in-common, or TICs.

“When neighborhoods have seen a lot of market-rate development, especially of market-rate condos, there has been a domino effect throughout the entire neighborhood,” Gullickson said.

An increase in homeowners will also shift The City’s politics and likely favor moderate political leaders more than progressives, political analyst David Latterman said.

“In San Francisco politics, all battles come down to land use,” he said. “Both the moderates and the progressives have been fighting for a long time about who gets to come here.”

Building a more sustainable city

Concentrating future housing growth in job- and transit-heavy San Francisco will be good for the environment, according to city officials and policy leaders.

“The single most effective thing we can do to fight global warming is allow people to live in a city where they don’t have to drive for every trip,” said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association.

Ensuring new neighborhoods are environmentally sustainable, energy-efficient and transit-friendly is one of The City’s planning goals, Planning Director John Rahaim said.

“Doing sustainability on a district level or on a neighborhood level has huge benefits,” Rahaim said. “You can do the infrastructure in a sustainable way. For example, you can use streets to capture storm water.”

The redevelopment of Treasure Island, for example, will be “very sustainable — almost self-sustaining,” he said. “It’s meant to really push the envelope.”

New homes at Treasure Island and at Bayview-Hunters Point redevelopment sites will likely include solar panels funded in part with city rebates, said Kofi Bonner of Lennar Corp., the master developer for both projects.

A plan on how to make the shipyard development eco-friendly is in the works, he said. — John Upton

More housing means affordability

While the majority of the new housing built in San Francisco will be priced at heights that will seemingly match the towers in which they are built, the building boom will also result in an increase in below-market-rate units.

The City’s inclusionary housing ordinance, which applies to all residential developments of five units or more, requires that 15 percent of new units be priced below market rate if the units are built on-site.

A developer can also choose to offer a 20 percent “affordable” set-aside if the units are built off-site or if in-lieu fees are paid.
In some developments, city leaders have negotiated for a larger affordable-housing set-aside.

Faced with a ballot initiative that would have required a 50 percent affordable-housing set-aside for the redevelopment of Bayview-Hunters Point, master developer Lennar Corp. proposed 35 percent and was able to convince voters that mandating such a large percentage of affordable housing would kill the whole project.

City leaders overseeing the Transbay-area redevelopment plan have promised that 35 percent of that project’s 3,400 homes will be affordable. A 2006 plan drafted for Treasure Island promises that 30 percent of the homes will be priced below market rates.

With an eye on spreading some of the affordable-housing wealth around, the Board of Supervisors recently voted to allow developers to build off-site inclusionary housing further away from the main development project. — John Upton

By the numbers

  • 360,399: Housing units in San Francisco
  • 60,000: Approximate number of housing units that could be built within 20 years
  • 2,286: New housing units built in 2007
  • 60: Percentage of housing units that are rentals
  • 81: S.F. housing units demolished in 2007
  • 1 in 190: California households facing foreclosure in June
  • 1 in 1,600: S.F. households facing foreclosure in June
  • $806,700: Median value of an S.F. home in 2006
  • $1.2 million: Average price for a two-bedroom unit at One Rincon Hill

Sources: San Francisco Planning Department, RealtyTrac, Lennar Corp., The Mark Co., U.S. Census Bureau

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