San Francisco median home prices continue hovering between $750,000 and $800,000 and as yet are relatively undamaged by the national housing market slowdown. So it comes as little surprise that private developers remain willing to brave The City’s daunting permit bureaucracy in hopes of constructing new high-end units. And in order to build, would-be developers are generally required by City Hall to include an assigned percentage of lower-income units priced at approximately $200,000 to $250,000.
But this trade-off leaves out of the equation something absolutely essential to San Francisco’s future economic and social well-being — badly needed additional middle-income residences for the working households that everyone agrees are being priced out of The City. Even worse, unintended consequences of San Francisco’s restrictive planning and building codes virtually guarantee that nothing new can be profitably built by private enterprise at prices affordable to midrange homebuyers.
Yet, what if it were possible to easily adapt the permit codes so thatprivate developers actually wanted to build middle-income housing — because they could then do so at a fair profit and without any need for taxpayer subsidies? According to a new task force study by the San Francisco Planning and Urban Research Association, this could be accomplished by simply easing city regulations to enable lower-cost construction of new housing in neighborhoods where land prices permit.
SPUR, The City’s own urban development think-tank, found that the midrange housing market could be effectively served by offering an option of smaller but more efficient units with fewer amenities. Such units are now extremely difficult to bring to market because of unnecessary restrictions involving building density, common spaces, parking capacity and height limits on wood-frame construction.
SPUR makes six main code-change recommendations for lowering city housing construction costs:
A building’s size should be regulated only by outer dimensions, not by the number of units allowed within. This would encourage developing smaller but more efficient units in response to market demand.
Parking should no longer be required in every new building, which would lower each unit’s cost by at least $40,000.
Stop regulating the number of bedrooms in all units. A multiple bedroom requirement forces residents to take roommates approximately as often as it encourages families to stay in town.
Give developers more flexibility in fulfilling their below-market housing quotas with either moderate-income or middle-income units.
Start allowing a fifth floor to be included in wood-frame structures instead of the current four-floor limit. And allow more multistory buildings to offer street-level housing insteadof retail or garages.
Allow more flexibility in how to provide sufficient common spaces, such as setting a total footage requirement that could be divided between a central courtyard, backyard buffer and roof gardens in a way that best suits the overall design.
All of these changes are comparatively minor and could easily be tested as pilot programs of limited duration. Yet in total they might significantly enhance housing opportunities for a vitally productive but too-often overlooked segment of the San Francisco community.