"S.F. Housing on the Way, but Not Soon Enough for 2015 Relief"
The proliferation of cranes across the San Francisco skyline signals that more housing is on the way, but it’s not going to be enough to bring relief to those looking to buy or rent a place to live in 2015.
About 4,000 units of new housing will be delivered in the next year or so. Of that, 880 will be condominiums and 800 will be below market rate, a mix of rental and for-sale housing targeting groups ranging from seniors to the formerly homeless to middle-class families making up to 120 percent of Bay Area median income, $116,500 for a family of four.
The rest — about 2,300 apartments — will be market-rate rentals.
The housing production is a big improvement from 2010-13, when fewer than 1,000 units were built annually. But it’s not enough to meet demand in a city that has added 74,200 jobs since 2010 — 25,500 in the past year. That’s about 70 new jobs a day over the past 12 months.
“It would take more inventory than is coming to offset population increases and the pent-up demand that already exists,” said Skylar Olsen, an economist with Zillow, the real estate website. “You have more people moving in, and those who are moving in have higher incomes to support the higher rents and home prices. It’s the locals who are going to have a hard time of it.”
Rents went up 15.4 percent in 2014 and housing prices increased 11.5 percent, according to Zillow. While San Francisco has the most expensive housing costs in the U.S. outside Manhattan, there are signs that the market appreciation has slowed, more in the for-sale market than in the rental market. Zillow is projecting a 3.7 percent appreciation in for-sale units over the next year.
Over the past year the lack of affordable housing in San Francisco has become a central political issue as the overheated market fuels evictions and sends middle-class families fleeing for less-expensive communities. In January, Mayor Ed Leeset the goal of producing 30,000 units of housing by 2020, 33 percent of which would be below market rate.
At 1100 Ocean Ave., near City College, Mercy Housing and the Bernal Heights Neighborhood Center are close to completing a 71-unit project that will include 45 units for families making 50 percent of Bay Area median income ($50,000 for a family of four), and 26 units for youths who have aged out of the foster care system. A recent lottery for the family units drew 5,572 applications.
“It’s depressing but also inspiring that so many people keep trying, which puts pressure on the people who do the advocacy and community building that is necessary to continue and expand this kind of work,” said Amy Beinart, the Bernal Heights Neighborhood Center’s housing director.
Beinart pointed out that 1100 Ocean Ave. was a city-owned property, and there is growing pressure to ensure that other public sites are set aside for affordable housing. Development of at least three of these sites, including 1950 Mission St., will be initiated in 2015.
“I believe that 1100 Ocean was a great example of the use of public land for public good and is a model of what we need to do,” she said.
Affordable housing advocate Peter Cohen, who leads the San Francisco Council of Community Housing Organizations, said San Francisco’s affordable housing developers are producing a decent amount of housing, but they can’t keep up with the demand, or with the number of market-rate towers popping up.
In addition, much of the public money that would have gone to fund new housing construction will instead be used to rehab existing public housing.
Switch to rehab
“You are going to see a lot of city dollars in 2015 and 2016 shifting from new construction to rehab,” he said. “We are not going to be building enough to keep up with the actual need. The only real answer is, we are going to need more money and more sites.
“You look at 300 to 500 units a year, you think it’s a great number,” he said, “but if you look at the need out there, it is staggering how far behind we are in terms of getting the city to a point where the reality is housing for all.”
But market-rate developers are having trouble keeping up with demand as well. Nearly all the projects that have opened over the past six months are sold out, including the 263-unit Arden in Mission Bay, which ran out of spots in six months.