By Darwin Bond Graham
The tech boom has made San Francisco’s real estate the most expensive in the nation. Tech companies, from startups to Fortune 500 firms, are cleaving more and more income for themselves out of the U.S. economy, mainly through advertising, smartphones, and tax shams. As the preferred domicile of the tech workforce, and now even as a choice address for tech offices, San Francisco’s housing and commercial space is in hot demand from buyers who have seemingly unlimited cash. This has pushed up prices considerably.
Add the background effects caused by several years of bond buying by the U.S. Federal Reserve —the rise in all real estate values nationwide— and you’ve got a city where the median home price topped $1 million last year, and monthly rent for a one bedroom is averaging just shy of $3,000.
Into this maw of demand, the developers are shoveling units and square feet. Take a look at the development pipeline (available online courtesy of the San Francisco Planning Department – http://www.sf-planning.org/index.aspx?page=1691) and you’ll see a map of the 47.6 square miles of the city. Much of it, especially the eastern half, is crowded with projects, packing in housing, retail, and office footage. There are 50,600 proposed units of housing coming to San Francisco.
Approximately 27,000 of these housing units have already been approved, with 6,100 currently under construction. Most of the housing under construction is “market rate,” meaning that it’s priced for those who can afford to spend roughly $36,000 a year on rent, or who have a quarter million in cash to drop on a down payment.
Despite the popular myth that “Nimby” forces have retarded growth – or that the city isn’t allowing or approving enough new housing — San Francisco is a real-estate development beast. (more after the jump)
