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Saturday, October 16, 2021

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News + PoliticsDevelopers cry poverty; so sad

Developers cry poverty; so sad

But city studies show that market-rate housing and commercial offices can pay a higher fee for transit impacts

 

A big developer tells the supes that paying a fair share for Muni might put projects over the edge
A big developer tells the supes that paying a fair share for Muni might put projects over the edge

By Tim Redmond

SEPTEMBER 28, 2015 – The vast majority of the people who testified today at the Land Use Committee on the Transportation Sustainability Fee discussed the impacts on housing, hospitals, and educational institutions. The folks from the colleges said that student housing shouldn’t have to pay a fee. The folks from the hospitals say they are already suffering from the costs of seismic upgrades and shouldn’t pay the fee.

The housing developers complained that the costs were too high.

The transit advocates said that the fees across the board are too low.

I didn’t hear anybody say that commercial office developers would be so badly hurt by a higher fee that they would stop construction – or that, should that come to pass, it would be such a bad thing.

The committee listened to testimony and then continued the item. But the central discussion item was: At what point are we charging developers so much money for their project that the whole thing no longer pencils out? There was no talk of the notion that growth should pay for growth, and that a project that doesn’t pay for itself shouldn’t be built in the first place.

Planning and transportation officials explained how they came up with the proposed fees, which are, at best, equal to a third of the actual costs that the developers are sticking on the city – which means on the Muni riders, the taxpayers, the people who pay for parking meters … the rest of us will pick up the billion-dollar tab over the next 15 years to pay for the transit costs that developers are creating.

The city staff talked about the factors that would make a project “infeasible” – that is, fees so high that the developers will walk away. Alicia John Baptiste, a senior staffer at the Municipal Transportation Agency, said that if the reduction in the value of the land that a high fee represented hit 10 percent or more, the city would consider that a project killer – for the moment.

“Once you get past the 10 percent point typically you are putting a pause on development,” she said. “Over time, land values will even out.”

In other words: Make developers pay the full cost of their projects, and maybe we won’t need a Mission Moratorium. Maybe things will just slow down for financial reasons. And is that so bad?

There are some fascinating documents that underlie this discussion. The city analyzed the actual costs to public transit – that is, what every project really needs in terms of new services – and came up with a number for what developers legally could be forced to pay.

Then a separate analysis looked at whether those fees would discourage development.

The second part, of course, required the city to look at the real profit and loss in commercial and residential development today. And there are some eye-openers.

For starters, in nearly every single residential project that the city projected, the return on investment – the developer profit – exceeds 20 percent.  The margins on office development are a bit lower, which is why so much capital these days is going into high-end residential.

So along comes developer Oz Erickson, who testified today that the margins on housing are so low a few minor fees could kill all of it. “It costs $800,000 a unit to build housing,” he said, “and the sales price is around $900,000. We are right on the edge.” He insisted that margins are as low as 6 percent.

“A one percent increase in interest rates will put an end to all residential development in San Francisco,” he said.

If that’s the case, why are there so many cranes? Why are developers spending so much money (more than they would have to pay in Muni fees) to stop the Mission Moratorium?

If building market-rate housing (and office space) is such an iffy idea in San Francisco, and can be killed by a transit impact fee, why is this one of the hottest markets in the world for real-estate development?

Both Sups. Scott Wiener and Malia Cohen talked about how the city was growing, fast, and will keep growing – as if that’s the inescapable natural order of things. But if the costs of that growth greatly exceed the benefits to the city – and the rest of us are going to have to pay the difference – isn’t it time to slow things down?

Just a thought.

The fee discussion was continued to next week.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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184 COMMENTS

  1. The word isn’t “nasty,” tomtip. It’s passive aggressive. I’ve just been reading a number of your comments throughout this site, you’re quite the smooth, sophisticated little sociopath you try so hard not to be.

  2. Labor is not a long term investment while capital projects are. DId anyone capitalize the cost of the Bay Bridge in per annum terms? If someone wants to pay me $100K over 10 years to do 5% time work then we can talk. If someone wants to pay me $100K over 10 years to do full time work, then I’m not taking that job. Doubling your money over 2-5 years ain’t bad.

  3. Yeah, and the geniuses at city planning know everything.

    Here are a few examples of how “right on” they’ve been:

    Not very many people who support growth growth growth bigger
    bigger bigger more more more seem to know much about a huge series of
    successive fails on the part of city planners.
    They don’t always get it wrong, but they come close:

    Good idea #1: Let’s
    build freeways to everywhere, especially to those areas where large landowners
    stand to get hugely wealthy as voila their property is near a freeway and ideal
    for suburban dream living.

    Good idea #2: Let’s
    destroy urban public transportation networks so GM and Goodyear can get rich
    selling cars and tires.

    Good idea #3: Let’s
    also make the freeways from #1 go all over San Francisco and along the waterfront,
    because that’ll look nice.

    Good idea #4: Let’s
    bulldoze the Western Addition and displace thousands of people as we destroy
    block after block of Victorian buildings.

    Good idea #5: Let’s
    build BART, a phenomenally expensive rail project, in order to further fill the
    coffers of the land owners and developers in the East Bay.

    Good idea #6: Let’s
    build tall ugly overpriced wasteful and useless luxury condo developments …
    in areas where no one wants them, no one can afford them, and no one was asked
    for any input.

    We know the earlier plans were crap (freeways come down, we
    have pretty waterfront shopping malls like the Ferry Building and the outdoor
    shopping/lifestyle residential enclave of Hayes Valley. Except for the Koch brothers and others
    equally as stupid, we know freeways to suburbia were horrible mistakes. I would say it’s obvious that bulldozing the
    Western Addition strikes even Ed Lee and London Breed as a horrible mistake,
    but they’re ready to allow another huge displacement of the residents of the
    Midtown Apartments, some of whom have lived there since their previous home got
    bulldozed.

    City planners and the pro growth/urban revitalization crowd
    know close to nothing about how to make cities work. Time after time they get it wrong, but
    somehow the fools always come back to say “this time we’re right” and
    bigger fools like Lee, Scott Wiener, and Mark Farrell are all to happy to nod
    and grin.

  4. There are plenty of other places that can be built on, but rich
    people and their flunkies at City Hall oppose them. Here are two examples:

    Russian Hill residents have fought off multiple attempts over
    the years to develop the reservoir at Hyde and Francisco streets, just up from Ghirardelli Square.
    They – along with Supervisor Mark Farrell – want the Recreation and Parks
    Department to pay fair market value for this large tract of surplus property so
    it can be turned into useable open space rather than housing. “Fair market
    value” for a full city block on Russian Hill could easily devour the
    majority of Recreation and Parks’ annual budget. Of course, Supervisor Farrell
    is happy to support unwanted market-rate residential development in relatively impoverished
    and disenfranchised neighborhoods that are not in his district, insisting that
    building more luxury housing is the only way to reduce housing costs in San Francisco, so it is
    entirely nonsensical to “save” this large area from development,
    especially given the

    cost.

    Because the wealthy
    communities on the peninsula refuse to permit any construction that increases
    the density and overall population of their cities, San Francisco is being crushed. SF cannot
    solve a regional problem, especially when the most buildable spaces have been
    declared off-limits by those who live their. If SF grows while the Peninsula cities don’t, it seems more than fair to
    increase SF’s share of Hetch Hetchy water, thus decreasing the amount made
    available to the peninsula cities who get water from the system. Those giant
    lawns and lush gardens should die off.

  5. Of course developers would say that … and it must be true, because they’re jumping to get every plot of land and as many PDR spots or lots with rent-controlled apartments so they can work really hard making ugly luxury condos … and if they’re really lucky at least one thin dime for themselves.

    Developers (and their gasbags at SPUR) lie about more or less everything. Of course, if you look at information they provide to the planning department, their huge profits are right there to be seen, even by a dim bulb like Ed Lee or Scott Wiener.

    One example: The proposed luxury condo development at 600 Van Ness Avenue has an estimated construction cost of just shy of $57 million for 150 units. As planned, the total residential square footage is 134,261. If they charge the “low” price of $1,000 per square foot, which is not off the mark, they will suck close to $135 million into their fat maws. And that doesn’t even include the 11,484 square feet of retail in the proposed design and 108 parking places (in this transit rich location) which will likely sell for $40,000 or more. Since the project hasn’t even been approved yet, the sales prices will be even higher. The second Onyx building at the base of Potrero Hill is selling at $1,200 per square foot, up from the cool grand they charged for the first Onyx units.

  6. You don’t seem very qualified to call someone an idiot if you think the employment rate correlates the the skills of it’s unemployed. Seriously, that’s not a very sophisticated assumption you’re making.

    On what planet can you build housing for newcomers only? Then how do you think you’re going to prevent them from outbidding locals?

    And who is pretending this economic growth is temporary. It’s a fact of life. Where the hell where you in the 90’s? Where were you in 2006?

    Why do you keep insisting on talking about development as if all discussions about development are about housing? You jumped in because I talked about wild development… I wasn’t talking strictly about housing. Are we just building housing? No, we’re building ballparks, and transportation terminals, and commercial high-rises, and …. good lord, why am I explaining this to you?

    I’m not anti-development at all. Keep reading my posts and you’ll see I’m what a real centrist sounds like. Sometimes you’ll agree with me, sometimes you won’t. I’m middle of the road.

  7. I mean, It’s cute that you deemed anyone unemployed is unemployable,

    No, you idiot, I deep anyone long term unemployed in a ~3% unemployment rate environment as very difficult to fit with a job. That’s not exactly a controversial position on how labor markets work.

    those being displaced have a way of life, they don’t want to be pushed into a space half the size for twice the money.

    The only way to prevent that from occurring in a high growth area in the long run is to allow housing to be built for newcomers, so they don’t have to outbid locals for a place to live, which is exactly what people like you and Tim oppose. So spare me your crocodile tears. Pretending there is something uniquely temporary and ephemeral about current economic growth is convenient given your clear anti-development priors, but that doesn’t make it particularly convincing.

  8. You’re focusing on employing the locals, when the discussion was keeping a roof over their heads, before we welcome the next boatload.

    I mean, It’s cute that you deemed anyone unemployed is unemployable, but this image of a job market starved for warm bodies, who just can’t find a roof over their heads is a total fabrication. It’s not the corporate relocations getting turned away, it’s the displaced….and those being displaced have a way of life, they don’t want to be pushed into a space half the size for twice the money.

    When we talk about housing, we’re not talking about uniformed space pods handed over from space lord Ed Lee. As much as I cited Jobs as a contributing factor to the housing crises, so to is the lack of a *healthy* market. That’s different than a subsidized market or a market dependent on new construction to turn over inventory. For a while the market depended on people losing their investments, while overstretched, on short sales. We went from that, to no lending, and a market where you had to pretty much have cash. That narrows down the buyers.

    If economic growth were stagnant based on housing, you would see businesses building dorms like in China to get around the problem. We haven’t come to that yet, because most of the business growth we’re seeing is on ghost evaluations anyway not substantive product. Wildly building to accommodate everyone hopping off a bus from podunk, hired with ridiculous perks, and stock options, is a recipe for disaster. So no, throwing up buildings doesn’t feed the need automatically.

  9. If the demand is there developers will come in and build things. There is very little anyone can do to stop it. A short term moratorium in one small area isn’t going to make that much difference.
    If people have enough money and want to live in a certain area they will build their own houses. They don’t necessarily have to buy a house with ten people living in it already.
    No one is stopping the rich from living in San Francisco or Oakland, they are taking over the city as they please.

  10. What about employing current residents?

    San Francisco’s unemployment rate is 3.3%. In any environment with such a low unemployment rate, most people with marketable skills will find a new job very quickly. The long-term unemployed likely don’t have a skill set that makes them suitable for many jobs.

  11. Not all development is housing.

    Not all housing solves a housing crises. Some contributes to it.

    Not every job created in a healthy job market, should require brand new housing built. What about employing current residents? Why must all transplants relocate inside city limits?

  12. The way to keep Oakland affordable is to let the rich people live where they want to. Tim doesn’t want to do that. So instead of living in rich person storage units, rich people will outbid less rich people for their homes, and they’ll wander over to Oakland and outbid tomtip’s previously happy plumber, and on it goes.

    The reason that Germany controls housing prices is because their politicians are hyper vigilant about inflation since they remember what happened during the Weimer republic.

    The way Germany does that, primarily, is by ensuring supply rises to meet demand. They’re able to do it by not giving buybodies like Tim tools to prevent new supply from being added, which homeowners (like Tim) use to increase the scarcity and value of their investment.

  13. “Wild” would seem to imply overbuilding. What we actually have is a situation where we’re adding about 1 housing unit for every 10 jobs. That’s the exact opposite of wild. San Francisco needs “wild” compared to that.

  14. sffoghorn can’t possibly be as stupid as he’s pretending to be here. It just doesn’t seem possible.

    Me: “Hey, sffoghorn. Come work for me. I’ll pay you $100,000.”

    sffoghorn: “Sounds good. That’s per year, right?”

    Me: “No, it’s over 10 years. But that doesn’t matter, does it?”

    (And yes, money is different from labor in many ways, but not in the central, relevant way: the investment of either involves forgoing other opportunities, and in both cases time frame is a crucial component of any serious attempt to comparatively evaluate opportunities.)

  15. Tim likes to challenge the idea that growth is needed at all.

    This is dangerous. If we make it so onerously expensive to build housing that even the richest developers balk during a historic boom, how will new housing ever get built?

    I think you’re being a bit credulous here. Tim doesn’t really hide the fact that he doesn’t want new housing built. Epic sprawl, forcing the affordability crisis on other communities, continued displaicement–it doesn’t matter to him, as long as his mortal enemy, the developers, are screwed over, and the city conforms to his aesthetic preferences, regardless of the cost (and, of course, his own real estate investment continues to skyrocket in value).

    The Mission Moratorium campaign should put to rest once and for all the myth that people like Tim care about affordable housing. He’s willing to squash hundreds of units of affordable housing to harm his enemy. Pretending to care about those in need of affordable housing is an attempt to make his insane vendetta appear to have some recognizably progressive motivation. He may have even convinced himself. But his mask has slipped; any serious person who hasn’t drunk the koolaid can surely see it for what it is now.

  16. ” Maybe things will just slow down for financial reasons. And is that so bad?”

    After adding 100K jobs and 8K housing units the last five years? Yes, Tim. The answer is yes.

  17. The fear is that all the new condos and high rises for the rich will tip the scales of the citizens in the favor of homeowners, who will then vote down protections for the renter class. Then SF is truly lost as playground of the rich. As has been mentioned here, when they win that battle, they will have lost, as the City they finally end up with will be a shadow of the City they thought they were getting.. Menlo Park north.

  18. This post gives me the major heebie jeebies. Talking about who is too costly to the city is incredibly dangerous. By the same logic we could talk about how much the homeless cost, or how much people who receive social services cost.

    The city should be open to all who want to live and work here.

    Living somewhere isn’t a right, but if we want the fairest and most just society we can build, we should try to make our city equally available to everyone. It’s a very dangerous proposition to start using some kind of economic test to determine who is allowed into a city. I know Tim thinks he’s arguing on behalf of the less fortunate, but history has never looked fondly on those that promote exclusion in any context. Exclusion as a tool for social planning usually ends up going very poorly

  19. Are you suggesting they are not drawing a profit? Gary’s numbers are pretty damn reasonable, and considering a 700-unit building could be managed by a small handful of people, I’m calling crocodile tears.

  20. They take a management fee because they’re, you know, managing. Are you suggesting a building with 700 units have an HOA self-managed by the owners?

  21. “Yes, Management companies will take a fee for managing all this…”

    Right – they continuously profit! Why is that, in the land of tech firms losing money for 10 years on the vague idea that they will one day be profitable, that you pity these developers who take a 20% profit (or more) up front, and then continue to profit down the line through management fees?

  22. Build up and up and up is what Sam is saying, but the same rules apply to condo towers as they to do small buildings. This is how trolls play stupid. I bet that Redmond is paying him for click bait.

  23. On a large building, there are often staff that need to get paid, systems that need regular maintenance. Are you suggesting that assessments be raised every month to make payroll and pay for that ongoing expense? Idiot.

  24. The developers cries of poverty are absurd. If the margins are so tight, why the hell are they in SF at all? Why not take the money to Houston or Miami or wherever? Are we to believe they are developing San Francisco and losing money out of a sense of civic duty. What utter nonsense.

    The reality is exactly the opposite. Developers are flocking to San Francisco because a tight supply and insatiable demand allow them to make 30% profits even given our planning and permitting process.

    Oz Erickson should be subpoenaed, his pro formas and other financials analysed and under penalty of perjury be forced to testify. Then we’d know that he’s been lying all along and the true extent of the profits to be made on gentrification.

  25. Its pointless talking to tomtip. He is a landlord whose only agenda is money. He hasn’t a care in the world for the future of SF, as long as it gets more expensive. And, as has been mentioned, he can pretend to “belong” more.

  26. Cities, including SF are riddled with the effects of unsound and short sighted civic developmental hubris. We were hoping SF would have learned from that, but fearing we have not.

  27. “people like me” – please explain; and, tomtip: you are not always civil – just read your reply to me;

  28. Gary and Fishchum: I read this 7 hours later and I am apologize to both Gary and Fishchum for including Fishchum in the same vein as the mean trolls – I will try harder

  29. Hemming, hawing, obfuscating, distracting, anything but addressing the substance of the question at hand in a way that relates to the previous post in any salient manner.

  30. You stuck your head up your ass a while back when you made the laughable claim that HOA paid property taxes. It is clearly still lodged up there.

  31. That developer was saying that his margins were too small, in other words that “he could not stand it” if the city raised any fees. Except he’s making it up.
    Next time you see an article about some developer giving SF up for some other city, rather than just complaining and still developing, post a link.

  32. Just because your job is in SF doesn’t mean that you have to live in SF. My plumber lives in Oakland. He seems happy enough.

  33. It doesn’t matter whether or not the developers “can stand it” because they do not have to. They can invest anywhere. If Sf makes it too difficult or expensive they will go for a better ROI in NYC or London or Dubai.

    The entire premise of this article is flawed. Developers are not pleading with the city to invest here. They are offering the city an opportunity to grow and develop. If the city doesn’t want that then, like Twitter, they can go to another more welcoming pace

    SF needs developers and their money a lot more than they need us.

  34. Naw, if SF becomes SJ, you will never win, even if you win.

    “I’m a winner! I’m the new SF”…. listen to yourself.
    If your last name was Benioff, you would still sound ridiculous.

  35. You said “Projects started 5 years ago did not anticipate such high returns.” What part of that did you not mean?
    What this article said is that raising fees will cover things like transportation costs, and that developers can easily stand it. It didn’t say that would lower housing costs.

  36. “you could make a case for a government take over of development in the areas under consideration.”

    Problem is, people own most of that land, and have to be paid for it at market rate (quite high at the moment). The city and the non profits have also failed to demonstrate an ability to produce any significant amount of housing.

    Case in point: http://www.socketsite.com/archives/2015/07/budget-to-build-72-affordable-units-in-the-mission-888889-each.html

    and

    http://www.socketsite.com/archives/2015/08/the-cost-and-renderings-for-120-affordable-transbay-apartments.html

  37. Developers have to consider many factors when deciding whether to commit capital to a project – some developers can afford to think over the long run and build in a slum or undeveloped area before it becomes gentrified. They always have to consider whether prices in a certain area will continue to appreciate over time. Many are financed by banks and have to consider how much interest they have to pay the banks. Others have their own capital to commit.
    Inflation in housing prices can cause serious problems for both owners and renters and developers. If you own a home and your toilet breaks or roof leaks you might not be able to get a plumber or contractor to fix it because they can’t afford to live within 250 miles of the city. Or you can’t get a haircut or take your dog to the vet without spending hundreds of dollars. The supermarkets can’t find people to stock the shelves without paying double minimum wage so they raise the price of food to compensate. The hospitals have to pay the doctors and nurses twice as much as anywhere else and they either close or find a way to pass the cost onto consumers. Its already happening in American cities and it could get worse.
    The reason that Germany controls housing prices is because their politicians are hyper vigilant about inflation since they remember what happened during the Weimer republic. Inflation spiraled out of control so badly it caused massive social instability and led to the rise of Nazis and the one of the worst wars in human history. Obviously its not that bad in San Francisco yet but you could make a case for a government take over of development in the areas under consideration.

  38. I’d like to know how MUNI spent that $500,000,000 bond, or was it really just digging up McAllister St., a few bulb-outs, and renaming the limited buses “rapid,” as if they somehow makes them BRT or something…

  39. Sorry, I’m not tolerant of you changing this city into a mall or promenade, or suburb, and straight up removing San Francisco of it’s character or of it’s population and diversity.

    It’s a childish culture war built out of insecurity and a failed sense of belonging, disguised under pro-economic rhetoric, and it’s no better than the Progressivist version of the same mission statement. You’re not for progress or change, you’re for outright appropriation, and the reason you love it is because it’s the only way you’ll feel like you belong here. It’s why you want to re-invent the city, and care less about Othering the people who made up it’s fabric, before you even got here. The saddest part? You wouldn’t even know a sourdough if it hit you in the face.

  40. I get it far more than you know. You are locked in the past – I am the present and the future of SF, and you can’t stand that. SF is now a city for winners and achievers, not losers and whiners.

    In which case, move over, out and on. I’m sure Santa Cruz is still adorably cute and old school.

  41. Lee wil romp home with 70% of the first round results. It won’t be close, like Newson’s re-election. And Lee will then have a mandate for 4 more years of growth and development

  42. I never said that new jos and residents has ZERO effect on transit. I simply said that it doesn’t have a one-for-one effect, for all kinds of reasons.

    We build more in the eastern neighborhoods because that is where the infrastructure is and that is where the demand is. The west side is much less suited to height and density

    You must take a different Muni than me, because it sucks, and I rarely use it.

  43. No Tomtip, the tendency is to recognize when people move to SF and don’t have the first clue where they are. People like you, or Weiner, will never be San Franciscans. It’s not about nostalgia or lost youth. You will never get it, and you will never contribute to what made this city a place you wanted to move to. The truth hurts.

  44. 100% b.s. to think that adding tons of jobs anywhere has no impact on transit, parking, traffic, and even walking in a district. I don’t see us building any “less” than any other city besides BERLIN, but at least when you look at transit overseas its punctual, on time, clean, efficient, and gets you to the majority of urban areas, since they regulate sprawl. We don’t regulate sprawl, and let subdivisions overtake the valley. We ignore adequate taxation, and therefore now have to make up for the difference. I did not say to build less, I prefer to build EQUITABLY in all neighborhoods, why should Forrest Hill, or the Marina be exempt from “density” and only poorer or less able to defend themselves neighborhoods are targets for re-densification, without impacting other home-owner neighborhoods..?

  45. But costs were much lower 5 years ago because we were in a RE recession. And in fact many projects did not proceed, Which is part of why prices are so high now.

    A rule of thumb I have heard is that one third of the price is land, one third is build and one third is profit. That seems reasonable to me, and jacking up fees and stalling new build is not going to bring down housing costs

    I was talking about buying existing rental buildings. Obviously no new rental buildings would ever be constructed if they were subject to rent control. That is the entire reason for the exemption

  46. “Projects started 5 years ago did not anticipate such high returns”—and yet they still built them! So it looks like profits can still go down and not pose undue risk, again, contra Oz Erickson’s feigned alarm.
    New units are not rent-controlled.

  47. But that 66%/13% pa is at what surely must be a cyclical peak. Projects started 5 years ago did not anticipate such high returns. And projects started now may well not pencil out at these levels.

    That degree of uncertainty and risk is why returns have to be higher. Personally I’d want 15% pa to speculate on a new project. If it is much less than that, there are other cities who will give me that. Investors are agnostic as to location – risk/reward is what matters.

    Same for rentals. A rental property in Marin is a lot safer – rents are high there and there is no rent control. The reason to go for SF controlled properties is the upside that comes with turnover.

  48. If Tim was not happy with me, he could easily block me. In fact he wrote to me saying that he valued my contribution. I suggest that you focus less on me and more on making your own contributions

  49. Short-term, vs. long-term. 66% over 5 years is 13%/year, better than most stock portfolios and with less risk. If you want to invest for the longer term, you can build 100 units of rentals rather than condos.

  50. Well, I don’t see it that way. Don’t respond to my posts and I won’t respond to yours. As for danimalssf and “others” there are WAY more people who have complained about you on this blog than me. So if it’s good for me to listen to others, you first. You over post and several people have said so.

  51. There is a lot of variety in our small city, which means that everyone can find a place they like. If you like Mission Bay, I don’t judge you. If you like Hunter’s Point, I don’t judge you.

    But what I hear a lot is actually intolerance, mostly from folks who have been here a long time and who feel entitled to nothing ever changing.

    In another 20 years this city will have re-invented itself again. Fighting change is futile. Instead, embrace it. It’s really not as scary as you imagine.

  52. There is a tendency for people who have been in SF a long time to hanker after the way it was decades ago. Maybe it is a mid-life thing, trying tor recapture a lost youth. Maybe it’s a hippie thing. I don’t know.

    But SF is not a world-class city that is the global center of the knowledge and sharing economies, and I think that is very exciting. Far more exciting than some vague recollection of a time and scene that was probably never as much fun as you recall it through rose-tinted glasses

  53. Obviously more often than you do. Bayview homes aren’t cheap.

    I’m not claiming the city is void of crime or danger, but if you have a fantasy of Hunter’s Point looking like Westlake, meets Rincon Annex…. then no thanks. HP is also a great example of the “unsavories” being corralled into one small section, as a showcase of bad activity, so as to justify turning it into a mall, or making it look like San Jose. You can’t just use white out. But, our of sight, out of mind, am I right?

  54. Each of us must design their own role. Mine is critical thinking and skewering hyperbole. You can choose a different role for yourself. My point was merely that insulting anyone who you disagree with isn’t a real positive contribution, and that was the point that danimalssf and others have made.

  55. Here is how I look at these things. The stock market has returned an average of a 10% annual return for about a century now, and with less risk than a single development in a cyclical market

    So if I was considering investing in a development project then I would need more than 10% a year to do that, or I might as well invest in stocks and have so much more free time

  56. I’m not angry. But who appointed you to the role of debunking ‘sloppy thinking’ ? What other roles do you have here?

  57. No, because land that is zoned for 40′ will be cheaper than land zoned for 200′. People who sell land are no fools.

    I was using a 100-unit building because that is what the estimate was in the SPUR article, and because that is what Oz Erickson’s group has been developing, not 9-unit buildings:
    http://www.emeraldfund.com/project-list.html

    Even if the 66% return is divided across many years, that doesn’t mean that he’s teetering on unprofitabilty, as the whine in the quote tries to make us think. In fact, the longer he waits, the higher the prices his units will fetch, and the higher his profits.

  58. I am not moving anywhere, because this city is becoming more like what I seek. If anything it sounds like you might be happier elsewhere, if you really do not like the changes happening here.

  59. I do not single out any one person’s posts to respond to. But if I see a point that is easily refuted, I will do so. That is a part of my role here – to debunk sloppy thinking.

    What I won’t do is respond to a serious point with a personal attack, and that is not a claim you can honestly make.

    I don’t really care whether you respond to me or ignore me. But I do think you should seek to control your anger. It could get you into real trouble one day.

  60. I don’t know why you moved to SF, or from where, and that’s personal….but you moved to a city that was a city, and cities have negative aspects, like crime, and unemployment. I’m not equating that to the City’s culture, but if you envision a sanitized City, and you think development is the surest way to get there, then you’re ….confused.

    If you don’t have a desire to assimilate or preserve this city, then maybe you picked the wrong city. Oh, and don’t mistake that for preserving the homelessness or crime. You’re better than that.

    SF isn’t dynamic. You’re living in a depressed city, where people with a suburban mentality are acting hood rich. A year ago, I would have said the city is thriving, but that was a mirage.

  61. OK, let me propose something: Don’t respond to my posts or people responding to my posts and I won’t respond to your posts or people responding to your posts. Problem solved.

    I AM intolerant of rude people, and regardless of how you see yourself, dominating every thread is rude, as is intentionally twisting what people write into something they would never write in order to say “I win”. That you evade taxes, do short-term rentals, have Ellised, etc, factors into this. Because of your actions as a landlord you are not deserving of civility.

  62. Surely the land cost per unit will be higher for smaller projects. A larger project can build higher and so apportion the land costs across more units.

    9 units is an interesting case because there is no need to provide for BMR housing. It isn’t clear to me how that cost was factored into your computation

    But again, even if that 66% is assumed correct, that is split across many years, so the annual return isn’t that stellar, especially when you consider the significant risks involved

  63. I did not move to SF because of the criminals or the homeless or the insane or the unemployed or the others whom you equate to the city;s former culture.

    I came here for opportunity and success. I am not a techy but I figured I could make a good living providing them with products and services, particularly housing, and that has happened. I am an American and so I want to succeed. It’s not my job to preserve this city as some kind of theme park to what is not ancient history.

    But to your other point, yes, culture and value is subjective, which is why you liked it more then and I like it more now. We are in one of the most dynamic and successful cities on the planet, and I am proud of my small role in that change

  64. A 9-unit building will have cheaper land. Developers build as much as the zoning will let them. Land that’s zoned lower will be cheaper. Labor costs per sq ft will be comparable.
    Loans will cost money, which will lower the 66% profit somewhat, but it’s such a large margin, there’s plenty of room for wiggle there.

  65. I don’t think it can be explained entirely by a selfish desire to see increases in the value of his home, although it is perhaps significant that Redmond, Welch, Hestor, Shaw, Campos etc. all own SF property and so profit from less new build.

    It’s also that their paychecks come from the current system. A large expansion of the city’s employment and housing base lead to a fear that the electorate will become more moderate, and that their progressive gravy train will come to an end.

  66. That’s called culture. Better is subjective. Value is subjective. Maybe your life is better, and your employment status has improved, but some of us remember when the fruit at Bi-Rite was just the same damn fruit at Safeway. Yeah, some cultural aspects have improved, but it’s not because they built Mission Bay. The real middle class can’t relate to half of what’s written about in 7×7 or San Francisco Magazine. I’d bet you don’t either.

    Okay, so you’re right, crime is down, probably because we priced out the criminals, and we’re turning the ghettos into suburbs. Maybe seeing SF City become more suburban makes it more livable for you personally, but then you probably shouldn’t have ever moved here. Wait, we didn’t actually get rid of the criminals or unsavories, we just pushed them into compressed 2 block penned off areas, where they remove the sidewalk garbage cans, and station community organizations to feed off that economy. You probably never see that, but they’re there.

    I never claimed it’s a bad thing you can walk safely down Fillmore…you put words in my mouth… but I will tell you that’s a false sense of safety you’re feeling, and to get you to that self righteous place, we lost a real fertile neighborhood for some BS carved up speedway, and projects, and some failure of a fictional Jazz theme park, and a dead shopping mall, promenades, and a crappy condo city. You champion that, you’re not championing culture, or a city. Sorry.

  67. Compared with 20 years ago we have better jobs, better restaurants, better stores, better entertainment, better transportation

    It feels like crime and blight have declined and several former bad neighborhoods have been considerably improved and cleaned up.

    The fact that I can now safely walk in the Fillmore is not the bad thing you are claiming.

  68. The city has a lot of leverage as it can refuse to permit development. A bigger problem is that can lead toe xtortion if we are not careful.

    The voters have consistently elected pro-growth, pro-development mayors for 30 years now. We already know what the voters want, and we will see that again in November as Lee is projected to win with 70% of the vote

  69. So a half vacant Rincon Annex, and those failed condos at the beach that became section 8 projects really made things livable for you?

    Really, what’s improved your life as a result of development?
    Name some specifics.

    I’m not anti-development, mind you, but SF was already interesting before triangular condo lofts slipped into every empty parcel of land available. It’s not a city on a grid, or one that was plopped on a map in one swoop….so planning the additions and revitalizations matters. The city has become a loony bin…. and I’m focusing on recent years, but you can look at the history, when whole neighborhoods (Fillmore…cough) never recovered aesthetically, or functionally from planning negligence.

  70. The city negotiates at a disadvantage so does the public, that’s the “system” I don’t state I am above the existing bean counters and mega-mogul funds that feed the development crazes. But we can as the public vote to change the profit margins and for the purpose of public benefit and not just profits which is called PHILANTHROPY which the current tech industry and business interests forget to readily while counting their coins

  71. The reality is that we build far less in this city which is why costs are always escalating. You are simply arguing to build even less by making it even more expensive.

    The proposed transit fee is fair considering that many new jobs do not increase the load on transit, for reasons I have outlined many times before.

  72. As usual labelled a NIMBY regardless of premise

    I am all for well designed density and development when supported by adequate sizing of infrastructure as co-pay transit, schools, open space libraries public pools and emergency services known as CARRYING CAPACITY of a city which is not a developer or bank driven formula through SPUR or SFHAC but a real cross the board analysis on issues such as sea water rise aging infrastructure and service buildings too small for the current density proposed.
    Transit tax is one pot needing filling there are many more and our current elected bodies are ignoring the climate impacts of the rubber stamping occurring at the planning level at city hall.

  73. No, you don’t like me because I successfully rip apart your positions, at least when they are not well thought out or you are talking about a topic that you don’t know much about, like real estate investment.

    I don’t mind whether you try and refute me in a civil way or whether you just decide to ignore me (which you keep saying you will do but then don’t).

    But getting rude and abusive all the time every time is not complying with Tim’s clear guidelines for this place. It really seems like you cannot just ignore and overlook those who have a different style and posture.

  74. Here’s your problem. I consider you to be troll-like and nasty, because you are much quicker to personalize things than I am.

    How about some tolerance?

  75. I’ve lived here for most of that time, and I find the city to be much more livable than back then.

    Maybe there has not been a grand vision for the city, but then cities that grow chaotically can be a lot more interesting than places that are centrally planned, like Ottawa and Canberra.

  76. That’s a profit spread out over a number of years, without factoring in construction loans, or foreign capital investments, etc.

    How relevant is a case study focusing on a 100 unit building? What about the 9 unit buildings?

  77. Sure, NIMBYism rewards those who already got theirs at the expense of those who aspire to have theirs.

    But a lack of social mobility (also ossified by rent control and prop 13) is not a good thing for the city

  78. I asked him previously to point me in the direction of any large amount of housing that he has ever supported. Nothing. You’re correct that his and others in this threads’ true goal is zero growth.

  79. Its not that we disagree. It is that you intentionally distort my opinions, jump to extreme conclusions, project what I write about a limited issue to a macro issue, and in general, use about 100 other high-school debate team tactics to ‘win’ and not to thoughtfully discuss. And then you dominate every thread, responding to every person who posts. Simply put – you are a lout.

  80. You’re kidding right?

    What does the red tape of city planning have to do with anything?

    The way this city has changed since the 80’s hasn’t been with any brilliant cohesive vision, it’s been all ego, and amateur master plans, and the results are a less livable city, bordering on a zoo.

  81. Nancy, you and I agree on just about every issue including tomtip. Fishchum, like me, can be abrasive, but I’ve not seen him be nasty and troll-like.

  82. It’s not that clear to me. For example, SPUR writes:

    “This is very simplified and does not include construction financing expenses, contingencies or developer’s profit, among other things”

    and

    “(SF) Land costs are among the highest in the country; construction costs are higher (particularly on tight infill sites); and the timetable for design, permitting and construction is longer than what is typically encountered elsewhere. There is a level of uncertainty in the planning process that is unmatched in other large U.S. cities. People unfamiliar with the construction process have asked me why we can’t cap the profit developers can make in order to bring housing down to more affordable levels. The problem is that the price of building housing, not including any profit, is already more than what most of the people who live here can afford.”

    That doesn’t read like developers are making massive profits.

  83. Eh. Development money thrown around wildly isn’t really healthy development, and every structure you build isn’t always an improvement.

    I also have to disagree that “almost very job” is created by a developer. Maybe you just worded that funny.

  84. Wait, what about the land? You also have to buy the land. That’s not included in the construction cost numbers you cited.

    What about fees, taxes, interest costs?

  85. OK, let’s try some real numbers:

    A 640 sqft unit in a new 100 unit building cost $470,000 to build, in Feb. 2014:

    http://www.spur.org/publications/article/2014-02-11/real-costs-building-housing

    Building costs have gone up 2.4% from 7/14 to 7/15:
    http://enr.construction.com/economics/
    So let’s say 4% from 2/14 to 9/15, which puts building costs at $490K, call it $500K even.

    As of April, new condos were fetching $1,257/sq ft:
    http://sf.curbed.com/archives/2015/04/14/condo_prices_in_san_francisco_soar_to_record_levels.php

    By now, it’s maybe $1300, so our 640 sq ft unit would fetch $830K, or 66% over the $500K construction price. Nice profit if you can get it.

  86. Where have I been “nasty”? Link? I realize I’m probably in the minority on many issues, but I’ve been making a concerted effort to be civil in order to let someone refute the points I’ve made without claiming that I’m being anything less than civil.

  87. foghorn sullivan’s grasp of investment fundamentals makes it easy to see why he still has to do the daily office job grind at an age where he really should be retiring and putting his feet up.

  88. I am never “nasty”. I pride myself of civility. It is others who are always first to turn things nasty by making personal attacks.

    Why not try refuting me instead?

  89. Both Fish and I are always civil and focus on the facts and the arguments.

    The anger comes from people like you, Gary and foghorn sullivan who cannot read an opinion they disagree with without getting petty and angry.

  90. Tim’s real agenda is to achieve a zero growth city. That ties in ith his desire to freeze the city in time like some kind of theme park for losers and misfits.

    And he thinks we should build only for those who cannot afford to be here

  91. LOL, so want a developer to accept a 3% profit on a project that could take up to ten years?

    Way smarter people than you negotiate this stuff,

  92. Your premise is that we need to build fewer homes and create fewer new jobs?

    When did NIMBYism become a valid political paradigm?

  93. so, just ramp up the nastiness from tomtip and if people “can’t take it” they are not suitable for discussion here –

  94. please direct this comment also to tomtip and the fish chum – their nastiness in the defense of the uber rich is appalling and just grinds on the ears

  95. Gary’s statement below is dead on… the building craze is not lessening. We MUST make the building groups and banks and profiteers pay in… or get out…

  96. Why the arguing of numbers, focus on the problem, money is funneling to specific projects, we have 3/4 of the city desperate for improved transit, if we want to build up we need to lay the groundwork of transit, now, so people don’t cram into cars, and roadways. So we need to raise taxes on housing, institutional, and business’s locating in SF.
    Uber wants a new headquarters in SF, or LYFT, or Google, or Trulia, or Facebook, or whatever provide taxes to alleviate the burden. Those vehicles are not regulated as taxi’s and we don’t have laws enforcing the electric vehicle mandate, or mileage tax, or size of vehicle tax so impose them and make the transit public systems the PRIORITY, not the end result of development. This goes for housing too. Than we can fix the transit, build the housing, and developers don’t make 20+% profits, nor 6% profits, but 3% or less, they need to get tough the politicians, and ignore the whimpering sounds of developers driving high end cars to their office pads, and focus on the masses of people trying to survive in the streets. I don’t have any pity for banks giving .01-05% interest… and charging us like its going out of style… Demand equitable numbers and make the developers pencil out a thinner profit line with the banks… or find a new bank and developer that will.

  97. The fact that you disagree with me, or even dislike me, is a not a justifiable reason for breaking Tim’s request for civility here.

    If you cannot engage in debate without quickly lapsing into nastiness, perhaps you should consider that you are not well suited for such discussions.

  98. Gary, you could make the same criticism of many businesses that operate on an ad valorem basis.

    You could equally argue that a 2 million dollar home should not pay twice the property taxes of a one million dollar home, because it doesn’t necessarily consume any more services.

    Fees in many kinds of business are based on a percentage, and rely on inflation to provide the basis for a corresponding increase in income.

  99. A small condo building will be self-managed, or may even not require HOA fees and simply pay bills as they fall due, assuming the owners trust each other.

    The bigger the building, the harder it is to self-manage. Once you get into the hundreds of units, you effectively need a corporation to manage all the complexity. And that comes with costs that need to be paid for.

    The owners can vote to fire any management company that doesn’t perform.

  100. That is likely where it went.

    As has been repeatedly stated these are supposed to be impact fees. It would do the authors cause a favor to list some things this money has gone to in the past.

    The article just reads, “give the government more money, oh and class” not “this what we got in the past and we could get more of that with higher fees.”

    A more persuasive article would state the gains to be had by the citizens of the city paid for by the fees. As far as I know as a citizen I get nothing out of these fees.

  101. Do Tim & Co. even _really_ want affordable housing? Seriously. It’s clear that the vast, _vast_ majority of the political energy of this crew at this point is dedicated to preventing things from getting built, right and left. Discussion of concrete plans to build other, different things – beyond some quick handwaving – barely ever makes an appearance here.

    Which seems telling.

  102. Reason: Tim & Co. only want “affordable” housing (hoping that subsidies somehow appear). “Affordable” housing secures his voter base, allowing the political class to continue their monopoly position. MR housing challenges that – though it doesn’t totally eliminate it; it just introduces an element of risk.

    So best eliminate the risk by banning all outsiders unless pre-approved for residence.

  103. Sorry about that. My ‘nastiness’ is not in every response – only those to the resident troll on 48hills, tomtip (this week – he changes his name quite often). He intentionally provokes, derails many discussion threads and is a landlord who uses short-term rentals to evade city regulations and keep his units from the rental market. He has also Ellised at least one of his properties.

  104. IMO, yeah, you’re pretty close on the HOA fees – I would bring that figure down slightly, but not by much. I really have no idea what the management fee is, either – but One Rincon has a shit ton of expenses – valet parking, spa, pool, gym, business center – that shit doesn’t pay for and maintain itself.

  105. The only number in question is the 15% management fee. There are 710 units in One Rincon and I spot-checked the HOAs and $1k seems about right.

    Edit: I just checked – there are 709 units. My mistake.

  106. “In other words: Make developers pay the full cost of their projects, and maybe we won’t need a Mission Moratorium. Maybe things will just slow down for financial reasons. And is that so bad?”

    This sentiment is a large part of why we’re in the spot we are now. Regulation is about finding sweet spot, that both mitigates potential harms, yet allows for economic growth. Tim likes to challenge the idea that growth is needed at all.

    This is dangerous. If we make it so onerously expensive to build housing that even the richest developers balk during a historic boom, how will new housing ever get built? When rents and sales prices aren’t riding so high, no new housing will be added, and we’ll be in an even worse position during the next cycle. There are “lots” of cranes because prices are so high that it becomes worth it to navigate the labyrinth of SF planning. If you make it not worth it even during the peak of the boom, we’ll never be able to accommodate future growth, and eventually city revenues will suffer.

    Urbanization is happening whether we like it or not.

  107. I don’t think your numbers are accurate, but I really don’t have any information that would refute your assumptions. I can tell you that property management isn’t exactly a “get rich quick” field – managing a large HOA is a lot of work, and I would have to believe if a group of condo owners felt they were being taken on the management fee they would have the ability to do something about it.

  108. Sorry, you’re really getting your ass handed to you on this one. Do you really believe a 10% return in one year is the same as a 10% return over 5 years? Wow. Just wow.

  109. Your nastiness in every response really makes these comments ugly to read. Lighten up a little bit. Take a breath. Go outside. Relax. And play nicely. Disagree without being disagreeable. All of that shit.

  110. Or maybe I’m a renter and an owner. And maybe I’ve been managing finances for family members who are no longer able to do so. Oops! You are such a numskull. And a tax cheat.

  111. You really can’t be that stupid, can you? I was specifically discussing increases for services.

    Here is the example I used: An increase in insurance. Let say the actual insurance increases by $40,000 a year. The total increase that will be passed to the condo owners will be $46,000, because the management company will have to get their additional 15% – for doing nothing. They were paying the insurance bills before the increase and they will be paying the insurance bills after the increase. No additional work and $6,000 more in profit.

  112. You said they “do nothing” I explained why that is 100% wrong

    Two lies exposed in one thread. Are you feeling OK today?

  113. You told us that you rented but did not have rent control, and that your landlord was “great”

    Leading us to believe that you rented a condo

    Tenants do not have to pay HOS fees. The owner does.

    Oops

  114. Happy to have educated you on how cities benefit financially long-term from new build. Feel free to use what you have learned here today

  115. Thanks for your thoughtful response. I can’t tell you how it enriched us with your additional insights. No really, I can’t.

  116. 1.

    What ongoing operating costs does the City impose on the HOA?

    2.

    Property taxes

    3.

    Exactly, and that leads to more revenues for the city.

    4.

    Thank you for conceding the point.

    Ass.

  117. But the residents get something in return for that. The insurance, maintenance and management of the building and the salaries of all the building staff.

    It’s not all profit and a full accounting has to be done.

  118. Amazing that you idiotically projected that I don’t know what HOAs are. I pay HOAs.

    On second thought, it isn’t at all amazing that you wrote something idiotic.

  119. As someone who pays HOAs, I fully understand what they are used for. What I’m getting at is this: Let’s assume the average HOA at One Rincon Hill is $1000 per month. With 710 units, that is $8,520,000 a year. A management fee of 15% is $1,278,000 a year, a very tidy profit for someone, after expenses. And since increases in the cost of services automatically increase the monthly HOA, the management company can actually get an increase for doing nothing, such as when the insurance increases.

  120. There is a need for a HOA for any condo building but there is no need for HOA fees. They are an escrow device to ensure that, when money is needed, it is there.

    But legally and technically, the HOA members can agree to not pay HOA fees and just pay as you go. I have lived in (smaller) condo buildings where that is the case.

    And HOA fees can go up, again if the HOA votes for it

  121. But their returns are looked at in the same way. And of course the lenders who finance them care a little about when they get paid back, do you think maybe?

  122. HOA fees are fixed while ongoing expenses are variable. To a certain extent, it is a slush fund unless the monthly fee has been calculated based on justified projected actuals.

  123. Returns are always annualized when looking at comparitive numbers. Take a look at how stock returns and bond yields are represented, for instance.

  124. It’s reasonable to look at a no-growth US city like Detroit as a contrast to a high-growth city like SF, and then try and notice which city is more desirable and successful.

    It helps you understand why SF voters, like voters everywhere, vote for jobs, growth and development over NIMBYism, regression and inertia.

  125. There are reasons why sucessive Brown Mayors guard complete control of the MTA jealously, see anti violence advocate Sulu Peleaga for an example of corrupt sinecure at the MTA.

  126. Look at Detroit to see a city that has adopted Tim’s ideas of being anti-growth.

    A straw man is a common form of argument and is an informal fallacy based on giving the impression of refuting an opponent’s argument, while actually refuting an argument which was not advanced by that opponent.

  127. Property taxes, DBI inspection fees, rules and restrictions that drive up maintenance costs, transfer taxes for every subsequent sale, and so on.

    Cities do very well out of development even without any fees.

  128. Of course it is relevant. 10% in one year is good. 10% in five years is meager. 10% in a decade is dismal.

    Return without a time period is meaningless

  129. How is that different from paying 900K for your condo and having a view of the building across the street from you?

    Most people in SF don’t have unrestricted views from their homes, and those who do have to pay a lot more than 900K.

    Being higher up gives you extra benefits e.g. more light, less noise.

  130. Almost every job and home in the city was created by a developer. Tim lives in a house that was built by a developer. And yet somehow they are evil?

    Cities for compete for inward investment and development money for very good reasons. It increases the tax base. Look at Detroit to see a city that has adopted Tim’s ideas of being anti-growth.

  131. Tim, when you cite that average 10% return number on a development, you ALWAYS forget the most important fact about it. A project can take 5, 7 or more years from conception to sale.

    So that 10% return isn’t annual, but rather the annual return is derived by dividing the 10% by the number of years elapsed. So even taking the most favorable case of 5 years, that’s a return of a lousy 2% a year.

    When you consider the risks taken – a downturn could wipe out the profit or bankrupt the developer, a 10% return over the life of a project is very low. Heck, I can get 2% a year return on T-bonds, with zero risk.

    A higher take by the city would drive out many developments. You want that because you are an unrepentant NIMBY, but most voters want to see more jobs, homes and prosperity.

  132. Amazing that Gary thinks that HOA money is some kind of slush fund rather than an expedient to pay ongoing costs, many of which are imposed by the city itself. It is the city that gets an “on-going source of revenue and profit”. The developer moves on.

  133. It’s possible. The average home price is about 1.1 million but right now developers are building a lot of smaller units. There isn’t much land left for building the kind of mansions we see around the city, and those mansions drive up the median home price.

  134. HOA’s either go to pay for amenities that the building provides, or goes into a reserve fund. Yes, Management companies will take a fee for managing all this, but any condo owner can see the building financials and ascertain where every penny of their HOA dues goes to.

  135. A lot of the small-medium buildings are wrestling with that very question.

    I don’t think the average person can really grasp the process or the hoops they have to jump through, as it is. I know I can’t fully. Let’s not assume these projects are without risk.

  136. This isn’t the wild west anymore. Pay up or get the hell out. And sorry, I don’t believe that the profit margins are so low. How many shell companies have been set up to sell supplies/services needed at very high prices to developers, with money going into the developer’s pockets? And how much money are management companies affiliated the developers making from on-going HOAs?

    Each new building being built is an on-going source of revenue and profit. Otherwise, who would bother to develop in SF?

  137. I know we like to think of developers as cartoon characters, but those people are few and far between, and this will only clear the playing field for them, because the little guys work on smaller margins. Why should we pretend every development is city sponsored, or a hospital, or student housing?

    Developments typically take 4 years at best from the planning stages.
    Starting now, we can expect every other new project to be completed just before the next dip in the market.

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