The new thing in development in San Francisco is “group housing.” It’s better known as tech-worker dorms, and it’s the latest way that developers get around the rules and build more profitable projects.
The supes are changing the rules to make it more clear what exactly this definition means—and in the meantime, developers are continuing to exploit it.
It’s a remarkable situation, for so many reasons—and the Board of Supes will hear an appeal Tuesday/15 that raises all of the relevant questions.
The original idea of “group housing” was residential hotels and similar places (including, in the early definition, fraternity and sorority houses, which don’t exist right now in SF) where people lived in fairly small quarters without private bathrooms or kitchens.
That’s been shifted by developers, with the approval of the City Planning Department, to increasingly mean tiny studios that might have shared bathrooms but include refrigerators, kitchen counters with stoves, and microwave ovens.
Not, in other words, all that different from traditional studio apartments.
Except that they are cheaper to build, and can be sold or rented to young people who don’t mind the tight quarters—or as medium-term corporate rentals.
None of that does much of anything for the crisis in housing for San Francisco families.
But while the Yimbys continue to argue that the only problem with the housing crisis is zoning and planning rules that create delays for developers, the reality that the move to group housing exposes is that the private market isn’t interested in providing the kind of housing that the city actually needs.
The cost of construction has gone up radically in the past two years. The international speculative capital that finances much of the new housing in the country these days isn’t seeing the kinds of returns it wants—even on traditional market-rate condos. To get those returns on, say, two-bedroom or three-bedrooms units, the rent or the sales price would have to be so high that even in San Francisco, you aren’t going to find many families that can afford it.
So: Tech-worker dorms. They “pencil out” better.
Which brings us to 3832 18th Street.
The Planning Commission approved in October, 2021 a project that is described this way:
The proposed project proposes the demolition of the existing 25-foot-tall, two-story, single-family residence and the construction of a 50’-4”tall (58’-4”tall with mechanical room), five-story, residential building containing 19 group housing units.
First: As I have warned, the construction of the level of housing that the Yimbys want will inevitably involve the demolition of existing housing. That’s what’s happening here.
Second: The new units will be tiny, fit only for single people or couples (who really like each other and can live in a very cramped space) with no kids.
Third: That’s not what the Planning Department says the city needs.
Three of the 19 units, all of which will be sold as condos, will be sold below market rate. That’s fine—except that as condos, they will also have Homeowners Association dues, which can make even BMR units too expensive for people who otherwise qualify.
If these places sell for the expected $500,000 or so, we’re looking at people who can pay $3,000 a month for a tiny studio.
It’s profitable for the developer. Is this what the city needs?
A group of neighbors have appealed. The Board of Supes will hear the appeal at 3pm.