Thursday, April 15, 2010

Beware, Richmond district: Developers want highrise development on Geary

From an interview with a developer, "Finding ways to build in S.F.," SF Chronicle, April 11, 2010:

Q: San Francisco has long been known as a city without enough housing, and specifically, not enough affordable housing. Is there any real solution to that problem? How effective are the city's current strategies?

A: The current affordable housing program in San Francisco is a valiant effort but it lacks incentives and flexibility. A 12 to 14 percent affordability requirement is fine when prices are high. When prices drop by 20 to 25 percent, projects cannot possibly afford to provide that amount of affordable housing.

When you sell a condominium for $1,250 per foot when your costs are $800 per foot, you can afford to pay $70 per foot for affordable housing. When you are selling for $800 a foot (where the high-end market is today), you can't possibly afford to pay that amount for affordable housing. Nobody will build. Construction stops.

Clearly, when prices go down, so should the affordable requirement. As for increasing the number of affordable units in San Francisco, there are many areas of San Francisco that could easily accommodate extra height. If, for example, on wide boulevards like Geary, you increased the height from 40 feet to 60 feet but required that 25 percent of the units built in the extra 20 feet be affordable, developers would voluntarily build those extra units. (emphasis added)

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