November 05 2013

How Did San Francisco Get So Expensive?

San Francisco is suffering from a housing affordability crisis. If you live in the Bay Area, this topic is all too familiar. The headlines are everywhere, prices keep going up and any kind of solution seems non-existent.

But how did San Francisco become America’s most unaffordable city in such a short period of time? Several factors have contributed to the city’s current predicament:

  1. Years of insufficient housing production coupled with a booming economy have finally caught up to the city;
  2. Stringent regulations for development make building any kind of housing difficult and time-consuming;
  3. A democratic public process that gives everyone a voice;
  4. The city has a strong anti-growth culture.

Suburban part of San Francisco, California

To address the first point, it comes down to supply and demand. There is not enough housing to meet the demand to live in San Francisco. The city has been averaging a growth rate of 1,500 net new housing units per year, while hitting a low of 269 in 2011. However, in 2012 the city added over 40,000 new jobs, which has attracted new residents.

Second, the process towards getting a project entitled is political and arduous, to say the least. On top of that, building permits are discretionary, meaning they can be appealed to the Planning Commission. It often takes up to five years to get a project entitled, but construction will only take two.

The last two points can be grouped together. San Franciscans have many opportunities to voice their opinions against a proposed project and there is a strong constituent of residents who don’t want to see the city change. The presence of cranes and high-rises getting built makes them fear that the city they grew up in is becoming too dense and expensive. Projects are consistently appealed for various reasons, which slows down the overall process and drives up development costs.

Urban area of San Francisco, California

It’s uncertain how long prices will continue to rise. If the city continues to restrict growth, then it will only be accessible to the wealthy. But if housing production continues to rise like it has the past two years, San Francisco will eventually be a city for all income levels.

Can you find affordable housing in your city?

Credits: Photographs by Robert Poole. Data linked to sources.

Robert Poole

Robert Poole recently graduated from UC Berkeley with a degree in Anthropology and a minor in City and Regional Planning. He grew up in San Diego but now resides in San Francisco. He is intrigued by, yet concerned with the large discrepancies in socio-economic development within the Bay Area. He currently works at a non-profit organization in San Francisco that advocates for new housing development in the City through policy and legislation. As he continues his work, he hopes to gain a more in-depth understanding of the city’s public process in order to develop solutions that create more affordable housing options for the City's low to middle-income residents.

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This entry was posted on Tuesday, November 5th, 2013 at 9:38 am and is filed under Community/Economic Development, Government/Politics, Housing, Land Use, Robert Poole, Urban Development/Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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3 Responses to “How Did San Francisco Get So Expensive?”

  1. The Dish Daily | When the Google Bus Stops (1/2) Says:

    […] In 2011, San Francisco added only 269 housing units; in 2012, the city added more than 40,000 new jo…. Because infill development has faced active resistance in San Francisco, regional population growth has to be pushed elsewhere—to Oakland, the Brooklyn of the Bay Area. […]

  2. Google Buses Targeted Over SF Housing Prices Says:

    […] average of 1,500 housing units per year San Francisco. But that number has been declining and 2011, only 269 units were built while 40,000 jobs were created in San Francisco. Seattle, meanwhile, has averaged 3,000 new housing […]

  3. When the Google Bus Stops: Change, Inequality, and Indifference in Silicon Valley | potpourri Says:

    […] which is half of what Seattle (a tech economy not unlike the Bay Area’s) produces in a year. In 2011, only 269 units were built while the city added over 40,000 new jobs in 2012 alone. Because infill development has been met with active resistance in San Francisco, regional […]

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