The value at which a residential unit in San Francisco is now considered to be “demonstrably unaffordable and financially inaccessible” by the City’s Planning Department has just been raised to $1.63 million, up from $1.51 million and versus $1.34 million in 2013.

The demonstrably unaffordable mark, which is set at 80 percent of the combined land and structure values of the single-family homes in San Francisco, is the threshold at which a proposed demolition or merger of a residential unit in the city does not theoretically warrant a hearing.

That being said, an interim zoning control was adopted earlier this year which requires hearings for the merger of demonstrably unaffordable units through the end of 2016. And as we first reported yesterday, legislation to permanently do away with the ability to “price out” of a hearing has been drafted.

In light of the city’s current housing affordability crisis, and in an attempt to preserve the city’s “affordable” housing stock, the Planning Department’s current policy is to recommend the denial of any merger in buildings with three or more units where at least one of the proposed units to be merged is valued below the demonstrably unaffordable mark.

Comments from Plugged-In Readers

  1. Posted by R

    So a house with a down payment that is around 4 years pretax salary at the median income is affordable?

    • Posted by Mark F.

      Affordable for the Zuckerburgs.

      • Posted by Futurist

        And the problem is?

        • Posted by Frank C.

          The problem is people like you who don’t understand the value (even to you) of having at least some affordable housing in every major population center for lower income people who provide services – which at a minimum, greatly impacts traffic, as when you get into a situation like when everyone who isn’t wealthy must commute from long distances by car. I.e. the Bay Area is turning into Los Angeles. And guess what, people like you won’t like this, unless you’re one of the tiny percentage who only uses transit and doesn’t mind increased air pollution.

          But given your demonstrated consistent rigidity and colossal self-regard, I don’t expect much realization of concepts like this on your part.

          • Posted by Futurist

            But I actually think you’re confusing the idea that just because wealthy/well to do/well paid people live and own here in SF means that affordable housing is not important. Because it is important.

            But let’s be clear: the way much “affordable” housing is being built now in SF is due to developers building market rate or luxury housing AND contributing to the affordable housing fund.

            And quite frankly, the term “affordable” means different things to different levels of income. That discussion could go on forever here.

  2. Posted by c_q

    so, basically 20% of the housing in SF can be merged or demolished without a hearing? just so long as it is the priciest 20%…

    • Posted by Conifer

      and what is wrong with mergers? Don’t you know anyone in New York or London or Paris?

  3. Posted by moto mayhem

    Unless you have significant wealth….
    to afford a $1.63M home, you need a $320K down payment and a household income of >$407,000. That must be $200K, but not quite sure how many make >$400K

  4. Posted by Denis

    I thought a demo was an automatic DR. Any idea what triggered this? The valuation has nothing to do with “affordability,” but is just a ploy to make unit mergers even more difficult. Remember each unit has to have an appraisal above the threshold.

    I heard anecdotally through the PHRA that a number of multi-family homes in the Marina and Cow Hollow were getting easy valuations for units above the then 1.5 threshold and merging legally without all the drama of facing down the commission. Of course, this new legislation does nothing to preserve affordable housing, but it may keep rent controlled units on the books. The irony being anyone who bought a property within the last decade with one or more legal units knows never to rent out the spaces to long-term tenants.

    Basically if someone bought a $3.5M house with, say, two studio apartments added back in the 50s, you’re stuck with them. You just have to get creative with an architect and try to design a functional floor plan that still reads as two units, without actually using either space as such. I have no idea how this scenario plays out in other neighborhoods because it’s seems really unlikely to even seek an appraisal even close to the 1.5M.

    Again this legislation seems to either target the Mission and maybe parts of D7, because there were zero sales of condos in the Sunset over 1.5 last year (according to my 30 second redfin search).

  5. Posted by Pablito

    The City’s policies are one of the main reasons housing is unaffordable for the majority of the City’s residents…. Tweaking numbers doesn’t cause new housing to be built. If affordability is ever going to get better then the whole Planning / Zoning code needs a major rewrite.

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