With new permitting and entitlement activity having effectively ground to a halt in the third quarter of this year while construction crews continued to work and deliver new units, the net pipeline of new apartments and condos under development in San Francisco inched down half a percent to just over 70,000 units of housing which is within a half percent of the overall pipeline at the same time last year.

Roughly 13 percent (9,250) of those 70,000 units are already under construction and should be ready for occupancy within the next year or two, which is 1.9 percent fewer units under construction than at the same time last year but roughly 50 percent more than the average number of units which have been under construction across the city over the past decade.

At the same time, the number of housing units in projects have already been entitled and for which building permits have either been issued, approved or requested – but for which the ground has yet to be broken – has ticked up to 18,000, which is the most in over a decade and 31 percent higher than at the same time last year, while the number of units in projects that have already been approved but not yet permitted (which still includes the majority of the 10,500 units by Candlestick, 7,800 units on Treasure Island and 5,680 units at Parkmerced, projects which have overall timelines measured in decades, not years) has inched down to 32,100 versus 31,900 units at the same time last year.

And with proposals for another 10,700 units of housing now under review by the City’s Planning Department, which is 30 percent fewer than at the same time last year, San Francisco’s overall Housing Pipeline now totals 70,036 units of housing, which is down 0.5 percent on a year-over-year basis and includes 13,400 units of affordable housing, according to our latest accounting of Planning’s databases as mapped and distributed above.

Comments from Plugged-In Readers

  1. Posted by ST

    Well, I guess we can expect to see more threads of “apple to apple” in SOMA….

      • Posted by ST

        In my observation, SF has been, for the past 2 years, slowly shifting from under to over supplied…especially in areas such as SOMA….with or without the “exodus” that everyone is talking about….

        It will be years (3-7 years) before the rent level climbs back to 2018 level… As a result, investment properties (think MFH) have not hit bottom yet….

        Wake me up when it is Q4 of 2021….

        • Posted by Cave Dweller

          Most of this pipeline was built on the expectation of massive growth. If the growth doesn’t materialize .. and so on. Threat of legislations such as this one: A California Plan to Chase Away the Rich, Then Keep Stalking Them coupled with the reality of a failing city such as San Francisco (in my opinion) .. also doesn’t help.

          • Posted by Notcom

            As the article itself admits, the proposal “is likely to run afoul of the U.S. Constitution”. So California may pull thru this… tho despite, rather than because of, itself.

          • Posted by Cave Dweller

            @Notcom — if Democrats win the Georgia run-offs next month, it possible a stuffed SCOTUS might make this perky little constitutional issue go away. But that is speculation. The fact is, the very threat has people running scared. Several high net worth individuals, the types that actually pay significant taxes, have already (and silently) exited the state.

          • Posted by Dave (Seattle dude)

            It is not constitutional at the Federal level but apparently at the state (of California) level. Which means those subject to the tax will leave the state and not have to pay the tax. Such people are already leaving. This tax won’t raise the money needed an the cutoff point for income to be subject to the tax and to “fix” it the cutoff point will be lowered over time.

            It’s is not just the very wealthy that are leaving, the simply well off are. Including retired state and city employees. Visit Incline Village – a large group of highly pensioned cops and fire retirees live there. They can’t afford the California income tax. In Vancouver Washington there is also a large group of retired California ex-pats. Again these middle class (mainly) people can’t afford to remain in California.

          • Posted by Notcom

            You’re aware – mehopes – of the rules as to who wins in such disputes (and if you’re not, they’re was a refresher course earlier in the month about states that try to control other states’ citizens).

            As for the highly pensioned retirees’ claim of “not being able to afford” the income tax: a little levity is just the way to end this sorry excuse for a year…thanks for bringing a smile to my face! 🙂

          • Posted by SFRealist

            Their pensions are so high that they can’t afford to live in California. Right!

          • Posted by Cave Dweller

            @SFRealist — its not that they can’t afford to live but perhaps they don’t want to spend with the idea of counter acting the effects of inflation on fixed income. Saving 10% yr on fixed income is straight out beating inflation. Their perspective is one of survival for next N number of years. N being their life expectancy post retirement and also being an unknown. I don’t its unreasonable to want to be able to maintain a lifestyle one is used to.

            That is the big picture which puts enormous pension/salary and revenue pressure on State of California. This is a ship that should be put on a corrected course right away — other wise Titanic, USSR etc.,

            The only thing that US has currently going in its favor is the reserve currency and its ability to print money to bailout. So long as the federal government can bail out states while offloading costs to rest of the nation — slumlord states like California can survive. But that is a dangerous path to be on.

            The very fact of housing prices in SF should warn us all of how bad the situation really is. When the music stops, its not going to be pretty. In fact, the music has already stopped but for the enormous multi-trillion dollar bailouts there would literally be blood on streets. Telecommuting is helping deal with this inflation by forcing RE deflation by migration.

            I went off there on a tangent — but micro and macro perspective and so on. Feel free to disagree and offer your counter points.

          • Posted by Dave (Seattle dude)

            I generally agree. The dollar remains the reserve currency but there is a desire by many countries to drop it as such. There is a possible move to a digital currency as well. The pension situation and the salries for many public sector workers is outrgeous. I know a City worker who is getting a 3.5% raise and is complaining it is not enough. She has not been out of work and is allowed to work from home. She has a totally unrealistic idea of the “real world” and the job situation for many non-public sector workers. Like other city employees she votes for every local tac increase/bond. It is not sustainable but a private sector jobs leave SF in growing numbers the influence of the public sectors unions will only grow. To the detriment of SF residents.

            SF has a real chance of becoming this generation’s Detroit with a large population drop and the hollowing out of business in the City. It’s likely more announcements will be coming of major corporations leaving SF. There is no reason for them to be here. TPTB seem not to care, that they will get a bailout from the Feds and things can continue as they were. Of course SF can drag things out for a while but as people and companies vote with their feet it will become clearer that the emperor has no clothes.

          • Posted by SFRealist

            Dave literally said that they “can’t afford to remain in California.”

            This is obviously a ridiculous argument. Of course they COULD afford to live in California, but they CHOOSE not to. Plenty of California is really affordable. Retirees move to cheaper locales all the time. Plenty of Americans retire to Costa Rica. There’s no great conclusion to be drawn here.

          • Posted by SFRealist

            Detroit’s population today is about 670,000, about 35% of its population in 1950 (1,850,000). I find it unlikely that San Francisco will lose 65% of its population, but maybe so!

          • Posted by Cave Dweller

            @SFRealist — affordability over a period of time and in the context of utility. Just because I can afford a $200 burger next door doesn’t mean I should. I’d be better for spending $1 on gas driving over to the nearest in-n-out for a $3 burger and so on.

            The flaw is that local tax revenues are being exported elsewhere by way of pensions because of lack of sustainable affordability over time. The local economy suffers increasing pressure on need for more tax revenues — a negative feedback loop.

            As long as California/SF can attract new businesses, higher revenues and justify the cost of living (or by federal bailouts), then people will arrive and support the economy to offset the pension exports. But what does the fact of increasing taxation tell you about the state of affairs?

          • Posted by Dave (Seattle dude)

            A very timely article by Matier in the Chronicle yesterday about the exodus of companies from SF and the Bay Area and the expectation it will now accelerate. The coming new exits are being heard of by business clients according to the head of the Bay Area Council. Of note – SF officials in particular don’t care and keep on resorting to more taxes such as doubling the transfer tax and the tax on companies whose executives are paid too much. This affirms my belief that SF will be among the hardest hit cities in the country and could experience a fate like Detroit did last century. A big population drop would be 25% IMO. It does not have to be as large as that experienced by Detroit to have major impacts on property values, local businesses and cultural amenities.

            “Charles Schwab, McKesson and Hewlett Packard Enterprise have all exited the high-cost, high-tax, high-regulation Bay Area for a less-expensive, less-regulated and business-friendlier political climate. All of them rode off to Texas.

            Other companies, including Apple and Dropbox, are keeping their headquarters in the Bay Area, but expanding their workforce elsewhere.

            But as the exodus unfolds no one seems to be batting an eye. Especially those in power. Especially in San Francisco.

            “We have some people saying ‘goodbye and good riddance’ but it’s going to have real impact,” Wunderman said.

            If anything, the pace of the departures appears to be increasing.”

          • Posted by SFRealist

            I’m not sure what you mean by “federal bailouts”. California pays far more to the federal government that it receives. California has been bailing out states like Mississippi and Alabama for decades. As one of the richest states, California is propping up the federal government.

          • Posted by SFRealist

            @Dave, I see we’re down to 25% population drop to be the new Detroit, instead of the 65% that actual Detroit has had.

            Sure, it’s possible that SF drops 25%! I wouldn’t bet on it. The big companies will hire elsewhere, yes, but that’s because they’re growing faster than the Bay Area builds housing–the Peninsula is much worse than SF in terms of building housing.

          • Posted by Cave Dweller

            @SFRealist — when Federal govt institutes forbearance and/or lowers interest rates they are propping up employment or in this instance trying to support price levels by way of stimulus. It is a round-about approach but its a bailout. The richest states are the most affected since their entire revenue estimation and expectation is based on economy performing at a certain level. Without that stimulus, states would be in pretty bad shape. Its a circular system. Federal system injects liquidity boosting up employment and supporting prices. States harvest revenue by way of payroll, income, property, sales + other taxes. We trade our labor, creativity, consumption, risk appetite + carrying capacity for a slice of the action.

            Without those multi-trillion dollar injections .. you get the picture. The ironic (and funny) part is too much liquidity will in the short term provide (create the illusion of) some price support but in the long term cause price inflation. Not only that, it distorts risk. In a capitalist system, risk distortion is pretty much akin to a diabetic patient consuming ladles full of white sugar and simultaneously taking insulin shots.

          • Posted by Dave (Seatle dude)

            I think a 10% population drop by this time next year is a given. I am not predicting a 25% drop but the drop could be more than 10% over the next several years. Especially if other major companies are planning on leaving as the Matier article mentions. Two companies likely to decamp are Uber and Twitter. Thousands of jobs gone if Uber heads to Texas which is its rumored new home.

          • Posted by Cave Dweller

            @Dave (Seattle dude) — x% loss be that 10% or less or more can translate into an absolute loss if SF doesn’t re-assert itself as a choice destination for business. Right now, the perch on which SF sits looks quite precarious. There is a lot of denial about the downward slide. Would people have imagined the conditions in the city today 10, 15, 30 or 40 yrs ago? That is how change happens, slowly at first and then abruptly.

          • Posted by SFRealist

            I’m not sure that what you describe props up California more than any other state. There are many ways to look at this, but in all of them California props up the federal government instead of the other way around.

          • Posted by SFRealist

            Dave, of course, has been saying for years that San Francisco’s population is dropping. He’s been wrong for years. He is right this year because of Covid, but no one has any data on what life will look like after a vaccine.

            I do see that his estimate of San Francisco’s population drop keeps being lowered from 65% to 25% to 10%. If you make enough predictions, one of them will be right eventually!

          • Posted by Dave (Seattle dude)

            @SFRealist – never said that SF’s population would drop by 65%. That was you taking the Detroit number and claiming I said it. I’ve said that the population will drop 10% and will return to more historic norms. That would be 700K – 750K. So there is a potential for a larger than 10% drop but no way can one get 65% from that. I’ve been saying since 2018 that the City’s population would start dropping which was obvious from the slowing growth trends at that time. Where you get I keep lowering my number from 65 to 25 to 10 I have no idea. Maybe you’ve been drinking a bit too much spiked eggnog. .

          • Posted by Ohlone Californio

            Heya Dave from Seattle. I wonder if you’ve taken note of the litany of articles describing the exact same urban exodus phenomena in Seattle publications as were in the SF publications. There are scores. What do you make of that?

          • Posted by SFRealist

            Well, first Dave said ” this generation’s Detroit with a large population drop”. Detroit dropped 65%, so I don’t know how else to interpret “this generation’s Detroit”. Second you called out 25%. That’s your number, not mine. If you’re now saying 10%, then that’s not Detroit.

            I personally feel like SF’s population drop will be less than 10% next year, but we shall see which one of us is right. We will also see whether San Francisco drops more or less than Seattle does.

  2. Posted by Dave (Seattle dude)

    Much of the pipeline likely won’t be built. Already the USPS is reporting that based on change of address requests around 90K residents left San Francisco between March and November. If that number is close to accurate then SF has seen about a 10% drop in its population. Given the ongoing exodus of jobs from SF the population drop could ultimately be significantly more than 10%.

    • Posted by SocketSite

      As previously noted and discussed, that “change of address” report was deeply flawed, to say the least.

      And in terms of quantifying the actual size of the so-called “exodus,” vacancy rate and labor force trends are more meaningful metrics from which to work.

      • Posted by Dave (Seattle dude)

        Still, it’s another metric showing a significant potential loss of residents. A 10% drop seems baked in. at this point. As to the pipeline figure is it adjusted for abandoned projects? Like the Renzi Tower, the Oceanwide condo tower, the skinny Howard Street condo/hotel projects, the “counter flow” Hines tower on Rincon Hill and a myriad of smaller projects?

        • Posted by SocketSite

          Again, it’s a misreported metric which results in people making erroneous claims (such as a “10% drop seems baked in”). And yes, the pipeline buckets (under construction, permitted, approved, etc.) reflect the most recently reported status of each project.

          • Posted by jimbo

            @balajis on twitter claiming today that 25% of SF households have left. his math is a little fuzzy

        • Posted by Notcom

          “Official” estimates out. These are always revised – usually down – hence “estimates”, but from what’s here, the pessimists have some splainin’ to do.

      • Posted by Notcom

        I believe one of the (many) deficiencies with this that the voice on high is complaining about is it isn’t a net figure: so just as you started with 124,131 and had to deduct 34,803 to account for intracity changes, you need to go to all the other XX,XXX P.O’s in the country and see how many have filed to move TO SF. Maybe the number is 38, and doesn’t matter much, but maybe it’s 89,329 and your number isn’t as much “baked in” as half baked.

        I don’t personally think so – probably no one does given the other metrics – but we just don’t know how big it is.

        • Posted by Dave (Seattle dude)

          We don’t know how big it is but many indicators suggest it is significant. Early next year IIRC an estimate of SF’s population for 2020 will be released. That said, the USPS numbers suggest a drop of more than 10% in less than a year. I don’t see that though I think ultimately there will be a 10% drop in SF’s population. Perhaps by this time next year.

          The curbside parking space indicator is also pointing to an exodus. At least in my neighborhood. Prior to Covid one could not find a parking space on my street after 5PM. Now – there are parking spaces available at that time. Not a lot but a noticeable difference from a year ago.

          • Posted by SocketSite

            “…the USPS numbers suggest a drop of more than 10% in less than a year”

            Once again, that’s incorrect. The so-called USPS analysis fails to take into account inbound migration along with historic norms and expected turnover rates.

            And as such, it’s not particularly useful data, bad analysis and a miss-assessment of the exodus (other than directionally).

          • Posted by Cave Dweller

            I think USPS numbers are flawed. But what would be highly reliable is comparison of electricity utilization between 2AM and 8AM. This is based on the assumption majority of the people are in bed by 2AM and out to work by 8AM and that most businesses are shut down. I wonder if its possible to get this data set.

          • Posted by Notcom

            “not particularly useful data, bad analysis and a miss-assessment”…but other than that perfect! Now if we can get back to those who are staying, and where to put them:

            I was in DTO this AM – well, the edge of it anyway – having the ’44 smogged, and noticed a steel framework rising (I believe it’s that development kitty-corner from Whole Foods). I think that’s the final project left in the Grand/27th district, and practically ‘every’ proposal on the map is either completed or well underway.

            So I guess Oakland’s “pipeline” pretty much delivered its load before the well ran dry; oh sure, some of the more esoteric projects – like that LSD -inspired tower on 13th, and the 956-times-delayed one on 7th – never got going, and more ambitious ones like Brooklyn Basin are probably on go-slow mode. but for the most part it was “mission accomplished”…now that it’s no longer needed maybe some good luck can rub off on Treasure Island.

  3. Posted by Aaron Goodman

    At this point makes more sense to buy back parkmerced as essential affordable rental housing, and do an infill alternative as we suggested prior, and address the 11 un-retrofitted towers.

    M-Line has gone nowhere
    Parkmerced has yet to start anything, besides festivities and corporate gatherings.
    Stonestown has shifted to 2021 next meetings
    SFSU-CSU ignored everything and continues to do so…. by building over prior communities and ignoring impacts.

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