As we first wrote back in 2007:

Going green might be trendy (and we’re all for it), but as far as we’re concerned it’s a focus on density (and infill) that will define the next era in San Francisco’s development, neighborhoods, and lifestyle.

As San Francisco startups scramble to secure increasingly expensive talent and space in which to house them, are local planning policies, regulations and NIMBY’s to blame? And are we at risk of slow cooking our golden technology goose?
The Next Era In San Francisco’s Development: It’s All About Density [SocketSite]
Why The Bay Area Should Have 11 Million Residents Today []

50 thoughts on “Is A Lack Of Density Cooking San Francisco’s Golden Tech Goose?”
  1. Of course there’s no way to prove it, but yes, there’s gotta be a breaking point where companies can no longer justify the cost for themselves or their employees.

  2. It should be increasingly clear to residents and local governments that the Bay Area desperately needs to address transit problems, especially on the Peninsula, that make it more difficult for all the “highly paid tech workers” to move around more efficiently. Individual companies running their own private fleet of buses is probably not the optimal solution.
    Additionally, it is clear that greater density in housing also needs to be allowed and the endless whining of the NIMBYs (who said no the Golden Gate Bridge, BART from SF to SJ, and any number of other project) need to be ignored.
    If the Bay Area doesn’t wake up to the economic engine of the tech sector will begin to migrate elsewhere. Austin being a prime example of a city that has benefited greatly from the SF and the Bay Areas inability to address housing and transportation.

  3. “are local planning policies, regulations and NIMBY’s to blame?”
    Yes, yes, and yes. SF is and has been shooting itself in the proverbial foot for decades.

  4. The problem is that the same people who complain about high rents also like how SF is and are opposed to higher density.
    High density means greater return on infrastructure investment. Look at how fast SOMA has grown where there has been significantly less red tape in the last few decades compared to other areas of the city.
    Maybe people are too tied to the idea of getting close to the ideal of a ranch style home, when people are perfectly willing to live in space efficient high rises near the downtown area.

  5. Gen Y is perfectly happy setting up in central cities, and this is not restricted to ‘superstar’ cities. See link.
    We need to figure out how to get past general consensus on every project. If developers are in compliance with zoning codes, then build NOW. Other cities are aggressively courting our best industries while we debate every office, condo or apartment project to death.

  6. I’m just going to throw this thought out there. Is there a point at which development volume overwhelms NIMBY’s and their ability to effectively obstruct it? In other words, will a surge in development naturally overcome resistance?

  7. Reminds me of the short-lived but insane time in dotcom boom. Supply overwhelm demand and rent go through the roof. Rental seekers doing all kinds of trick to get landlord’s attention. This is not good for the economy.
    In my mind the tech companies are missing forest for the tree when they have a conversation with the city and they use this to haggle for tax reduction. That tiny bit of money is least important for them in the long run and they are acting like cheapskate. What really matter to tech is housing, transit and schools (and to some extend, open government data). Uninvestment buy you a broken city and hurt you in the long run.

  8. “Are local planning policies, regulations and NIMBY’s to blame?” Yes, yes, and hell-to-the-yes! I’m glad to see people talking about focusing on density and infill. The constant push and pull between organic growth and artificial constraints (such as the three listed above) has led to incredibly stupid outcomes, benefiting no one. “Smart growth” requires both being smart and accepting growth. The NIMBYs sacrifice smart for their losing battle against growth, ensuring that the worst outcomes come to pass. (See, e.g., intransigent Republicans in Congress.)

  9. KG. Half kidding here. but you might be suggesting some form of “Shock and Awe” and it could work.
    …”impose this overwhelming level of Shock and Awe against an adversary on an immediate or sufficiently timely basis to paralyze its will to carry on . . . [to] seize control of the environment and paralyze or so overload an adversary’s perceptions and understanding of events that the enemy would be incapable of resistance at the tactical and strategic levels.”

  10. I read recently that 22K new units are due to come on the SF market over the next while (5 years?). The number was so high it got coverage nationally, though I can’t remember where I read it.

    There is a scolding tone to this which is so tedious. No, democracy is not your enemy. (Clue: you can’t be anti-government and pro-democracy). Deal with the market, deal with the community, deal with the regulations. Then, make your money and quit whining.

    About the private bus lines run by Penninsula tech companies. That is not due to inadequate public transit. That is due to the desire of the companies to create sealed off work environments. They exist for the same reason that fancy on site cafeterias exist, and gyms, and dry cleaning. They are keeping their employees separate from the community on purpose. I think part of the reason is just to prevent talent poaching.

    [Editor’s Note: Unfortunately, the five-year pipeline for housing San Francisco isn’t anywhere near that number. We’ll run an update tomorrow.]

  11. This despite growth in both population and work force? And specifically tech work force? Too pessimistic, by half. Don’t lead the way for everyhater to bemoan something for three years and then self congratulate when a natural market shift occurs. Things are looking up now. Not down. Own that once in a while, Socketsite.

  12. I think all of us would agree that after the dot com bust we saw many live/works lofts that could not be given away, in a manner of speaking. Now we have all these apartments for “techies” coming on the market, and I wonder if someday we will see the same, lots of empty apartments after the techies have moved on to greener pastures. It seems to me, that without nurturing our service and production businesses that maintain a constant employee base, that what is happening in City policy and playing out in the new building types is perpetuating the boom/ bust cycle, and we are doomed to repeat the past failures of the live/ work loft debacle.

  13. As an owner of a local technology startup, which is hiring rapidly, the cost of office space and residential housing, lack of quality transportation, and lack of quality schools are major, major issues. Right now, the density of talent is winning, so we are in SF, but this density could easily swing to Seattle, Austin, San Diego and other very desirable, but cheaper to set up shop for employees and employers. If I was SF, I would be building residential and office buildings rapidly near public transportation (north and south of Market st. and other major transit corriders).

  14. @dissent
    “you can’t be anti-government and pro-democracy”
    Yes you can.
    “Deal with the market, deal with the community, deal with the regulations. Then, make your money and quit whining”
    I think the point of the article is that people aren’t coming here because they don’t want to deal with any of the messed up bureaucracy here, and the overly expensive housing… and that business will go where the talent is.
    You don’t understand the private bus lines (or cafeterias) at all. They exist because the existing transportation is not workable, so the bus lines allow the employers to recruit in areas where the workers are living. I certainly make job decisions based partly on how easy or difficult it is to get to work. Poaching happens generally through direct contacts, or at social/ professional events, offering bus rides and food has very little to do with poaching, and a lot do do with offering competitive benefits.
    By the way, the employees don’t have to eat in the cafeteria or take the buses…

  15. SF should take off the reins and go high-rise immediately. SF seems to hold itself back from its full potential all the time.
    Go up in SOMA, Cathedral Hill, Japantown, Mid-Market, Van Ness and inner Geary…most areas are a heavy mix of residential now….and some of these area’s are wind-swept wastelands in need of attention…bring in the residents and the amenities, transit, services and JOBS will follow.

  16. SF is building high density along market right now though. There are at least three or four high-profile high density Market st projects, near public trans,in various stages of development, currently. Also the schools are improving,and several recent reports speak to that.

  17. “Individual companies running their own private fleet of buses is probably not the optimal solution.”
    Well, I think it’s the optimal solution for the current environment. The tech campuses on the peninsula were in no way built to take advantage of mass transit. They’re separated from each other, spread out, and there’s no effective way to connect them all. Individual buses are probably the best you can hope for.
    If the cities want to change that, they should start approving dense developments around existing Caltrain stations. I’m not holding my breath, though. As long as cities require parking for the developments + parking for people going to the station + wide roads to support all that traffic, it won’t make any economic sense to build TOD there, and Caltrain’s potential will remain hobbled.

  18. As someone moving back to the city (from Chicago), the lack of density really gets to me. I’d happily pay a market rate if I could get something close to what I can get in Chicago, but the housing stock in SF just doesn’t compare. New (<10 year old) high rise with parking, access to transit, and a grocery store across the street. But there are only a handful of buildings that fit that in SF, while there are probably 40 in Chicago (and another 100 older buildings).
    If something like this existed, we’d buy and stay for the long term. But right now, we’ll be the transients that everyone hates–coming in while the wage differential is >100k and leaving when it drops down to <30k or when we have kids. We might move right back to Chicago where we can take our California profits and actually buy housing.

  19. @ rabbits,
    You grossly exaggerated the point of the article you name-linked. The author was quite measured. You talked as if all of Gen Y is down with it rust belt urban renewal. The article quite clearly laid out a sober view of what is ocurring, and why, plus the numerous challenges.

  20. There is a scolding tone to this which is so tedious. No, democracy is not your enemy. (Clue: you can’t be anti-government and pro-democracy). Deal with the market, deal with the community, deal with the regulations. Then, make your money and quit whining.

    I agree with you that there was a scolding tone, but this was a blog item and the person who wrote it describes himself as “an adjunct scholar at the Cato Institute”, so I think we can assume he’s both anti-government and anti-democracy.
    Lots, if not most libertarians believe that the marketplace is the only legitimate mechanism for deciding how to allocate resources, so asking them to “deal with the community” is a non-starter. They kinda don’t understand when they come to a planning commission hearing and arguments along the lines of “you should support this proposed project that will make me a lot of money; ignore the externalized expenses to the neighbors, the city, etc.” don’t immediately silence all critics. Not that I’m defending all NIMBYs.
    The part that I really disagree with was the final ‘graph:

    In short, the reason there’s too much money chasing too few businesses isn’t that the country is running out of people with good technology ideas. It’s just that bad housing policies mean that there’s nowhere for additional people to live.

    Uh…the reason there’s too much money chasing too few businesses isn’t that the country is running out of people with good technology ideas. It’s that too many people (sometimes irrational and inoptimal allocators of capital) are chasing after the next google or facebook or whatever company that can be started for next to nothing (which is the characteristic that all social networking and so-called “collaborative consumption” companies share) and promises a multi-billon dollar payday immediately after the IPO.
    If you could wave a magic wand tomorrow and change the Bay Area’s supposedly restrictive housing policies in one fell swoop, we’d still have lots of “me too” Web 2.0 companies out there soaking up venture capital while similarly early-stage firms engaged in solving real problems and meeting needs of the economy outside of “doing X over the internet” sector still go starved for financial support, cleaner energy and conservation is a great example.

  21. @ anon1
    My point was that young, creative types are tending to find urban environments attractive, even some that SF dwellers would never consider. If the Bay Area is to remain competitive with Seattle, San Diego, Austin, etc. (and yes, the Rust Belt), then density is needed right now. Unfortunately this region is not making the best use of its assets in this regard. I agree with teh other posters re: Caltrain TOD’s and building out SF near transit lines. The more and the faster the better.
    Do we really think that going back to $800-$1000 sqft condo pricing and similar ridiculousness in office space is sustainable, or desirable long-run?

  22. Editor, Was my post off topic? People are talking about developments in the rust belt and this post is about SF not letting in development easy while other places are letting thing in they used to fight tooth and nail, like Casinos!!!
    [Editor’s Note: Links to casinos without much context raises spam flags.]

  23. That Forbes article misses an important point. Silicon Valley is creating an enormous amount of jobs. They’re just not in California. Even if we had 2X the amount of residential and office space right now, bay area firms would still prefer to hire people in lower cost countries.
    One question VCs always ask these days when reviewing business plans is “What is your outsourcing strategy?”. Even little startups need to think about keeping their payroll low as they expand.

  24. i thought the CII (complete inventory index) was coming back. I really liked it and would be useful for this thread. I swear you said it was coming back.

  25. I don’t remember the CII being promised; but the inventory should be coming any day now. 🙂
    On a separate note, I am noticing a trend on SS away from pricing and apples and market swings to a more economic, policy, planning shift. Curious if that is intentional or just whats on the newswire these days.

  26. Milkshake,
    Your comment is completely inaccurate. VCs care about a talented team and a great product that is solving a real + large problem.
    I should know, since I have raised multiple rounds of funding and never got asked that question. They care about a low burn rate, which could just as heavily be influenced by reducing office space costs and salaries, but not to the detriment of the product or team.

  27. BusinessOwner – Maybe we’re talking to different VCs. I’m in the software biz and the outsourcing question always comes up if for nothing else as a way to ramp up the QA team.
    The payroll question also comes up. Office space costs don’t seem to be a big of a concern compared to datacenter costs though.

  28. Milkshake, it does sound we are in a different world. I know of multiple SF startups and I don’t think any of them have any significant outsource operation or talking about big “outsource strategy”. Yes the total workforce many have comprise of 5-10% outsourced contractors. But those are mostly non-core work. Otherwise our company is hiring like a big vacuum machine. And it sounds like it is the case across the industry.

  29. sf is already the second most dense true US city (after NYC and ahead of chicago, boston, and miami), though there is certainly more density in neighborhoods in other cities – w/in the chicago loop and waikiki beach – and smaller feeder cities.
    sf is already denser then london, copenhagen, stockholm, sydney, barcelona, buenos aires and most non- indian/chinese urban areas.
    even in NYC, more density exists in the historically blue collar NJ cities across the hudson river then in the city proper.
    i doubt very much we’ll ever get true manhattan hi-rise density outside of the financial district/market corridor and true transit changes are dreams only at the moment, but so many things could be done that would help much faster then new highrises and added train tracks.
    allow backyard infill and basement conversions as well as setback upper additions to mission, valencia, folsom, and van ness buildings (another floor will not change existing light on these streets and its where people want to live).
    go higher still at true transit hubs – without parking.
    eliminate rent control rules on gut remodels and added units and ease condo conversion. i have zero incentive to rebuild the illegal ground floor unit i gutted from my 2 unit 1912 building except for personal use or before resale. supervisor chiu doesn’t want me to make an in-law unit for short term rental (and wants the sftu to be able to sue me on the city’s behalf if i do) and existing rules would make an added separate unit rent controlled AND take me out of fast track condo conversion and into the lengthy lottery (by turning my 2 unit to a 3 unit).
    more density isn’t likely to happen in sf if it doesn’t come from the small property owners who already own the buildings. there just aren’t that many empty lots.
    we also need to acknowledge that there is only so much available sf land and be more regional. west oakland, south san francisco, and downtown san mateo and redwood city are already convenient by bullet/bart, they just need more consistent later and off hour service and there own building code reforms.

  30. modern edwardian,
    That SF density stat is skewed, becuase of the way SF doesn’t have other attached cities in the metro area. Chicago, Boston, Philly, Miami and LA all actually have more density.

  31. I posted this earlier and it disappeared. It is directly relevant, please do not censor it (if that is what happened).
    From, “The Apartment Boom in San Francisco”:
    As recovery winter melds into growth spring, we’re anticipating that construction of multi-family rental housing structures will be an important contributor to growth. One key variable here, however, is whether the highest-rent, highest-demand municipalities will facilitate this process by issuing permits or whether regulatory choke-points will put a damper on things. San Francisco, while by no means having transformed itself into a lax permitting jurisdiction, seems to be doing its part:
    Largely in response to the city’s growing technology sector, 22,000 residential units are in various stages of approval and construction. In a few years, residents could be signing leases for new addresses in South Beach, South of Market, Central Market and Mission Bay. […] Since 2008, only about 1,710 units were built each year, compared with an average of 2,220 each year between 2004 and 2008, according to the department.

  32. Backyard “infill” should never be allowed. Our Planning code strictly defines the amount of rear yard allowable and it should remain as is.
    Rear yards in The City are key elements to our liveable neighborhoods, providing open space, green space, light and air, gardening space, trees,landscape etc. They are not available spaces for more building.

  33. @futurist
    i love my backyard and i understand it’s function but have trouble with “never” or “always”…and that’s part of the problem with codes and rules vs. goals and intentions.
    check the julia morgan house above. i suspect this is infill with the added garage roof as terrace and landfill creating a more function backyard space (i don’t think this is an original excavation for a 5 car garage and a wine cellar in 1908?). i’ve been in oversized backyards that could support more then the allowed permit free shack, say a 250 sq ft cottage, and still give sunlight and a garden for all. several of my neighbors have rear homes which couldn’t be built today but don’t detract from my homes warmth or joy.
    i get your points, but have also lived in a building with a rear yard that was never used; it got next to no direct sunlight and was so cold and so deeply excavated that a structure of some sort with skylights and a green roof or decking would have been an improvement to the rentals and likely added a tenant. all while being below neighbor’s fences which sat atop the cement walls from some prior structure/foundation that rose 6 feet on all sides at the property line.
    i suspect there are other places in this city where the damage is done and remodeling an existing structure could follow the model of new construction with additions and communal roofs, decking, and setbacks. i know i saw many unused and nonconforming backyard structures during my house hunt. my house is adjacent to an unused 250 ft rear structure on the western side which my realtor said was nonconforming today and exists empty.
    if you want density, it’s going to require more then just building up. in some cases that will be back…not haphazardly or completely, and with care, but back nonetheless.

  34. There may be perhaps some exceptions to the rear yard open space as build-able, but I would not want to see it become the norm.
    Open rear yards benefit adjacent property owners as well. The average rear yard is pretty small and adding a building unit to it would have a negative impact, I feel, on our unique neighborhoods.
    Where I’d like to see density increase is an increase in the allowable height limit in many neighborhoods, especially corner sites; perhaps going up to 5-6 stories, and in SOMA, parts of the Valencia corridor going to 8-10 floors.

  35. frankly, futurist is right on this. If you want a backyard unit, buy one in an area where zoning allows for it. Find a competent real estate agent and tell them you’re looking for homes with RH-2 zoning. Its not hard at all.
    Anyone that has ever, Ever, sat through a planning commission meeting should understand that “codes and rules” are necessary because “goals and intentions” are impossible to determine and enforce. Someone shows up and says “I want to add this secondary unit so I can house my (insert relation here)” and then next month after completion it’s on craigslist as a rental.
    We have codes precisely to guarantee fairness and city planners never have to get into trying to determine someone’s “goals and intentions.”
    We want density, but approving onesy twosey backyard pave-overs and wholesale legalization of rinky dink ill-designed unwarranted units isn’t an efficient way to go about it.

  36. I think Futurist nails it: We need taller buildings and more density along transit corridors. The problem is that the mere mention of 8-10 stories for any area and someone is inevitably bound to scream “Manhattanization!” and will do what they can to kill the project.

  37. Different strokes for different folks. Infill housing in back yards is good for some places not for others. It would allow development in some suburban feeling neighborhoods without massively changing the feel of the neighborhood, but still allow for increased density. An outright ban on infill is foolish.

  38. The screams of “Manhattanization” will soon be drowned out by the need for tax revenues. Unfunded liabilities will come due, services will be cut, and the people will start screaming for more money.

  39. There is no “straight outright ban on infill” that I’m aware of, in fact the city encourages it. Find an un- or underdeveloped lot in an area zoned for Rh-n where n is > 1 and build ’till you reach the limits of what the code allows. Knock yourself out.

  40. I’m referring to futurist’s Backyard “infill” should never be allowed… comment which, to me, implies a desire for a ban.

  41. The concept of “different strokes for different folks” implies a city concept where everyone can do what they want, without regard for others. We have planning and building codes in place to balance the needs of many, and respecting open space, light and air.
    Let’s be clear: what I addressed was building a second unit IN the backyard of existing houses. To my knowledge, the planning does NOT allow that for many good reasons: light, air, open space,greenery, etc. It has nothing to do with controlling density, per se. Yes, you can build 2 units when a lot is zoned RH-2, but even that zoning has restrictions as to rear yard open space and setbacks, as they should. Like Brahma says, build to the limits of what the code allows.
    Our rear yards in San Francisco are an essential component of a liveable city, and must be preserved. No, this is not a Nimby attitude, but merely respecting and working with our unique urban landscape.

  42. Brahma earns his SocketSite HTML merit badge for knowing how to put a “>” character into a post.
    (you do it by typing “&gt;”. “&lt;” is useful too)
    regarding backyard infill, lyqwyd makes sense to never say never. It won’t happen in our lifetimes though.
    SF proper already has plenty of density. The low hanging fruit lies outside of the city limits along the regional transport nodes (i.e. BART and Caltrain stations) Some of those stations are surrounded by suburban type densities. A half mile radius around those rail stations should be upzoned.

  43. @futurist, actually it means there can be different rules in different parts of the city, much like how today certain areas have different height restrictions.
    Your idea is authoritarian and you assume you know what’s best for everybody else.
    If you are correct and it’s banned that any back yard infill is allowed, then that is a change as it certainly was allowed in the past. If the code has changed, then it can change again, and that’s good.
    Many developments in SF has no, or very little yard, nothing wrong with it. There are ways to mitigate back yard infill impacts to others. I stand by my opinion that to ban it in all cases is foolish.

  44. Unfortunately, my opinion is not “authoritarian” and no I am not implying I know what’s best for everyone. I am simply talking about what exists today in the current Planning Code.
    Where we see small cottages and houses in back yards today, those were built many years ago, often many without permits, and the codes did not address those. The planning code, in many parts, was developed to NOT allow that rear yard infill to become the norm, because Planners saw the value in rear yard open space to both the subject property owner AND to the adjacent neighbors.
    And yes, there are some examples of little or no rear yards today; some of I know of right here in Noe Valley, as well as other areas. Those properties are typically substandard and the lack of open space and natural light is not very pleasant.
    I’d be interested to know how one could “mitigate back yard infill to others”.
    Certainly the code could change. I would not want to see that happen, in regards to rear yard open space. I think most homeowners would not approve of that change either.

  45. @futurist, when you put quotes around something, it means somebody else said exactly what you are quoting.
    What I actually said was “mitigate back yard infill impacts to others”
    One example would be to allow backyard infill only in the northern lots of a block, thus minimizing the potential of blocking a neighbors light. Or having height requirements, such as nothing taller than 10 feet. There are plenty of other approaches like this.
    I’ve seen many, quite nice, examples of back yard infill that have very little impact on their neighbors in San Francisco and other bay area cities, that were built to the same code requirements as the main structures.
    “Those properties are typically substandard and the lack of open space and natural light is not very pleasant.”
    You are implying that all, or most, buildings that have small to no yard are built below standard?
    I can assure you that is incorrect. Pretty much every building that’s on a block with an alley has a very small yard, as do most corner lots. These buildings are of the same quality as their nearby companions with larger yards.
    And of course any new back yard infill would be required to be built to modern requirements.

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