New Plan for Central SoMa Doubles Additional Housing and JobsAugust 11, 2016
While the area defined as “Central SoMa” has shrunk from 260 to 230 acres, with the majority of the area’s northern boundary having been shifted to the south of Howard versus Market Street, the City’s revised Central SoMa Plan now includes the potential for an additional 7,800 units of housing and office space for an additional 45,000 jobs, versus 3,500 additional units of housing and space for 28,000 jobs as outlined in the draft plan.
Big changes from the draft plan include an upzoning of the Flower Mart site to allow development up to 270 feet in height, versus 85 feet as originally envisioned, and an increase along Harrison between Second and Third to allow building up to 350 feet in height.
But the maximum height for the SF Tennis Club site at Brannan and Fifth remains at 200 feet despite the proposed plans for a 250-foot tower to rise.
The Harrison Street site between Third and Fourth, upon which Boston Properties has proposed building a modern 240-foot tower development, isn’t proposed to be up-zoned for more than 160 feet in height.
And the former K&L Wine Merchants parcel along 4th Street isn’t proposed to be upzoned for more than 250 feet in height despite plans for a 350-foot tower having been drawn.
The Creamery/HD Buttercup parcels at the corner of Townsend and Fourth remain the one Central SoMa site slated to be upzoned for building over 350 feet in height, which would allow Tishman Speyer to construct a 400-foot tower, and possibly a 350-foot sister tower, as preliminary proposed.
Comments from Plugged-In Readers
I was expecting there to be more height 🙁
Naturally, the developers will be lining up to apply for exceptions before the ink is even dry.
7,800 new housing units and 45,000 new jobs… How does this math result in a positive impact on housing scarcity and cost of living?
I believe it was John Rahaim who mentioned today that all other area plans focus almost exclusively on housing, and that Central SOMA should be understood as one part of a larger city rather than a microcosm.
There are over 60,000 housing units in the works citywide. Central SOMA is a downtown/downtown-adjacent area, so the high proportion of jobs in this area plan makes sense.
600-700 ft in the maroon areas would be much better.
This will exacerbate the housing crisis. The plan needs to mostly eliminate the office component and lower maximum heights to 160 feet.
Apparently there was lots of opposition at the PC meeting. From locals. I live West of Twin Peaks and there is a lot of concern here too about the over-development of SF. Hopefully the Supervisors will step in and require major changes to this plan. They have the final say and this plan, as revised, has the potential to have a huge negative impact on all of SF.
Yes new housing and transit improvement makes housing and transit worse. Makes a lot of sense.
There was no opposition at the PC meeting. It was all interest groups looking for a cut of the benefits. Mainly SOMCAN. However, their feedback was ridiculously misguided. They lost when they fought the 5M and they will lose again. There are a lot of provisions in the plan to improve bicyclist and pedestrian safety and their feedback was ‘we need to make this plan work for pedestrians’…as if they didn’t even read the plan. They also had a bit about keeping heights low as if that will help anybody.
It should eliminate *all* of the office in favor of residential and amenities (retail, school, parks, etc).
If Brown’s proposal goes through it would be possible for developers to build 100% offices in this area, because the plan has rezoned practically the entire area as Mixed Use Office, where offices are unconditionally permitted and there is no requirement for residential-to-nonresidential ratio.
I agree. This is where the Supervisors need to step in and eliminate most of the mixed use zoning being proposed.
Brown’s proposal is DOA in the Leg. Unfortunately.
I am going to assume your reasoning for eliminating the office aspect is to keep the prospective people out of the city. Also, by lowering the maximum height is to keep as many people out of the city from working here? Highly not likely. The housing crisis was started by not building to demand. By keeping up this ancient way of thinking, it will only get exasperated.
I also live West of Twin Peaks and Tang is my Supervisor. She wants to fully develop and up the height along major corridors in the Irving, Taraval and Judah areas.
[Editor’s Note: A Blueprint For The Sunset And A Red Flag Or Two.]
“The housing crisis was started by not building to demand.”
No. In real estate, demand is fluid while supply is forever. Not only was it impossible for anyone to envision this crazy of a boom, but in 2011 a builder could not even turn a profit. And what a lot of people aren’t being realistic about is the very negative impact all this growth is having on the quality of life here, which will actually serve to reduce demand the more they build.
That is just flat out wrong – and frankly economically illiterate. “in 2011 a builder could not even turn a profit” – Seriously? THAT is your argument? I don’t know – what was going on in 2011? Its sooooooo long ago that I just can’t seem to recall…
OH RIGHT! The entire global economy was in in the middle of the worst financial crisis since the Great Depression (a financial crisis that some parts of this country – and well as many other entire countries – STILL have not recovered from). A Wall Street, Realtor and banking led financial crisis built on outright fraud. So yes, in the middle of 2011 nobody could turn a profit. And nobody could easily forsee how relatively quickly the U.S. would bounce back (compared to other nations).
But that is just a relative blip. The chronic undersupply of housing in SF has been going on for decades – something which astute – and economically literate – observers have been criticizing for a long time.
Yeah I know exactly what happened in 2011, I scooped up rental property for pennies on the dollar. I can only speak for myself, I’ve lived here since 1995, and finding reasonably priced housing was never an issue until 2013. Even when home prices went crazy 2003-2007 the rents were very much in line with the typical salary. The rental market got tight for a while around 2000 but all you had to do was go further out from the central neighborhoods. The fact is that this current boom is just as transitory as the last two and they’re definitely building a lot more in response. Again, real estate demand fluctuates but new housing supply is permanent. My prediction is that you “build more housing” folks are going to silenced by the invisible hand of the market quite soon.
“I scooped up rental property for pennies on the dollar.”
Well, there you have it Sabbie. That’s your conflict of interest just in case you didn’t realize it. You don’t want more housing built.
I don’t really care if you build more housing or not, but the infrastructure needs a massive upgrade at the same time, because the quality of life is really suffering. It’s not just me who says this, look at the surveys. As for the SF middle class, it’s probably beyond saving for the foreseeable future, which is why we’re moving soon.
“infrastructure needs a massive upgrade”
I agree. Both housing and infrastructure need a big upgrade in this housing-reactionary town.
“As for the SF middle class, it’s probably beyond saving… which is why we’re moving soon.”
“I scooped up rental property for pennies on the dollar.”
Not sure if you were referring to yourself as the middle class. If you own several rental properties, it is likely that you’re not.
If you live west of Twin Peaks, this is not your neighborhood. Stop meddling.
right. we live in a CITY Trevor.
Next you’ll be zeroing in on “this is not your block so stop meddling.” Good grief.
It is if I am paying taxes in this City.
Don’t worry Dave, you’re the one always claiming that office space is oversupplied. If it really is, then none of this office space will be developed.
The plan needs to build taller along 4th st, since that is where the new subway is going in. Same for near Caltrain.
Agreed … this plan makes zero sense – most of the up-zoning is one to two looong SoMa blocks from 4th Street, which makes it *not* transit oriented… That’s just plain dumb… All of 4th Street should have been upzoned, to make a consistent corridor … this splotchy planning approach makes no sense to me.
They probably want all the upzoning to be far away from the SOMCAN folks who are opposed to any new housing or office space.
There is likely a lot of truth to that observation. City likely knows there will be a SOMCAN shakedown at some point, so they need to minimize the size of the shakedown.
Upzoning all of it is a nice thought, but basically they just up zoned all of the parcels that have a reasonable chance of getting developed:
1. Corner of 4th and Townsend, primarily single story
2. Corner of 4th and Brannan, gas station
3. Corner of 4th and Bryant, single story
It seems very unlikely that the Palms or 601 4th St would get razed and rebuilt as a highrise. They have a lot of units and all of the current owners would need to get bought out probably making it economically infeasible. It doesn’t make sense to me to fight for raising the height limits there when those buildings will probably be there for the next 50-100 years.
The planned narrowing of 2nd Street is supposed to redirect PM commute traffic bound for the east bay from 2nd to two routes where they are proposing the most height increases: Harrison eastbound between 2nd and 3rd, and the approaches to the 5th St on ramp.
Drivers headed to the east bay from southwest SoMa that would have used 2nd to Harrison to the bridge are expected to use 3rd to Harrison or the 5th St onramp by way of Bryant or Brannan or Townsend. That is the plan. It was in the EIR and discussed at the public meetings. Would hope the planners know the plan(s).
I-PROFIT WAY TOO MUCH
I-DONT THINK WE FIT IN THE LIFEBOATS
I-THINK WE NEED A NEW PEOPLES PLAN
I-THINK WE MAY NEED A BIGGER BOAT
I-CAPTAIN THE SHIP CANT TAKE IT MUCH LONGER
I-SAY SHOULDNT WE BUILD DOWN INSTEAD OF UP (SEE I-SINK)
I THINK you need a coherent argument, if you want to persuade anybody
THINK – the transit systems already being planned wont be able to support the density that [the] pipelined and approved development will need.
we gotta change gears on transit and transit planning, unless you happen to like sardine cans.
the lyft/uber cars will be stuck with muni in traffic all day long, not to mention the street pedestrian scene getting to be like NYC very quickly.
45,000 jobs, that’s a lot of waiters and bartenders! Or maybe they are including Uber drivers too? Considering that the local Fed tracks the strength of the tech sector, and the latest numbers just went negative as in 2001 and 2008.
Planning is never perfectly aligned to economic cycles. But there will inevitably be another cycle, and perhaps much more office space will be needed then. The City needs to be prepared for growth, no matter when it will actually occur. Yes, of course we are often in danger of solving yesterdays problems, rather than tomorrows, but it’s hard to get around that.
What’s up with the 30′ height limits between Harrison and Bryant? Why wouldn’t we want taller buildings there to block out the sight and sounds of the freeway as much as possible from the rest of the city?
To be clear, all that is happening in San Francisco is vertical sprawl. Just as bad for health and the environment as any other sprawl — or even more likely, worse. The people who have colluded to do this to our city, someday and with a little elbow grease, will sit in jail cells.
stop being so mellow dramatic. Vertical sprawl is certainly better than horizontal sprawl like in the burbs.
I appreciate the self cancelling neologism “mellow dramatic”
Do you live in SF?
Reading the comments here…sometimes I think there is no hope for this city whatsoever. I keep paying attention to what’s being done in other cities (and virtually all of our country’s thriving and desirable cities are seeing many of the same issues and pressures, with each doing different and often effective or innovative things to propel themselves more effectively into a 21st century future).
SF Progressive in a local context is identical in my mind to a conservative in national politics. National conservatives hold the 1950s idealism to be the gold standard of life then, now, and forever, and fail to see the positives of change and how and why we must continually change and adapt going into the future.
SF “progressives” may hold progressive social ideals and values, but when it comes to the #1 issue currently and for some time now and for at least a decade more, facing San Francisco, it’s that same mentality. Nobody here can stand the notion that the city is a magnet for people, is growing and will continue to, and as things in our universe rapidly change, so must things in SF adapt and change along with or in advance of these exterior forces. This involves a collective acceptance, even moreso than in a Raleigh where people aren’t already stacked on top of each other, that we must PROGRESS forward or eventually be left behind no matter how hard we fight change/progress and stack the deck against it.
I hereby lump all SF “progressives” in with the ideal Trump voting constituency, in elevation of idealistic notions and tendencies (based subconsciously or consciously on memories and feelings that one has, embellished or unembellished, in the mind, rooted in a different time) over reality and actual progress.
I don’t think my analogy is a stretch, and I am dead serious. Let the haters start hating anonymously over the internet over my own anonymous post. I also think some people in this city are actually diseased, and the root cause is a mental cloud that hangs over the city and bits and pieces of this collective conscious fall back into certain people’s psyches. I honestly believe this is a real thing. Every city has a unique collective conscious that you can almost immediately begin to feel. The “pulse”, per se. I think SF, maybe DC, LA, Miami, and NYC have the most powerful that are able to negatively (or positively) impact certain people more than others. Sometimes that feels like a darker cloud here in SF, and it certainly doesn’t help that it’s often foggy, overcast, or drizzling throughout the year here, for the psychological aspect of this cloud to transpire in a visual way (for me).
I’m weird, I know. But there are energies out there that flow through all of us and throughout the earth, and little bubbles of different energies and that’s an aspect of the energy bubble here, whether we think of it that way or not.
I’m also worried about the future of this city. There is a toxic mindset in SF that those who came here before others have a better right to live here. The only thing we can do is support organizations like SF YIMBY and SFBARF. And vote.
You are right, the same ignorance and misdirected populist anger that powers Trump is what powers the twisted politics of SF housing.
I’m also worried about the future of this city. There is a toxic mindset in SF that the drive for short-term profits at all costs should take precedent over the long-term livability of the city.
The same ignorance and oligarchic entitlement that powers the American ruling elite is what powers the twisted politics of SF housing.
How on earth does building tall/dense near a caltrain/subway stop kill livability in the city? Will it cast shadows on 5th and Howard dumpster alleys? This is why progressives should have no say in housing policy.
1. Building more skyscraper luxury condos makes all housing more expensive;
2. Eliminating PDR jobs in favor of office space for thousands of disruptive on demand pizza delivery app coder jobs puts the city in the game of business cycle speculation, instead of planning for the long-term.
IOW, progressives shouldn’t be involved in housing policy because their meddling hinders short-term profit, asset speculation, and get-rich-quick schemes. So short-sighted!
Why is a PDR job in SF more important than a PDR job in SSF? No tariffs over municipal lines last time I checked.
2 beers mind stuck in 7×7. needs to think about broader bay area
“long-term livability of the city”
Let’s price out everyone in the city until only the rich can live here. You are right, this is “oligarchic entitlement”.
The surest way to price everyone out of the city is to continue building luxury condos (built on sand, yet!) to meet the short-term demand for more assets to speculate on.
Build for the long-term, not the bubble. Thousands of new luxury condos are not being built for the long-term, but for the bubble.
It does look like this bubbles reached its limit: Big Unwind Begins in San Francisco, Miami, New York, Houston: Rents in “Primary Markets” Sunk by Apartment & Condo Glut
So, in the coming bust, we’ll have an oversupply of high-end units. This will lower price pressure on the high end market, but lower-priced markets will only be marginally affected: the further the market from the high end, the less the affect there’ll be on price. Luxury condos will get a haircut, but insanely-priced broom closets in the T-Loin will still be insanely-priced. The haircut for luxury condos won’t happen overnight, because central banks will do everything they can to prop up falling asset prices.
Using your logic, wouldn’t building more low end units just raise the price of low end units?
The cost for developing in SF is very high due to the uncertainty with the approval process. It is uncertain because people like you two beers raise every possible roadblock. For example, the beehive building in mid market is being held up by someone claiming a rundown set of sleazy buildings (I think a strip club is there) is historic.
Every time you people delay a project, the cost of that project goes up and up. What do developers do? They build luxury units because the margins make it possible to handle the cost of delays and uncertainty.
You’re advocating building lower end units. Then please stop obstructing the market and let things be built. Your obstructionism is causing everyone pain.
“You’re advocating building lower end units. Then please stop obstructing the market and let things be built. ”
Developers will build whatever they think offers the highest ROI. Making the development process more streamlined would increase the ROI on a given project, but by itself it in no way would offer any incentive whatsoever to build more affordable units.
The current crisis wasn’t caused because we’re currently building too few units or even too few affordable units. The current crisis is a speculative bubble which, by empirical definition, cannot be mitigated with increased supply. Bubbles only end when the exogenous conditions that prompted them change.
However, the current wave of building mainly high end units will enure that there will still be an affordability crisis in the bubble aftermath. Building too many gilt palaces would ultimately result in lower prices for gilt palaces, but would have a negligible effect on the price of thatched huts. Building too many Ferraris would ultimately result in lower prices for Ferraris, but would have a negligible effect on the price of Kias. Building too many luxury lofts will ultimately result in lower prices for luxury lofts, but will have marginal impact on the price of one BR studios in the T-Loin (prices for one BR studios in the T-Loin will ease up when the market for them — entry level disruptive pizza delivery app coders — dries up).
“Making the development process more streamlined would increase the ROI on a given project, but by itself it in no way would offer any incentive whatsoever to build more affordable units.”
Of course the high margin luxury units will be built first. But uhhh, there is a finite amount of demand for luxury units.
“The current crisis wasn’t caused because we’re currently building too few units or even too few affordable units. The current crisis is a speculative bubble…”
Dude, have you seen the data? SF population influx over the past several decades is beyond overwhelmingly higher than new housing supply. Have you been living under a rock? This has been building up for decades. There is no distinction between this “current crisis” and decades of poor urban planning.
“However, the current wave of building mainly high end units”
This goes back to the earlier point: make the approval process less uncertain. The only units that developers wants to try building are luxury units due to the cost of uncertainty. There was a study recently that this was the most important point of freeing up the market, even more important than zoning and height restrictions.
You’re conflating non-fungible market segments. Yes, there’s been an influx of millenial app coders. They are well-paid, but they are not the market for luxury condos. The don’t want ’em, and they can’t afford ’em. The current building boom isn’t just about providing housing. A large component of it is being built to meet speculative demand for high-end housing, and to repeat myself, you can’t build your way out of a speculative bubble.
Developers aren’t building luxury units due to “uncertainty;” they’re building them because they can sell them for far more than anything else they can build.
How many ‘millenial app coders’ do you know? I know a bunch of them. They are well paid and the new condos are exactly what they are looking for. But because there aren’t enough new luxury condos, they crowd into middle class houses and apartments, pricing out middle class people.
Keep in mind that despite an increase in available inventory, new condo sales in San Francisco are down over 30 percent in 2016 and prices have been slipping.
two beers, whether markets (or market segments) are “fungible” or “non-fungible” is not the relevant question. The relevant question here is whether housing units are substitutes for one another to a would-be purchaser. A “modest” unit is a substitute for a “luxury” unit to most buyers — they would prefer a luxury unit but will buy the modest unit if that is all that is affordable. Hence, where there is a dearth of luxury units, the modest units will get bid up. And if there is a surplus of luxury units, they will sell (or “clear”) at a lower price. Supply and demand do, of course, drive the prices for either and both. Building lots of luxury units will, in turn, result in lower prices for modest units as the whole curve would get shifted.
Just saying “bubbles are different” is tautological and adds nothing unless you’re going to provide a model to explain your hypothesis. I’m not aware of one (I’m aware how the 2004-07 bubble worked, with NINJA loans, pick-a-pay, and zero down; that is not occurring today). The Ferrari vs. Kia analogy does not work. Those two automobile models are not substitutes for a buyer. People looking for a Ferrari are not even considering Kias, and vice-versa, for the most part. Whereas most people with, say, a $1 million budget looking for a gold-plated 2br condo in Pac Heights will generally consider a more modest 2br condo in, say, Laurel Heights, when they see that’s all they can afford. I’ve never met anyone who said they would not have bought a “nicer” place at the same price because that just wasn’t what they were looking for.
“Just saying “bubbles are different” is tautological and adds nothing unless you’re going to provide a model to explain your hypothesis.”
What’s the level of demand for a free lunch vs whats the level of demand to catch a falling knife?
Sometimes people get so convinced that prices will keep rocketing up that demand skyrockets and becomes very inelastic with respect to price. Who wouldn’t want a condo that they believe will print them money?
What happens in a bubble is that the expected price appreciation becomes the dominant factor in people’s purchase decisions (demand) vs the absolute price level. If you think that housing is going up 10% per year, buying a 500k house gets you 50k per year, but if you stretch to $1M you’d get $100k per year.
So it’s not that S&D gets broken during a bubble it’s that in most normal situations demand drops when prices rise. If the price of eggs doubled people would eat fewer eggs and switch to alternative proteins. Higher prices also encourage more supply and you’d get some stability in the market.
In a bubble you have the opposite relation between demand and price. If people see a house go from $500k to $600k in a year and they internalize this and expect future price gains, now you have demand going up as price increases. The increased demand produces further price increases and you have positive feedback. But obviously this can’t go on forever and at some point things stall out. And now with no expectation of price increases, the current prices start to matter. Who cares about the purchase price if you can just sell it for much much more 3-4 years from now? But what about when you actually have to pay down the mortgage, taxes and insurance for the foreseeable future with no appreciation to bail you out? Now the process starts in reverse with price declines fueling expectations of more price declines, which kills demand and so on and so on…
incog, yes, that is basically how bubbles work. Of course, that is also basically how many well-functioning markets work — e.g. the stock market is largely driven by buyers expecting the price of the stock to rise, above all other considerations. Expectations about future prices is nearly always a component of a demand curve. So this does not answer the threshold question of whether SF housing is, or is not, in a bubble rather than a classic case of high demand and limited supply resulting in higher prices. You can look at records of SF population/job growth vs. much more limited new housing growth and see how the supply/demand curves shifted. It is not uncommon at all for this situation to result in permanently higher housing prices in a given location with no subsequent “crash” – see Manhattan, or Aspen, Colorado, or many other places.
But you illustrate my point. You write: “If the price of eggs doubled people would eat fewer eggs and switch to alternative proteins. Higher prices also encourage more supply and you’d get some stability in the market.” All straightforward, of course. But two beers has been arguing precisely the opposite, that if those high prices (in luxury housing) encourage and result in more supply, we’d simply see even more rapid price increases. That is the hypothesis I’d like to see modeled. I don’t see it (and much of what I do for a living involves defining and analyzing markets and modeling supply/demand), but I’m open to being convinced otherwise. But I need something more than “we’re in a bubble and that’s just how bubbles work.”
With stocks, bonds and income properties you are buying a slice of current and future profit. So there too you can have a more fundamental situation where an increase in price per dollar of earnings makes something a less attractive investment vs a bubbly situation where a rise in price creates the perception of future rises in price which feeds back into demand.
As for if we are in a bubble in SF, we’ll have to wait and see to be sure. But what I look at, both in data and in people talking about their individual purchase decisions, is what demand does when there’s no longer a perception of rocketing prices.
And as far as construction, my opinion is that we should make use of the bubble to bring in development to the city but be mindful of negative externalities. Adding supply may do little to nothing to tame a bubble underway, but that supply will still be there after the bubble is over and so should be of a type and quality that people actually want when it’s a home they need to pay for v.s. an ATM.
The difference is that here, people try to keep their housing values inflated and keep new people out of their neighborhood by claiming they are against the ‘oligarchs’ or capitalists or by claiming they are trying to preserve diversity…it’s actually pretty twisted.
Talk about twisted. Thanks for the contradictory word salad, not to mention strawman and red herring. Bringing in more people would raise housing values, not lower them. So, they’re actually doing the opposite of what you say they’re doing.
No one gives opposition to “oligarchs or capitalists” as the reason for trying to limit luxury condo towers and retain PDR jobs. There are plenty of good, practical reasons for doing so,
Where do you get your talking points? The Joe McCarthy/Roy Cohn Manual of Civil Debate?
Ah yes two beers. This is the insane guy who says supply and demand doesn’t apply to SF “boom & bust economics”, without any supporting research. Ironic that he’s pointing out rhetorical fallacies.
“Bringing in more people would raise housing values, not lower them.”
More people are coming to SF. What are you going to do? Build a wall to prevent them? Or limit housing to raise prices to prevent affordability? Oh wait that is what’s being done.
I didn’t say “supply and demand doesn’t apply to SF “boom & bust economics””
I did say that S&D is one of many factors, not necessarily even the most important factor, and that it applies in more complex and sometimes contradictory ways than the simplistic, reductive models you were spoonfed in [Econ 101].
Taking one chemistry class doesn’t qualify one to handle dangerous chemical explosives. Why, after taking one econ class in which one is spoonfed a simplistic model that doesn’t always apply to every market under every condition, is someone qualified to comment on economics?
“I did say that S&D is one of many factors, not necessarily even the most important factor, and that it applies in more complex and sometimes contradictory ways than the simplistic, reductive models you were spoonfed”
Supply & demand is not the biggest factor to price discovery? That’s a very big claim. The burden of proof is on you. Mind teaching us your new, complex economic model?
“virtually all of our country’s thriving and desirable cities are seeing many of the same issues and pressures, with each doing different and often effective or innovative things to propel themselves more effectively into a 21st century future”
Nice to see the larger perspective, and comparison with our peers. I think it’s unfortunate that so many San Franciscans incorrectly believe that everything we have here is the pinnacle of human achievement, and so we better stop building, stop improving, and sit on our laurels.
Sure, we may be an international hub of technology innovation, and yeah we may have beautiful water, rolling hills, and cable cars, but that doesn’t mean we do everything better than everyone, or that we can’t learn from the examples of others. Far from it.
@jsimms: I agree. Thank you!
Also, the map belies the idea of “zoning”. A “zone” of one parcel is not a zone, it’s micromanagement.
Looking at this map of the Muni central subway, it is too bad that there wasn’t the foresight to have it connect to the new Transbay Terminal. My understanding is that the existing Caltrain station will be extended to the new Transbay Terminal?
If so, I wonder why this plan does not include the future development of land on the Caltrain tracks? If Caltrain is going underground to the new terminal, isn’t it Mayor Lee’s plan to have the old Caltrain terminal open for new development?
[Editor’s Note: The Options for Redeveloping SF’s Railyard, Tracks and I-280’s End]
I’m guessing its partly due to the CalTrain extension not having the funding to be built. If it happens – there are stability issues maybe with the box – it could be decades off.
I’ve always felt that Phase 1 of TTC should’ve been tunnels and train station. Phase 2 would be replacing the above-ground bus portion. That way, we have some meaningfully improved infrastructure after Phase 1. Where as now, we’ll still have a bus terminal and no Caltrain extension.
The TTC will be a bus station. There will be no direct connections to rail service at the existing BART/MUNI on Market St. by means of passageway. The DTX keeps being pushed back. Clearly, it’s not a priority to bring rail to a new multi-modal transit center.
Dollars to donuts, HSR ends up coming up the East Bay side and not the Peninsula. With plans for an eventual tunnel connection from Oakland to the TTC (a spur to SF) replacing the once plnned Peninsula HSR line. . Which plans will never come to pass.
DTX? Given potential issues with the box how much will the budget balloon for bringing CalTrains from Townsend to the TTC?
Building a TransBay tube from Oakland to SF for HSR would be far more expensive than coming up the Peninsula. Your thoughts contradict what happened this week. San Mateo signed an agreement with HSR authority to receive funds to build right always for the future HSR to SF. Also, HSR authority authorized funds to Caltrain to electrify the line and in turn, allows for a blended system. So, sorry about raining on your fantasy.
Dave, will this happen before or after your prediction that housing prices in Oakland will exceed housing prices in San Francisco?
Personally I think it would have made more sense to bring HSR to Oakland and then SF under the bay. But that ain’t happening.
I never said housing prices in Oakland will exceed those of SF. You have the wrong guy on that prediction.
Swinging Central Subway all the way from 4th to 2nd street would create a crazy swirl line that would lead to a slow and unpatronizing service – akin to N Judah doing a massive loop over to Caltrain.
With your proposal, consider that T currently runs on 3rd, then swings over to 4th near Caltrain. Then it would swing over to 2nd to meet Transbay. Then swing back over to Stockton towards Union Square.
As much as i had wished the same thing, the geography just down’t work here.
However, whenever 2nd BART transbay tube is designed, I’m 100% sure that this line will meet up with Transbay and your dream will be fulfilled.
I hate this city. Why are we building more places for employers? We don’t need more jobs, we need more housing! When rents are $2,000+ for studios in the heart of the TL the problem is not a lack of jobs, it’s a lack of housing for the people with jobs! WTF?!?!?
At least if the new jobs were in fields other than on-demand pizza delivery apps, there would be the maintenance of the broad economic base that characterizes any healthy city. We’re putting all our economic eggs in one job basket, and this plan accelerates the process. In the next downturn, the carnage will be even worse, because of the obsession with a short-term Ponzi “tech” sector.
There’s a reason they’re called “unicorns.”
Yeah, man,Facebook and Google and Apple are just flashes in the pan. Total Ponzi schemes. When will they ever make any money?
touche! your ad hoc exceptions surely disprove the general condition. Well done, sir!
My mistake. With their market caps of $358B, $538B, and $582B, they are the trivial exceptions to the rule.
What’s the market value again of the companies you are referring to?
Google, Facebook, Apple. Some of the most innovative companies in the world to emerge in the past several decades. Some of the biggest and most effective organizations of creativity to emerge from mankind. Just building “on-demand pizza delivery apps”.
Uber, Airbnb, Pinterest, Twitter, Dropbox, Square, Stripe, Docker, Slack. Transport people! Rent our homes! New social networks! Store & share our stuff! Accept payments! New infrastructure! New ways to communicate at work!
Oh yeah, also just all “on-demand pizza delivery apps”.
Apple was founded 1976. Google was founded 1998. They have little to do with this current bubble. Facebook is not all that different from Friendster and Myspace; in fact the world’s largest advertiser just scaled back its Facebook ads because they don’t really work.
Most of the unicorns you listed are still not even making a profit. Of course the best ones will probably survive the bust but not at their current valuations.
In 2004, Apple’s market cap was about $30B (today; $590B). When Google went public in 2004 it was worth about $35B (today: $538B). Facebook was founded in 2004. Are you really saying that the creation of about $1.4T (trillion with a T!) of market value has little to do with present housing prices? Not to mention LinkedIn, Salesforce, etc. Do you think they too have little to do with present housing prices?
Salesforce founded 1999, Linkedin 2002, LOL you’re getting closer, just another decade or so and eventually you’ll get to the unicorns.
So are you saying that the unicorns are a bigger factor than Apple? Note that Apple’s market cap is greater than all the unicorns combined, not to mention Google/FB/etc. Is that what you’re saying?
Those large cap companies have been around for a long time, yet housing in San Francisco housing did not enter full crisis mode until around 2013. What changed? Certainly those companies have expanded hiring too, opened SF offices, started offering tech shuttles. But there are over 2,000 new tech companies in SF since 2010 with over $10B in VC capital, it would be downright silly to put them in the same boat.
Btw, market cap is just the current value of stock shares, and has nothing to do with real growth. Check out Neuromama, they reached a $35B market cap without even operating a business. And just take a look at AMD, HP, and Dell to see how fast these companies can lost market cap.
The iPhone, one of the most successful tech products of all time was intro’ed in 2007. It’s massive success did nothing to stem the popping of that housing bubble.
“Apple was founded 1976. Google was founded 1998. They have little to do with this current bubble. Facebook is not all that different from Friendster and Myspace”
All three grew to become giants in “this current bubble,” as you call it. Using Sabbie logic based on founding date, Goldman Sachs was founded in 1869, so it has little to do with modern finance. And keep saying that about Facebook, you just sound idiotic at this point of Facebook’s domination.
“Most of the unicorns you listed are still not even making a profit.”
This is true. But that is a different discussion. Are these companies just “on-demand pizza delivery apps” as you and two beers have been claiming? Hardly. They provide significant value to society and the economy.
If unicorns “provide significant value to society” then we will certainly see them return profits to investors, right? Doesn’t look like it will happen anytime soon though. Seems like so far the winners are those who were acquired by those large cap companies. Perhaps you’re a bit too naive about the goals of venture capital. I guess the big question is how many dead unicorns will investors stomach while they wait for those returns. I’m guessing one or two is all that is needed to spook the whole herd.
You are looking at the wrong end of the bull (market) whip. Early investors sell to later (less-privileged) investors, and so on. As long as the Nasdaq/Dow are high enough to “justify” yuge “potential” ROI multiples for unprofitable companies, the early investors can corral a herd of schmucks long enough to sellout with ample gains on the winners to cover ~90% of their early investments going bust. That was the great lesson of the dotcom: profits are only necessary for losers that don’t time the market exuberance.
How much profit have Twitter or Skype made, and what have their valuations been?
Now should the stock market drop by half and slam shut the IPO window and scare off the dumb money, then you can say: “I felt a great disturbance in the forecast, as if millions of spreadsheets suddenly cried out in terror.”
“They provide significant value to society and the economy.”
But at what valuation?
Some apps on my phone are wonderful, but they cost me 99¢
As the old economics saw goes, “How useful is water vs gold and what is the price of water vs gold?”
“the early investors can corral a herd of schmucks long enough to sellout with ample gains on the winners to cover ~90% of their early investments going bust. That was the great lesson of the dotcom: profits are only necessary for losers”
But this is exactly why things boom and crash. In a normal market the fortunes of companies are always rising and falling. Many of the ups and downs of individual businesses are uncorrelated, one companies product is a hit and another’s a flop.
But in bubbly times, the one factor that dominates is the availability and willingness of “schmucks”,as you call them, to pay up for a money losing company in hopes of selling to a still greater fool.
And companies which are profitable can sustain themselves during periods of investor malaise via their own profits. But companies which both lose money every quarter and show the prospect of having their valuations fall from great heights don’t have long to live.
And the sheer fact that “profits are for losers” or at least not very relevant to an investors ROI removes much of the motivation to create solid profitable companies. Thus during bubbly times many many insubstantial companies get created.
SV booms when significant tech progress can be converted into tangible benefits. Usually these are due to Moore’s Law opening new applications of computer tech, such as the PC revolution, the Internet/WWW, and smart phones. SV crashes when these booms are overplayed/oversold beyond their benefit. The crashes are usually corrections of the overplayed top, not returns to the pre-boom level.
Profits and “solid companies” are necessary to survive for those with the poor timing to mature when there isn’t a current boom to gloss over their weaknesses. Google for example went public in 2004 after it generated revenues of nearly $ billion in 2003 and a net profit of more than $100 million.
“If unicorns “provide significant value to society” then we will certainly see them return profits to investors, right? Doesn’t look like it will happen anytime soon though.”
You are behind the times. A while back unicorns were in a valuation frenzy. That gate has swung shut a long time ago. Only a couple are still able to raise a lot, often using the less smart money. Recently unicorns have been focused on the road to profitability. Unless you have crazy growth you are focused on profitability and building a sustainable business.
Time will tell, but I believe in all of the companies that I listed: Uber, Airbnb, Pinterest, Twitter, Dropbox, Square, Stripe, Docker, Slack. Sure some of their valuation may be off but they are still interesting companies and they are all figuring out how to grow up.
Bottom line, Sabbie and two beers, you guys are just plain [foolish] to call the entire bay area economy the “on-demand pizza delivery apps”. Really just stop.
Do you have data showing that the majority of these new jobs are from “unicorns”? Certainly doesn’t seem that way from job listings. And while companies like Twitch (Amazon) and Google and Salesforce are all categorized as “tech”, they’re really entirely separate categories.
I don’t know if the “majority” of the new jobs are in unicorns, but it doesn’t take a “majority” to become a serious issue. 20%? 30%? More? I don’t know. But what will be the effect on local jobs when the bill comes due for the “no need to showa pul parade begins again. Your only hope is that the SaaS sector never has to show a profit. Yay, financial crofit as long as we’re growing” SaaS sector? Many tens of thousands of jobs will be wiped out as the U-Haapitalism!
No, not really. The infrastructure being built is real. If thousands of these “fake” jobs are wiped out there will still be millions of new square feet of commercial space and thousands of new apartments for your Trump sector jobs to move back in.
How very condescending of you.
Even in good times, your “Trump jobs” would never pay enough for families to live in luxury lofts. And good luck inserting your “Trump jobs” into office space.
So your argument is that we can never build too much office space – that no matter how much we build it will continue to be filled with high paying jobs and never decrease in price. And this is an argument that we should build less of it? Using your logic, we’ve literally found a free pot of gold, and yet you want to ban picking it up. I’m baffled.
By destroying broad diversity in jobs and making room only for office workers, you’re creating an employment and economic monoculture. Monocultures never end well.
2 beers, too often you think about SF as an isolated economy. SF just happens to be mostly surrounded by water, with a random cutoff on the southend. SF is aprt of the Bay Area economy, where there is plenty of diversity in jobs. Even in SF, only 9% of jobs are in tech. and all tech not created equal as a big proportion of those are at salesforce.
im not sure what monoculture you are referencing. are you Mr. Robot?
“By destroying broad diversity in jobs and making room only for office workers, you’re creating an employment and economic monoculture. Monocultures never end well.”
Are buildings formerly used to manufacture things not currently being used by internet companies? I find it highly unlikely that only koder kidz can use the millions of square feet of new office space being built. Is that what you’re saying? The office space being built now can only be used for a “monoculture” of industry? Why?
I mean golly, the building next to me was a church, which now houses residences and in the past housed an art studio.
speaking of unicorns seeking profit, uber lost $1.27 billion in first half of 2016, according to a new report in bloomberg (namelink). Apparently they have burned through about half of the $16 billion they’ve raised in cash and debt. Looks like they have ~3 years cash left at their 2015-2016 burn rates.
I wonder if they will find they can’t operate at prices much below cab companies after all…
I wonder if they will ever open their Oakland office or if their soon to be shiny new SF HQ atop landfill will fulfill one of Parkinson’s Laws: “perfection of planned layout is only achieved by institutions on the point of collapse….During a period of exciting discovery or progress there is no time to plan the perfect headquarters. The time for that comes later, when all the important work has been done.”
Meanwhile, the meter is running.
Well, they are working along on the Oakland office. I certainly hope they occupy, but even if they don’t they will have created a great project in the heart of downtown Oakland, and that will have positive benefits WHOEVER occupies it. It will be interesting to see this play out over the next couple of years.
“housing in San Francisco housing did not enter full crisis mode until around 2013”
Funny… I could have sworn that people were talking about how expensive housing was since at least the mid 1990s. Were you here in the first dot com boom?
I’ve been here since 95. For buyers, yes it was fairly similar during the last two booms. But for rentals, no way. It got a little tight during the dot com bubble, but all you had to do was go a bit further out (Sunset, Bernal, etc). And during the housing bubble 2003-2007 rents never got that bad. I had a nice 2BR in the Richmond and I could only get $1800/mo for it.
Well that is certainly an interesting rewriting of history.
Everyone has been complaining about how expensive housing is for at least 20 years. (I have heard that it was relatively inexpensive in the 80s and early 90s)
I’ll ditto what Sabbie said. Yes, there was a very short and extreme rise in rental prices in the dot com boom (which came right down in the bust), but other than that rental prices haven’t been that bad in SF until recently (the last five, I’d say). We’ve never been a cheap city (well, since the 70’s anyway), but there have always been options, including, as Sabbie notes, lots of less popular much less expensive neighborhoods within the city.
I don’t know what you guys are talking about. It was cheap to buy and it was cheap to rent in SF in the mid ’90s. Rent was cheap! you could get a big flat in Lower Haight for like 1200 bucks. You could get a palace in the Mission for a grand. Where do you get the notion that it wasn’t cheap? it was.
And in the mid-90s you could buy a 2BR place in Hayes Valley or the Mission or the Inner Sunset for under $200,000 (~$330,000 in 2016 dollars), about $1300/mo. Prices started to really heat up in the late ’90s. This is why I don’t have a tremendous amount of sympathy for 20+ year renters who complain about being Ellised. It would have been pretty easy to buy your own place back then – not for everyone, of course, but for anyone with a college education and even a somewhat decent job.
And in 2009-2012, SF prices again became quite affordable for buyers, although not like in the mid-90s or earlier.
folks, the stats are easily available (paragon’s version at namelink). In SF asking residential rents doubled from the mid-90s to the dotcom peak, then dropped about 25% in the bust. Inflation adjusted, SF residential asking rents didn’t return to the dotcom peak until 2013-2014. SF commercial asking rents are still ~25% below the dotcom peak, inflation adjusted. Commercial asking rents dropped about 50% in the dotcom bust.
Housing prices didn’t rise as much as rents in the late 1990s, and mortgage rates were in the 7-8% range most of that period.
Cheap vs expensive is relative to your situation wrt income and choices. I knew many people that left SF/SV in the late 1990s because of the housing costs and similar in the late 1980s housing price boom.
You can have both booms, busts and bubbles occuring *and* a long term structural change in incomes for some people.
People with six figure salaries buying at 9x income is bubbly. But there are also many many people who will never ever in their lives even see a six figure income. For the latter group housing may well have become “expensive” for a long time. But while their experiences are important in a human sense, what’s going on there is distinct from the booms and busts of high end housing. (Except for the 2007 era housing bubble where no one was checking income for home loans).
Market prices are set by those who buy, not by those who don’t
These buyers are driving up SF real estate prices with their rising “salaries” hahaha. Around 37% of sales in SF are all cash, and our median price is around $1.2M… isn’t it amazing how much cash you can save up after a couple years of coding apps even while paying the highest rents in the nation?
It adds more housing than jobs. Non-issue. Next.
Too bad they didn’t raise the height to at least 450 feet.
500-600 ft would definitely make sense in the maroon zones in the plan. I live in this area and frankly the mid-rises are all boring and make it feel like we’re in a downtown redwood city. Let’s build some more high-rises, add 20-25% more housing by building UP!
This is SF. How dare you suggest that we build more and modernize the city? By god we need to make this city livable!
haha. These height limits are ridiculously arbitrary and counter-productive. A big city not allowing tall buildings is like a rural area not allowing farms. It makes no sense.
Has anyone done an analysis of the Forest City/Hearst/5M that was exempted by SUD from the Central SOMA Plan? How much more would they be required to pay and how many more BMR units would they be required to build? How much will the city lose under this bad deal?
UPDATE: Recommended Height Limit Raised for Proposed High-Rise Site
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