Residential Construction in SF Has Dropped to a Two-Year LowNovember 14, 2016
As we first reported earlier today, there are now a total of 63,700 apartments and condos in San Francisco’s Housing pipeline, including 6,400 which are currently under construction across the city.
But while San Francisco’s overall pipeline is at a record high, the number of new proposals for projects is on the decline and the number of net new units under construction is the fewest since the second quarter of 2014 and 27 percent lower on a year-over-year basis, according to our accounting of Planning’s data.
Comments from Plugged-In Readers
If I had to guess, Developers are waiting for the BoS to lower the Prop C 25% on site affordable housing to somewhere sub 20% before they are ‘enticed’ to submit plans.
How many dwellings are fully entitled and just waiting to be built? 50,000 or so? Do we blame local government for in grown toe nails too? LOL
Either these boys and gals have financing or they dont after the entitlement is approved. But go back to making stuff up. Its funny … sad, but funny.
40,600 (of which 12,000 have either already been permitted or started the permitting process).
SS…your numbers are confusing and inaccurate.
1. You state – “there are now a total of 63,700 apartments and condos in San Francisco’s Housing pipeline, including 6,400 which are currently under construction across the city”
If 6,400 are under construction, those units are no longer in the pipeline. They have already been permitted and are therefore out of the pipeline. So your down to 56,300 in the pipeline.
2. In reply to Jamie’s question – How many dwellings are fully entitled and just waiting to be built? You reply “40,600 (of which 12,000 have either already been permitted or started the permitting process)”
Your reply makes no sense at all. Which is it – 40,600 or 12,000? Again, if the project has been permitted, it’s no longer in the pipeline. It’s out of the pipeline.
I think the problem is clarity as to what it means to be in the “pipeline” It’s a casual term describing a project that has formally started the permit process and has filed for a permit – the first stop being the planning department. The number the permit application is given upon filing stays with the project all the way through the various departments during the approval process…ie the pipeline.
Anything else it just pipe dream.
1. A unit is in the pipeline until it has been delivered and is ready for occupancy. Projects that have already broken ground can be stalled for months, if not years. And in a downmarket, they can be abandoned or re-purposed.
2. Beyond the units which are already under construction, another 40,600 units have been entitled, which means they have been approved for development by Planning. And projects representing 12,000 of those units have either already received or applied for a building permit but have yet to break ground.
Yup. If this is the start of a down market or a prolonged flat market many of these projects could be delayed if not abandoned.
I believe the entitlement window is 3 years so projects recently approved can wait several years before breaking ground which might put the finished projects 5/6 years down the road when the next up cycle may have started. I’m curious when the Oceanside condo tower is set to break ground – if soon that may not be the best timing.
Even if the entitlement lapses, many of these project sponsors seek extensions and usually seem to get those extensions.
Vell….you can still blame sfgov as the demands they placed back then make these projects risky ventures going forward. Margins too tight, unknown risks too high going forward. As a landlord with existing properties, this is fine and dandy by me btw. Prop C is just the icing on the cake, an extra insurance policy that heaven forbid SF overbuilds. Thanks campos, thanks Aaron, thanks kimmie!
Extremely high construction costs are playing a major roll in the slow production rate.
I’m going to need a source for that bold assertion
Source schmorce. Nature of the beast my man.
Contracting is a greedy boom and bust business. When everyone wants to build, prices shoot up. When everyone is running scarred, prices drop like a Led Zeppelin.
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