With new proposals having been submitted to the City for roughly the same number of residential units that finished construction in the first quarter of the year, the overall pipeline of apartments and condos under development in San Francisco is holding around 63,600.

But as we first noted last year, the year-over-year growth in the overall pipeline has been trending down since the fourth quarter of 2015. And last quarter’s gain of 144 units versus the first quarter of 2016 is compared to a year-over-year gain of 8,620 units the year before.

In terms of the state of the current pipeline, there are now 5,600 units of housing under construction across the city which should be ready for occupancy within the next year or two, including the 111 condos finishing up construction at 650 Indiana Street, the former Café Cocomo parcel in Dogpatch, as pictured above.

In addition, there are 13,100 net-new units of housing for which building permits have either been issued, approved or requested, and 31,500 units in projects that have already been approved but not yet permitted (which 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).

And with proposals for another 13,300 units of housing under review by the City’s Planning Department, which is the fewest since the second quarter of 2015 and trending down, San Francisco’s Housing Pipeline now totals 63,600, including 10,400 new “affordable” units which are to be offered at below market rates, according to our accounting of Planning’s database.

At the same time, sales of new construction condos on the market in San Francisco were down 25 percent last year, at least one index suggests that new condo prices have dropped over 8 percent from a peak in the fourth quarter of 2015, and rents in the city are down over 7 percent.

24 thoughts on “Pipeline of Development in S.F. Holds but Nearing Negative Growth”
  1. The fall-off in net gain from 2015 to 2016 is huge. There is little doubt pipeline development goes negative this quarter. Last year 79 major developments were proposed – about 6 per month. So far this year it seems far fewer than that are being proposed – we’d be at about 24 new major proposals by now and there hasn’t been near that number.

    It’ll be interesting to see the pace at which entitled projects are put up for sale. Will it accelerate? There were several put on the market last year amounting to several hundred units of proposed housing.

    The other aspect to this, with falling prices and demand, is how it will impact a project such as the residential component of the “claw” complex. That project is a go, but the price points initially projected for the units may not be attainable in this emerging condo market. Will the project be VE’d down to save money? Will the hotel component be enlarged within the building envelope while mapping those hotel rooms for condos and eventual conversion down the line when the market is strong again?

    What happens to that skinny condo tower proposed for Howard? Is it entitled yet? If not, could it and other projects in the pipeline but pre-entitlement be scaled back or dropped altogether?

  2. Cost to build keep going up. Faster than rents. Construction jobs are often exhausting and dirty. Few if any City residents want to do that sort of very hard work. The labor force commutes in from farther and farther away. Labor costs go up. At some point the squeeze on the economics cause a slowdown.

  3. The middle class, working class, and people of color population has been decimated in SF; now they’ve just moved on to Oakland to do the same.

    1. Shhh, people around here still think that building more brand new condo units will lead to lower prices, they don’t want to believe the studies that it just leads to more gentrification and higher prices.

      The reality is that people here don’t want lower prices, they want increasing property values for the wealthy, and subsidized housing for the poor. Otherwise they might try that 15% tax on foreign buyers, wink wink.

      1. Building new condo units WILL lead to lower prices if you build enough of them. We’ve already seen some softening of prices and reductions in market rents in neighborhoods where a lot of new units have come online.

        The problem is that there’s so much demand right now that development isn’t coming close to meeting it. But the building is having an effect. It recently took me a month to rent a vacant unit in a very desirable area which, for the past twenty years, had always rented after a single open house (with multiple applicants.) Building new units is having an effect.

        If nothing else, building new condos takes some of the pressure off the existing housing stock and results in fewer evictions and TIC conversions. I find the argument that building more units raises prices to be rather laughable. Do you really think that NOT building new units will lower prices?

        1. 1. How can you prove it was new supply that pushed lower rents? And not the well documented slowdown in the local startup sector, or SF losing some of its appeal due to cost of living and quality of life while other cities are on the rise?

          2. Although rents have softened, home prices have not (in most market segments). How do you explain that?

          3. I’m not saying more supply wouldn’t lower prices. It’s a matter of degree. I’m saying that the amount of new supply needed to lower prices to where we might consider them affordable to the middle class is unattainable. Ask me if I care whether a techie has to pay $1M or 1.1M for their new condo in the Mish. And finally, studies have been done that back up what I said.

          1. And yet as we allowed more housing to be built, prices have generally risen more slowly or held steady.

        2. If anything this story indicates there is no longer so much demand in SF. SS has featured many an article reinforcing the fall-off. Be it price appreciation, vacancy rates or rents.

          Developers will go where there is demand and a profit to be made. Many cities are poised for large jobs and population growth, have a more affordable housing base and better quality of life. Forbes listed those cities a few months back.

          Entitled projects are being put up for sale because of, among other things, future price risk.

          There was that BAC poll showing about 40% of millennials are considering moving out of the area in the next 5 years. Add in Redfin’s March stat showing SF at the top of the list of cities that residents are looking to leave.and indications are a fall-off in demand for SF homes/condos for the near and medium term future.

        1. Still no proof that there aren’t a lot of foreign buyers in SF.

          The fact is, if you had any real interest in finding out the truth about whether or not there actually are a lot of foreign buyers in SF, you could do that fairly easily in a number of different ways. And if you had any authentic interest in seeing home prices in SF become more “affordable” then you would consider a tax on foreign buyers as one tool in the arsenal.

          But readers like you have no interest in finding out the truth, because you have no real interest in housing becoming affordable. But even more so, you don’t want to know the truth because you desperately want to believe the narrative that IT’S DIFFERENT THIS TIME. That all those other times were bubbles, but this time it’s fundamentals. Because I can upload a cat video for my grandma to watch, that totally justifies 25 year olds running around buying $2m condos.

          Well sorry, that’s wrong. Like everyone from Evan Spiegel to Donald Trump to Bill Gross to Stan Druckenmiller has been trying to tell you, this is just another BIG FAT UGLY BUBBLE BLOWN BY THE FED and it’s going to pop like the rest them. But this time it’s going to be much worse, because a decade of zero interest rates has left a 3.5T funding hole in US pensions that will be blown sky high when you add the 50% correction in equities on top of that. If you think voters were mad in 2016…

          1. i don’t believe its different this time. you got the wrong person. I do think we are in a bubble, but don’t see a massive pop, just a 15-20% deflation over next few years, which is fine with me.

            back to topic. I just don’t believe a large percentage of Residential real estate buying in SF is from foreign investors. people keep saying that but no one has shown data to back it up.

          2. If you are truly interested, you’ll simply open your favorite search engine, type “san francisco real estate foreign buyers” and read some articles about it. The NAR also has a report on foreign buyers that includes data at the state level, that you can extrapolate to SF, it is also available online with a few clicks of your mouse. You can also ask any local real estate professional. If you can’t be bothered to do any of those simple things, then maybe you’re not really interested at all, but just trying to push your own story about SF real estate.

          3. the burden of proof is upon those who claim that foreign buyers are frothing the market. ive gone to several of these places, and the % of foreign buyers documented is minuscule. if you think they are pumping the market, maybe you should provide proof of your assertion.

          4. Normally you are right about the burden of proof, but in this case, I posted before and the moderator deleted my links, so not going to waste my time. Again- I gave you three easy ways to see for yourself, if you can’t be bothered do a simple internet search or seek out an expert then why are you still going on about the subject??? Because you have an agenda, that’s why.

          5. The usual reason for the editor to delete a post on this topic is that this is America and you don’t draw demographic conclusions based on people’s last name. Spare us the innocent victim routine.

          6. The links I provided did not make any assumptions based on name. Again, the fact that you keep taunting me for lack of data when you can easily type “san francisco real estate foreign buyers” into your search engine in less than ten seconds tells me and everyone else here that you have zero interest in finding out the truth.

          7. Search engines are great at confirming whatever you want to believe.
            Why do you think the editor is deleting your links?

          8. I challenge you to use your search engine to confirm that there are very few foreign buyers in SF.

            Maybe you’re trying to imply I’m a racist or xenophobe, forget it. My parents were immigrants and I welcome foreigners of all races with open arms. But I also have an agenda, to see San Francisco real estate become more affordable. So I want to welcome foreigners with open arms, plus a nice little 15% tax on real estate. It’s a win-win. The extra money would help our city provide much needed services, and those who are not truly committed to SF can simply go elsewhere. It worked in Vancouver. If it doesn’t work here, ok, but no harm in trying. Many other countries besides Canada including China, Hong Kong, Mexico, UK, Australia, and Switzerland tax or otherwise limit foreign buyers, there’s nothing malicious about it.

  4. Ah, Cafe Cocomo. I went there often from about 1999 to 2003. I doubt unusual places with live music and dancing can survive the surbanizing of San Francisco. Imagine San Francisco packed with new small condo buildings and no place to go except for municipal- or donor-supported institutions like the opera and SF Jazz. it’s already happened.

    Musician rehearsal and art studios are gone and with them a mass of music and art. My artist friends moved out long ago, with last ones waiting until they lost the lottery for the Minnesota artificial support complex. Actual burbs around here probably have more artists and musicians than SF because they’re cheaper, e.g., Concord and El Cerrito.

    Not one musician I know who gigs in SF lives there. They live in Hayward, Oakland, though that’s getting too pricy also, El Cerrito, and other cheaper places. Many have moved out of the Bay Area and out of state. A poet I know moved to e Crockett.

    Describing San Francisco as undergoing suburbanizing is actually an insult to suburbs since San Francisco’s techafication is much worse — a horde of political libertarian myopic money-grubbing coders perfecting nails in disruption coffins, making evil-enhancing social networking programs that enable disastrous revolutions like Syria and Trump. San Francisco needs real disruption: a 9.0 quake or a direct 150-meter meteor strike.

    1. That’s an insult to libertarians. Techies are Libertarian in the streets but Krony Kapitalist in the sheets. You know very well they didn’t vote Libertarian in the last election. As for artists, seems like it’s practically become illegal across America given the cost of living, thanks Fed!

    2. “San Francisco needs real disruption: a 9.0 quake or a direct 150-meter meteor strike.”

      Yeah, there’s nothing like the deaths of 10’s of thousands of people, or perhaps even millions to make one feel all warm and fuzzy. Besides, we all know EVERYONE in SF is a “myopic, money-grubbing coder” who provides nothing of value to the world and would be better off dead.

  5. Musicians, artists, are long gone. There are people in SF with trust funds left who play at being Bohemian – but it’s not really the same. It’s okay for cities to evolve. Dense high rise living is not conducive to drummers, tuba players , sculptors. The City has moved on to the next thing.

Leave a Reply

Your email address will not be published. Required fields are marked *