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Developments in development: Preserving rent-controlled stock

June 17, 2017

by Laura Wenus : missionlocal – excerpt

When it comes to affordability, San Francisco is facing a tricky balancing act. Planners are making an effort in one illustrative case to make it clear to a developer who wants to replace a building on Mission Street with condos will face serious scrutiny if the project means removing rent controlled housing. 

The building that houses the Old Jerusalem restaurant on Mission between 25th and 26th streets is being considered for redevelopment. In their feedback to the developer, the planners have made it clear that a number of different area-specific restrictions like the Interim Controls and the MAP 2020 plan establish a high threshold for demolishing rental units. And there are two rent-controlled apartments in that building.

In its response to the developers, the planning department asks the developers to consider a relocation plan for the tenants prior to a hearing, among other conditions that must be met…

But while we are seeing some cities build rapidly for those who can afford market rate, they fall short of below market rate housing targets. Take Oakland, for example, which according to the East Bay Express last year reached a laughable 4.5 percent of its affordable housing goal.

That’s not to say that building market rate housing has no effect on prices. RentCafé and Yardi Matrix have observed flattening in rents in expensive markets around the country, San Francisco among them, and analysts there believe it’s because of production. Yardi’s analyst believes if the building trend continues, rents will continue to fall.

Also, when you factor in existing rents (what people are paying where they live, not what apartments are being listed for), rents are lower than headlines might suggest.

A less clear picture emerges in home sales – Two different condos on Valencia Street are being listed at a loss from their original sales. At the same time, San Francisco’s median home price is again record-breaking, now sitting at $1.5 million(more)

 

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