Since this column has apparently turned into Bubble Watch, let’s get that out of the way first: It’s still not totally clear that the “correction,” as the more euphemistic among us put it, is here, but there is some sort of writing on the wall.
Yes, Fidelity slashed startup valuations some more, yes there is yet another article out this week about how housing prices might be stabilizing. But a few other tech companies are doing quite well according to Fidelity, and the housing market overall is still big-picture booming. To me, the most interesting was this piece from Wolf Street via Business Insider, which argues that the real trouble with the local tech+housing bubble is that “If only 11% of the households can afford to buy a median home, who is going to buy the other homes?” And once the VC funding dries up even more than it is already beginning to, companies will no longer be able to offer prospective employees the money they would need to settle here permanently as they seem to be doing now.
So perhaps someone can educate me: What’s going to happen if the developers who have started construction on units that cost $500,000 per door try to sell or rent them in a market where only 11 percent of the population can even afford the median price condo? And what will happen when the market has corrected enough to reject the kind of tomfoolery that gives us $6.49 million mega-condos in former churches staged with little throw pillows that say “Mission”? Are we flooding a shrinking market – or is SF just going to become a city owned by absentee investors?
Last week, the Board of Supervisors took one step toward increasing the amount of below-market-rate housing built in the city: Jane Kim and Aaron Peskin succeeded in sending a ballot initiative to the voters that dramatically changes inclusionary housing requirements (the rule that says a developer has to build 12% affordable in each new building or pay for 20% equivalent being built off-site). They want to set that adjustable bar high – at 25 percent of units on site to be affordable, and 35 percent if they’re built elsewhere.
Oh, and remember the public lands thing that we voted on last November? How the city should prioritize public land for housing? The list of eligible parcels is in. In the Mission, there’s a parcel at Cesar Chávez and Guerrero, as well as a parking lot by Cesar Chavez and 101 behind a storage facility. The Examiner reports a Board committee will hold a meeting on the parcel list soon, presumably to address interesting details like the fact that the biggest parcels of public land are, according to the Examiner, underwater.
Meanwhile, we could be seeing a requirement that all new buildings in San Francisco have solar panels on their roofs – that is if legislation that Supervisor Wiener has introduced is passed. State law already requires that new roofs be 15 percent of roofs on new mid-size buildings be “solar ready,” meaning suitable for solar panels to be installed. Wiener’s legislation would require that those 15 percent actually have the panels.
In business updates, it’s a bad time for galleries it seems.
The buyer of a Mission street building next to the Alamo Drafthouse has sold it to an LLC, Socketsite Reports, after originally sealing the deal with a promise to put an art gallery there instead. Socketsite speculates that the site, which is zoned for 55 feet of height, might get condos rather than a gallery after all.
After a scant year on Mission Street near 19th Street, Fecal Face Dot Gallery (FFDG in case the slightly off-putting phrase “fecal face” doesn’t ring a bell) is closed, according to SFist. The gallery was a transplant from the FIllmore, where it lost its space to a fire, and the end of its lease also spelled the end of its business operation on Mission, though the owner tells SFist that a pop-up elsewhere is likely.