Developments in Development: Rough road ahead

Developments in Development is a “weekly” column recapping real estate, housing, planning, zoning and construction news.

I was going to start out with a happy headline this week: People love San Francisco despite the high cost of living, a new survey says. Another chimes in with the finding that San Francisco’s eviction rate is among the lowest in the whole U.S.

Unfortunately, the first survey somehow managed to find 600 people to quiz, of whom only 1 percent had grown up in the city (an impressive zero percent were natives of San Jose or Oakland in those parallel surveys), so the fact that people who recently moved here for a job like it here is maybe unsurprising.

As for the eviction rate, well, as Curbed notes, that’s likely because the job market here is strong. Plus, that survey looked at San Francisco renters who had experienced eviction — which makes me wonder how many people who experienced eviction in San Francisco remain in the city to be polled as a San Francisco resident?

Especially when $3,400 a month for an apartment is the new normal.

Such a hot market continues to bring with it more of the usual attempts to game the system — take, for example, this CBS Local investigation that found dozens of owners of homes who purchased them through the city’s below-market-rate program who are renting the units out, which is a big no-no because they’re supposed to be homes, not investments.

On the opposite end of the spectrum, a major corporate San Francisco landowner is addressing the problem of illegal short-term rentals by partnering with Airbnb and tenants to make aboveboard short term rentals. The tenant can short-term-rent (short-term-sublet?) and the landlord gets a cut of the deal, reports the Chronicle.

The pressure on low-income housing is unlikely to ease anytime soon — at least if two pieces in Curbed this week are any indication. The first extols the value of the Low Income Housing Tax Credit and how President Donald Trump’s new proposed tax plan could undermine it. The second explores how the elimination of a bond program and a certain kind of tax credit may lead to the loss of 1 million affordable housing units around the nation over the next decade.

A pretty frequent refrain in the conversation about why everything is so expensive is that rent control is interfering with the market. Well, researchers at Stanford took a look at that recently, using San Francisco as a case study. And they do seem to support the notion.

That said, they also listed a number of other effects of rent control — like that “essentially all” of those incentivized to stay in the city because of rent control would have left by now if it didn’t exist. And as a tenant advocate tells the Mercury News, part of the problem is that landlords responded by taking rental units off the market and turning them into “tenancy-in-common”s, or workaround condos, in which case the solution the advocate suggests is simply to disallow conversion into TICs.

Researchers also observed that rental turnover in some of the hottest areas was highest, possibly due to evictions and buyouts. To wit, tenant advocates are putting their effort into statewide ballot measures this year. Repealing restrictions on rent control is one proposal, but more recently, they launched the effort to put an item on the ballot that would guarantee all tenants facing eviction legal representation.

While the state political machine grinds on, one local project seems to have ground to a halt: 1900 Mission St., where a developer two years ago proposed turning an auto repair shop into 11 condos above a ground floor retail space, is up for sale, SocketSite reports. The proposal, with some tweaks, actually passed muster at the Planning Commission in early October after being held up by a discretionary review request, so all the entitlements are in place. Will it find a buyer?

Elsewhere, some new businesses seem to be on the horizon.

Rice Paper Scissors won approval to move into the former La Plaza Delicateses grocery at Folsom and 22nd streets. And on 14th Street near Folsom, someone appears to have a craving for a bagel business — a proposal is under review to renovate the inside of a garage to create a wholesale bagel manufacturing facility (without retail or public access). Very curious about these plans for a secret Mission bagel spot.

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