San Francisco is one of the nation’s most exciting cities, both to visit and to live in. Whether you experience the breathtaking scenery on the Golden Gate Bridge, or immerse yourself in the culture at Haight-Ashbury, San Francisco offers something for everyone. While the city continues to be a prime destination for tourists, would-be residents are coping with a relatively under-appreciated drought: a shortage in the housing industry.
Like other large cities in the United States, San Francisco is experiencing a significant housing shortage. While the demand has increased at alarming rates in recent years, the Bay Area has not been able to meet the need for additional housing. If the demand continues to increase, the supply should as well, but the city has not seen this trend thus far. Why? Who can help to resolve the ongoing housing crisis?
As many landlords in San Francisco may tell you, working to create additional housing communities in the city has proven to be nearly impossible. From the complicated, and oftentimes strong-armed politics, to limited spaces to build, developers are becoming less likely to invest in a housing project in the Bay Area.
In 2014, former Supervisor Scott Wierner put forth the idea of adding more than 33,000 units over to the housing supply in San Francisco through legalization of ADU units. However, the likelihood that the target units will be competed continues to decrease, as landlords continue to face more hurdles than they are willing to deal with, resulting in the continued need for housing communities. What are some of the challenges that landlords face when working to get a new housing community approved?
Increased Demand For Company Space
San Francisco’s economy has experienced substantial growth in the last few years, with powerhouse companies like Google, Dropbox, and Facebook finding homes in the Bay Area. This is a major barrier to building more homes. For example, between 2015 and 2017, Silicon Valley allocated nearly 21 million feet of real estate exclusively for commercial properties, more than the last 13 years combined. The need for office spaces continues to take priority over much-needed housing communities. As a result, would-be residents are finding it increasingly difficult to find an affordable property, because everything that has become available is being used for commercial properties.
High Costs
With commercial real estate continuing to dominate the city’s available real estate properties, the costs of buying a home have seen a substantial increase as well. Last year alone, the median price of a San Francisco home increased to nearly $1.7 million, a 21 percent increase in just one year. The increased costs of buying a home has had a significant influence on the cost of living in the city, with San Francisco now being considered one of the most expensive cities in the United States to live in.
As San Francisco continues to grow, so does the need for a sensible solution to the housing shortage. For would-be residents, the process of simply searching for a home can quickly become a major source of stress, because of the difficulty finding an affordable home. While there is no single answer to solving the housing shortage, the city of San Francisco should take action to begin building additional housing communities to meet the growing need for living accommodations.