Common sense seems to dictate that luxury tastes have been driving the housing market’s lack of affordability for those living in San Francisco. However, census data says it's the lack of housing that’s ultimately to blame.
As Urban Wire points out, many attribute the rise in high-dollar housing to developers offering opulent condo buildings with over-the-top amenities. Doing so causes gentrification and therefore an overall increase in pricing.
San Francisco is in a league of its own for housing prices. With over 65 percent of 2016 home sales going for a million dollars or more, there is a favorable lean toward an affluent market. And with an increase of 26 percent from 2011 for those sales, the trend is forging ahead with steam.
Using using data from SF’s Housing Inventory and Office of the Assessor-Recorder, findings reveal that only 10 percent of home sales over a million dollars in 2016 came from new builds. That means a solid majority of these sales came from “existing home stock,” many of which are decades old.
According to the data, the reason for lack of housing is, well, lack of housing. Demand is simply overpowering the supply. They also suggest, via a study conducted for the Terner Center for housing Innovation at UC Berkeley, that between the years of 2010 and 2015, the region added six times as many jobs as it did housing units. Basically, there are now more jobs and office space than homes for the people who work here.
There are several methods presented to combat the housing shortage. Reducing ground-floor retail requirements to allow for profitable residential space as well as reducing parking spaces to one pace per unit — especially in units near public transit — is one idea. The city could also decrease basic permitting time for measures like design review and building permit approval to allow faster turnaround time.