City Report: San Francisco’s Housing Production Reached New Heights in 2019

San Francisco, Planning Department, Housing Inventory Report
Image Courtesy of San Francisco Planning Commission

By Meghan Hall

San Francisco’s need for housing continues to grow as residents flock to the City on the heels of technology companies and startups. However, it appears that the City’s efforts to ramp up construction throughout San Francisco are moving along, providing—however small—a check to the demand that continues to bolster residential fundamentals. According to a recent Housing Inventory Report released by the San Francisco Planning Commission in the spring of this year, housing production in 2019 was up significantly since 2018 and reached one of its highest levels in the past 20 years.

“By monitoring changes in San Francisco’s housing stock, the Inventory provides a basis for evaluating the housing production goals and policies of the Housing Element of the San Francisco General Plan,” explained Gina Simi, communications manager with the San Francisco Planning Department. “The Housing Inventory also reports the annual net gain in housing units citywide. Affordable housing, condominiums, and changes in the residential hotel stock are other areas of interest covered by the Housing Inventory. In addition, the report provides a regional perspective by examining housing construction activity and home prices for the nine-county Bay Area region.”

The Housing Inventory Report is conducted annually in San Francisco and details just how many units have been added, demolished or altered annually. The report has been consistently produced since 1967 and is used as the basis for a variety of City-led housing initiatives.

The most recent report found that construction of new housing in 2019 totaled more than 4,850 units, an 81 percent increase from 2018. The year’s numbers represent the second highest production total in the past 20 years and includes 4,461 units added through new construction and an additional 397 units added through conversion of non-residential uses and expansion of existing structures. 

About 160 units in the housing stock were lost via demolition, unit mergers and removal of illegal units. Overall, there was a net addition of 4,698 units—also a high for the city—sitting 68 percent higher than the 10-year average net addition of 2,801. In all, there were about 399,300 dwelling units in San Francisco at the end of 2019. Between 2014 and 2018, San Francisco had a population of about 881,000 and just under 360,000 households, according to U.S. Census information.

Affordable housing production was also up last year, with 1,456 units brought to market. The number is more than twice the amount of housing units completed in 2018 and is 50 percent above the five-year average of affordable units produced, at 980 units. New affordable units made up about 30 percent of new additions to the housing stock. 83 percent of new, affordable units are affordable to very-low and low-income households.

Nevertheless, Simi acknowledged that housing affordability across all income levels remained a major issue for San Franciscans. “Overall, the cost of housing production remains a significant problem,” she said.

Some of the largest projects to reach completion last year in San Francisco included 245 First Street, which included 548 market-rate and 149 low-income units, 510 Folsom, with 545 market-rate and 109-low income residences, and 600 Minnesota, which produced 318 housing units. Two major affordable housing projects also were delivered in 2019: 2500 Arelious Walker Drive and 1150 Third Street. The projects brought 121 and 118 units for very low- and low-income residents to the market, respectively.

However, affordability is likely to remain an issue for many, as the housing production momentum continues to fluctuate. In 2019, the Department of Building Inspection (DBI) authorized 2,944 units for construction, a 52 percent decrease from the number of units approved in 2018, which totaled 6,097. The Planning Department fully entitled 535 projects—totaling 3,924 units—in 2019, a 24 percent increase from 2018 levels and a 25 percent decrease below the five-year average of 5,274 units.

The report also notes that changing trends in construction and residential conversions are the main drivers behind alterations in San Francisco’s housing stock. For the past five years, new housing units added—90 percent—are in buildings with 20 or more units, and approximately 56 percent of units added in 2019 were in Mixed Use zoning districts. 

Developers and landowners are also taking advantage of the California State Density Bonus Law and HOME-SF, a local density bonus program that stipulates new construction must contain 20 to 30 percent of affordable units to receive density bonuses and zoning modifications. As of December of 2019, 55 projects were in the pipeline for the State Density Bonus Program, which can add a potential 6,113 units to the housing stock. In addition, 15 projects were in the pipeline for the HOME-SF; the developments could add 686 units to the housing stock. 

As the City continues to grow, officials are leveraging the information within the Housing Inventory Report to create policy and steps to meet future development goals. New housing inventory remains a major priority for locals as both population and housing costs continue to rise.

“Building more housing is a top priority for Planning,” Simi said.

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