Affordable Housing in San Francisco
By Rachel McIlvaine, 2018
This website was designed by Noah J. Durst to illustrate the final research project in UP 458: Housing and Real Estate Development at Michigan State University. All content was developed and written by Rachel McIlvaine (BSURP, 2019).
This website was designed by Noah J. Durst to illustrate the final research project in UP 458: Housing and Real Estate Development at Michigan State University. All content was developed and written by Rachel McIlvaine (BSURP, 2019).
San Francisco has historically and continues to suffer from exorbitantly high land and housing prices. Many factors contributed to the existence of the affordability crisis, including geographic limitations, a fast-growing tech economy, and regulations. Unaffordable housing prices have a variety of impacts, from slowing economic growth to negative health implications for residents. A household earning the median income of $103,801 could not afford to buy nor rent a median-priced home (Thadani, 2017), and there are more households than housing units affordable to them in nearly every income group (American Community Survey, 2017). Renting is popular at all age and income levels in San Francisco, and the percent of renters is expected to rise at every age and income group by 2040 (ACS, 2017). Most of this demand for rental housing is accommodated through multi-family housing structures, which have also comprised the majority of new housing construction (San Francisco Planning Department, 2017). Still, not nearly enough new units are being permitted to keep up with San Francisco’s population growth, let alone erase the housing shortage (State of the Cities Data System, 2017). To address this issue, I propose the redevelopment of a single-story auto shop along a mixed-use major transit corridor in the Bernal Heights neighborhood of San Francisco. The incredible demand for housing makes this affordable multifamily development very low-risk, so investors may be willing to accept lower target returns. Utilizing San Francisco’s 100% Affordable Housing Bonus Program to increase the development’s density allows rents to be much lower than market rate while still being financially profitable. The project will have 48 1-bedroom, 1-bathroom units rented for $1,550/month, making it affordable to households with an income of $70,000.
San Francisco has historically and continues to suffer from exorbitantly high land and housing prices. Many factors contributed to the existence of the affordability crisis, including geographic limitations, a fast-growing tech economy, and regulations. Unaffordable housing prices have a variety of impacts, from slowing economic growth to negative health implications for residents. A household earning the median income of $103,801 could not afford to buy nor rent a median-priced home (Thadani, 2017), and there are more households than housing units affordable to them in nearly every income group (American Community Survey, 2017). Renting is popular at all age and income levels in San Francisco, and the percent of renters is expected to rise at every age and income group by 2040 (ACS, 2017). Most of this demand for rental housing is accommodated through multi-family housing structures, which have also comprised the majority of new housing construction (San Francisco Planning Department, 2017). Still, not nearly enough new units are being permitted to keep up with San Francisco’s population growth, let alone erase the housing shortage (State of the Cities Data System, 2017). To address this issue, I propose the redevelopment of a single-story auto shop along a mixed-use major transit corridor in the Bernal Heights neighborhood of San Francisco. The incredible demand for housing makes this affordable multifamily development very low-risk, so investors may be willing to accept lower target returns. Utilizing San Francisco’s 100% Affordable Housing Bonus Program to increase the development’s density allows rents to be much lower than market rate while still being financially profitable. The project will have 48 1-bedroom, 1-bathroom units rented for $1,550/month, making it affordable to households with an income of $70,000.
