San Francisco's RHNA Target, Progress and Pipeline

As was long ago determined by the California Department of Housing and Community Development (HCD) and the regional Association of Bay Area Governments (ABAG), in order to meet the growing demand for housing in San Francisco, the City was given a goal of building 31,193 housing units between 2007 and 2014, its Regional Housing Needs Allocation (RHNA).

With 11,993 market rate units having been built in San Francisco from 2007 through the first quarter of 2014, the production of housing for those with household incomes above 120 percent of the area median is at 97 percent of the RHNA goal of 12,315 units.  Unfortunately, the market rate component only represents 40 percent of the overall Housing Needs Allocation which was given to the City.

The majority of the identified need and goal for the City was to build housing which would be affordable to those with household incomes up to 120 percent of the area median, the projected need for which was at least 18,878 affordable units to be built in San Francisco by the end of 2014.

As of the first quarter of 2014, a total of 6,085 “affordable” housing units have been built in San Francisco since 2007, a little less than 32 percent of the City’s goal with nine months – and 12,793 units –  to go.

In the Planning Director’s report to the Planning Commission tomorrow, the number of units in the pipeline, rather than actually produced, are highlighted and included in the percentages at the end of the progress table.  We have, however, added the City’s actual attainment towards its goal in red above.

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Comments from “Plugged-In” Readers

  1. Posted by soccermom

    Meanwhile, Redfin shows 137 listing under $400K within a short drive of the Richmond BART station.
    $320K mortgage 4.5% 30 Years = $1,621 per month.

    • Posted by richensf

      Between the air quality and the crime, you wouldn’t even live to see the end of that mortgage.

      • Posted by SFResident

        Well, I suppose that’s motivation for people to become educated, earn and save, then buy houses in their area of choice.

        • Posted by Frank C.

          While that’s partially true, re: realities of a market economy, affordable housing is a market failure in most of the US, and this “bootstraps” type of BS doesn’t take into account the spillover effects – traffic for all of us (and air quality) is already way way worse than it would be if service workers or mid income professionalls didn’t have to drive 2 hours a day to get to work. And their children suffer, and we suffer as a result of that.

    • Posted by Almond Moore

      Isn’t this article about rentals?

  2. Posted by zzzzzzzzzz

    All the figures above strike me as completely arbitrary. How does anyone determine how many units should be built for any particular income group? Why is it desirable to produce more units for low income than moderate income households? What is the “desired” range of incomes to be housed in San Francisco, or any city for that matter? At the end of the day the goal should be to produce housing, not to generate completely arbitrary goals for housing particular income groups.

    • Posted by Almond Moore

      Any thriving city needs economic diversity. San Francisco unfortunately is lacking in that department. As the article states there is already a surplus of market rate rentals available. There is clear need for low income housing. Why would anyone oppose that?

      • Posted by jill

        less than 25% of the housing stock is market rate rentals? What are you talking about?

        • Posted by Rico Hampton

          The article states there were 18,078 total rental units built between 2007 – 2014. 11,993 are above market rate while only 4,978 are below market rate. Which means 66% of the current rental market is above market rate.
          I’m not sure where the 25% came from.

          • Posted by jill

            25% of total housing, which includes all rental buildings, not just those post 2007, and all owner occupied.

            <25% of SF's total housing stock is market rate rentals

  3. Posted by Jackson

    You have given an excellent example of available options for those priced out of City housing.
    San Francisco is becoming outrageously expensive like every other highly desirable city in the world.
    Those unable to find housing with the seven square miles of the City, will have to relocate to the nearby peripheral areas.
    When I bought my first home in Chicago, it was considered a ghetto and full of gangs. Thirty years later the neighborhood has become very fashionable and expensive i.e. BuckTown. Those priced out of the City can start and build equity in their new neighborhoods too.

    • Posted by Futurist

      Good points. I’ve been saying essentially that same thing for a while here on SS. There are many many viable and affordable areas outside of the SF city limits. Those neighborhoods will all improve as first time buyers move in, fix up and add value and energy to those areas. The City has no inherent “obligation” to provide housing at ALL income levels simply to those who wish to live here. We have no reason to become super dense just to please all those who only want a San Francisco address. Quality of life, quality and quantity of our public transit systems all play a factor in how we grow AND how much we grow.

      • Posted by Frank C.

        Fine, then you need to also argue for vastly improved regional transit, which means you would pay more out of your pocket, too – because what we have is inadequate. Otherwise, more cars on the road making more long drives, worse air, worse traffic, etc.

        • Posted by SFResident

          Good point. The costs of commuting are much greater for service workers. Rectifying the poor state of public transit should be top priority.

  4. Posted by jill

    same for near vallejo ferry terminal. you can afford that mortgage on $50K/yr

  5. Posted by Sierrajeff

    All the preceding comments underscore that it’s ludicrous to treat 7×7 San Francisco as a self-reliant full-service housing market. Just as Manhattan is part of a larger city with everything from Brooklyn to Staten Island to the Bronx, the immediately surrounding areas here – from Oakland to Marin to the Peninsula – should be treated as part of the whole for all housing analysis purposes.

    • Posted by bullfrog

      agreed. if only the larger bay area shared tax revenue and budgeting like new york city all residents and cities would be better of and less vilified. sorry oakland.

      • Posted by Sierrajeff

        never thought of it quite that way, but yes if Oakland were just part of a Greater San Francisco, like Brooklyn is of NYC (or Croydon in Greater London), it’d probably both have a better overall reputation, and see improvements in policing and infrastructure.

    • Posted by Futurist

      ++ Yes.

  6. Posted by SFResident

    I agree with most of the comment here — SF is not obligated to subsidize housing nor is it necessary with vacancies in the greater Bay Area.

    To add a novel thread to this discussion, I’ll remark that it is unfortunate that most of the BMR housing does not go to middle class families (only 6.5K units were built for 80% AMI), who are likely comprised teachers, nurses, social workers, firemen, etc. Rather, these units largely allocated for very low-income beneficiaries, who do not contribute anything to the tax base. Consider that over half of the new BMR housing in Mission Bay South are slated for people with AMI less than 50% (48K for a family of 4), meaning many new residents will likely be un- or under-employed. Don’t get me wrong — I absolutely support federal tax money being used to provide a social net (food & housing). But I think it is nonsense for a single city (rather than federal government) to squander $1000 sq/ft prime real estate on people who can receive free shelter and other welfare from the federal government while residing anywhere in the US.

    • Posted by Dazy

      I agree with you on money being spent to house and feed the low income is needed but disagree with you on it being nonsense to offer low income families an opportunity to own or live in these areas of prime real estate..Now looking at it from the first gen stand point yes, the adults will most likely be under-paid and or unemployed but there are benefits for the community and not to mention children of these families. Now kids of these low income families benefit the most from low income programs such as housing. They are surrounded with a better environment which make them overall better..try looking at it like a ripple affect. I understand its a bigger issue that the federal government should deal with but thankfully our wonderful City of San Francisco is dealing with this issue the best way they can and not just saying its not our problem…because maybe one day this city can be a model of how housing is offered to all not just the higher income homes but offer livable housing to all income levels…

  7. Posted by S

    Vallejo and Richmond have lower income people living there.. some have made that choice. SF has an obligation to care for ALL it’s residents, not just the rich ones. That’s democracy! All good cities have people of different means living there. That’s what makes them places where upward mobility happens – there’s opportunities and good jobs that don’t exist in primarily low income places like Richmond and Vallejo- and the mix of people lends vibrancy. If SF was just for the rich, it would basically be the big city version of Carmel.

    • Posted by Futurist

      I disagree. SF does NOT have an obligation to care for ALL its’ residents. Using your logic, then why would not 10’s of thousands or more move here with no income at all, but simply expect The City to “care” for them?

      • Posted by S

        I’m talking about people that already live here (probably being evicted.) these units don’t go to jobless bums – these are people who work and contribute to our community.

        • Posted by S

          PS 80% of AMI is hardly poor. these are teachers, social workers, police/fire, and other hardworking (tax paying) citizens of SF that are being priced out of a community they support

          • Posted by SFResident

            I completely agree about the 80% AMI cases, and I was trying to make that point earlier. However, note that 600 out of 3000 to-be-developed units in Mission Bay are for very low income, including 200 units for homeless (block 3E, parts of blocks 13 and 6E). Again, it’s great if the federal government provides basic essentials (food and shelter) for those who need it. But I feel it’s excessive for SF — acting by itself –to allocate $1000 sq/ft apartments for these cases. And I disagree that some people are entitled for such excessive subsidies just because they’re residing in SF at the time of the lottery.

          • Posted by Mike Kennedy

            I disagree with the police/fire statistic that is used to make people feel guilty. Most of these midget cops and firemen I would t want living next to me. They wouldn’t do anything once the S hit the fan. I am sad when real locals born here cants stay. But most of these new cops are suburban midgets anyway..

      • Posted by John Willis

        Futurist, you don’t seem very future oriented in your thinking. Some one has to “care” for poor and disadvantaged children lest they grow up to be your neighbors in their disadvantaged adult version.

      • Posted by Sierrajeff

        Well I think there’s a nuance here. I think San Francisco does have an obligation to care for all of its residents equally. It does not, however, have an obligation to create housing mix where anyone (of any income level) can be a residents. i.e., like any government it should care for those who are here… but it shouldn’t have to shoehorn in unrealistic housing goals for those who are *not* here.

    • Posted by Mike Kennedy

      Craziest comment ever

    • Posted by Jimmy The House Flipper

      I agree! Because there is just no way a person could commute from Richmond or Vallejo to a good job in SF and climb up into the middle or upper-middle class that way. No way at all.

  8. Posted by zzzzzz

    I would argue that SF benefits from having more high income residents who pay lots of taxes and don’t consume government social services or rely on the public schools. SF needs more people who give more than they take.

    • Posted by S

      the people these units are meant for WORK – they provide goods and services that people in SF consume. There is demand for their labor here. It’s a hard sell to tell someone they need to commute 2+ hours a day to serve you coffee or care for your children.

      • Posted by Jill

        Why is that hard to tell someone? That’s what makes a market. People do what they have to. If someone takes BART from Richmond to pour my coffee, I’m happy that the city is providing a job for them. They should be happy too, we shouldn’t be handing out housing in the most expensive housing market to everyone who has a low paying job.

        • Posted by S

          It’s not being handed out, it’s being purchased. You’re not even allowed to sell the units for profit. I think this is actually a pretty fair way to provide housing for people not making a ton of money working here. There is very high demand here for affordable housing – each of these units will probably get something like 200 applicants each. Developers have no incentive to build housing for the middle and lower classes even though I would argue that these units are in higher demand than luxury units. That’s the problem these policies aim to fix. I’m not going to argue that these are the best ways to make it happen but I do agree that more units geared towards middle and lower income people need to be built.

      • Posted by Jimmy The House Flipper

        Why? I mean, they could just get a job close to home making coffee or babysitting. Presumably they are suffering through the commute for a reason. Higher wages perhaps? They like working in the city? Their spouse works in San Jose and their job is in SF so they split the commute? Who knows why people do what they do. I have a really hard time with blanket statements like this to justify huge government subsidies that we all pay for via higher prices. As if the world would stop without the government’s intervention. Please.

        Take Moscow. My new favorite big city. 9 million, yes MILLION people take their Metro every day. The volumes of people at rush hour are unfathomable. Does the government feel the need to subsidize housing in prime areas of Moscow so that low-income people can live there and avoid this commute? No. They do not. And yet the city functions smoothly nonetheless. People figure it out on their own. There’s a lesson in that, somewhere.

  9. Posted by Joseph A

    The issue is that the percentage of Non Market units is far to high ,
    San Francisco should present incentives not penalties to build Low Income Housing ,
    I would like to see 90 % Market Rate , and 10 % subsidized , and so that that city can have the number of subsidized units they should need to increase the total of Market Rate Units ,

    • Posted by SFCitizen

      I think the BMR program in the City does use the 10% number for BMR units or pay into the City fund. The project at 2175 Market has a higher percentage of BMR units because they received construction financing through a special program. The editor of this site should be able to update my post with the link for more information.

    • Posted by Sammy

      Right on Joseph. The percentage of non market rate units in SF is far too high. That means that fewer market rate buyers have to bear the burden of subsidizing more BMRs. The mathematical outcome is that only the rich can afford this market and the working class continues to move out of town. The sad truth of SF is that the middle class should be declared an endangered species. The only way out is to build a lot more market rate housing.

    • Posted by Jimmy The House Flipper

      I would like to see 100% market rate and the city subsidize whomever it pleases via the tax revenues they collect from the real world. Let’s see how long this program lasts when they have to pay with their own money instead of someone else’s!

  10. Posted by Paco

    OMG – we need to figure out a way to give people more free housing – that makes sense! Really?

  11. Posted by Sally

    All you have to do is look beyond the east end and old neighborhoods of SF.

    Lots of good value around

  12. Posted by Hitman

    The Comrades on the BOS are getting exactly what they want – the elimination of the middle class.

  13. Posted by NoeValleyJim

    This report pulls out the entitled units for Treasure Island and Park Merced. I don’t know why the author’s did this, but the number of low and middle income units entitled but not built would soar if they were added back in.

  14. Posted by anon

    No one has the right to live in any area they want. Anyone who disagrees can build me a nice reasonably priced home in Knightsbridge.

    • Posted by Futurist

      I’ve been saying that for a long time here.

      • Posted by anon

        Yet you’ve also been saying that the city should restrict people who want to build more housing, thus you’re pro-city-knows-best-who-should-be-allowed-to-live-where.

  15. Posted by observer

    I am a native san franciscan – been here for 57 years…
    Many of my friends from high school had to move out due to cost, many moved to inexpensive areas of the city such as the outer sunset because of cost. Nobody I grew up with expected to be subsidized just because they grew up here or moved here for that matter. Its insanity… Self-entitlement. It’s almost better in SF not to strive to make a solid middle-income salary as you will have no chance to buy housing. 30% goes to low income and those folks are set for life. Someone has to pay for that subsidy and it will end up being the upper middle income resident who will have no opportunity at all…the other condo’s will be targeted to higher income buyers so developers can make up the difference and underwrite their projects for banks.

    • Posted by Frank C.

      Do you believe that forcing anyone who isn’t wealthy to work outside of areas where it’s expensive (i.e. has bad transit) does NOT contribute in a huge way to terrible regional traffic and traffic inside of SF? Which will only get worse?

      I think there’s a balance. I think we absolutely need some affordable subsidized housing for this reason alone. It doesn’t have to be in SF proper, but it *must* be accessible to good public transportation. That means subsidies will be needed to build it. So we should all pay.

  16. Posted by S

    The idea behind these “affordable” units is that housing is decoupled from speculation and investment. You are not allowed to sell for profit so these units literally become nothing except a place to live. If you don’t have the possibility for profit, lots of artificial inflation of the prices doesn’t happen. You don’t have people creating bidding wars, you just provide someone with a lower cost, stable home.

    I honestly think it’s only “a subsidy” because market rate the unit would sell for a lot more. I don’t think the cost to actually build these units is that far off from what the BMR price really is as most of these new units are not really built to a high standard. It just eats into developers profits a bit but they are still making money enough to keep building.

  17. Posted by zzzzzz

    “…There is very high demand here for affordable housing – each of these units will probably get something like 200 applicants each…”

    It’s called having a “sale.” Sell or rent something for a fraction of what it’s worth, and of course there’ll be lots of takers.

  18. Posted by P&M

    BMRs are that much of a deal for the purchaser — they are regulated in terms of whether you can rent them out or sell them for a profit at market rates. Cheap to buy now comes with a LOT of strings attached. Just wait for the market bubble to pop (much as it did for 2007 recession) and buy a regular place.

  19. Posted by P&M

    ^^ Oops, I meant that they are NOT a good deal. Remember when Obama offered tax cuts for first-time homeowners when the credit froze and the real estate markets began to tank? If you wanted until the market tanked 1-2 yrs. later, you got a much better deal than any tax break.

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