San Francisco Examiner, February 9, 2019
Laura Waxmann • “Close to 45,000 potential homes are currently approved in San Francisco — the highest number tracked by the city’s planning department to date — but many have yet to break ground.
“ ‘No more bureaucracy. No more costly appeals. No more not in my neighborhood. It’s simple: Affordable housing as-of-right because housing affordability is a right,’ said Mayor London Breed.
“But public disapproval and the slow approval process aren’t the only roadblocks. Constraints on financing and a growing trend of flipping entitlements are significant causes for delays, with some sponsors never intending to build.
“Sean Keighran, president of the Residential Builders Association, cited city departments “working in a bubble’ as exacerbating ‘uncertainty’ already experienced by developers due to construction loans, ‘high land costs, rising interest rates, rising construction costs, and a softening real estate market.’
“Keighran called construction loans the ‘highest risk of all,’ adding that interest rates, now as high as 8 percent, have doubled in recent years, while real estate sales are slowing down.
“The non-profit Council of Community Housing Organizations estimates that it can take up to four years for a for-profit project to secure financing for construction, and entitlements can be sold to other investors or ‘held for years with no firm requirement to build the project.’
“ ‘You can easily increase a property’s value in hundreds of thousands to millions of dollars just by entitling a project,’ said Jonathan Moftakhar, a realtor with Vanguard Properties.” Read more here