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Applications for new housing in San Francisco hit new low

By J.K. Dineen, San Francisco Chronicle, May 2, 2022

San Francisco Planning Department has received applications for just three projects totaling 62 units being processed during the first four months of the year, according to city preliminary project applications data.

“[P]lanners are expecting several large projects to be submitted in the next few months [but] developers and construction industry leaders say it reflects [negative economic conditions] giving pause to lenders and property owners who might otherwise be lining up future developments.

“The dearth of new projects represents a significant drop from past years. In the boom year of 2015, city planners processed 17 applications totaling 2,084 units during the first four months of that year.

“[I]f the number of new applications coming in doesn’t jump in the coming months, San Francisco could feel the slowdown in 2025 and 2026.

“Chris Foley, a veteran city broker and developer who is in the early stages of planning a major residential project at 620 Folsom St., said … ‘You are looking at $1,000 to $1,100 a square foot in hard costs alone — that’s not even including fees or land values.’

“Planning Department Chief of Staff Dan Sider said the focus has been on getting projects as ready as possible, even if developers are hesitant to start work. The city has about 70,000 units in its pipeline, about 10,000 of which are in ‘preconstruction,’ meaning they could get going quickly under the right circumstances.

“Ted Chandler, managing director of the AFL-CIO Housing Investment Trust, said his group is ready to invest in San Francisco housing development.

“While acknowledging that the spike in material costs and interest rates has created a slowdown, Chandler said it’s a good time for his group to invest.”

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