A local builder estimated perhaps 70 percent of his colleagues really are encountering dry rot or other unforeseen conditions before requesting to tear out more than the plans said they would. But many never intended to go by the plan: "Thirty percent are savvy developers or architects or permit expediters working the system."

Unlike mere mortals, those savvy, well-connected parties can pass through San Francisco's overlapping regulations like water through a sieve. Being charged with an illegal demolition is the nightmare of any builder in the city. The guilty party may be hit with a five-year moratorium on developing the site. But, notes a longtime Building Department higher-up speaking on condition of anonymity, leaving a derelict building or hole in the ground for years just punishes the neighborhood. So, an in-the-field compromise can be worked out with builders nabbed taking out more than they ought to have. "We might impose more rigorous standards to make a trade-off," notes the higher-up. Seismic or other upgrades could be tossed into the mix. "We may ask you to do a few extra things."

Of course, he continues, it always helps "if you have the right connections and you funnel things to the right people. We might agree to whatever the Planning Department said — whether it's in the building code or not." The Building Department, he concludes, "is an amazing place."

Drake Gardner’s design to replace this building at 125 Crown Terrace has been approved. The next step: “Build it — and not get in trouble with the inspector for taking out more than you designated you were going to.”
Photo on left by Andrew J. Nilsen
Drake Gardner’s design to replace this building at 125 Crown Terrace has been approved. The next step: “Build it — and not get in trouble with the inspector for taking out more than you designated you were going to.”
Former Supervisor Aaron Peskin says the Planning Department’s take on metamorphosing buildings “is tortured beyond a Kafka novel.”
Paul Trapani
Former Supervisor Aaron Peskin says the Planning Department’s take on metamorphosing buildings “is tortured beyond a Kafka novel.”

And this is an amazing city.


The Big One in '06 proved that San Francisco real estate adheres to the law of gravity. But its behavior since then indicates the local housing market is not easily explained via the conventional laws of economics. When the housing supply goes down, demand goes up. But when the housing supply goes up, demand goes up more.

"If you look at housing production in San Francisco, the more we produce, the higher prices go," says Teresa Ojeda, the manager of the Planning Department's information and analysis group. A near-insatiable demand for high-end housing has crowded out those seeking any other kind. "Prices are pretty much determined by ability to pay. If people have money to pay, prices will go up."

People have money. People have so much money, John Pollard says, they're paying millions for century-old cottages, outbidding builders like him who'd blow those shacks up into luxury homes for people with even more money. A bidding war between profligates willing to pay through the nose for the San Francisco lifestyle and house-flipping entrepreneurial builders is just the latest factor driving the teachers, bus drivers, and other salt-of-the-earth types referred to in local politicians' speeches out of this city. As San Francisco becomes the bike-friendly, walkable, green metropolis it aims to be, housing costs will further skyrocket. For decades, however, the city has served as a virtual test case on how to price real estate out of the reach of ordinary people.

Even in the 1970s, San Francisco was still one of the cheapest places to live in the Bay Area. But the demise of the city's industrial economy flipped the script. San Francisco became a corporate hub of the FIRE economy (finance, insurance, real estate), and has now laid out the tax-incentivized red carpet for tech and biotech firms and their well-compensated workforces. In The Transformation of San Francisco, Chester Hartman noted that the typical price of a San Francisco home in 1965 was only $3,000 more than the national average — but $53,000 more by 1980. According to the real-estate website Trulia, the median San Francisco home sale price hit $735,000 in late 2012. The U.S. median is $178,000, per the National Association of Realtors.

The city's indignant nudists recently claimed that an ordinance requiring them to cover their genitalia in public marked the loss of the free-spirited San Francisco of yore. The stark numbers above reveal that city was lost long ago. Unlike development-friendly, sprawling towns like Phoenix, Houston, or even San Jose, vast swaths of San Francisco look roughly similar to how they did generations ago. But looks can be deceiving. This city isn't just inhabited by different people than it used to be, but different kinds of people doing different kinds of jobs and using the city and its housing stock in different kinds of ways. Between the 1960 census and the 2010 edition, San Francisco gained 65,000 residents while losing 31,000 families. All the while, the ratio of renters to homeowners remained constant at 65:35 — though San Francisco is now the nation's most expensive rental market, catering to a far different crowd. It brings to mind, once again, the Ship of Theseus: Does a city remain the same when its residents are replaced in this way? In San Francisco's case, it's hard to argue that's so.


Despite clearly prevailing trends, San Francisco's civic boosters like to claim that ours is a city of socioeconomic diversity. There's even something about valuing that in the General Plan, along with preserving affordable housing. Census data, however, reveals the heavy majority of San Franciscans — some 58 percent — are now impoverished or wealthy. Wealthy people seem to be doing fine and, to its credit, city government has been aggressive about providing housing for the needy. Since 1985, some 1,100 units have been generated via fees paid by office developers. Since 1992, residential developers have been mandated to build or fund an "affordable" unit for every 10 they construct; this has led to 1,600 units. Nice — but 2,700 units represent 0.7 percent of the city's housing stock. And the teachers and bus drivers aren't staying — a thirtysomething couple with those professions might earn in the neighborhood of $130,000 or $140,000 per year. That's too much to qualify for the city's affordable housing programs — but too low to outbid the nouveau riche or developers jockeying for a modest home.

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7 comments
shadethrower
shadethrower

The "de facto" demolitions in this fine city are, however, not confined strictly to economic and policy bastardizations of residential properties. Ironically, both the Planning Department and the Department of Building Inspection are housed in built anew "remodeled" buildings brought to the City by a Texas developer. What is good for the goose is good for .......the rest of us?!?!

sfreptile
sfreptile

This has been the long standing joke in The City for years.  Once developers discovered they could build on the down side of the street, four and five stories in the back became common.  Look at Valley Street.  The major construction was down hill.   

There is a project on the 400 block that is truly reaching for China.  And that Cabana on Noe?  Protecting a couple of studs.  It is a well known game.  Shameless McGee (r.i.p.) was the best in the business. 


The new development on Diamond.  What a joke, the original developer wanted three houses of substance.  The building department recommended four.  


The developers enter public parks and cut down trees to jack up the speculated price for the new development.  Sometime for the good, but sometimes for the bad.  I doubt if they get fined like a resident does.  

This is a big time game, and you better find out, "On what side is your supervisor?"

herterb
herterb

It's business as usual in the corrupt SF Building and Housing Inspection Department. The top people have finally learned they must be more careful in their corruption after two of the heads had to resign in a row. One had condemned a property and then bought it, nothing new. It was rampant many decades ago so a system was implemented to help stop it allegedly. Inspectors were supposed to be rotated in what area of the city they cover every two years. Doubt they are still doing it and the senior people over them are not rotated and obviously the head person isn't. 

There are building inspectors who are contractors who are doing $1 million dollar remodels with just a $50K permit with the full knowledge of their boss and the top people at DBI. 

 The journalists and city supervisors are afraid to write an article for fear they will be targeted by the DBI for inspections of their property. The FBI is supposed to investigate corruption in local government but won't bother, they want headlines for their work.

edilist
edilist

If you are a wealthy developer or client of a developer, your connections to city hall will get you whatever you want in SF.  As the article mentioned, the system is literally designed for these folks.

It does not matter if it's permits, traffic tickets, or city jobs.Sure, it's a less blatant form of corruption...hidden behind forms, city departments, bogus hearings, and such.  However the amount of money involved with this institutionalized corruption dwarfs the overt petty bribery we self-righteously identify in other parts of the world.

If you are a person such as myself, without any connections, you are simply out of luck.  Trying to add one bedroom to a two bedroom house for our second baby has proved fruitless.  So like many others we are likely going to move.  One more family chased out of a city that only really pays lip service to wanting them to stay.

MossyBuddha
MossyBuddha

OK, so this is a nice little story but the argument that creative renovations of buildings on underutilized properties in supply constrained and highly demanded neighborhoods is destroying affordable housing how? stopping an expansion isn't going to somehow make the housing all that more affordable.  (relatively) affordable family housing is in the neighborhoods the big money avoids like bayview, portola, and ingleside, and vis valley. new megaprojects at hunters point and treasure island and the new units out at park merced will take some pressure off and provide people with modern places to live. we'll also build more affordable housing through prop C funds and other inclusionary sources.  is it enough?  probably not.  but to pass off the disagreements of reasonably wealthy people (and with only a passing mention of the tenants who are collateral damage) as some sort of big thing about affordable housing is just silly.

Tami Twarog
Tami Twarog

Great article. Love that pic of Aaron Peskin "tortured beyond a Kafka novel" Indeed.

hplovecraft
hplovecraft

Sounds like you got some skin in this game...

 
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