Developers walk away from pricey Bay Area market, exacerbating housing shortage

J.K. Dineen in the San Francisco Chronicle notes that development of market-rate and affordable housing in San Francisco will slow to a trickle in 2019 because of higher construction costs, escalating fees, softening market, and increased interest rates. Builders are sitting on the sidelines as a result.

“Development is not going to happen,” said Sean Keighran, president  of the Residential Builders Association. There are four strikes and you get only three.”

“Nobody buys land and develops in a downward market. Our guys stopped buying sites a year and a half ago.”

Dineen notes that construction costs in San Francisco have more than doubled in the past five years, and the minimum percentage of affordable housing units required in a development has jumped from 12 to 18 percent, further increasing cost.

San Francisco Chronicle, December 23, 2018