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"Building straight into the sky is easy." Except, it isn't. Construction costs of taller buildings scale non-linearly with every additional story [1]. Building
by timr 10y ago
"Building straight into the sky is easy."
Except, it isn't. Construction costs of taller buildings scale non-linearly with every additional story [1]. Building skyscrapers costs upwards of $300 per square foot, whereas single-family homes cost a fifth or a sixth of that. It's so much cheaper to build low-rises, in fact, that virtually no developers will take on a high-rise project unless the property is so expensive that it can command luxury prices. This is more-or-less true for mid-rise projects as well, though at a lower price point (~$200 per square foot).
The conversation about planning and NIMBYs is misguided. As the article concludes, the city is out of land. Any new construction requires buying and knocking down something else, and the choices are all various flavors of "expensive" or "inconvenient".
For example, east of Divisadero, the density of SF is actually pretty high:
https://www.google.com/maps/@37.7907112,-122.424097,3a,75y,49.97h,101.71t/data=!3m6!1e1!3m4!1sYg3R-popEOqY7D1nmamSww!2e0!7i13312!8i6656 https://www.google.com/maps/@37.7907112,-122.424097,3a,75y,4...
But west of Divisadero, there are huge sections of the city that look like a suburb:
https://www.google.com/maps/@37.7468355,-122.4598049,3a,75y,254.69h,81.03t/data=!3m7!1e1!3m5!1ssQVb92JRfHr60VH5_AkY8Q!2e0!6s%2F%2Fgeo0.ggpht.com%2Fcbk%3Fpanoid%3DsQVb92JRfHr60VH5_AkY8Q%26output%3Dthumbnail%26cb_client%3Dmaps_sv.tactile.gps%26thumb%3D2%26w%3D203%26h%3D100%26yaw%3D316.5%26pitch%3D-3!7i13312!8i6656 https://www.google.com/maps/@37.7468355,-122.4598049,3a,75y,...
...the problem is, everyone wants to rebuild the dense parts to be skyscrapers (which is very expensive), and transit access to the suburban parts is quite bad. Developers won't build even medium-density projects in western parts of the city, because there's no demand, because there's no transit. Instead, they build higher density in the Mission and SOMA. These buildings will always be expensive, "luxury" units, because at $300+/sq.ft. construction costs the economics don't pencil out otherwise.
[1] https://westnorth.com/2014/03/18/between-rocks-and-a-tall-place-two-height-limits-hold-back-affordable-mid-rise-construction-in-dc/ https://westnorth.com/2014/03/18/between-rocks-and-a-tall-pl...
- x0x0 10y agoWhy is $300/ ft2 construction costs a problem when condos are going for $1k / ft2? Even selling condos for $600 / ft2 would be a major improvement. data: http://www.trulia.com/real_estate/San_Francisco-California/market-trends/ http://www.trulia.com/real_estate/San_Francisco-California/m... then click the wavy graph next to "explore this area" sales price / sqft
- twinkletwinkle 10y agoA quick distinction, you have to build all of a skyscraper but you only get to sell part of it as condos. There are hallways, janitors' closets, fire stairways, etc etc.
- timr 10y agoYes, this exactly. If you can get 70% efficiency in a skyscraper you're doing phenomenally well. Also, the cost of land isn't included in the $300/sq.ft. number (though that becomes a proportionately smaller concern for taller buildings, for obvious reasons), nor the costs of financing, insurance, maintenance, etc. But more to the point, these numbers set only the lower bound on what a unit will sell for. These numbers don't predict the final market price of new construction, but they tell you when a project can be justified.
- x0x0 10y agoHmm, [1] suggests 25% overhead for 30-40 stories. Maintenance is largely irrelevant to the sales price, assuming the HOA/condo association fees aren't wildly out of line with others. Also, these should scale linearly or sub-linearly I'd think. I still don't see an answer to why $300/ft2 (or hell, $500/ft2) construction costs are a problem when condos sell for $1k +- 50 ft2 in the north east chunk of sf. Even $500/0.70 = $714 / salable ft2. Which should make selling prices near $1k a damn attractive proposition. The cost of land goes as (land cost / ft2) / ((1/0.7) x (stories - 1)) so even $5k/ft2 of land cost comes out to $103 per salable ft2 on a 35 story building. [1] https://westnorth.com/2015/04/27/high-rises-land-efficient-but-not-floorspace-efficient/ https://westnorth.com/2015/04/27/high-rises-land-efficient-b...
- x0x0 10y agoReplying to self: denominator on land costs should have factor .7 not (1/.7) so $210. Embarrassed.
- rayiner 10y ago> Instead, they build class I-III in the Mission and SOMA. These buildings will always be "luxury" units, because at $300+/sq.ft. construction costs the economics don't pencil out otherwise. In the long run, that isn't true. A skyscraper has a useful life well in excess of 50 years. If you look at places like Chicago, you'll see that luxury high-rises get renovated 20-30 years in to become mid-range places. Of course, that requires the foresight to have permitted enough high-rise construction yesterday.
- timr 10y ago"In the long run, that isn't true. A skyscraper has a useful life well in excess of 50 years. If you look at places like Chicago, you'll see that luxury high-rises get renovated 20-30 years in to become mid-range places." It really depends. They just gutted 101 Van Ness (a pre-existing 1960s-era skyscraper) and turned it into housing. It's all luxury -- the cheapest units are upwards of $3000 a month for a tiny studio. When developers renovate a building, they ask for what the market can bear, not for their cost of redevelopment. All you can really do is assume that long-term, more housing is good, and less housing is bad. That's fine, but it doesn't change the fact that new construction doesn't help anyone but wealthy people in SF, today. "In the long run, we're all dead."
- harryh 10y ago> That's fine, but it doesn't change the fact that new construction doesn't help anyone but wealthy people in SF, today. If you build more luxury housing it lowers the price of luxury housing so that a marginally less rich person can move to that tier. That marginal move reduces the demand on the next lower tier of housing which should reduce the price at that level. And so on, and so on...
- timr 10y agoThis was addressed by the source article. It happens a bit, but it isn't magic: one of the author's models found that for every 1% increase in housing, rents dropped by 1.7%. Lowering rents enough to make SF affordable for poor people requires construction on a scale that isn't just impractical -- it's economically impossible. No developer would choose to build into such a market with fixed construction costs at hundreds of dollars per square foot.
- kbenson 10y agoAn hour north of SF, my single family home cost me $216 sq. ft. Prices in SF are significantly higher. Trulia makes it look to be ~ $700-$1000 sq. ft.
- kelnos 10y agoI don't mean to belittle your choice as I assume you're happy with it. But please understand that, for a lot of people, living an hour north of SF is too far for their taste. Even to the point of being worth the extra money.
- kbenson 10y agoI think you lost track of the thread at some point. I supplied housing prices at my location to counter the parent's assertion that skyscrapers were too costly as supported by "Building skyscrapers costs upwards of $300 per square foot, whereas single-family homes cost a fifth or a sixth of that." I was not trying to suggest that people move an hour away for cheaper housing, but that even an hour away, a skyscraper at those prices isn't necessarily a bad deal, making it much more feasible in SF.
- imgabe 10y agoThe big price jump is where you have to switch over from wood construction to steel. Once you're high enough that you need a steel structure you may as well build it as tall as you can to get as much use out of the land as possible.