From the linked "Residential Nexus Analysis": http://sf-planning.org/sites/default/files/FileCenter/Documents/8380-FINAL%20Resid%20Nexus_04-4-07.pdf http://sf-

From the linked "Residential Nexus Analysis": http://sf-planning.org/sites/default/files/FileCenter/Documents/8380-FINAL%20Resid%20Nexus_04-4-07.pdf http://sf-planning.org/sites/default/files/FileCenter/Docume... >The prototype rental unit, also drawn from the Sensitivity Analysis work program is also 800 square feet and rents for $2,500 per month or a little under $3.20 per square foot per month. New rental units are not feasible in today’s market; however, the inclusionary program will be in place beyond the current market cycle and must anticipate development of rental units in the future. The assumed rental rate is higher than is achievable in the current market except under extraordinary circumstances (luxury projects in premier locations, etc.). The rental rate has been estimated as the required minimum level for a project to be feasible, given total development costs, conventional financing terms, and typical operating expenses. The household living in this unit is likely to be paying approximately 30% of income on rent (not including utilities). This translates to a household with a gross income of $102,000 per year. This is a rather interesting claim that I haven't heard come up in this debate before. I'm not sure if it's just because it made more sense to sell condos in 2007 (before November) or because construction costs are actually so high you can't build apartments that cost less than $2500/month and/or $3.20/sf. It seems that research into cheaper building types, and regulatory initiatives to permit those, ought to be part of a solution. Although since the majority of the value of a property in SF is often the land, a land tax might be called for as well.