The $100 number is referring to the acquisition cost. Essentially, housing development is so expensive and risky in SF that the cost of the building has to be e

The $100 number is referring to the acquisition cost. Essentially, housing development is so expensive and risky in SF that the cost of the building has to be exceptionally low for there to be a chance of making an economic profit. So you need to be able to acquire it for cheap because the costs and risk to convert are estimated at $1000. These aren’t just construction costs, but things like hiring an army of bureaucrats to get the approvals from the city, and the possibility that you might have to wait several years to get started while the paperwork gets moving. Think of it this way: you have the opportunity to buy a house, except you can’t live in it for an indeterminate amount of time, it needs some renovations, you might have to rent the basement out at below market rates, and you still have to maintain it and pay the mortgage for however long it takes to sort all this out. So how cheap does that house have to be before you’re interested (and can talk a bank into backing you).