San Francisco already has built or conserved over 20,000 units of affordable housing of various types, which is about 5% of all units in the city. Also, about 40% of housing units citywide are rent controlled, making them more affordable than market rate units.
With its high land acquisition costs, expensive labor and complex regulation, San Francisco is an expensive place to build housing. For example, a new 83-unit project at 1036 Mission cost $56.5 million to build. That’s $673,000 per apartment.
Not only are affordable housing projects expensive to build, but they also crimp property tax collections. Affordable housing projects are often operated by not-for-profits that qualify for a “welfare” exemption from property taxes. In San Francisco, a total of $2.4 billion of real estate is shielded from property taxation due to this exemption resulting in a loss of $28 million in tax revenue to the city, school district and other local government entities. In San Francisco Unified had this revenue, it could afford to give all teachers a 7% raise.
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