In San Francisco, the high price of proximity

Summary:San Francisco's housing market is pricing out the people that high-tech firms need. What can be done? The city reconsiders how small units can legally be.

Supply and demand: that's how the market works, more or less, when regulation doesn't come into play.

But what happens when it does?

San Francisco is seeing an unprecedented level of interest from high-tech companies and their employees, and the small city (population: 813,000) finds its housing inventory bulging at the seams. With an average rent of $2,000, the city is pricing out many of the people -- students, entry-level job holders, service-class folks -- the tech firms need to survive.

Typically, there are three ways to deal with this kind of gentrification:

  1. Add more units, often vertically;
  2. Add more units by subdividing existing inventory;
  3. Let people live in surrounding areas (such as Oakland).

All of these things happen naturally, of course, as market pressures rise. But the city is looking at solution No. 2 above and considering an option previously left off the negotiation table: changing the building code.

San Francisco's existing code stipulates that there must be at minimum 290 square feet in a unit; proposals seek to reduce that figure to 150 square feet. Whether you call them "shoebox" units or "micro-apartments" or simply "tiny," it's clear that there is demand -- from tenants and landlords alike -- for cheaper inventory within city limits.

NPR has the story:

City Supervisor Scott Wiener authored the micro-apartment proposal for people in Huang's situation.

"We have a housing affordability crisis in San Francisco," Wiener says. "Rents are through the roof."

Wiener says he wants to help people who would prefer their own space but can't afford the city's sky-high rents.

"And if we can give them an option that's smaller for [$1,200, $1,400 or $1,500], that's a good thing," he says.

The Los Angeles Times and others have also covered the proceedings.

New Yorkers, Londoners and Tokyoites reading this article will surely scoff at San Franciscans' attitude toward personal space; all three have average unit prices that are even higher than the above.

But the initiative -- also under consideration in Boston and yes, New York -- threatens previous standards on how much personal space is acceptable. Those laws were put in place to reduce overcrowding and stress on surrounding infrastructure, something that Singapore was forced to address when shoebox units took off there.

Photo: Matthew Rutledge/Flickr

This post was originally published on Smartplanet.com

Topics: Innovation

About

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. He is also the former editor of SmartPlanet, ZDNet's sister site about innovation. He writes about business, technology and design now but used to cover finance, fashion and culture. He was an intern at Money, Men's Vogue, Popular Mechanics and the New York Daily Ne... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.