Blogger and programmer Eric Fischer has an excellent post up on his site where he looks at: “Employment, construction, and the cost of San Francisco apartments.” It’s worth a good solid read.
What he did was dig deep into whatever data he could find – the data goes back to the beginning of the 20th century in some cases – to try and figure out a solution to San Francisco’s housing affordability problem.
Many (including myself) have argued that, at least part of the solution, is to build more, not less, housing. However, others, such as Tim Redmond of 48 Hills, have argued that building more market-rate housing would simply exacerbate the current situation.
In Eric’s analysis, he looked at everything from median rents and new housing units constructed (above graph) to annual wage growth and income inequality. I particularly liked his summary of the city’s various building booms.
In the end, here’s the conclusion that he came to:
“In the long run, San Francisco’s CPI-adjusted average income is growing by 1.72% per year, and the number of employed people is growing by 0.326% per year, which together (if you believe the first model) will raise CPI-adjusted housing costs by 3.8% per year. Therefore, if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year). If visual stability is the goal instead, prices will probably continue to rise uncontrollably.”
By visual stability, he is referring to maintaining the current urban fabric of San Francisco just the way it is. In other words, he is making the link between preservation and affordability in a prosperous and growing city.
Intuitively, this makes sense to me. It’s unrealistic to think that you can maintaining some level of housing affordability without allowing supply to increase alongside demand.
At the same time, I do not believe that preservation needs to equate to no changes whatsoever. Urban preservation, to me, should be about dutifully respecting the past while still looking firmly towards the future. And that’s how I believe successful should be approaching this problem.
This morning I stumbled upon an old New York Times article from August 7, 1983 called: The Empire and Ego of Donald Trump.
Here’s an excerpt you might find interesting:
The essence of entrepreneurial capitalism, real estate is a business with a tradition of high-rolling megalomania, of master builders striving to erect monuments to their visions. It is also typically dynastic, with businesses being transmitted from fathers to sons and grandsons, and carried on by siblings. In New York, the names of Tishman, Lefrak, Rudin, Fisher, Zeckendorf come to mind.
And now there is Trump, a name that has in the last few years become an internationally recognized symbol of New York City as mecca for the world’s super rich.
“Not many sons have been able to escape their fathers,” said Donald Trump, the president of the Trump Organization, by way of interpreting his accomplishments. Three of them, built since 1976, stand out amidst the crowded midtown landscape: the 68- story Trump Tower, with its six-story Atrium housing some of the world’s most elegant stores; the 1,400- room Grand Hyatt Hotel, and Trump Plaza, a $125 million cooperative apartment. And more is on the way.
“At 37, no one has done more than I in the last seven years,” Mr. Trump asserted.
As I read this, 3 things came to mind.
1) One could argue that, as real estate development institutionalizes, the megalomanic and dynastic nature of the business is being somewhat muted.
2) I hope we are well beyond the point where a “dynasty” has to be transmitted only through men. We are, right?
3) Trump sounded the same at 37.
If you’re an architect, developer, or someone else in the business of building buildings, chances are you have an extensive mental list of things that you would think about before buying a piece of real estate. I know I certainly do. These are things you learn over time – sometimes by making mistakes.
Depending on the type of real estate, this list would vary. So this is not going to be a comprehensive list of things to consider, by any means. But today I thought I would mention 3 things that a lot of people might not think about when buying a new condo, particularly when buying pre-construction off drawings.
Noisy Adjacencies:
What’s around the suite? Elevator shafts, mechanical rooms, and gyms all create noise. There are measures to protect against all of these noises, but that doesn’t stop me from worrying about these sorts of things. For instance, in my experience, some (many?) condo gyms don’t have the right kind of floor to deal with dropping weights. In these cases, something is usually done after turnover to address the noise complaints.
Exposed Overhangs:
Does the suite overhang the floor below or sit on top of a space that is exposed to the elements, such as a loading bay or walkway? If so, you might get a cold zone if it hasn’t been properly insulated or heat traced. Of course, most projecting condo balconies also create a thermal bridge that can create a cold zone around it. But the first example could be worse. If you live in a place that doesn’t have subarctic winters (Toronto) this may be a moot point.
Transfer Floors:
The most efficient way to build a multi-family building is to repeat the same floor plan as you go up the building. This ensures that everything runs in a straight line. The minute you create stepbacks and offsets, you then need to start “transferring.” This means that structure and services will need to be brought from one location of the building to another. This can lead to deeper structural beams and additional bulkheads which could then impact ceiling heights in the suites. This won’t always be the case, but something to think about when you see dramatic changes in the building’s form next to your suite.
Again, this is not a comprehensive list, but these are some of the small – perhaps anal – details that I would think about if I were buying a condo. Feel free to add other items in the comment section below. They don’t have to be anal-retentive in nature.
If you’re on the building side, you work to get ahead of these issues by, for example, anticipating where you could need additional height for transfers and sound attenuation (such as around mechanical spaces). But buildings are complicated and sometimes things happen. It’s a long way from initial sketch to finished occupied building.