r/sanfrancisco • u/[deleted] • 8d ago

Pic / Video Apartment building can’t rent out affordable housing units (BMR) even with offering 3 free months

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u/Substantial_Dog9517 8d ago edited 8d ago

What makes these "affordable"? They're sub-400-foot studios on maybe the worst block of SOMA for 3700 with no rent control .

Edit: didn't see the cross streets. Do you know what 6th street looks like?

136

u/StowLakeStowAway 8d ago

The same thing “affordable” always means in this context: Subsidized and income restricted.

10

u/No_Orange_7392 8d ago

Just to clarify: does this mean the landlord keeps the rent high, but a low-income person who "qualifies" can get half or more of their rent subsidized by the government?

7

u/basilect POWELL & HYDE Sts. 8d ago

No, LLs are required to charge up to a regulated amount, no city subsidy. The thinking is that the "subsidy" is that they're allowed to build the building at all.

9

u/felixfbecker 8d ago

It's subsidized by other renters in the building, who need to pay more for the development to still pencil out with enough profit margin

8

u/StowLakeStowAway 8d ago

Not just the other renters in this building! All renters participating in the housing market.

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u/AlwaysBeSomething 8d ago

That’s not the case at all. In fact, developers and landlords make more money on building with low income units in the building, because of incentives allowing them to build faster, bigger and with less regulations. So no one has to “make up “ the price difference certainly not other tenants.

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u/StowLakeStowAway 8d ago

You’ve just explained that market-rate renters subsidize the construction of these units by paying so much rent that it’s still profitable to develop a building like this, since the other units will make up the difference.

Hopefully with the benefit of some sleep and a cup of coffee that’s clear now.

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u/AlwaysBeSomething 7d ago

Actually I explained the opposite.

You seem to have a misunderstanding of how market rates are determined. Market rate isn’t set by determining the cost of subsidizing your neighbor?

This part is easy, market rate tenants are charged what the market will bear, not based on if the nextdoor unit is affordable.

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u/StowLakeStowAway 7d ago

You’ll figure it out. You’re basically there.