Hillcrest's Uptown Planners wonder wtf

SD's housing market is only going one way UPWARD and the idea that more building is going to result in lower cost homes is a marketing ploy by Developers to be able to build more units per lot cheaper. The international value of the US$, SD's acceptance of wealth and SD's near perfect weather will insure that living here is always going to be expensive, especially for all those that don't already own here because those who are in the business of renting/leasing will squeeze their clients for every cent they can get, just like they are doing now, I also believe that we will see property values double, especially for single family homes in cool neighborhoods as ever more of SD's homes are converted to either multi-family use or scraped and developed into multi-story rental units that are too valuable to sell, since they can be rented or leased, since there there will always be a high demand for housing in SD. Consider this simplistic example (using round numbers): A developer buys a single family home for 600k and spends 400k developing the property. If he builds 3 units and they are each worth 350k he has made 15% or $150,000. If he builds 4 units and they are each worth 350k he has made 40% or $400,000. If he builds 6 units and they are each worth 350k he has made 110% or $1,100,000. Yes, the numbers are not exact but the idea is that the more he builds the greater his profits will become since he only has to pay for the land once. Add to this equation is that currently "stick built" construction can go up 6 stories so if you are building and can get the zoning, why not maximize your profits? This is why what we are seeing built is either tall or much taller, since once you decide to pay for site improvements to use steel you can build very tall like the new tall buildings being built along Balboa Park in Hillcrest that are all expensive “penthouses”.
— July 7, 2016 8:29 a.m.

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