City hopes SoMa development will pump millions into land values—and public benefits

The city hopes that the new neighborhood plan considered for the roughly 17 block-area dubbed Central SoMa will pump property values way up between Second and Fourth Street.

That amounts to tens of millions of dollars in the case of some buildings, but the overwhelming majority of that largesse would go into paying for things like affordable housing, parking, open space, and other public benefits.

Analysts at San Francisco-based Seifel Consulting singled out a handful of model sites in a report released Tuesday from the Central SoMa area and crunched how the proposed zoning changes and subsequent new development would affect their values

Approximate Aberration

For example, changing a 160-foot office building from light-industrial to mixed-use would increase the value of the property by an estimated $10 million. And $6 million of that would end up going into the “value capture” basin of new development for the public.

Under a slightly different use variation, the juice would go as high as $20.6 million, with 70 percent of that ($14.4 million) dedicated to the public.

Small (60-unit) condo buildings could see their value soar between $2.5 million and $5 million with usage changes. Larger buildings, with 120-200 units, would benefit to the tune of anywhere from $6 million to $28 million.

Approximate Aberration

In every case, more than 50 percent of that value goes toward public benefits, even climbing as high as 77 percent in certain apartment buildings.

These examples of course assume that land owners and developers of under-built “soft sites” elect to take advantage of the new options afforded if the plan passes.

All told, the accounting presents a fairly rosy picture of higher density under the plan. On paper, the plan comes out looking extremely good for the city’s general welfare.

Kateryna Fischuk

But of course, neighborhoods don’t exist on paper as columns of numbers, so the inevitable gentrification fears if Central SoMa becomes a Mission-style development hot spot would not be relieved by an accountant’s ledger.

Note that under the plan, the city hopes to add 25,000 new residents, 40,000 new jobs, and 7,500 homes to the neighborhood. But the Draft EIR points out that even if City Hall does nothing, more than 16,000 people will probably move there anyway.

• Central SoMa Financial Analysis [SF Planning]
• City Plans To Add 25K To SoMa [Curbed SF]