High construction costs stall new housing projects in San Francisco

Patrick Kennedy, a developer known for building mid-sized apartment buildings in San Francisco and Berkeley, says it is increasingly difficult to make housing projects financially viable, according to the San Francisco Standard.

Kennedy's projects typically include four to five story buildings with 10 to 15 units, aimed at families, students, and downsizing residents.

He describes the current environment as 'brutal,' noting that construction costs in San Francisco are among the highest in the U.S. and possibly the world, with an estimated $1 million required to build a standard two-bedroom apartment.

The city faces a housing crisis marked by soaring rents and homes selling well above asking prices, underscoring the urgent need for more housing, especially affordable options, the Standard reported.

Despite broad agreement on the need for increased housing supply, the high costs present a significant barrier to development, complicating efforts to address the crisis.