If you have free pricing in perpetuity, then you can build housing that might have a lower margin near term but an overall high NPV over its lifetime.
What do you mean by that? Rent control in SF only applies to buildings built before mid-1979. New buildings built today, whether low-end or high-end, will not be subject to rent control now, or in 15 years.
There was a 2020 ballot initiative to change that so buildings older than 15 years old could be subject to rent control on a rolling basis, but IIRC that failed. (And even if it had passed, that wouldn't explain the last 10+ years of predominately "luxury" building.)
New construction is exempt, though.
https://www.apartmentguide.com/blog/rent-control-vs-rent-sta...
https://rentguidelinesboard.cityofnewyork.us/resources/faqs/...
Yep, those are the definitions. It looks like rent stabilization policies are frequently mis-termed "rent control", though.
I don't disagree that they don't add much to the cost, but they are high-margin offerings - people pay more rent for places that offer these.
http://38doloressf.com/amenities/
Amenities: LEED Gold certified, butterfly garden, outdoor living room with fire pit
Compare that building with the 181 Fremont[2] in SOMA which has a several private lounges, a doorman, a building concierge, and valet parking. Several other building in that area, such as the Avery[3] do have pools. I'd consider that 181 Fremont would still be a luxury offering in a city like Chicago where the housing market isn't insane.
However, despite the range the building offerings, most units still rent out for $55-75/sqft.
[1] https://www.avaloncommunities.com/california/san-francisco-a... [2] https://181fremont.com/amenities/ [3] https://www.theaverysf.com/lifestyle
Contrast that with the more spartan apartment buildings building 30-40 years ago. Basic construction, laundry in the basement was the main amenity. These were clearly built for middle or lower class folks to live in.
Rather than contrasting it to living standards 30 years ago, it makes more sense to contrast it with living standards today in real estate markets that aren't insane. A comparable apartment to 38 Dolores, with similar amenities is Chicago's Jeff Jack apartments[1] which has much of the similar amenities at a fraction of the price (~$1,000/mo for 1bd) - still likely targeting yuppies but in a different tier than Chicago's high end offerings. However something like a building in Chicago's Gold Coast (which has pricing of around ~3,500/mo for bd) includes features that are in 181 Fremont - pool, lounges, concierge, dry cleaning and even larger floor plans than you would typically find [2].
Alternatively you could say that a lot of apartments in SF get away with charging luxury prices for what really should be standard fan-fare apartment because demand is so high. The GP mentioned more succinctly, a lot of units in SF are cheaply constructed building that are actually rented at luxury rates.
[1] https://jeffjackapartments.com/building/ [2] https://www.twowestdelaware.com/amenities-and-features/
It's not legally defined as anything so any developer can build a shoebox with a bathroom and a murphy bed throw in a nice countertop and call it "luxury".
It's also become a pejorative for ANY market-rate housing in cities by NIMBY anti-development types.