For $700 a month, renters will soon be able to live in sleeping pods in San Francisco

SAN FRANCISCO -- In San Francisco where the average rent price is $3,000 - $4,000 a month, renting a sleeping pod for $700 a month is a deal.

"I was living in the Presidio before and was kind of looking for cheaper options just so I could keep working on the stuff I wanted to and working on open-source projects," said Ben, one of the residents and entrepreneurs.

The majority of people who live in the building have the same goal; build a tech start up and make it big. So, paying high rent prices is not part of that equation.

"I'm originally from China, but I just graduated from the University of Illinois Urbana-Champaign and moved here after graduation," said Ruidi. "Almost everybody is a founder. They want to achieve something greater and build something that creates more impact for society."

Each pod is the size of a twin bed, 4 feet tall with two fans, a mirror, and a curtain for privacy.

But after this housing concept went viral in 2023, many here were at risk of losing their housing because the city said the people running it didn't have the right permits.

"There was never anything illegal about the pods. It's just that we didn't have a change of use because this building used to be bank. So, we went through that process for about a year. In the meantime, the planning department at some point said that we can't list it because people were complaining thinking we were renting illegal housing," said James Stallworth with Brownstone Share Housing.

For the first time, we are hearing exclusively from James Stallworth with Brownstone Share Housing, the company that runs the pods. We got a look inside their building, a place he said almost didn't survive because of how long the permitting process took in San Francisco.

"There really wasn't anything that we had to change about the building. If we had to do all sorts of retrofitting to make it safe, I would have accepted that. I'm a human and know we have to provide a safe place to live but there were no safety concerns. There was really no construction that we had to do to improve the building," said Stallworth.

After over a year, he is glad they finally have the right approval for the pods.

We contacted San Francisco's Department of Building Inspections, and they confirmed that on Sept. 5, the planning department issued "a letter of approval for the sleeping pods."

They also asked him to obtain paperwork for their shower stall and fix the front entry lock.

The entrepreneurs who live in the building hope the city makes the permitting process easier.

"It's affordable and convenient and I think it's something that strengthens people doing venture stuff. If this existed three or four years ago, we probably wouldn't have lost so many early-stage startups to Austin, Denver or places like that," said Ben.

Stallworth said they are planning to have a bigger place in San Francisco despite the one year permitting process they experienced.

"We are in the process of opening a place that is five times this size. Early next year it will be opening," said Stallworth.

San Francisco's Building Inspection Department explained the violations:

"(1) File for and obtain a change of use permit with City Planning approval to legalize the installation of the sleeping pods OR remove and revert to last known legal condition. 2) Replace front entry lock with a type that does not require a key to exit in case of an emergency within 5 days. 3) File for and obtain a building permit for the installation of the shower stall. A separate plumbing permit is required. Permit application must state to comply with NOV. Obtain all required inspections to abate this NOV.

On September 5, 2024, the Planning Department issued a letter of approval for the sleeping pods. The Planning Department's Property Information Map has information about their determination and the Planning Department would be your best source to detail the process and timing behind this determination.

On October 13, 2023, a DBI inspector confirmed that the property owner replaced the front door lock so that a key is no longer required to exit.

So items # 1 & 2 have been addressed but item # 3 is outstanding.

As such, Notice of Violation 202313896 remains unresolved and the associated Order of Abatement issued on April 12, 2024 remains in place."