Latest data shows you can’t bring prices down by building more housing

By Tim Redmond : 48hills – excerpt

When prices soften, developers stop building. So that plan isn’t going to work.

A Dec. 29 story by the Chron’s real-estate reporter, J.K. Dineen, who knows the market as well as anyone in town, shows exactly why the Yimby agenda will never work in San Francisco. The story dropped in the middle of the week when news readership is the lowest of the year, so I’m not sure how many policymakers saw it. But it has critical information about the way housing markets really work.

To wit: Developers now think that the market for condos and apartments is “softening” – that is, it’s not rising as fast as it used to – so they aren’t planning to build any more, except at the very high end.

In other words, you can’t bring down housing costs by removing barriers to more market-rate housing – because as soon as those costs come down, the developers (and more important, the speculative investors who finance them) put their money somewhere else…

“Everything that is going forward is falling above the $2,000 (per square foot) price point,” Garber said. Projects with a projected price of $1,300 or $1,400 per square foot are not worth it to developers, he said. “In the short term, we are not going to see a lot of those delivered.”(more)

Can Big Tech Be Tamed?

by Gary Kamiya : modernluxury – excerpt
(includes Photo-illustrations of Tech Titans by Clark Miller)

As the tech industry grows to unfathomable proportions, San Francisco needs to grow to match it. A call to arms for a city under siege.

I. A MIGHTY RIVER

Cities, it’s been said, are like rivers, and San Francisco has always been a leaping, unpredictable one, constantly jumping its banks and fed by the most varied and unlikely springs. I’ve been splashing in this unruly current for almost half a century. But several years ago, something happened upstream. A great deluge of money of a magnitude not seen since the bonanzas of the 19th century began to crumble our protective levees, hoisting San Francisco’s skyline, swamping its housing, stalling its traffic, and profoundly altering its character…

The combined market value of Apple, Facebook, and Google’s parent company, Alphabet, all headquartered within 40 miles of downtown San Francisco, is more than $2.2 trillion—about the same as the gross domestic product of Italy, the eighth-largest economy in the world… (more)

 

 

Condo Seller Gives Up Half a Million Dollars to Help Save the Neighborhood She Loves

By Scott Hutchins : modernluxury – excerpt

A teacher offered her Mission district condo for $500,000 under market value. The only catch: The buyers had to pass her cultural litmus test…

Catherine Lee, a film school instructor who has lived in the Mission district for over 20 years, had a real estate dilemma. She owned two places in the neighborhood—a condo that she was renting out and a two-unit building where she and her ex had lived until they split up. The breakup had catapulted her into a financial dilemma: To keep the two-unit building, she had to buy out her ex; to buy out her ex, she had to sell the condo.

Lee hated to think of losing her first bit of San Francisco—a two-bedroom Edwardian railroad flat on Alabama and 23rd Streets with beautiful hardwood floors, high ceilings, a marble fireplace, garage parking, a great backyard, and location, location, location. She’d bought it in 1993 for $90,000; 22 years later, with the market on fire, it would likely sell for at least 10 times that—in a matter of days, if not hours…

In exchange for a chance at her beautiful condo at a 2005 price, Lee asked prospective buyers to submit to an only–in–San Francisco application process. They had to explain who they were and how they would benefit from the condo. They had to swear that it would be their own home—not an investment or rental—and promise to never complain about Dia de los Muertos. Finally, they had to offer a 10-year “cultural promissory note”: a legally binding, decadelong commitment to provide something of cultural value—theater tickets, writing lessons, organic produce from “your uncle’s farm in Salinas”—to the community or Lee herself.

And so the competition began… (more)

State wades into S.F. waterfront height-limit fight

By John Coté : sfgate – excerpt

State land-use officials are questioning the legality of a proposed San Francisco ballot measure that would require voter approval to exceed height limits along the waterfront.

The measure, which supporters are trying to qualify for the June ballot, would affect at least three major waterfront development projects that are a central part of Mayor Ed Lee‘s vision for growing the city’s economy, including the Golden State Warriors‘ plans for a waterfront arena just south of the Bay Bridge.

The ballot measure is of “questionable validity,” according to a letter sent Monday to City Attorney Dennis Herrera by Mark Meier, the chief legal counsel for the State Lands Commission. The agency, which has authority over state lands, including the San Francisco waterfront, has “concerns about the legality of this proposed initiative” because it would supplant the city’s decision-making authority – which is supposed to be exercised on behalf of residents of the entire state – with a vote of the local citizenry…

‘Fatally flawed’

A separate legal analysis by Robin Johansen – an attorney at Remcho, Johansen & Purcell, which specializes in election law – contends the ballot measure is “fatally flawed” and runs afoul of both state and local law, in part by trying to take away authority from the Board of Supervisors granted under the City Charter without going through the much more difficult process of amending the Charter itself.

The city attorney’s office declined to comment, saying it was long-standing policy not to comment on measures that are before voters…

The Warriors are proposing to build a 125-foot-tall arena on a pair of conjoined piers where there is a 40-foot height limit. The project also includes building a 175-foot condominium tower and two 105-foot mid-rise buildings for a hotel on a lot owned by the port across the Embarcadero, where there is a 105-foot height limit.

The San Francisco Giants are proposing a pair of slender towers that could rise to at least 320 feet as part of an urban village with buildings of various sizes on a 16-acre site near AT&T Park that is currently their main parking area, which they lease from the port and which is zoned as open space.

Pier 70 plans

At Pier 70, a group of developers is preparing to restore about a dozen battered industrial buildings while adding as many as 1,000 housing units and 2.5 million square feet of commercial space, including two towers up to 230 feet, on port property where height limits vary from 40 to 65…

All of the sites are on property that was entrusted to the city in 1968 by the state under the Burton Act, which allowed the city, through what is now the Port Commission, to manage the day-to-day activities on what had been state land…

Under a tenet of common law that dates to Roman times, the waterways of California, including waterfront property, are held in trust by the state for public benefit and maritime use. The state “still remains the ultimate trustee of these granted lands,” Meier wrote in his letter as the top attorney for the State Lands Commission, a three-member panel that includes former San Francisco Mayor and current Lt. Gov. Gavin Newsom

Proponents of San Francisco’s measure, though, say they are looking to ensure that the rules that are already in place – height limits – remain, unless voters decide there is a compelling reason to change.

“All this measure does is give the people the right to protect that waterfront,” Golinger said. “Anything the politicians can do, the people they work for can certainly do too.”… (more)

 

 

San Francisco builders meet on anti-development wave

by J.K. Dineen : bizjournals – excerpt

A high-powered group of developers is meeting today to discuss the emerging anti-development movement that is taking root across San Francisco.

A month after voters rejected a condo project at 8 Washington St. by a wide margin, market-rate housing and office developers throughout the city are facing heavy opposition from residential groups concerned that the city is changing too fast and that the current wave of luxury building is catering to high-rolling tech workers rather than regular folks.

This week Gabriel Metcalf, the executive director of the urban think tank SPUR, sent an email to leaders at commercial and residential developers responsible for the bulk of the new housing and office structures currently transforming the city skyline.

These include Tishman Speyer, Kilroy Realty Corp., Shorenstein Properties, TMG Partners, Related of California, Prado Group, Strada Investment Group, Forest City, Lennar, Build Inc., Wilson Meany and the San Francisco Giants. It also includes Michael Theriault, who heads up the San Francisco Building Trades Council.

The email states: “I think we all can see the forces are gathering. I’d like to invite you to a closed session meeting to talk about 2014, the anti-growth backlash in San Francisco and what we need to be doing.” (more)

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