Net Gain in Housing, 1992-2012
Housing Stock by Building Type
Percent of Housing Vacant, 2000-2012
Vacancy Breakdown, 2000-2012
Changes in the Mission, 2000 to 2010
More housing to come to the Mission
| Infographics
Courtney Quirin is a trained wildlife ecologist turned environmental journalist with a knack for photography and visual storytelling. Though her interests span many topics and disciplines, she's particularly keen on capturing multimedia stories pertaining to the global wildlife trade, human-wildlife relationships, food security, international development and the effects of global markets on local environments and cultural fabric. Courtney completed a MSc in Wildlife Management at the University of Otago, New Zealand, where she not only learned how to catch and tag fur seals (among many things) but also traveled to the highlands of Ethiopia to identify the nature and extent of farmer-primate conflict and its linkages to changes in political regime, land tenure, food security, and perceptions of risk. From New Zealand Courtney landed at The Ohio State University to investigate urban coyotes for her PhD, but just shy of 2 years deep into the degree, she realized that her true passions lie within investigative journalism. Since moving into the world of journalism, Courtney has been a contributor to Bay Nature Magazine, a ghostwriter for WildAid, and the science writer for Academia.edu. While at Berkeley's J-School Courtney will focus on international environmental reporting through the lens of documentary filmmaking and TV.
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The most interesting stat is that from 2011 to 2012, the percentage of housing that is “for season, recreational or occasional use” doubled from about 15% to about 30%. It would be great to dig in to this specific stat and break it down further. How do you get that info?
@poor.ass: I am not sure why you characterize the writer as as bitter or unsuccessful, there is nothing in his writing that indicates that.
He actually makes two good points.
1. The housing “recovery” has now led to prices that were previously considered over-inflated bubble prices; and
2. Risking mortgage rates are going to make these prices increasingly unaffordable.
He suggests that this will lead to another RE collapse. My sense is that there are fewer over-extended borrowers right now than in 2008 (because of tighter lending requirements) so domino defaults are less likely. But a flattening or a small dip in the market is certainly possible. A lot of new wealth is flowing into SF so, the SF market may do better than other markets.
One can disagree with the writer, but I don’t see any reason to dismiss him.
Glad to see all the Mission housing in the pipeline. Viva la Gentrificacion.
Do poor people, working people, and minorities make you uneasy? Are you concerned with anything other than maximizing your profit?
Do rich people, successful people, and whites make you uneasy?
Are you concerned with anything other than criticizing those who work hard to make a profit?
Most people who work really hard never get rich,
Most people who are rich didn’t get that way through hard work.
I actually mostly agree with both of you.
I think john is a small property owner who did well, certainly nothing like being born into great wealth, which is entirely different scenario.
Two beers is mostly right too- wealth does not equate to being better than anyone else. There is some/a lot of luck also associated with becoming wealthy. Although if you work hard and smart at it, your luck goes up. And family wealth passes on to the kids is often a curse.
Additionally, there are some great tax benefits to owning real estate. But it’s no more taking advantage of government programs than rent control is. The external reality is what it is. Learn how to use it.
Your 6 out of 10 is noise in your quest to substantiate your earlier claim that more than 50% of rich people did not achieve that through hard work. Strip out the Waltons and the picture changes immediately.
There is of course more to success than hard work. You could say that hard work is necessary but not sufficient. After all, you could work hard digging holes and then filling them in again, but that is unlikely to make you rich.
It’s a combo of hard work and employing smarts. I’d be the first to admit that many have worked harder than me. But they haven’t worked smarter.
We can debate forever who adds more value. But we do not need to, because the market does that for us.
What does make me uneasy are people who use wealth as a sine qua non of their own virtue.
Another canard is the equation of “rich” with “successful.” I’m not referring to upper middle class workers like dentists and lawyers, who do work for their status, but to useless eaters, like the Walton or Koch kiddies, born into billions, and whose only “work” has ever consisted of using their genetic lottery winnings to extract even more wealth from those who actually create it.
One difference between you and me is that I acknowledge that both blue collar and white collar people might be considered hard workers. It seems that you view blue collar people — the people who do your dirty work — are freeloaders. To me the freeloaders are the people born into wealth, who make their money from speculation, asset rent, and arbitrage. You and your ideological soulmates GW Bush and Mitt Romney, seemk to believe that gittin’ born rich is hard work.
But, okay. to play your game: six of the ten richest people in the US were born into unimaginable wealth. Two of the ten richest persons in the US benefited from US taxpayer investment and subsidization of the infrastructure their business’ relied on, and on the taxpayer-subsidized education of the human capital that did their company’s actual work.
Can you source the data behind your assertion that most (more then 50%?) of the wealthy did not achieve that through hard work?
I’d be interested to see some hard evidence for that.
One thing that struck me was the large increase in the percentage of homes that are used for temporary, seasonal or occasional use.
I suspect there are a number of factors behind that, not least the use of AirBnB and other specialist online intermediaries that enable property owners to make more money without losing control of their homes in the way that rent control does.
There’s also the factor of people buying downtown condos and lofts as a second home and/or city pied a terre.
One other thing is clear which this report does not mention. The number of units is slowly increasing and those are all units exempt from rent control. While it is estimated that about 4,000 to 5,000 rent controlled units vanish each year, for one reason or another.
Rent controlled housing units are already less than 50% of the total number of SF housing untis, and that percentage will necessarily continue to decline. At some point in the not too distant future, there will not be a quorum of residents benefiting from rent control for it’s continuance to be viable, either politically or economically.
U sure it’s that low? (% RC units). I think it’s more like 70-80%. Got any stats?
About 75% of rental units are RC, which makes it about 50% of overall housing units in the city.
My figure comes out at 46%, which isn’t so far from your figure of 50%. Either way, the percentage declines every year.
I’ve read (but cannot cite right now) that SF has in total about 370,000 housing units. This seems reasonable if you assume an average household size of two, given SF’s population is about 800,000.
And that there are about 170,000 units under rent control. Obviously excluded are all SFH’s, condos, live/work lofts, post-1979 construction and units owned by some part of the government, a charity, church or non-profit.
The stat I think you are thinking of is that about 65% of SF voters are tenants. I believe this is true but can be explained by the fact that household sizes are larger for rental units. Think all those large 3BR and 4BR units packed with roommates, often two to a room.
U see my last comment under housing is brutal post? What do you think of Oakland vs D10 wrt future appreciation?
I should add that I do not personally use evictions as part of my investment strategy, and have never bought a building with the intention of evicting anyone (except for one case where I wanted to OMI a unit for myself).
Like you, I invest for the long-term, although am also open to an opportunistic profit if that becomes available quicker than I thought.
That said, I think it is very important that Ellis remains as a “final solution” to an unviable building. And the ability to Ellis puts a floor under the value of a building with low rents.
More broadly, Ellis has an important role in gradually changing the demographic of this city so that it becomes more investment-friendly and politically moderate. Both those factors are important to investors in the long run even though I’d agree with you that the more ridiculous land use policies of the city can benefit the shrewd investor.
I figure we win either way, which is all part of what makes SF a great town for building wealth.
I’ll also add that money is not everything, not by a long shot. Having control over your time and (lack of) obligations is much more valuable IMO. One can do well as a small property owner in SF, but becoming very rich, say net worth north of $10 mil is hard to do investing solely on your own (well, maybe when you’re 80 yo, but then who cares.) You start becoming more corporate, getting other investors to invest with you, wholesale Ellis acts, etc. I have zero interest in A) dealing with other investors in my projects and B) being a schmuck and Ellising properties wholesale to flip. (I would support the occasional Ellis act when done in good faith.)
Basically I brought smart and picked buildings where I could add substantial value- added a unit, imcorporated a basement into living space, executed a lot split, condo converted, etc. I also work well with tenants. Never wanted/needed to Ellis act nor evict, as I always worked directly with tenants. Leveraged smartly, and got in the mission at a great time. Once in 03 and again in 05. I’d rather have a few tight, renovated properties with good tenants than a bunch of crap props and lifer tenants, so I avoided that.
I’ve been living off my RE assets for over 10 years now. But besides my efforts depicted above, and as I said before, the extreme market distortions rent control produces, have given me outsized returns. I know some are bitter about the RE situation here, but hate the game, not the player (I didn’t impose RC in this crazy ass city 🙂
I’ve mad decent scratch from stocks as well but Re has three crucial advantages:
1) Easier to borrow and leverage
2) Better tax breaks
3) High running yields while you wait for the appreciation
I quit work a few years ago when my RE was throwing more money at me than I could spend. My vaca properties are both in the US and overseas. I generally manage them either via AirBnB or through a local agent.
What’s your success story? ML needs to hear more success stories and less envy stories.
Nice. It’s amazing how well one can do in SF as a small prop owner, as long as you effectively deal with RC and ride the appreciation train. I’m quite bullish on SF RE over the long term, the next 20 years. Tech is a powerful driver, but not the only one. Especially if you can swing non RC rentals, it’s like printing money (so thanks rent-control-market-distortions.)
Where are your vaca props? Are you hands on managing those (or do you have a real job)? Shit, managing vaca’s is a part time job right there!
In 1997 i bought two rental buildings, in 94110 and 94114.
In 1999 I bought a third in 94103.
Of those, one was eventually Ellis’ed, one was TIC’ed through natural vacancies and the other remains.
The other properties were vacation rentals, personal residences and a 2-unit which I condo-converted.
When and where did you buy your first investment prop in SF?
I don’t claim to know about macro economic issues nor do I have any ability to predict market cycles. So I can only look at an area from the point of few of it’s stock of homes, conditions and location.
Also, I’ve never lost money on a property and I’ve had eight, so I’ve become more averse to risk now that I have got something to lose. Back in the day I was trying to get rich. Now I’m trying to stay risk.
That’s also why I’ve scaled down my rent-controlled properties because that is an additional layer risk of I do not need and, moreover, an unpredictable layer.
Not going south of Cesar Chavez or east of Potrero is an ingrained prejudice in my mind. I’m probably missing out on some deals, but I’m at the point now where I am more cautious and prefer to stick to what I know works.
All that said, I see similarities between the SE of SF and much of Oakland. An important factor might be that Oakland’s politics make SF’s politics look sane. If Oakland spirals towards BK, as may happen in a downturn, I wouldn’t want to be a sitting duck RE owner there.
John, I agree with most of what you said. Mish was rough in 97; I brought first in 03… There were a few loft project in the mish already. 1st prop I brought was in noe in 94, which of course went straight up. Mish did too for me.
Hayes valley is weird in that it went up/Dow/up.
100% agree sketch goes up in boom, down more in bust. Once/if D10 “turns the proverbial corner” then yeah, you get the gentrification bump as well as downside protection of a desirable hood. It’s exactly what I got with my mish props.
Big question, is that gonna start happening in D10. I’m not sure. Not sure about Oakland either, but I’d prefer to be in d10 than Oakland, I think. Can you ferret out a +/- between those two locations? Light rail, a SF Addie, weather, etc??
My feel for investing in more marginal area is that they appreciate faster in up markets, as buyers look to more sketchy areas when priced out of the good hoods. But the bad hoods decline more when things turn down.
There’s probably a critical tipping point where an area goes from marginal to gentrified, and maybe the Mission is at that point now. Back in 1997 when I first bought in the Mission is was pretty grim and I was taking a risk. Now I rent to google employees.
Hayes Valley was another case in point. It was gentrifying in the 1980’s but then we got a downturn at about the same time as crack cocaine became popular. Downhill quickly.
But we had a quake and the freeway came down, and it’s been one way up ever since.
So I’d figure that the prospects for D10 depends on continuing upwards price pressure. Absent that, it’s not an area I want to deal with as a rental in much the same way as I decided not to deal with Oakland.
370,00 is what I’ve read too. But never seen 200k for non RC. Great if it’s that high, but it think it’s more like 100-150k, but can’t substantiate. Yeah 65% are renters. That went down by about 5% I believe over the last 10-15 years, I think. Also good news. So your numbers are possible, as rat packed tenants will skew the numbers of tenants to units vs owner occupied.
A thoughtful article about present local conditions: http://www.nakedcapitalism.com/2014/01/wolf-richter-housing-bubble-2-0-hits-messy-resistance-california.html.
Thanks for that, it was mildly entertaining. The writer proudly bills himself as an executive and start up specialist, but basically just pounds out a whole bunch of sour grapes. Clearly he’s unsuccessful and bitter about it. He gloats about the über silly google bus phenomena, and throws up wildly biased “stats” about a housing bubble. Yes, all you who can afford to buy SF RE will soon regret it when the bubble hits (and I’ll feel better about myself too, btw.).
Well I got new for you buddy boy, this RE boom will go on for at least a couple of years. The December stats he shows are cyclical trends- there are always less buyers end of year. Duh! This dude is a rank amateur, and a bitter one at that. But pretty entertaining, if simplistic to read.
His stats compared December sales year to year.
Y’all should go over to blog socketsite.com to see how it’s done.
Dude, these are journalism students, learning the craft. And this is a non-profit site.
Bitching and complaining about non-profit journalism students reporting on difficult topics is really petty.
If you just want real estate porn form a pro-landlord/property owner echo-chamber POV, wouldn’t you be happier over at CurbedSF?
I agree SocketSite does a good job. The forums are overwhelmingly realtors and landlords, and perhaps a better fit for you than ML. I don’t like every article SS posts, but I don’t bitch about it when I do.
I don’t get you guys — poorass, John, thatguy, Bob, et al — who constantly bitch about ML, yet can’t stay away. What’s with you guys, anyways?
The content is silly. Stop defending people who publish garbage.
The market will determine what is built, and what is destroyed. Stop complaining and get in where you fit in.
I love you two, baby.
TwoBeers, are you suggesting that there is something inherent in ML that means that it is much more tenant-focused?
In other words, are you postulating an intrinsic political bias here as an intentional mandate?
Where do I say that?
If by “bias,” you mean that they report on issues that make you uncomfortable. well,good journalism _should_ make one feel uncomfortable.
If you just want to feel good, what you’re seeking is called “propaganda.”
I’m fine with ML in general. I loved that they started a contest for the google buses, for instance, rather than jumped on the bandwagon of the “aren’t they terrible?” slimeline of the left.
Those who feel differently would probably prefer the predictable left-wing bias of something like the SFBG.
I’m very happy here. You?
Let me put it this way, then: you, poorass, and the other LLs here constantly criticize ML when you don’t like the story they’re reporting. This doesn’t mean they’re inherently pro- or anti- tenant or landlord. But the fact that you’re so uncomfortable with the stories here makes me wonder if you’d be more at home in an decidedly pro-landlord/realtor site like Curbed. That you guts are so unhappy with ML yet are so present here makes me wonder why you are so present here. That you so frequently attack ML seems to be a clue…
I was seeking clarification, TwoBeers. You said earlier that we might prefer a pro-landlord “echo chamber” to ML, which sent me the message that you think ML is unfriendly towards landlords.
I do not think that at all.
Useless report. Source of info? Also, some of the data and the way it’s presented is suspect. But source, man source! Journalism 101 bro.
Data source right there at the bottom, bro.
That is not proper source citing! Come on now!
Neat report. Your developer should program this to scale to mobile devices. It can only be viewed on a large screen.