Don’t hate the player, hate the game, says Zumper – or rather, hate the top dogs in the game: The latest study of expensive rents indicates you shouldn’t be blaming techies, but rather the people who fund their enterprises. A Zumper study found that without venture capitalist funding, rents in the city would be some 33 percent lower, or $1,069 for a one-bedroom. The logic being that VC funding creates jobs, jobs which attract high income workers, and those high wage workers in turn need places to live that, oh yeah, haven’t been built. Full analysis here.
Meanwhile, city planners are scrambling to work out how to stop the city bleeding out all its non-high-income residents (not low-income, since the standard of low and high incomes is totally out of whack in this town anyway).
Commissioners heard but then delayed for adjusgments a neighborhood preference change for affordable housing that would have prioritized tenants if they live in the supervisorial district of the affordable housing project they’re applying for or if they’ve been displaced in a no-fault eviction — owner move-in, renovation, etc. — or by a fire or natural disaster.
Housing activists railed against the proposal, saying it would give tenants false hope of getting into an affordable housing complex at a time when the city isn’t building nearly enough. They also criticized the conflation of district with neighborhood and asked that smaller areas be used. Commissioners said no one was claiming this was a solution to the housing crisis, but did tell city planners to return with a proposal that redefined neighborhoods.
Commissioners then delayed interim restrictions on market-rate housing in the Mission — for the fourth time now, but this time put it on hold until after the November elections. The restrictions would have added an extra layer of scrutiny from the Commission for projects that displace existing tenants or convert production, distribution, and repair (PDR) spaces. In a sense it is a quasi-slowdown on market rate housing.
Four of the seven commissioners believe controls would interfere with the Mission moratorium on the November ballot so therefore the delay. Housing activists, who showed up at the meeting to repeat their argument that interim controls distract from Proposition I, were clearly thrilled.
And oh man are things ever heating up in the Prop I campaign. Contributions against the moratorium, according to the city’s OpenData site, total some $740,000 for August and September alone. Only $45,765 have been contributed to promote it, nearly half – some $20,0000 – coming from the Mission Economic Development Agency. Meanwhile the California Association of Realtors has given the most to defeat the moratorium, a whopping $237,000, followed by Robert Rosania, best known as the developer of the mega project at 16th and Mission. He gave $180,000.
Those aren’t even the largest contributions to housing-related ballot initiatives. The Yes on A campaign supporting the $310 million housing bond has received $948,000, and several donors are spending tens of thousands both for the housing bond and against the moratorium.
In neighborhood news, TableHopper and Inside Scoop report Bar Tartine’s new owners have decided to call their restaurant Crescent instead because it “summarized the ebb and flow of things, and the birthplace of civilization and food.” The bakery’s Mission restaurant was sold to Tartine chefs Nick Balla and Cortney Burns earlier this year when Tartine merged with Blue Bottle Coffee to combine their croissant and coffee expertise.
But aside from the Board of Supervisors approving much more stringent tenant protections this week, things aren’t looking good for some local tenants this week – Socketsite reported the possible eviction of an elderly couple in a building now going for $1.995 million. The two-unit at 867 South Van Ness was sold five months ago and is now on the market, but the fate of the two 60-something tenants is unknown.
Similar story on 22nd and York, where a recent acquisition seems to foreshadow the eviction of several tenants. If all these evictions are spurring some rage, the Alliance of Californians for Community Empowerment (ACCE) is throwing an Anti-Eviction Block Party at that intersection tomorrow at 1 p.m. “Learn more about the campaign to make your neighborhood a Zero-Eviction Zone! Join us!” reads a flyer for the event.
Supply side housing development is not going to solve the problem. There are currently approximately 675 condos/lofts/TICs on the market in San Francisco. The median price is just shy of one million dollars. Based on recent sales rates, that is more than a six-month supply. (There are also approximately 475 houses currently for sale in SF, with a median price of about $1,200,000 – about a four-month supply based on average sales of about 30 per week.)
If there is so much pent up demand for housing and so many “homeless” high-paid workers, why are there any units available for so long? The demand for unnecessary luxury housing simply isn’t there to the extent that developers and supply siders attempt to argue. There is no way a six-month supply of condos and a four-month supply of houses can be considered a dire situation for those who can afford them. Building more of these types of units will not lower the cost. Developers and their friends argued against an increase in the transit impact fee because their margins are so thin that any increase in cost could kill a project. If current projects barely pencil out selling for around $1,200 per square foot, no for-profit developer is going to build and build and build more supply of condos so that the magic of the market lowers the price to “affordable.”
Most people cannot afford to buy one of these dwelling units, nor will they ever be able to. While it will vary depending on the specific loan type, the amount of the down payment, and the HOA fees, a million dollar condominium costs at least $5,000 and likely closer to $6,000 per month. Most lenders will require an annual income of $180,000 at the low end and $216,000 at the high end. What is on the market is beyond the reach of the vast majority of us. That is why we need affordable housing – and rental housing specifically.
To be sure, there are competing meanings of “affordable,” but for most buyers, a BMR condo is out of reach because of the high HOA fees. Also, if you buy a BMR unit, you cannot sell it and buy a larger (or smaller) BMR unit because the plan is for first-time home buyers only. In other words, there is no BMR mobility. As long as you aren’t forced to sell or foreclosed on because the actual cost really isn’t below market in the long run, once you’re in, you’re in. You won’t, however, get a second chance, should you have a change in family size.