More on the Harding Theatre

Today's Examiner also covers a few of the details surrounding the Harding Theatre being put back on the market.

"Developer Michael Klestoff said he still plans to knock down the rear portion of the building to make room for a nine-condominium development, while selling off the front part of the building, which contains the single-screen theater he and co-owner Patrick Stack agreed to preserve after a long battle with neighbors."

They also spoke to Supervisor Mirkarimi, "who brokered the compromise in which the developers agreed to scale back the size of their condo development and preserve the important parts of the old theater. Mirkarimi says the price was too high. The owners paid $1.6 million for the entire building in 2003."

"The price is so high it will likely dissuade any buyer who has the community interest at heart," said Mirkarimi, who represents the neighborhood at City Hall.

Well, what did you think would happen? Did you think that Klestoff would just roll over and give it back to the city for $1.6M? He's splitting the lot on Divisadero from the one on Hayes, which is probably worth close to $1M on its own, and selling the front theatre building (on Divisadero) for $2.35M. If anyone was really concerned about it, why didn't they deal with it two years ago? The real estate market has changed and if anyone wants this building, they will have to come up with market rate finances. Plain and simple.

I would love to see a theatre in that location, but I'm also realistic about what is destined to happen when neighbors wait too long to complain and think that they can turn back the clock. It would be setting a really bad precedent for future housing development if the city tries to determine what a property should be sold for. All that will do is create a more vicious market among the properties that aren't on the city's radar. Once again, Econ 101.

Census numbers show The City is one of a kind

The Examiner today discusses the latest census figures, finding that "San Francisco is a magnet for well-educated white-collar workers and new immigrants, but its population of poor residents has grown and it has a lower percentage of households with children than any major county in the nation, according to new Census Bureau statistics released Tuesday."

"Perhaps, the most striking statistic — and one The City has been grappling with in the last year — is the extremely low number of children in The City. Only one in five city households has a child — the lowest figure of any major county in the nation. Supervisor Bevan Dufty chalked the figure up to poor school test scores and the fact that San Francisco has such a large lesbian and gay community, which traditionally has not had children in large numbers. But Dufty is hopeful that those numbers will reverse."

There is an additional piece in the Examiner about how this relates to housing. "In fact, only posh neighbor San Mateo County topped San Francisco's median home price of $661,904 in 2004 among 236 large counties around the nation. Hidalgo County had the lowest median price."

Leland Avenue coming back to life

An article in today's Examiner discusses changes to the commercial center of Visitation Valley, including new housing.

"A key component in the redevelopment is the now-closed and contaminated Schlage Lock plant at the foot of Leland Avenue along Bayshore Boulevard. Plans call for a mix of housing and retail on the 20-acre site, which closed in 1999 after laying off hundreds of workers."

"Meanwhile, Adam Varat of The City's Planning Department said a $75,000 grant from the Haas Jr. Foundation will pay for a design plan to beautify Leland Avenue with trees, benches, lighting, new crosswalks and sidewalks. The redesign is part of The City's new "greening" initiative."

Visitation Valley is a neighborhood that doesn't have the cache of a neighborhood like Glen Park but offers many great benefits, including great freeway access. Many people who have been priced out of neighborhoods north of I-280 have moved into Silver Terrace or Visitation Valley. One of the most popular benefits is the proximity to McLaren Park, which is one of San Francisco lesser-known treasures.

For a Google Map to Leland Avenue, click here.

SF Tenant's Union continues protests at open houses

On San Francisco's first sunny weekend in months, some folks decided that the best use of their time was to picket open houses...

BeyondChron has an article on Sunday's protests at a Potrero Hill property.

"The organization has been using such pickets in recent months to inform and deter buyers who approach buildings where tenants have been evicted through the Ellis Act. Picketers have set up in front of these buildings during open houses, holding signs, distributing flyers and talking to potential buyers."

I guess I keep mentioning this short-sighted behavior to highlight the fact that too many people are fighting the wrong fight. They're fighting the wrong people. Why should the owner of the building on Potrero Avenue (in the article) be forced to do the city's job of subsidizing low-income housing? With rent control, there are very few choices for landowners. If this landowner needed to get out of the San Francisco market (for whatever reason) and they put this building on the market with all of the units occupied, the difference in sales price would be hundreds of thousands of dollars. Yes, that's plural. Hundreds of thousands. This may be this family's only property. This may be their retirement money. Should they not be able to take advantage of a free market?

Again, I do not condone evictions. I believe that those who are unable to compete in a free market should be subsidized by the city. But landowners are being forced to fill that position in San Francisco, and it's not fair.

"Some of the picketers are particularly sensitive to the issue of eviction. The 40-something Mecca remembers a large-scale displacement in his working-class neighborhood when he was growing up in South Philadelphia. He says his work in housing advocacy is inspired by a larger social problem. "I think this is all part of that sense of entitlement that people with money have," he says."

So, let me get this straight... Landowners are supposed to do the city's job of subsidizing housing, AND they have a sense of entitlement? I think the only fair answer here is that they are entitled to take advantage of the market conditions just like everyone else. This location was likely VERY inexpensive when it was last purchased (due to being on a busy street and in a previously less-desirable location). Someone took the risk to purchase the building, someone provided five units of housing for many years, and now they may just need to move into different investments. Shouldn't that be their prerogative?

In the end, the owners risked their savings to provide much-needed housing. What did the tenants risk? The same thing that all tenants risk: the potential loss of their home at some point in the future. It's just the nature of being a tenant, as much as that concept is lost among certain folks in San Francisco...

San Francisco opens two arts high schools

Schools and real estate tend to go hand-in-hand, at least for families with children. The Examiner today has coverage of two new arts high schools that are opening this fall.

"The Academy of Arts and Sciences is the offspring of The City's popular School of the Arts — without a requirement that students audition to attend. Metropolitan Arts and Technology High School is a replica of another charter school, City Arts and Technology High School."

"Both schools will open with only a full freshmen class of 100 students, with plans to add another grade level each subsequent year in order to slowly grow to full size of less than 400 students, serving grades 9-12. While other small high schools exist within The San Francisco Unified School District, a typical high school has 1,000 or more students."

Are fixer-uppers a good deal in today's market?

Dian Hymer has a piece today on Inman News about purchasing fixer homes in a rapidly appreciating market.

"The key to success is being able to walk away from a project that doesn't make sense. If you pay too much going in, you'll make less when you sell unless you skimp on renovations or home prices escalate. Don't be too quick to wrap up a deal. Successful real estate investors often make offers on hundreds of candidate properties before finalizing a purchase."

There's no question that houses in San Francisco have been selling for extraordinary prices lately, and with a little paint and some furniture a seller can make even the biggest fixer can look like it's in move-in condition.

Make sure to do your inspections. There's nothing like having another set of eyes (a professional, too!) to help you assess the fundamentals of the property.

It is still possible to find fixers that can sustain a significant (and costly) remodel. It just takes a good eye, and some patience.

SF Tennis Club to become housing?

The San Francisco Business Times is reporting that a developer is in contract to purchase the San Francisco Tennis Club with the intention of going through the necessary steps to convert the property into 400 units of housing.

"The property has a 180,000-square-foot, four-story building that has 12 indoor courts and 12 outdoor courts, plus a restaurant, pro shop and other facilities. Owners ClubCorp of Dallas recently repaved the courts, but the building will likely be bulldozed to enable Pulte to build anew on the real asset: 2.5 acres of prime land just 2 blocks from SBC Park."

The interesting, if not humorous, side to this story is that it will be hard to argue that any underserved (no pun intended) classes of people will be displaced here. Tennis is not known to be a sport that attracts the less-fortunate. The biggest hurdle will be getting the property rezoned for residential, something that could take years unless the Planning Department, the neighborhood, and the Supervisors cooperate.

It's outside of the Rincon Hill development area, so Chris Daly's developer surcharge would likely not apply. Expect him to scream about something, though, as it is within his supervisorial district.

According to the article, the developer is paying $30 million dollars for the site.

There is also further discussion of the Flower Market sale and mentions another that another office building is in contract with the intention of converting to housing.

It's looking like developers are finding ways to make housing work for them in San Francisco. With any luck, the city government and the SOMA neighbors will find a way to facilitate it, and we will start to see the disparity between housing and housing need start to decrease.

More housing = less evictions. Work out the math, Chris Daly.

And no, that developer did not just pay $30M for the SF Tennis Club site so you could argue for low-income housing. Not unless some city subsidies are going to cover the difference (which never happens). You'll get your required 10% affordable quotient (40 homes, in this case), and the city will have up to 400 buyers that don't have to look at TICs, which will result in fewer evictions.

'Cuz remember, Chris, that's what it's all about, isn't it?

Prices of Homes Sold around San Francisco

Once again, here's the link to the Chronicle's weekly list of homes sold around San Francisco.

Seller has the right to say no

Robert Bruss answers a reader's question today in the Chronicle about a seller's obligation to accept a full-price, all cash offer.

"...a home seller does not have to accept a full-price, all-cash, no-contingency purchase offer even at the full asking price specified in the listing of the local multiple listing service."

As many buyers who have been around the San Francisco market are aware, it's very common for sellers to have expectations far above a property's list price. You'll often see the line "seller reserves the right to accept, reject, or counter any offer." As Mr. Bruss points out, this is not a necessary addition to an MLS listing (unless an agent's broker requires it within their office), but it does serve to highlight when an asking price is far lower than that seller's expectations.

Real estate is all about negotiation and market value. If you know the market and you see something that's too good to be true, then it almost certainly is. That doesn't mean that bargains and opportunities don't come around every day in this town. You just have to know the market well enough to know when it's time to jump on something great.

There are many reasons why a property sells below market value, but an aggressively low asking price is rarely one of them.

Funny money for mortgages getting a hard look

There is a synicated piece in the Chronicle today on a Nevada company's program to 'rent' you a bank account full of money when purchasing a home.

"Need a hundred grand on deposit to convince a lender that you deserve a million-dollar mortgage? You've got it ... even though you haven't really got it, because you "rented" it from a company in Nevada for an up-front fee of 5 percent -- $5,000."

You don't actually 'get' the money. They rent you an account and verify to anyone that calls that the money is yours.

The article goes on to discuss the FBI's potential investigation of this company for fraud, of course.

What this 'rental' seeks to solve is the problem of having enough reserves to satisfy mortgage lenders for the size of the loans that people are taking out these days to purchase a home.

If you need a $900,000 mortgage (on a $1.2M home, for example), the bank will expect to see somewhere around $100,000 in reserves in the bank AFTER you have made your downpayment and closed escrow. This makes perfect sense, but when so many people are stretching to afford housing these days, they often can't afford to keep that much money in the bank.

The banks are basically interested in seeing six months' worth of all of your payments at-the-ready. The sources for this money could include savings, stocks, life insurance, and 401k or IRA monies as well.

The other 'service' that this company was providing was a 'verification of employment' for a fee. If you have just lost your job but can legitimately afford the home you're in escrow for, the bank will pull the loan if they can't verify that you are currently employed. Even if you have taken a sabatical (a voluntary maternity/paternity leave, for example), the banks look down on that and will want to see two years of job history prior to lending you any money.

I don't condone what this company was/is trying to do, but it does offer the opportunity to see some of the pitfalls that you might run into when looking to purchase a home. Talk to your mortgage broker as far in advance as possible and give them as much info as you can. It will save you a lot of heartbreak in the long run.

Greenspan: Investments Won't Soar Forever

Alan Greenspan on Friday reminded folks that home and stock prices will not rise forever and are subject to price fluctuations. SF Gate has an Associated Press article on the subject this morning.

"History has not dealt kindly with the aftermath of protracted periods of low-risk premiums," Greenspan said.

CBS Marketwatch has an additional piece from Saturday's final day of the Jackson Hole, WY Fed Policy meetings.

"As the housing boom ends, housing prices "could even decrease," Greenspan said."

He didn't say anything about a 'bubble', nor did he say anything about economic disaster. Just that housing prices 'could even decrease'...

Yahoo! News also has coverage on the Jackson Hole meetings.

In some hot markets, lottery is ticket to home ownership

In another piece from CBS MarketWatch, the Mayor's Office of Housing is profiled as a lottery system for affordable housing.

"Here, in the land of the $726,900 median-priced home, people earning an average income can afford about one square inch of house, so they either remain renters, call on more affluent family members for help to buy, or vie with other desperate owner-wannabes to buy units at below-market rates through city programs aimed at first-time buyers."

This is exactly what I was talking about earlier today with regards to deed restricted housing. It's affordable now and will remain affordable forever. This is good for folks wanting to get into the market, but you will not build any equity at all. It's merely a way to control your destiny at an affordable price. The sales price (when you sell) only increases from your purchase price based on actual costs of improvements plus sales commission and transfer tax. Not a penny more.

As an example, there are beautiful lofts in Potrero and South of Market that have sold recently for under $200,000. They originally sold in the late 1990s and the owner was unable to sell for more than what they paid plus commission and transfer tax. There are entire loft buildings, by the way, that are affordable owner-occupied housing, too...

Don't get me wrong, it's a great option for some people, but I just want everyone to understand the complete picture and that it's not the answer for everyone.

Added 8/27 - SF Gate has a similar article on this same topic, discussing some of the affordable housing projects that are coming online soon in San Francisco.

If you're interested in this type of property and meet the criteria, get on the list with the Mayor's Office of Housing ASAP and hope that your tickets gets pulled in the lottery. 10% of every new development is required to be affordable housing, and those units will go to folks who are preregistered with the city.

For more information on the Mayor's Office of Housing, visit SFGov.org.

New players overshadow old markets - Usual suspects in real estate cycles become less volatile

CBS MarketWatch has an interesting article on why the San Francisco real estate market (among others) will not likely suffer a significant recession due to the speculators moving on to places where land is readily available (like Las Vegas).

"Now places like Las Vegas, Phoenix, Bakersfield, Calif., and Naples, Fla., are supplanting real estate's usual suspects. These burgeoning regions are now on today's cutting edge in land speculation."

"So what's to come for the big names? For one, smaller inventories and steadier price hikes -- not to mention the assumption of greater risk by the newer markets -- seem to be insulating West Coast and Northeastern cities from the threat of a much-feared real-estate bubble."

Now, other than my perpetually optimistic view of things, it's nice to see someone else out there showing WHY I have reason to continue to see the brighter side of San Francisco's real estate market.

"Even though Las Vegas and Bakersfield have set records for price increases in recent months, the usual suspects have been rising at a more measured pace."

Just what Greenspan likes to say... Measured pace... Sounds like what I've been saying all along...

Behind the housing hype - SF Bay Guardian

The Guardian has a piece this week about their perceived shortfalls in Mayor Newsom's plan to create more affordable housing.

"The new initiative, dubbed Home 15/5, calls for the construction of 15,000 housing units over the next five years, with a little more than a third (5,400) to be affordable to low- and moderate-income households – currently defined as those earning up to $76,000 (low) to $114,000 (moderate) a year for a family of four."

"But the city needs another 12,637 affordable units by next year, according to projections included in the General Plan's Housing Element, a 250-page policy guide developed by the Planning Department and approved by the Board of Supervisors and state officials last year."

"Not all housing is good housing," Julie Leadbetter, of Homeless Advocates of the Mission, told the crowd gathered on the steps of City Hall that day. "We have to ask, who's this housing good for?"

I know Julie personally, and although she means well, I completely disagree with her. We need to continue to create deed-restricted (affordable/low-income/no-income) housing, but we need housing at ALL LEVELS to prevent what they are really worried about: evictions.

Look at it this way: most TICs units are what buyers are looking for... They are 2-4 bedrooms, large square footage, original details (Victorian, Edwardian, etc), great locations, and the list goes on. If that's what the free market wants to buy, then the free market will find a way to buy those units. But, realistically, if there were sufficient units available in other types (read: new) buildings in other locations, people would move to those locations where prices would likely be more reasonable. That would take pressure off of the current rental units.

One other thing that is lost in this media battle: affordable for-sale housing is DEED RESTRICTED. If you buy at a reduced price, you will not make ANY money on that unit when you sell. You will gain the benefits of a mortgage tax write-off, but you will not be able to take advantage of market appreciation. This is not the American dream that most buyers are expecting. They just assume that they get a good deal and they sell and make money.

We need this housing as much as market-rate housing, but why not build enough market rate housing (while increasing housing density along transportation corridors, too!) to bring prices down? That's what this is all about. Supply and demand. Econ 101.

This debate should not be about making money, but unfortunately it is. And it's all about that supply/demand equation. If you can shift that balance, you solve the problem (or at least begin to solve the problem).

"Supervisor Maxwell has already been holding Land Use Committee hearings on the discrepancy between definitions of affordability, and on affordable-housing development scenarios. Supervisor Mirkarimi wants to see developers include more low-income units with their projects. "We need a greater inclusionary rate, so we don't have to continue fighting these fires," Mirkarimi told us. "And we need to create more opportunities for middle- and working-class families to own their own homes.""

Activists, Supervisors and attorneys can continue to fight about this (and the above-mentioned 'fires') till the cows come home, but all it will do is distract everyone from the real solution and cost both sides a lot of time and energy.

Chronicle’s Front-Page TIC Story Ignores "Victims"?

The sensationalists at BeyondChron have a complaint piece today about the Chronicle's coverage of TICs.

"In Thursday’s Chronicle story, “Strangers sharing mortgages,” it is not until the 35th paragraph of a 40 graph story that readers are informed that “TIC’s displace renters and erode the city’s stock of affordable housing.” Up to then, the article largely resembled a sales brochure for the real estate investors and agents who profit most from the TIC industry (even sales brochures cite some of the risks)."

I know I am probably beginning to sound pro-TIC or even pro-eviction, but that's not the case. I just want to highlight the fact that evictions are NOT about TICs. Evictions are about lack of housing stock. If we keep fighting about TICs, how can we possibly focus on building more housing?

When will the 'us vs. them' attitude take homebuyers into account? The majority of homebuyers are currently tenants and they are TIRED OF RENTING. They want to own property. They want to have a say in their own destiny. Instead of hoping that Ted Gullicksen can create a protest or Brian Basinger (AIDS Housing Alliance) can incite a riot on their behalf, they are purchasing a home in whatever manner they can. They have no evil intentions. They just want a home.

Why are first-time homebuyers not "victims"? Because they have jobs? Because they have different priorities than lifetime tenants? That's just patently unfair to make a statement like that.

Even better, the story continues by saying that "With the housing boom starting to wane, expect the Chronicle news section to engage in even greater distortions to keep its real estate advertising revenue flowing."

Maybe this writer should get out on a Sunday to see how many buyers make up this 'waning' housing market... Or ask the 27 buyers that just wrote offers on one Noe Valley property this week...

Two new projects hope to bring life to Bayview area

The Examiner today has an article on a proposed 341-unit condominum complex on the site of the now-defunct Coca-Cola factory at 5800 3rd Street.

"The project is meant to be family-oriented, said Bob Kagan, senior vice president of developer Levin Menzies & Associates, with one- to three-bedroom apartments and townhouses and play areas for kids. He said the prices will start at around $500,000 to be affordable for young families. The company plans to offer financial assistance to business owners who wanted to move into the retail space, perhaps opening a café or restaurant."

"The project is expected to go to the Planning Commission for approval Thursday."

The light rail on 3rd Street is supposed to open "next year," but that will create many new opportunities for developers to create housing along that corridor. And with such good transportation, it can be a viable option for people without cars.

The second project is just down the street... "It's on the heels of another large project just two blocks away, approved two months ago. Armstrong Place is an entirely affordable project, with 256 for-sale and rental units — half for seniors — that nonprofit BRIDGE Housing plans to build at 5600 Third St."

S.F. Flower Mart vendors consider bid from developer - Part 2

As I posted earlier, the SF Flower Mart (@ 6th Street/Brannan) is considering selling a portion of its land to a developer who whose intention is to build housing. SF Gate has a detailed article on the topic today.

"...the 88 shareholders of the cooperative that controls the west end of the Flower Mart have received ballots asking them to authorize the sale of their portion of the site to AvalonBay Communities, a real estate investment firm in Virginia."

You will recognize the AvalonBay name from other projects in the South Beach/SOMA area, most of which (I believe) are rental housing.

Predemolition sales offer help-yourself, home-hardware bargains

Carol Lloyd's Surreal Estate column on SF Gate today covers the world of predemolition sales.

"That's right -- this sale is taking place at a 4,000-square-foot home in Portola Valley, a sprawling 1950s ranch house that was remodeled only five years ago and slated for demolition this month. It features a gleaming granite and oak kitchen, hardwood floors, three new tile and oak bathroom vanities and old-growth redwood siding, among other things. And all of it -- from the subfloor to the roof gables -- is available at bargain-basement prices as long as you're willing to write a check, rip the stuff out (or pay someone to do it) and cart it off."

I guess this would appeal to the do-it-yourself-er in all of us...

The best part of the article is the list of recycled resources at the bottom. My favorite is Ohmega Salvage in Berkeley...

Quake insurance could get cheaper

An article in SF Gate today discusses how The California Earthquake Authority is looking to have earthquake insurance rates cut by 22%.

Among the attendees in this discussion is Governor Schwarzenegger.

"The reduction is being proposed largely for two reasons. First, scientists have determined that earthquake hazard probabilities, along with the risk of property damage, are lower than previously thought, and the authority is required by law to base its rates on the best available science. Second, the cost to the authority for reinsurance, or insurance for insurance, has sharply fallen."

The argument, for the most part, among folks who do not carry this insurance (like myself) is that premiums and deductibles are too high to merit having the insurance at all. For most of the victims of the Northridge quake (SoCal), their damage did not exceed their deductible, leaving them with no benefits. Of course, since earthquakes are not covered by your traditional homeowner's insurance, an earthquake could be devastating for many (most?) homeowners if they do not have adequate savings to make those repairs.

Supe proposes new TIC lottery system

Bevan Dufty is proposing a new TIC lottery system whereby folks who have made it into the lottery process will have improved chances after each year when they are not chosen. An article in the Examiner this morning discusses one TIC owner's concern that he could be waiting indefinitely to get the lucky pick.

"Peter Holden, a San Francisco clerk who 20 years ago bought the four-unit Hayes Valley building he lives in, said he hopes Dufty's new plan goes ahead because it offers some certainty that he can eventually get out of the landlord business without having to sell his property."

"Under the old system," he said, "I see my chances decreasing forever."

San Francisco's Bunny Slope Mentality

Well, there's one bride and a few monks that are happy, but the rest of us are pretty bummed out that Icer Air 2005 has been cancelled by the City.

SF Gate's Culture Blog rips city government a new one, as we all should.

"How is this event any different from a major movie studio closing down a couple of streets so The Incredible Hulk can blow up a few cable cars? At least with the Moseley plan the public is invited to enjoy the free entertainment, instead of being shuffled away by a bunch of overprotective studio types."

I know that the folks over on Potrero Hill offered to welcome the event with open arms... Why the heck not?!?

I know that I live in a city so I can say IMBYP (In My BackYard, PLEASE!). If I wanted seclusion, I'd move to the country.

My brother got married at the Flood and I would have considered it a welcome addition to the reception if Johnny was throwing a party nearby...

The SF Gate article also has a great foot-in-mouth line from Supervisor Alioto-Pier, “This is the only responsible thing to do,’’ she said. “You can’t do an event in San Francisco and not discuss it with the neighborhood groups, and not abide by the conditions of the permits,’’ she said. “San Francisco’s not for sale.’’

Not for sale? Hmmmm....

Strangers sharing mortgages - Many would-be homeowners say TICs are worth the risk

SF Gate has yet another story on TICs and the upcoming individual mortgages.

"One of the few tricks to getting into the superheated San Francisco housing market has been the tenancy in common. In so-called TICs, co-owners share a single mortgage on a property. As a result, the owners are intertwined financially. If one owner can't make the payments, the whole group can suffer.

The practice, already widespread in San Francisco, could become even more popular because of a new kind of mortgage loan that would free owners from financial dependence on one another. The new mortgage would allow each owner in a TIC to have his or her own loan, which also would make it easier to sell or refinance units."

Once again, everyone's favorite tenant's rights activist has his say... ""They would make TICs look so much like condos that they actually cross the line and turn into condos," said Ted Gullicksen. "They may trigger TICs to become covered under condo conversion law."

Sorry, dude. No can do. A TIC is a form of HOLDING TITLE. There is NO WAY to regulate HOW PEOPLE HOLD TITLE. A condo conversion takes a large building with one assessor's parcel number and gives it multiple parcel numbers. In a TIC (with one loan or many) there is no change to the parcel number and therefore no conversion. It's just a bunch of people joining together to purchase a single property.

Ted & Co. will just have to be a little more creative if they think they can 'stop' TICs from forming. It's not about the TIC, it's about the evictions. Evictions are a function of supply and demand.

Not all TICs result in evictions, and not all evictions are a result of TICs... But ALL EVICTIONS ARE DUE TO A LACK OF HOUSING.

Do I need to say it again? Apparently, I do. BUILD MORE HOUSING!

For more information on the as-yet-not-understood concept of 'holding title', here's a link to a great PDF file from Chicago Title Company. Even Ted should be be able to understand this one.

Funny, but I don't see 'condo' on there anywhere!

New-Home Sales Hit Record High in July

Regardless of what's going on in the existing home market, SF Gate is reporting that new home sales are still increasing, with a record high in July.

"New-home sales in July soared to a seasonally adjusted annual rate of 1.41 million units. That represented a 6.5 percent increase from June's pace of 1.32 million units, which had been the previous record"

This really doesn't affect us in San Francisco, where we rarely (if ever) see 'new' homes, but it does show that people are still buying homes at a record pace, despite the doom-and-gloom tales by some economists and media outlets.

Latest home sales figures from California Association of Realtors

According to the California Association of Realtors (CAR), "The median price of an existing home in California in July increased 17.1 percent and sales increased 1.3 percent compared with the same period a year ago...". Today's Examiner also has an article discussing these numbers, but finds a way to make them look a little less rosy.

It's quite funny how a press release can be issued with some housing data and the media can spin it into something negative... Their comment about the 0.4% drop between June and July was a very small part of the article, but they found a way to include it in their first paragraph.

As you can see in the following quotes (which I agree with), this June to July shift is very common (and I have discussed this many times already this year). “Year-to-date sales continue to outpace last year's, but are moderating compared with the levels experienced earlier this year,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “This is in line with our expectation that sales in 2005 will be 1.4 percent ahead of last year’s record pace."

"Historically, June accounts for the largest share of annual sales and there typically is a month-to-month decline in sales from June to July in the regional and county sales figures, which are not seasonally adjusted,” she said.

So if it happens every year, why pretend that it's a problem?

Harding Theatre back on the market

After a significant outcry by neighborhood and preservation activists, the Harding Theatre is back on the market for $2.35 million dollars.

For a bit of background on the single screen theatre at 616 Divisadero between Grove and Hayes, see the web site dedicated to saving the theatre.

The theatre was purchased quickly a couple of years ago by local developer and real estate agent Michael Klestoff for $1.6 million. Only after his plans were approved by the city preliminarily did folks in the area start to make a stink about it. In the interim, however, the site has gained in value dramatically. Since all of Klestoff's attempts to turn the space into mixed-use housing and commercial met with tremendous opposition, he really had no choice but to put it back up for sale.

That begs the question: what now? Who's going to pay the going rate for the land/building who can't re-develop the site? There's no way that someone can turn that site into something viable with a purchase price that high, but the free market would say that it's easily worth that much.

Idealism is great, but right now we need housing. I grew up working in a small theatre and have as much nostalgia as anyone in San Francisco for the single-screen movie house, but the opportunity to make this work was two years ago when the parcel was on the market. Not now. Not at this price. Not without someone with more stock options than investment sense.

Does anyone else see an Armory-like battle in the works? Does anyone in the neighborhood really want to see this building shuttered up and covered with graffitti for the next 10 years while the activists fight anyone that comes along?

The city will not help make this into a community space. The Supervisors may just fight about it and delay any sort of progress, but that leaves private developers to make it work. And they need to justify it financially.

Heck, I'm a neighbor and have been for eight years. What I want to see is neighborhood vibrancy. I want to see more restaurants, more commercial, and more housing. We have a definite shortage of community spaces, but that is NOTHING compared to the lack of housing that we're dealing with.

Losing historic spaces sucks. Period. But this is a valuable piece of real estate and it's time to work with whomever buys it and make it into something that the neighborhood can be proud of: a mixed-use development with more housing.

Update - 8/24

I also have the link to the MLS listing for the sale. It mentions (in a non-public area of the listing) that the lot is in the process of being split so the parcel on Divisadero will be separated from the lot on Hayes. I would assume he's only selling the Divisadero parcel at this point and keeping the Hayes parcel for his own development. This would increase dramatically the current value property vs. his purchase price. I would assume we'll see some housing put on the Hayes parcel, then.

The original building wraps around to Hayes Street. If the lots get split, the building will have to be demolished, at least partially...

Great San Francisco History web site

SFGeneaology.com is a site created "...to provide FREE internet access to genealogical and historical information for San Francisco and San Mateo Counties, and the State of California."

That said, there is some great information about the history of different neighborhoods, dating back as far as they can find data (much of which is donated).

For example, looking up information about the long-since-defunct Lone Mountain Cemetary (where USF is now located), I found the following:

Dates of Existence: May 1854 to 1862
Location: between 162 and 170 square acres
Number interred: 7,000 (1862)
Moved to: see individual cemeteries
Notes: this cemetery was divided into the Calvary, Odd Fellow's and Laurel Hill cemeteries

Curious about what was in your neighborhood 200 years ago, if anything? This site just might have some information!

Vacant Lots on Castro to Be Filled by New Homes

From this summer's Noe Valley Voice comes an article about two long-discussed vacant lots in Southern Noe Valley.

Neighbors are concerned about the scope of the new homes due to a couple of recently constructed 'monster homes' on Valley Street.

"The neighborhood's worries are rooted in a number of bloated homes that recently went up around the corner, on a Valley Street cul-de-sac. In the last two years, developers have renovated, or torn down and rebuilt from scratch, at least five homes on the pitched block between Castro and Diamond streets. The largest, a four-bedroom, 41/2-bath house with 4,400 square feet, sold in March for $2.7 million. That same month, another new house, with four bedrooms and 51/2 baths, sold for $2.3 million."

Also in the same issue of the Voice is a nice little graphic on the cost of living in Noe Valley, including home sale prices and rents around the neighborhood.

Mid-Market eyed for unusual projects

Also in the Examiner today, a discussion on the potential future of the Mid-Market area, between Fifth and Tenth Streets.

"For example, Group I is building 60 tiny condominiums a block from Market Street. The project has attracted attention because of the small size of the units, their relative affordability and the lack of parking because of its transit-rich corridor location. The condos at 83-91 McAllister St. start at 225 square feet and will be priced in the $200,000s and up, project manager Dan Paris said."

This is an area of San Francisco that is ripe for people of all economic levels to have a say in its future, and to see some positive changes for everyone. Anything is better than dozens of vacant, boarded up buildings...

S.F. Flower Mart considers bid for part of property

From today's Examiner: a real estate developer has put in a bid to purchase a portion of the Flower Market at Sixth Street and Brannan.

"The San Francisco Flower Mart is made up of two separate entities: the San Francisco Flower Market, an Italian flower growers' collective founded in 1956, and the California Flower Market Inc., created in the mid-1950s by Japanese-American flower growers.

San Francisco Flower Market is selling off its portion of the property, roughly one-third of the 280,000-square-foot building that stretches nearly an entire block from Sixth Street to Fifth Street along Brannan Street."

And the activists get their $0.02 in, too. "South of Market activist Jim Meko said the area is zoned for service and light industry and that the neighborhood should remain a place with jobs, not just housing"

Do we want more housing or not?

Developers Adopt Wait and See Attitude Toward Planning Reforms

In order to build more housing, all roads pass through the Planning Department. Developers have their concerns about how well the backlog in Planning might be handled, even with twenty-six new employees...

There's no argument that the Planning Department has problems. Now it's up to the Mayor and the Supervisors to make sure that issue is addressed properly. One of the biggest hurdles will be appointing heads of either the Building or Planning Departments without running into resistance from the progressive supervisors, or from the Mayor (if a candidate is suggested by the supervisors). We've already seen the back-and-forth about the acting head of DBI put through the ringer over her appointment just prior to taking maternity leave.

Bay Area Mayors Roundtable

CBS5 had an hourlong interview tonight with the three Bay Area mayors... Interesting to see them all together, especially how competitive they were with each other...

"Three mayors, three cities. and one candid discussion with Hank Plante. For the first time ever mayors Gonzales, Newsom and Brown talk openly about gay marriage, the Bay Bridge, housing and their vision for the Bay Area’s future."

Here's the link to the video on the CBS5 web site.

It all came back to two things: housing and public transportation. If they don't find a way, individually and collectively, to make those two items work, then they haven't done their jobs.

Another application filed to turn Armory into housing

This story was run in the Examiner almost a month ago, but I wasn't looking for it at the time...

Turns out another hardy soul has decided to take on the Supervisors and the Mission Anti-Displacement Coalition and try to turn the Armory building into housing and office space.

"A developer filed an application last month to turn the imposing Moorish-style fortress at 14th and Mission streets into 173 units of housing with some office space."

"A plan to turn it into a movie studio fell through in 1986 and a proposal for live-work lofts was abandoned in 1997. Partly because of its historic significance, it was at the center of the dot-com gentrification wars, with protesters flooding a Planning Commission meeting in 2000 to fight a new-media office complex."

There is also an old print shop on Mission @ 15th Street which has been on the Supervisor's radar as a location for housing. This would make up an entire city block that could be turned into more residential units, but so far there is nobody willing to take on the project and not get paid for it. Imagine that...

"The conversion [at the Armory] requires installing a complicated pumping system to deal with possible flooding from the old Mission Creek that runs under the structure, seismically upgrading the building with an underground supporting wall, cleaning up lead and asbestos, and removing old fuel tanks. The electrical, ventilation and plumbing need to be redone...the cost of the entire project will likely run about $45 million."

Unless there are some subsidies out there, you won't see any developer taking this project on at less than 90% market rate (which is how normal market rate buildings are approved, with 10% slated for Below Market Rate units).

Let's hope it works this time.

With Valencia Gardens construction in full-swing, that neighborhood is ready for the influx of vibrancy. I DID NOT say gentrification, just vibrancy. There have been two entire city blocks sitting vacant for a long time now, and the best thing for that location is to get some housing in there ASAP.

How many parcels are left in San Francisco where we can build this many units of housing? How many locations need attention as much as 14th & Mission? It's time to find a way to make this happen...

Sorry, Ted Gullicksen, there are no tenants being displaced this time... Just a big, empty building that needs some love... And a little help from your friends at the Board of Supervisors...

Further misinformation on condo conversion

The folks at BeyondChron need to do their homework. Sensational journalism only works when you have some bit of truth to what you're writing.

Today's rant includes a piece on so-called condo conversions of buildings that were BUILT as condos, and only rented by the developer for tax reasons or market climate. Not a single one of these developers had any intention of being long-term landlords. They did what any non-subsidized developer would do: they looked at the market and sold when the time was right. There's nothing AT ALL wrong with that.

"Now, as the market for condos continues to heat up, property owners are increasingly putting those rental units up for sale. Owners of five large buildings in the South of Market, including 595 units at 250 King street and 102 units at 175 Bluxome, have already made the switch, leading to the loss of hundreds of rental units for San Francisco tenants."

Repeat after me: Build more housing! Build more housing! Build more housing!

If these guys would spend 50% of their time thinking of ways to solve the problem instead of finding ways to clog up the system, think of how much brainpower would be put to better use!

The sad reality is that Daly and Gullicksen are hard at work right now to take away the rights of those who can best solve this city's housing problem: the developers. Remember, unless we are paying their bills, we need to find a way for them to profit. It's what makes this country great, right? Take away their ability to make money, and THEY WILL LEAVE. That will increase the pressure on the rental market, pushing more and more people into TICs, creating more and more evictions, and sending more and more people out of the city. And we'll be left with nobody to build the housing that we so desperately need. At all levels, and all price points.

Seems pretty simple, doesn't it? Shouldn't more people be looking for candidates to replace Daly when he's up for re-election? Anyone game?

Presidio more of a haven for families with children?

The Examiner today has an article which discusses how the Presidio may be the family-friendly neighborhood that many say doesn't exist in San Francisco.

"With large houses and sprawling yards, even some families who can afford to buy homes in San Francisco are choosing to rent in the Presidio because of its family-friendly amenities and know-your-neighbor culture."

Using your mortgage as a checking account: The CMG Plan

It's always interesting to hear about new mortgage products on the market, especially those that might help pay down a loan balance more quickly.

Jack Guttentag has a piece today on Inman News about a product from CMG that functions both as a mortgage and as a checking account. Your paycheck is deposited into your account, and pays down your principal balance. As you use your paycheck (by withdrawing funds, writing checks, etc.), your principal balance goes back up. But even if you use all of those funds in a month, the bank has been able to use your money in the interim, thereby paying down the balance a little bit at a time.

Apparently these programs have been used in other countries for a while now, but this one of the first times I've seen this product offered in the US.

Permit manager received loan after condo OKd, papers show

SF Gate has more coverage on the SF Department of Building Inspection (DBI) manager's criminal case.

It was tough enough to get projects through when all was legal and disclosed. Now I can only imagine the scrutiny each and every permit will end up receiving, and the delays that will result.

One of the common issues I run into as a real estate agent is concerning work done without permits (both with home sellers and with home buyers). When delays at the DBI cause people to skip the permitting process, it hurts everyone involved. It potentially decreases the value of the property, it could result in fines and considerable investigative work by a building inspector, and could be a hazard (fire or otherwise) if the work was not done by a licensed tradesman. Not to mention the loss of revenue to the city when permit fees don't get paid.

Imagine the positive domino effect... If we hire a few more GOOD employees at DBI (including a new Planning director), their salaries could be paid by all of the permits that get submitted when the department proves it can do its job correctly and on time!

I recently did a remodel on my home and had a very smooth experience with the DBI. Although one item needed to be changed that required additional structural engineering, ultimately it was for the long term structural integrity of the home (making up for prior work done without a permit by a previous owner) and did not result in a huge cost. Sometimes the permitting process works out fine and does not prohibitively impede a project...

Further info on individual TIC loans

The San Francisco Business Times has an article this morning on the current situation with individual TIC loans.

Most importantly, there appears to be interest from the secondary market (other banks who buy loans that are originated elsewhere). This is going to be extremely crucial for this program to really grab hold... If the banks who are considering this now don't have a secondary market, they will be forced to hold the loans for the duration (which for Bank of Marin is ten years). Most banks will eventually sell their loans to a third-party, thereby freeing up more capital for other clients.

Says Bob Griswold, President and CEO of Bank of Marin, "There are people who are interested in making a secondary market in individualized TIC loans," adding that he's been approached by such parties. "I think we'll see a secondary market develop."

There is also further discussion of E-Loan's entry into the TIC market in the fourth quarter of this year.

There is also a previous SBT article from August 16th on this same topic.

Currently, the Bank of Marin product, although already completely sold out, has a slightly higher price than traditional loans. They have offered their loan to borrowers who needed $300,000 to $400,000 loans, at an interest rate of 7%. The loan is amortized over 30 years, but is payable in 10 years (owners would have to refinance at that time, or pay the loan in full). The rate is fixed for five years, then adjusts once for the final five years.

Compared to the current risk associated with co-borrowing as TIC buyers are forced to do, this slightly higher rate will just mean that TIC prices will stay lower than condo prices, but only slightly...

List of recent home sales around San Francisco

Once again, here's the link to the Chronicle's list of recent home sales around San Francisco.

This is coming from the county recorder's office and from public records, not from the MLS. Also, bear in mind that many of these transactions would have closed as much as a month ago, meaning that offers were accepted (and pricing decisions were made) up to two months ago.