Refi activity slows

Kelly Zito writes in today's Chronicle about the slowing mortgage refinance market. "The Mortgage Bankers Association's weekly refinance index, which measures refinancing volume, dropped 17 percent between mid-October and the week ending Nov. 18. In addition, the volume of all mortgage applications -- both refinancing and purchases -- dipped 3.4 percent compared with the week before, the Washington, D.C., trade group said."

"Since September, mortgage rates have risen steadily, taking a bite out of buyers' spending power and making it more costly for owners to tap into their property's equity. The average rate on the benchmark 30-year fixed-rate mortgage was 6.37 percent last week, up from 5.74 percent a year earlier, according to Freddie Mac."

I chose to only quote the facts in this article as I don't agree that asking people in D.C. and New Jersey, or asking nationally-based economists relates to what ultimately happens in San Francisco.

There's no question that those of us (myself included) with adjustable rate mortgages are seeing our monthly payments change, but that's part of the homeownership process. If you want a fixed rate, you might want to refinance now. Once we see things level off a bit in the mortgage world, we'll likely see a stabilzation of rates. This will give folks the opportunity to set their expectations for their monthly payments.

I definitely don't agree that the market will "all but shut down" with another half-point increase in interest rates. This guy is obviously out of touch with the fact that people still need a place to live. And they're not building any more land in San Francisco.

Supes defer condo-conversion ordinance decision

The Examiner is reporting today that on Tuesday "The Board of Supervisors put off a decision on a controversial plan to establish a seniority system for The City’s annual lottery to turn 200 tenancies-in-common into condominiums."

There was no timeline given for when this issue will be brought back to the table.

Plans for cycling race grind to halt

Ahhh... Our beloved Supervisors have done it again! Please add this one to your 'why I won't vote progressive in the next election' list.

From today's SF Gate, "The organizer of the annual San Francisco Grand Prix, a pro race that attracted some of the world's best cyclists, said in a written statement Sunday that it will cancel next year's race because of a raucous dispute with City Hall over who should pay for police and other city services required for the event."

Basically, the city couldn't resolve a billing miscommunication last year, causing the organizers to not be properly billed, then someone decided to report (in the press) that the organizers hadn't paid their bills. Really bad form, guys.

A few 'Supes also decided to make this a political issue (namely Daly and Peskin) in an effort to win back some of their fading approval ratings (from even their prized constituents).

""Sadly, it's a no-win situation, and we simply cannot go forward," said David Chauner, director of San Francisco Cycling LLC, which founded and runs the annual race. The 108-mile race was regarded as one of the country's most challenging because of its length and the city's steep hills. It wound through the heart of the city and drew hundreds of thousands of spectators and more than 100 world-class athletes. Lance Armstrong, seven-time winner of the Tour de France, participated several times in the race before he retired."

"Both San Francisco Cycling and Newsom's office said the company shouldn't be faulted for not paying sooner because the city's Department of Public Works only mailed the 2004 bill this month. Supervisor Aaron Peskin contends race organizers should have paid a preliminary bill from the Police Department a year ago for the full cost of the 2004 security and then sought a partial refund from the city later."

So, Peskin expects someone to pay for the city's mistakes then ask for a 'refund'? You've got to be kidding me.

I am a cyclist who has seen professional events all over Europe, this was the closest the USA has come to the energy and feel of a full-on European event. Even the Euros felt at home here. And just like that, Peskin and Daly throw a fit, scare potential sponsors away, and cause the organizers to cancel the event.

"Still, Peskin said he thought San Francisco Cycling scrubbed the event because it was having trouble lining up the necessary funding, not because of anything to do with City Hall. Even San Francisco Cycling said it had lost money on previous races. Peskin also said that San Francisco will host a new bike race in February -- part of the 700-mile Tour of California. Tour organizer AEG has promised to reimburse the city for the entire cost of policing the event, Peskin said."

"The net is that San Francisco will be just as well off,'' he said.

I guess that's because he never did his homework or never bothered to ask. He just ran around yelling to make himself heard. And no, San Francisco will not be just as well off. The Tour of California is a stage race that begins in San Francisco and finishes in Los Angeles, but will not attract nearly the crowds or the economic revenue for our city that the Grand Prix did.

It's a damn shame.

For an enthusiast publication's coverage of the cancellation, check out VeloNews.

Oakland developers are bullish on residential towers

From today's San Francisco Business Times, "Housing developers have a barely controlled mania for building skyscrapers in Oakland, despite showing no interest in such projects as recently as last year."

"At least a dozen highrise condominium and apartment projects are in the works, and they have spread far from Lake Merritt, where the towers have traditionally clustered. They are now poised to pop up all along Broadway, starting in the Auto Row area well north of downtown, then dotting the street and its flanks along 30 blocks, through the city center, to Broadway's southern terminus. At the Jack London Square waterfront, a proposed highrise is set to rise 20 stories or more."

"Homebuilders have also been impressed with the Oakland city government's unequivocal support for highrise housing development, at least in the urban core. In fact, city planners this past summer urged one company, Shorenstein Co., to pursue a denser, taller version of a housing project it is proposing near 12th and Jefferson streets, favoring a 25-story skyscraper over a cluster of eight-story buildings."

What a concept... "city government's unequivocal support for housing"... Just imagine what that might be like...

No. You're right. Too much of a stretch for SF city government.

Adjustable mortgages undergo big swings

From today's SFGate, "After hovering near historic lows through much of the spring and summer, rates for both long-term and short-term mortgages have climbed markedly during the past two months, taking a bite out of buyers' borrowing power and forcing Steach and others to re-evaluate their financial plans. In particular, those with adjustable mortgages -- in which payments float up or down periodically depending on the direction of short-term interest rates -- have seen big swings in the past 12 months or so."

"The benchmark 30-year fixed mortgage, the preferred loan for generations, is not an option for many borrowers whose only chance to get into the high-flying real estate market these days is an adjustable loan. Around the Bay Area, about 80 percent of new home buyers are taking out adjustable loans as opposed to less risky fixed-rate loans -- about double the rate of two years ago, according to market research firm DataQuick."

As long as you have purchased your home smartly, and not paid a all-time high price (comparable to other properties in your neighborhood), even a negative amortization loan won't be a death knell.

But it's never a bad idea to call your mortgage broker to check in and see what they can tell you about your current and future situation...

Fortune Shines on Sunnyside

Hopefully you've already bought your house in Sunnyside, because the neighborhood that I've been touting for years has finally made the mainstream, with an SF Chronicle cover story.

"As San Francisco's median home price approaches $800,000, it was inevitable that even a place as working class as Sunnyside would be discovered -- and, with time, reinvented. Even though there are signs that real estate sales are slowing, the prices in the region are still astronomical."

"What's happening in Sunnyside is emblematic of what's happening all over the Bay Area: Home buyers are being forced to search for under-the-radar, blue-collar communities, sometimes even crime-ridden neighborhoods -- if they want to stay. And San Francisco is at the center of it all, providing the clearest picture of how housing prices can throw an area's demographics for a loop. Middle-class families with children are leaving because they can get more for their money outside the city. Now, most home buyers are couples in their 20s, 30s and 40s who make six-figure incomes."

So, what's the next neighborhood? You have to consider the 'hoods that people still won't really touch: Excelsior, Portola, Silver Terrace, Mission Terrace, Balboa Park... The next BART stop down the line from Glen Park is Balboa Park... You might want to look that direction...

S.F. State moving a campus

SF Gate is reporting today that S.F. State has leased space @ 5th & Market for a new campus. "The owner of the San Francisco Shopping Centre has leased 107,000 square feet, or about half the office space available at the new Westfield San Francisco Centre, to San Francisco State University for a larger downtown campus."

"Under the 15-year lease, the university's business school and its continuing education and community outreach programs will occupy the entire sixth floor and part of the fifth floor of the complex, which will also house a new Bloomingdale's store, a nine-screen movie theater, a high-end grocery store and other shops. The programs will move there in early 2007 and serve about 7,700 students per year. The new campus will replace the university's downtown campus, which occupies about 50,000 square feet at 425 Market St."

In addition to the obvious increase in vibrancy from the new San Francisco Centre, this larger SFSU campus will help bring more live into the mid-Market area.

Gaming the housing peak

SF Gate played the negative side of a recent Dataquick housing report today, "Although the median price of an existing single-family home in the region was $644,000 last month -- 16.7 percent higher than a year ago -- it was $2,000 below what it was in September, according to a report released Thursday by DataQuick, a La Jolla real estate information firm."

Whew! $2000! Prices and activity ALWAYS drop a little bit in the fall. Every single year. Yes, we have some economic factors that may cause the market to function a little differently in certain locations and price ranges, but don't be fooled. If you read this blog often, you have seen my examples of articles from past Novembers and Decembers calling for the collapse of the housing market. Yet every January or February, it picks right back up again.

This is, of course, my opinion, but I just see nothing but great opportunities for buyers right now. If you're a buyer and you're waiting for the market to drop, I think this is as good of an opportunity as we've seen since post-9/11. Will this continue into next year? I would wager that people who wait till 2006 will be disappointed with a complete lack of inventory in the first few months of the year. Many sellers have not seen their expectations met this Fall and they won't be selling until they see the market strengthen again. This means there will be low inventory and likely lots of buyers.

Like it or not, this is still San Francisco, and many of us really want to live here. And notice how the economy is moving along just fine, job stability is up, salaries are up, and there will be lots of buyers flush with holiday bonuses come January...

City approves final element of Rincon Park

From today's Examiner, "Paving the way for the completion of a leisure and commercial complex at Rincon Park along San Francisco’s Embarcadero, the city’s Bay Conservation and Development Commission voted Thursday to approve the restaurant portion of the project, now five years into the planning process."

"...the 20,000-square-foot commercial complex, which is the final element of the project, will have two two-story restaurant buildings, each 19 feet tall and measuring about 6,000 square feet. Of the remaining 8,000 square feet, about half will serve as private outdoor dining for the two restaurants. A 20-foot-wide public walkway will separate the two buildings, leading from the Embarcadero to the Bay. Construction is expected to begin before the end of the year, according to [a permit analyst], and the developer hopes to have the two buildings completed by August 2006."

Planners: Get out of your car

From today's Examiner, "As condo high-rises bring thousands of new residents downtown, San Francisco policymakers are hoping to get those inhabitants to be more like New Yorkers — city dwellers without cars."

"The commission on Thursday recommended a maximum of three parking spots for every four units of new housing downtown, while [Supervisor Chris] Daly’s legislation calls for one spot for every two units. The legislation would also ban freestanding parking garages downtown."

But, "“New residents competing for already scarce spaces in downtown and Mid-Market will deter visitors,” said Patricia Breslin, director of the Hotel Council of San Francisco."

This is another example of poorly thought-out legislation. Currently there is a minimum number of spaces required in new construction. What Daly is suggesting is a maximum number of parking spaces (one spot for every two units) along with other strict requirements. Why not just allow builders the option to build without the parking requirement? Why swing the pendulum so far in the opposite direction? And if there is no allowance for freestanding parking structures, what about all of the people who commute from outside of SF where there is no public transportation option?

This one needs a lot more work...

Time-share Condominiums to top Ghirardelli Square

The Chronicle and Examiner are both reporting today that the Fairmont is planning to convert the top floor of its Ghiradelli Square building into timeshare condominiums by mid-2007.

"The development, which the firms are calling a "private residence club," will be managed by Fairmont Hotels' Heritage Place division, which also operates similar high-end projects in Acapulco, Barbados and Telluride, Colo."

"Each [of the approximately 50 units] will have two or three bedrooms and between two and 3 1/2 bathrooms, said owner JMA Ventures of Los Altos. JMA, a real estate investment group, bought the 170,000-square-foot Ghirardelli Square early last year for $38 million. The company also plans to revamp the property to include high-end retail and dining, art galleries and spa facilities."

"Earlier this year, the Fairmont had hoped to convert a 23-story tower at its posh Nob Hill hotel into condos, but the Board of Supervisors approved an 18-month moratorium on hotel-to-condo conversions in August."

"[Supervisor Aaron] Peskin said though he would prefer straight residential, this will provide some union jobs. “This isn’t housing for real people, but it’s at Fisherman’s Wharf, so let it be,” he said."

Why's that, Aaron? Because 'real people' wouldn't want to live near Fisherman's Wharf?

Show Support for Supervisor Dufty's Condo Ordinance

The Small Property Owners of San Francisco (SPOSF) is urging all TIC owners to contact their supervisors to ask for their support for Supervisor Dufty's Condo Ordinance.

Now is the time to let our supervisors know you support home ownership. Last week, the Board tabled a measure sponsored by Bevan Dufty that would give added weight to those stuck in the condo conversion lottery the longest. It only affects properties that are occupied by their owners. Not a single renter is displaced. Sup. Dufty aims to improve the odds in the conversion lottery for those who have been stuck there the longest. There is no public benefit served by turning the lottery system into a virtual status prison for TIC owners.

Please write, call or email all the SF Supervisors regarding Supervisor Dufty's ordinance. It is scheduled for a vote on Tuesday, the 22nd. This simple amendment to the existing ordinance would grant TIC owners an increased likelihood of conversion the longer they have been waiting. This amendment would affect the system of owner-occupied condo lottery applicants; no evictions will result. Please urge the San Francisco Board of Supervisors to pass this important, worthwhile ordinance.

SPOSF supports home ownership. SPOSF believes it is a positive thing for the city, for its prospective homeowners and even for tenants who have the dream to someday own their home in San Francisco.

A full list of the supervisors and their contact information can be found at SFGOV.org.

Did you hear that, Ted Gullickson? Not a single renter is displaced and not a single eviction will result from the passage of this ordinance. Now go find something worthwhile to do with your time and energy!

Condo Boom Requires Conversion Moratorium?

Not likely... At least not likely in a legal, constitutional, acceptable, intelligent way...

The riot-inciters at BeyondChron are trying to drum up support for a moratorium on condo conversions with many half-truths and lots of activist opinion, but very few reasonable facts.

"In the past two years alone, Rent Board statistics show that over 800 rental units have been withdrawn from the housing market under the Ellis Act, with another 650 units converted to ownership through owner move-in evictions. Meanwhile, Supervisor Bevan Dufty and others have responded to this sharp loss of rental housing not by addressing it, but rather by encouraging additional condo conversions."

This writer's angle here implies that there is a evil developer out there taking these units off of the market. There is a demand for housing in San Francisco and when your demand outweighs your supply, people will do what they need to do to find affordable options. They also want to be in control of their own housing destiny. Why lie in wait only to be forced by the sale of your building to find housing in 30 days?

This is still a free market, and there will always be people who are not content sitting back and milking a landlord for their rent-controlled entitlement. Supervisor Dufty is not 'encouraging' condo conversions, rather he is addressing a need and desire by approximately 2500 unit owners to bring their units up to current code and also to be provided with a separate title and mortgage. Just because a unit becomes a condo, doesn't mean it will never be rented again. It just means that someone is likely owner-occupying it at this point in its life cycle.

"According to Ted Gullicksen of the San Francisco Tenants Union, at least 500 rental units are annually converted to ownership without the filing of an eviction notice. The lack of such notices means the Rent Board has no record of this rental housing loss, but the impact is the same: San Francisco has lost nearly 2500 rental units in the past two years alone!"

Well, if there's no EVICTION, there's no need to file and EVICTION NOTICE, now is there, Teddy Boy? If a unit is vacated by a tenant, a landlord is free to do as they wish. Remember, it's a free market. The biggest loss here is that there are 2500 fewer tenants for Mr. Gullickson to drag along on his protests of whimsy. Never mind how much nicer San Francisco looks now that buildings are being cared for by their owners.

"Simply put, the case for allowing rental units to convert to condos no longer exists. There is no longer a scarcity of ownership opportunities in the existing condo market, and conversions no longer offer an “affordable” means of obtaining homeownership."

Oh, really? Have you looked at the condo market vs. the TIC market lately? There is still a great disparity between the prices of the two. Sounds like an "affordable means of obtaining homeownership" to me. But I guess I'm letting those darn facts get in the way of my emotion...

"The Board of Supervisors will consider legislation next week to change the condo lottery to shorten the waiting period even for those who have evicted tenants. The Board should reject this legislation and instead consider imposing a conversion moratorium that could protect those currently in the process but deny future applications. If the votes are not there on the Board, a June or November ballot initiative imposing a condo moratorium is a virtual certainty."

THERE'S NOTHING ANYWHERE WITHIN THE BOARD OF SUPERVISORS THAT SHORTENS THE WAITING PERIOD! What don't you fools understand about this? There is one item in front of the board that grants SENIORITY to owners who have been waiting the longest in the lottery. There's nothing that changes the 200 units per year restriction. You have got to be a complete retard to think that this changes anything for tenants, and only really affects a few folks who have OWNED their units for 10+ years.

If the votes are not there on the board (to pass something tenant-friendly), another illegal, unconstitutional, unreasonable ballot initiative is likely to appear. If you own a TIC, you should find a way to be vocal about this stuff. The activist community has yet to actually pass an initiative that has survived court appeal, but it still accomplishes some of their goal, which is to make the whole homeownership process more and more painful. The effect, of course, is to drive down supply, which in turn drives up prices.

It's really sad that the ignorance and misinformation continues.

Home sales set a record — again; prices up almost 15%

From USA Today, "Existing home sales set another record in the third quarter of 2005, and prices jumped nearly 15%, but even the National Association of Realtors in its report Tuesday said the housing market will probably begin cooling after its five-year boom."

"Sales of single-family homes and condos rose to a 7.24-million annual pace in the July-September quarter, up 6.5% from a year earlier. At the same time, 69 of the 147 metropolitan areas studied had double-digit price gains, as the median price of a single-family home climbed 14.7%, year-over-year, to $215,900."

"There are scattered signs that the housing market has already begun to slow. Interest rates on 30-year fixed-rate mortgages are now running about 6.3%, compared with 5.89% in the third quarter. The inventory of new and existing homes on the market is rising."

Ritz-Carlton joins condo club

From the Examiner, "The Ritz-Carlton will partner in a luxury condo and time-share development in the historic former Chronicle building on Market Street."

"The plans call for adding eight stories atop the current 16-story building, the first skyscraper on the West Coast when it was constructed in 1890. The Chronicle moved out of the building in 1924. The developer plans to unwrap the aluminum and glass exterior added to the historic building at Market and Kearny streets in the 1960s. Removing the cover will showcase the brick and stone façade, a move cheered by preservationists."

SF Gate has a similar digest piece on the new condo plan.

Condos Coming to Heart of Tenderloin

BeyondChron is reporting this morning that a developer has purchased 130 Turk Street with the intention of building market-rate condominiums.

"A three-story condo project proposed for the Tenderloin has local residents skeptical about its viability. With the neighborhood’s high crime rate and low median income, why would anyone want to build affluent condominiums there? Perhaps even more importantly, would anyone really want to buy them once they’ve been built? "

"[Neighborhood resident Marvis] Phillips and fellow long-time resident Michael Nulty, land-use chair for the TFC (Tenderloin Futures Collaborative), insisted that they are not against the project or against development at 130 Turk St. in general. The site previously was home to a bathhouse, but for years it has remained vacant after the building was gutted in the late 80’s said Phillips. All the vacant buildings do add to the blight in the neighborhood,” said Nulty. “Seeing something positive come out of this would be great, I just know I couldn’t afford to live there.” "

So, it's OK to build condos in some neighborhoods and not in others? Why aren't the activists fighting this one? And since they're not fighting this one, why fight so many of the projects that have come up recently? There are numerous neighborhoods that residents would like to see cleaned up or made safer (like Mission @ 14th/15th Streets), but somehow the activists feel that they should fight to limit or prevent the construction of new housing.

Where's the quote from our good friend Ted Gullickson this time? Doesn't he have something to say about this? This is in Chris Daly's district, doesn't he have something to say about this? It's all very curious, indeed...

Owners fear city will add red tape to conversions

Well, Chris Daly is at it again, bringing yet another soon-to-be-ruled-ridiculous piece of legislation to the 'Supes.

From today's SF Business Journal, "A proposal expected to go before a San Francisco supervisors committee would require that more apartment buildings get Planning Commission approval before converting to condominiums -- a change opponents say complicates an already difficult process."

"Specifically, Daly's proposal calls for Planning Commission hearings when buildings of two or more units apply for condo conversion. Those hearings are only held for apartment buildings of five or more units now."

So, here we go again... Daly is suggesting this in attempt to almost criminalize the act of homeownership. And what happens when a market with strong demand gets pushed? First they will point out what a jackass Daly is, then they'll find other ways to work around this system (if anyone else is silly enough to see it through to the full Board, or worse, through to completion). As I've mentioned before, you can't stop this process, Chris. Ultimately, throw all you want at it. You can't win, and you won't be in office long enough to make a difference. You have lost all of your clout with the board and all but a few of your consituents. And those that want to be homeowners will be homeowners, whether you like it or not.

This proposal will not stop evictions. This will only serve to piss off two thousand homeowners who already own and live in their units and are just trying to get clear title to their property. Nor will this stop future evictions, as people will just call in a bank with individual TIC financing and they won't even consider the condo process. At that point, there's little reason to consider it.

So what's your point, Chris? Why not put your energy into something productive? Go take that new silver shovel you got on Thursday and help those guys down at Rincon One dig their hole for those beautiful new condo towers. After all, you're so good at digging yourself into holes...

McGoldrick Introduces Anti-Eviction Legislation

From the Examiner's 'District Watch' column, "This week, Supervisor Jake McGoldrick requested legislation to prevent the eviction of families with school-aged children during the school year. The legislation seeks to address the serious disruption in children’s educational development caused by evictions."

No additional details were available on when this legislation would be presented for public comment.

Bay Area rental market hits a happy medium

From today's Chronicle, "I think it's actually pretty nice," [one renter] says. "I feel like I got a good place for a good price."

"And that, say the experts, is the sign of a healthy, balanced rental market. [This renter] didn't, as it seemed many prospective Bay Area renters had to do during the dot-com boom of the '90s, have to lug around suitcases of cash, sign over her firstborn child or engage in a high-stakes bidding war. Conversely, desperate landlords don't have to behave like barkers in front of a Broadway strip club, luring renters with lavish incentives as they did during the bust that followed the boom."

"It's a matter of balance," says Chris Bates, marketing director of Realfacts, a market research firm in Novato. "At this point, neither side has a huge advantage. Neither has a disadvantage. Renters aren't being gouged, and landlords have some space to increase rents at a reasonable rate as the economy grows."

"The latest numbers, says Bates, bear that out. After a three-year period in which occupancy and rental rates remained flat throughout the Bay Area, there has been a slow, gradual increase during the past year. In San Francisco, occupancy rates went from 92.5 percent in the first quarter of 2004 to 95.5 percent in the third quarter of 2005."

"The state Employment Development Department reported that employers added 26,200 jobs in Oakland and San Francisco between August 2004 and August 2005. This, say some analysts, has contributed to the rise in occupancy rates. Because they have the potential to reduce the amount of rental stock, low interest rates and other incentives, such as interest-only loans, may be factors as well."

What do I think about this? I think this is a sign of a stronger economy. Renters do not have as many choices as they did for the past three years. Many companies are hiring significant numbers of new employees (such as Yahoo & United Airlines), and people in steady jobs are getting raises and feeling that they have a bit of job security. With these numbers improving steadily, that will definitely affect the home purchase market. Once the rental supply tightens even just a little bit more, rents will start to rise again, even if just slightly. That will give home buyers more reason to consider purchasing. And with new units being built in Rincon Hill and South Beach, there should be lots of new construction options for them to choose from, as well as new individually-financed TIC units.

This is really good news across the board. A healthy economy is good for everyone. It's doubtful that we'll go back to the rental mayhem of 1999/2000 anytime soon, if ever, but it's obviously becoming more and more difficult to find a great rental.

The only thing this doesn't bode well for is naysayer journalism. They're running out of doom & gloom articles to write as the housing markets for both rentals and sales continues to defy their expectations.

TV host should be fired for comments about city, Daly says

Again, not a real estate-related post, but any chance to poke fun at Chris Daly, right?

And not that I disagree with the fact that Bill O'Reilly is a jackass, but Daly really put his foot in his mouth yesterday.

From SFGate, "Not everybody took Fox News host Bill O'Reilly's on-air comments this week about terrorists bombing Coit Tower as the hyperbole that fills the talk-radio ether. One of the ticked off was San Francisco Supervisor Chris Daly, who Friday called for O'Reilly to be fired."

One blithering idiot calling out another one? "When you have the privilege of being on the airwaves, there comes with that a certain amount of responsibility," Daly said.

Oh really? Perhaps we could reword that foot-in-mouth statement to read, "When you have the priviledge of public office, there comes with that a certain amount of responsibility."

Yeah, Chris, you go on with your hypocritical self!

I'm still just loving the fact that he stood side-by-side on Thursday with Mayor Newsom, silver shovel in hand, breaking ground on the new Rincon Hill project. The very same project that he both lambasted and extorted money from. I think he was just trying to gain a little public support following one failed attempt after another to satisfy his activist constituents. Maybe he was looking to salvage some of his meager 29% approval rating?

And I'm looking forward to seeing him skewered on national television if he gets the chance to go head-to-head with O'Reilly. I can't stand O'Reilly, but Daly can't win against someone who spends 365 days a year in front of a national audience.

"I've never been on a network show like that before," Daly said Friday.

Quit while you're ahead, Chris, before you embarrass us all...

Officials break ground for new condo towers at foot of Bay Bridge

From today's Chronicle, "It was a familiar story Thursday afternoon -- a developer and city officials turning over a ceremonial shovel of dirt to mark the beginning of work on a new San Francisco high-rise. But this one at the top of Rincon Hill, one of San Francisco's more obscure landmarks, will produce a pair of buildings that will change the look of the city's skyline and completely transform a neighborhood."

"The project -- called One Rincon Hill -- consists of two glass-and-aluminum towers, one 55 stories high, the other 45 stories. They will be the tallest residential buildings west of the Mississippi. The taller of the two towers will be 550 feet high, not as tall as the 853-foot Transamerica Pyramid, but their location just south of where the Bay Bridge touches down in San Francisco will make a spectacular change in the way the city looks."

"Among the things [developer] Urban West will pay for is an upgrade in the Art Moderne Sailors' Union of the Pacific headquarters hall just across Harrison Street from the condo towers. There will be a community center in the union hall, and a new neighborhood park at Fremont and Harrison streets. The money for the community improvements convinced [Supervisor Chris] Daly, and he showed up to wield a ceremonial shovel, an unusual role for a public official in the progressive wing of San Francisco politics. "There are a lot of places where high-rises make sense," he said after the ceremony."

Did Chris Daly really say that? Then again, it's amazing how he can be swayed by a little money himself... "when ... Urban West Associates of San Diego, agreed to put $20 million into the mayor's affordable housing development fund and $18 million into the Rincon Hill community improvements fund and a South of Market stabilization fund, the deal was a go."

Building On Brownfields - High demand for real estate drives eco-cleanup

From the Surreal Estate column on SF Gate, "You see them in every city -- old abandoned gas stations, dry cleaners that sit empty for a decade, factories that no longer belch smoke into the city sky. Brownfields, they're called. The EPA defines them as real estate that has been or is perceived to be contaminated with toxic substances. According to San Francisco-based Center for Creative Land Recycling, which helps nonprofit developers and governments with cost and feasibility assessments, there are approximately 100,000 brownfields in California."

"Because these sites require detoxification to make them habitable, perhaps it's not surprising that this somewhat esoteric undertaking is being fueled largely by baser forces known as property values. (Call it the nice side of a mean real estate market.)"

"In the last 10 years we have seen the emergence of a family of ecological technologies that allow us to go into a number of badly damaged environments and quickly transform them..."

Rates on 30-Year Mortgages Climb

From SF Gate today, "Rates on 30-year mortgages jumped to the highest level in more than two years this week as financial markets grew more concerned about inflation."

"Mortgage giant Freddie Mac reported Thursday that the nationwide average for 30-year, fixed-rate mortgages rose to 6.36 percent, up from 6.31 percent last week. That was the highest level since 30-year mortgages were at 6.44 percent in early September 2003."

"A year ago, 30-year mortgages averaged 5.76 percent, 15-year mortgages were at 5.16 percent and one-year ARMs averaged 4.16 percent"

The important thing to remember is how this fits into the overall historical picture. When I bought my first house in 1994, I was more than happy to pay 8% to borrow money. Higher interest rates will affect sales prices eventually (assuming they keep rising), but I don't hear these rates figuring into buyer's decisions on whether or not they are going to purchase this year.

California's Housing Affordability Index fell four points to 15% in September

The percentage of households in California able to afford a median-priced home stood at 15 percent in September, a 4 percentage-point decrease compared with the same period a year ago when the Index was at 19 percent, according to a report released today by the California Association of REALTORS® (C.A.R.). The September Housing Affordability Index (HAI) increased 1 percentage point compared with August, when it stood at 14 percent.

The affordability index in the San Francisco Bay Area held steady from August to September at 12 percent, down from 15 percent a year ago.

At 26 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 20 percent. The Northern Wine Country region was the least affordable in the state at 7 percent.

Pricing home to sell in a changing real estate market

From Inman News' Dian Hymer, "The number of home sales in July was the third highest ever recorded, according to the National Association of Realtors. But anecdotal evidence suggests that the market is changing. In some areas of the Midwest, home sales have slowed considerably. In California, home sales remain brisk, but the market is cooler than it was in early spring."

"You will probably face more competition than you would have if you sold last spring. Other homeowners also think now is a good time to cash in on the phenomenal appreciation that has occurred over the past few years. This doesn't mean it's not a good time to sell. But it does mean that you might not sell with multiple offers, so don't count on extreme overbidding. It could also take longer to sell. You might face more negotiation."

"Don't waste your time testing the market at an unrealistic price. This market is for serious sellers. There are plenty of serious buyers for listings that are priced for sale at current market value."

Her point is that the rise in inventory is giving buyers more time to consider their purchase and sellers might only see an offer or two, but sales are still strong. This is giving us a more balanced market, but is not a market decline. If you're a buyer, there is lots to see out there right now... Are you willing to take the chance that this abundant inventory will continue into next spring? History would say it won't.

No. 2 administrator to be superintendent when Ackerman exits

The Examiner reporting today that SF Schools Superintendent Arlene Ackerman will be replaced by her second-in-command.

"Gwen Chan, deputy superintendent of San Francisco's public schools, will take the helm of the district in March or April and will stay in the top post through at least June 2007, officials confirmed Wednesday."

"The board plans to conduct a national search for a permanent superintendent during the 2006-07 school year, and Chan may be considered a candidate for the job. She will wait to see how her new job goes before deciding whether to apply for the permanent post, she said."

"Board member Mark Sanchez, who frequently butted heads with Ackerman, said he thought Chan would be able to work with all seven board members. Ackerman said Wednesday that Chan was a good choice."

Growth, without big box

I rarely, if ever, agree with anything written in the Guardian, but there's an OpEd piece today discussing the Home Depot in Bayshore that's right on the money.

"A key element in the revitalization of southeast San Francisco is Bayshore Boulevard. It's an area begging for development. If done right, development along this corridor could bring jobs and vitality to our community in a way that strengthens our connections with the rest of the city yet protects our locally owned business. Bayshore can be a place where city residents work, shop, and eat together. Locally owned small and midsize businesses can thrive, bringing tax dollars into city coffers and jobs to an area of the city that has suffered under neglect for far too long."

"Some members of the Board of Supervisors insist that Home Depot will bring tax dollars into San Francisco. Yet a Texas study concluded that locally owned businesses recycle 45¢ of every dollar back into the community, but big-box stores return only 13¢ of every dollar to the local economy. The rest goes to corporate headquarters."

It's really sad that too much is being discussed today, after the vote, when this has been a pending disaster for far too long. Hopefully it's not too late for Bayshore to still be a vibrant industrial and commercial neighborhood, one without Home Depot.

Mayor fears mass evictions in affluent S.F. neighborhoods

From today's San Francisco Business Times, "San Francisco Mayor Gavin Newsom said new mortgages that permit fractional tenants-in-common loans raise the prospect of tenants being evicted from the city's apartment buildings -- and a resulting political backlash."

"The mayor told the San Francisco Business Times that he has recently spoken to two real estate investors -- "speculators," he called them -- who are considering using the Ellis Act and the new TIC financing to convert rental units into owner-occupied housing."

""I respect property rights. But if we're going to have speculators come in and kick out 20 to 30 families, that's not what this city is about," Newsom said."

Hmmm... Seems like exactly what I've been warning about since they announced these new loans... Time to find a way to give developers a way to build some housing, or they'll find ways to create it themselves. This is just further proof that you cannot restrain a free market. The market will win every time.

*Reminder* I am not in favor of evictions of any type. I merely point this out in an "I told you so" fashion due to our current crop of Supervisors and tenant activists penchant to ignore reality in order to garner headlines. This one is about to come back and bite some of them in the ass.

There is really nothing that the city can do to prevent the Ellis Act; it's a state law which overrides local law. There's nothing they can do to stop people from joining together and purchasing property in whatever manner they see fit (i.e. as tenants in common). And there's nothing they can do to stop banks from seizing the opportunity that exists to capitalize on an emerging market. Now that the door is open, what will the 'supes do? I'll be curious to see what what they come up with. Their solution will, just like all of their past attempts, end being proven unconstitutional eventually, but they'll find a way to slow things down, I'm sure.

Ted Gullickson, are you listening? The free market is winning and your followers are going to look to you for help. Perhaps the time is right to do something intelligent, like support the creation of new housing?

You bet your house: Home price futures are coming

One of my clients sent me this article today from USA Today about a the beginning of a new trading category for home price futures.

"The Chicago Mercantile Exchange, a financial marketplace dealing in the value of everything from interest rates and foreign currencies to pork bellies, has committed to offer trading next year in a category many consumers take personally: U.S. home prices. Housing-price futures, based on the median home price in each of 10 U.S. cities, aren't being tailored for individual homeowners. But they may provide some protection for mortgage companies, home builders and anyone else with a large stake in residential real estate if housing values slide — while giving other investors a way into a lucrative market."

"Investors will be able to trade contracts electronically based on median home prices in Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco or Washington D.C. — or a composite index of the ten cities. The indexes were developed by the real estate research firm Fiserv Case Shiller Weiss"

"Those who are optimistic that prices will continue their double-digit rise can buy contracts, making a profit if the increase exceeds their costs by the expiration date. Investors who want to soften the potential blow of a decline, on the other hand, can buy versions of the contracts called put options that will pay them money if the price drops, ensuring that they recoup some of their lost house profits."

I suppose since they are already trading in weather futures, it was only 'logical' that housing would be next, right?

Thanks, Brett, for sending this one over!

Fort Mason Center lease to get 60-year extension

In some rare good news, today's Chronicle is reporting that the National Park Service just extended the lease at Fort Mason for another 60 years.

"Twenty-eight years after San Francisco's Fort Mason Center opened with high hopes and vague plans, center officials today are expected to sign an agreement with the National Park Service that will extend the life of the waterfront cultural enclave for 60 more years. The long-term lease for the 13-acre center serves as a vote of confidence for the Fort Mason Foundation, which leases space to nonprofit arts and environmental organizations as well as theater companies and the popular Greens restaurant. More important, officials on both sides of the deal say it should allow the foundation to arrange financing for seismic upgrades and routine improvements for the 10 buildings at the center."

What happens when the Big Boxes come to town...

Spartanburg, SC. Five Years After Wal-Mart Came To Town

Sprawl-Busters reported on October 25, 2000, that Wal-Mart wanted to shut down its existing discount store in Spartanburg, South Carolina, and build a supercenter nearby. Five years later, here’s an update from activists in Spartanburg: “I wanted to update you on the Spartanburg Wal-Mart, and allow you to see how out-of-hand it has truly gotten. Since Wal-Mart left its location, and destroyed acres of forest to build it's mammoth supercenter, Lowe's has moved into Wal-Mart's old location, adding a red light which everyone in the town hates. Now, Home Depot has bought and shut down a beautiful golf-course that was in town, with a lake that was always a nice view on the way to/from town. Now it sits empty. The acres of golf-course are now abandoned, with Home Depot at the crest of the hill. Thank goodness they at least made the location far back to where you can't see it, but the red light that they added, which serves no purpose, is a constant reminder it's there. People hate this red light as well, and I often see people run right through it because there's never anyone to wait on at the light. Now, Goody's, as well as all the other stores that were in the previous Wal-Mart strip are gone. And we have an overly congested road with Wal-Mart, Lowe's, and Home Depot within 1/2 mile of each other. I can't bear to think what will come of the rest of the golf course. As for now, it's an eye-sore, but better than pavement and concrete. Our downtown struggles heavily as our blind city-council and chamber of commerce does nothing to help. Chamber membership is WAY down because of their choice to support Wal-Mart's movement. I currently work for a small-business aimed at helping our small-businesses come back. it's the only way we can fight to stay alive, and it's working as best it can. It's called Local Benefits.com, at http://www.localbenefits.com please check it out…Although it may be too late to save us from the monster, I and others of us are willing to try whatever we can to save our ever struggling vacant downtown.”


What you can do: People often ask me what really happens when Wal-Mart comes to town. Spartanburg is probably a typical example of the aftermath. After Wal-Mart, more big boxes come in a cluster, and existing merchants disappear, downtowns struggle, and the tax bill keeps going up to pay for the services for the big boxes, especially police and road maintenance. The character and feel of the town changes. It begins to look remarkably like other towns, and any distinctive features are lost in the acres of asphalt and concrete. Wal-Martburg looks exactly like the hundreds of Wal-Martburgs everywhere.

Is this what we want for San Francisco? I know we're not a semi-rural location, but don't think for one second that the rest of the big boxes don't have parcels all over the Bayshore, Hunter's Point, and the Central Waterfront scoped out (if not already purchased) just awaiting the outcome of last night's vote. This was the wrong message to send to 'formula retail', too. What's next? A Wal-Mart in the Presidio?

It has been 10 years since Costco opened in SOMA, and along the way Best Buy and SportMart have made their way into the Central Freeway corridor, but haven't we learned from other's mistakes? Haven't we driven around any other region of the country and seen the rampant homogenization?

I guess the next option is to not support the store. Just don't shop there. I know that's going to be like getting Chris Daly to keep his composure in a Board meeting, but that's my suggestion. If their numbers for the SF store suck, they'll pack up shop and consolidate in Colma.

And I practice what I preach. I have never been in the SOMA Costco. I don't shop at Best Buy. Heck, I won't even shop at the Colma Home Depot (Cole Hardware has everything I need and they can order the things they don't have). I didn't move to San Francisco to watch it become just like every other suburban nightmare...

Home Depot gets nod to build in The City

It's a sad day in San Francisco, my friends... The same group of supervisors who oppose common-sense housing policy have just approved (IMHO) the lowest form of city destruction possible... They have approved the Home Depot in Bayshore.

Never mind the fact that the Colma store is 3 minutes away. Never mind the fact that Home Depot wouldn't sign anything binding them to the promises they made about fair wages or the hiring of local residents. Never mind the fact that this has been a key ingredient nationwide in the loss of 'community'...

It will, however, likely lead to a lower quality of life for anyone within a mile of the store, eroding property values and creating uneccessary traffic congestion on neighborhood streets.

The Examiner posted a story just before midnight on Tuesday on this unfortunate turn of events, "Supervisor Sophie Maxwell, who put together the winning margin on the board largely by touting the need for jobs in the adjacent Bayview District, said the discussions had gone on long enough in view of ongoing violence and unemployment in the neighborhood she represents."

So, instead, we'll create a strip mall atmosphere and degrade the neighborhood in a different direction altogether?

People have earned the right to shop where they choose. That doesn't mean that Home Depot has earned the right to move into a crowded city that is already short on land for much-needed housing or industrial jobs.

A three minute drive. That's all. I see NO reason for this, whatsoever.

"The pivotal “yes” vote was delivered by Board President Aaron Peskin, who conceded that he generally takes a dim view of chain stores that can hurt small businesses but said he had made a 180-degree turn on the issue. The reason he voted yes, he said, was due to “one of the unwritten rules” of district representation by supervisors. “It is about self-determination,” Peskin said."

Self-determination? Peskin says that as if Maxwell's district will be the only one affected by this decision... What a spineless move.

But Supervisor Ammiano is still fighting. "Although the 6-5 vote denied an appeal of the EIR filed by Cole Hardware, Ammiano said afterward there might still be more challenges ahead. “It’s not over yet,” he said."

Now if only Daly, Mirkarimi, Sandoval, and McGoldrick (who all voted against the store) spent even 20% of the time fighting this that they do fighting the creation of new housing... Home Depot wouldn't have stood a chance...

The Chronicle also has a piece in Wednesday's paper on the decision, "Supervisor Jake McGoldrick said Home Depot had sought to play "the politics of resentment" in winning approval for the 107,000-square-foot store by pitting neighbor against neighbor. "They have come into our community and caused deep and perhaps lasting harm by dangling jobs," he added. "We want good jobs. We do not want poverty-level jobs.""

Are More People Leaving San Francisco Than Arriving?

In Sunday's New York Times (registration required) they discuss how many people are leaving California for the Midwest.

"Last year, a half million people left California for other parts of the United States, while fewer than 400,000 Americans moved there. The net outflow has risen fivefold, to more than 100,000, since 2001, an analysis by Economy.com, a research company, shows, although immigration from other countries and births have kept the state's population growing."

There's also an interesting graphic entitled "San Francisco has more people leaving than arriving" showing how many people moved TO San Francisco in 2001 and how many LEFT in 2004, along with where they are going...

"The current migration out of California is not as large as the one in the mid-1990's, which was driven more by job losses in aerospace and other industries than by real-estate prices."

Thanks, Brett, for the tip on this article!

Parcel tax advantage for seniors

From the Chronicle's Business Section today, "Depending on where they live in California, homeowners who are 65 or older can reduce their property tax bill -- in some upscale areas by more than $600 a year -- by applying for a senior exemption to certain school parcel taxes."

"The exemption is not always well publicized. To get it, seniors must fill out an application provided by the school district and include proof of age. To qualify, the home generally must be their primary residence. In some districts, they must renew the exemption each year."

"In San Francisco, seniors can apply for an exemption to a 20-year parcel tax approved in 1990 after the Loma Prieta earthquake to repair or upgrade schools. The tax is $32.20 per year for a single-family dwelling or condo and $16.10 per parcel for multi-unit residential buildings."

Towers, farm seen for Treasure Island

From today's Urban Design column in the Chronicle, "The plan calls for as many as 5,500 housing units on the west side of the island facing downtown San Francisco -- nearly twice the number previously proposed. Most of them would be within a 10-minute walk of a new ferry terminal across from the city's historic Ferry Building. And 260 of the island's 400 acres would become public open space, including a tidal marsh cut into the northeast corner of the manmade island."

And from the Examiner, "Howard Strassner of the Sierra Club’s San Francisco chapter said the old plan paid lip service to sustainability, but was essentially a suburban development. In a leap from suburban to urban, the revised proposal places 90 percent of the housing within a 10-minute walk of the ferry terminal to limit car use."

"Though construction could begin by mid-2008, the project will likely take over a decade to complete."

With this being the last real undeveloped piece of the immediate Bay Area, it's good to see that they didn't opt for suburban sprawl and wisely looked to create more density, walkable neighborhoods, and decent transportation options.

"Treasure Island is a once-in-a-lifetime chance to embrace sustainability -- and sustainable in this context doesn't just mean organic farming or solar and wind power," said Michael Cohen, the mayor's director of base re-use and development. "It also means residents don't have to go back to San Francisco for everything -- and that requires a critical mass of people" to support shops as well as alternative forms of transportation such as the ferries."

Vision of a library for Mission Bay taking shape

From today's Examiner, "The City’s first new branch library in 40 years is set to open next year in Mission Bay, San Francisco’s newest neighborhood, where 11,000 residents will eventually live.

"Linda Sobuta, principal in SMWM who is speaking on a panel this weekend, said the library’s location is at the “joint of two neighborhoods, Mission Bay North and Mission Bay South.” Currently, the roughly 1,000 apartments completed are in the northern neighborhood, but eventually both areas will have about 3,000 units. Sobuta said this branch will likely be the only one serving other emerging neighborhoods such as the SoMa, Rincon Hill and Transbay areas."