San Francisco’s housing market is so competitive . . .
How competitive is it?
Here’s the headline from a recent Business Insider article: “San Francisco’s housing market is so competitive that a massive wedge of rock selling for $1 million is actually a bargain.”
Ungainly long headline aside, it’s the kind of story that sounds funnier than it is. The 7,000-square-foot lot in Telegraph Hill could support “12 new homes in one of the city’s most exclusive neighborhoods,” according to Business Insider’s Katie Canales. It’ll be tricky to build on the giant rock, but a look at any of the hilly and rocky neighborhoods across this city shows that it’s done all the time.
Twelve more homes isn’t going to do anything to ease the city’s housing crisis; the city has to be developing vastly more housing than it is, but as long as many city residents continue to fight tall buildings, we’ll continue to see one-off boutique developments like this Telegraph Hill rock one.
Opponents of taller buildings complain about the possible “Manhattanization” of the city, though it’s unclear what exactly they hate about Manhattan. I’ve lived in Manhattan. Like San Francisco, Manhattan is a city of neighborhoods. Like San Francisco, Manhattan has parks. Like San Francisco, Manhattan has artists and other creative types. Unlike San Francisco, Manhattan has a population that recognizes they live in a big city and not in an overgrown Carmel-by-the-Sea.
But being against taller housing, being against development, being against streamlining the city’s expensive and cumbersome development process — NIMBY San Franciscans can be against all of that but still feel virtuous for complaining about the city’s changing nature and the loss of affordable housing, all the while benefiting from the record increases in pricing that make them real estate millionaires because they bought their homes 30 or 40 years ago.
Off my soapbox. Let’s look at some recent happenings in San Francisco’s real estate world.
NEARLY $6 MILLION MORE FOR TENANT PROTECTIONS
Mayor London Breed announced an increase over two years of $5.8 million in funding for legal services for city residents facing eviction, bringing the total that the city spends on protecting tenants to more than $10 million annually.
This follows on the heels of the passage of Proposition F in June, which decreed (but didn’t fund) legal representation for San Francisco residential tenants facing eviction.
Are all evictions unwarranted? We know of stories of tenants who grossly abused the existing protections for tenants, drawing out for months evictions based upon nonpayment of rent and other violations. Those folks now will have taxpayer-assisted legal protection at their side, as will the actually deserving evictees.
NEW NAVIGATION CENTER
The city opened a new Navigation Center in August, providing housing and services to 125 homeless residents at a time. The Division Circle Navigation Center will make use of state funds and underutilized Caltrans land, thanks to Assemblymember Phil Ting’s AB 857. The Division Circle center is based on land previously used as a parking lot.
PAYIN’ THE COST TO BE THE BOSS
Zillow reports that San Francisco is second only to San Jose on its housing price index, coming in at $954,100 (behind San Jose’s $1,292,600). San Francisco was also in second place in the rent index, at $3,399 (behind—who else? — San Jose’s $3,499).
And if you’re wondering if those who claim supply and demand doesn’t apply in San Francisco are correct, note that Paragon Real Estate reports the median housing price in San Francisco rose $205,000 just in the first six months of 2018. San Francisco (and San Jose) are in the bottom 7 out of the top 50 biggest metro areas in the country in terms of the size of their for-sale inventories.
ON THE SUPPLY SIDE
Nationwide, apartment construction has slowed following six years of growth, according to RentCafe. But this year, the Bay Area will deliver an increase of 15 percent in additional apartments on the market in 2018, with 11,200 new units.
But is it enough, and will people be able to afford the apartments?
Zephyr Real Estate announced its quarterly sales heroes for the San Francisco region for the second quarter. Congratulations to returning champ Tanya Dzhibrailova (for the highest dollar volume in the individual category), Domain San Francisco and Real SF Properties (both for highest dollar volume for a team), and Mike Plotkowski (largest sale representing buyers).
ENCOMPASSING REAL ESTATE
In other industry news, New York brokerage Compass, which bought Paragon Real Estate Group just two months ago, is adding to its local presence by purchasing Pacific Union International.