While unveiling a budget that he called “the most difficult that we have faced since 2012,” California Gov. Jerry Brown also let state legislators know that he was keeping his tough line on housing development and affordability. The governor killed any hopes that he would increase spending on affordable housing without a deal.
Instead, Brown once again put the focus on attempts to make it easier to build homes and lower costs for creating low-income housing. “What we can do is cut the red tape, cut the delays, cut whatever expenses we can afford to do without to make housing more affordable and therefore increase the stock and therefore hopefully bring down the costs,” he said at an early January press conference.
Last year, the governor proposed reducing local interference and the associated costs that slowed and even prevented developing new housing in the state’s cities; as long as the housing met certain affordability targets and some other goals, those projects would be fast-tracked for approval. Brown had promised to spend $400 million more on affordable housing if the legislature approved his plan, but legislators rejected it.
In November, Los Angeles residents approved a measure that would impose affordability requirements on developers seeking exemptions from planning rules, but Santa Monica rejected a measure that would have required a citywide vote for each and every development more than three stories in height.
$920,000 FOR A FIXER-UPPER
Paragon Real Estate had some good news, bad news in its 2016 year-end market recap. The good news is that fixer-upper single-family homes are still relative bargains — as they should be, because by definition they need further investment and work. Ranked among a number of factors that can reduce a home’s sales price, being a fixer-upper was second to last, with only a tenant occupied home forcing a bigger discount.
The bad news? The median sales price for a fixer-upper home in San Francisco was $920,000. Savvy buyers should look for a fixer-upper that is also tenant occupied. Paragon said that fixer-uppers still sold at an average of 15 percent above their listing prices. Probate sales and homes without parking were also price-reducers. The median sales price for all San Francisco homes in 2016 was $1,325,000, according to Paragon; for other properties, the median sales prices were $1,095,000 for condos, $1,378,500 for co-ops, and $939,000 for TICs.
SAN FRANCISCO RENTS DROP 4.9 PERCENT
No one was surprised to see a headline in December that Bay Area housing prices had reached record heights. But “San Francisco Prices Decreased 4.9% in 2016” was probably not a headline many people expected to see. But in fact both headlines are real.
Real estate website Zumper reports that though San Francisco was still the nation’s most expensive rental market at the end of 2016, “the median price of one-bedroom units in the city has cooled off substantially, down 4.9 percent since this time last year.”
Rents were still climbing in some neighborhoods, such as Bayview, the Marina, Telegraph Hill, Glen Park, and Outer Richmond, among others. But Cow Hollow, Pacific Heights, North Beach, Russian Hill, Nob Hill, and other neighborhoods all experienced rental price drops.
SHEEHY REPLACES HOUSING ADVOCATE WIENER
Following District 8 Supervisor Scott Wiener’s election to the state senate, Mayor Ed Lee appointed Jeff Sheehy to fill his seat. The replacement on the board of Wiener, a policy wonk who strongly backed developing more housing at all levels, has housing activists of all stripes watching to see if the city’s policies change.
In accepting the position, Sheehy signaled some degree of continuity, saying, “It is a privilege to follow Senator Wiener, and I hope to build on his legacy and his outstanding leadership on housing, transportation, and public safety.” Sheehy is a longtime activist in the city, working on HIV/AIDS, victims’ advocacy, and LGBT rights issues. He lives in Glen Park.
LONGER ON THE MARKET
The number of days it takes to sell a home in San Francisco has gone up, rising from a low of 22 days in September 2016 to a high of 70 in December, according to the National Association of Realtors.
“Billions of neurons, hundreds of billions of interconnections, can process more than 2 million bits of information in one second. Any brain can do that. . . . If you learn one new fact every second, it would take you more than 3 million years to challenge the capacity of your brain. … There’s an assumption you can only do one thing and that we have these very limited brains and they’re incapable of learning anything else. I find that a tad humorous.”
—Dr. Ben Carson explaining his capabilities to the Senate Banking, Housing and Urban Affairs Committee