Whether driven by public policy in Washington or by uncontrollable foreign actions (see “Quote Unquote” below), interest rates have been falling steadily for decades, and they have defied expectations of imminent increases.
Just from 2007 to July 7, 2016, average annual interest rates on 30-year conforming loans have dropped 44 percent, reports Paragon Real Estate Group. They currently hover slightly above 3 percent. Compare that to rates that were well above 15 percent in 1981; rates have fallen steadily (albeit with occasional blips upward) ever since.
VOTERS AS URBAN PLANNERS, REDUX
City voters will face on their November ballot a question about allowing an exemption to a longtime restriction on office space in the city, one that has helped push up office rental rates and push out nonprofits and other renters unable to afford the high rates being charged in the current economic boom.
The Jobs, Housing and Parks Now initiative would remove the Candlestick Point and Hunters Point Shipyard from the office space cap imposed by Proposition M. In mid-July, the San Francisco Business Times reported that the measure had submitted more than 17,000 signatures to get it on the ballot. Sophie Maxwell, a supporter of the initiative, told the Times, “We have made progress in creating local jobs, open space, and affordable homes. This measure is essential to ensuring that this progress continues — and moves faster — at a time when we need it most.”
HOUSING NOT TENTS ON THE BALLOT
Supervisor Mark Farrell, supported by colleagues Scott Wiener, Katy Tang, and Malia Cohen, submitted an initiative which, if approved by voters in November, would mandate that shelter or housing be offered to people living in homeless encampments before those encampments were dismantled. (The homeless individuals could also choose to receive paid transportation to a destination outside of the city.) The city would also have to provide 24-hour notice of a tent encampment’s removal, and it would store homeless individuals’ belongings for up to 90 days after it was removed from an encampment.
Saying that “the answer to homelessness is housing, not tents,” Farrell said, “Encampments simply prolong homelessness, but ‘Housing Not Tents’ actually provides a solution.”
A YEN FOR S.F. COMMERCIAL REAL ESTATE
China ranks third among foreign buyers of U.S. commercial real estate over the past six years, and San Francisco has been a favorite target of those Chinese buyers, according to a new report.
Jones Lang LaSalle reports that new and old Chinese-owned commercial projects (such as the First and Mission tower and 755 Sansome Street, respectively) are examples of high-profile investments from China.
SECOND NAVIGATION CENTER OPENS
The long-expected opening of a second Navigation Center took place at the end of June, when Mayor Ed Lee announced its opening at the Civic Center Hotel on 12th Street. The new location has 93 beds and is owned by the UA Local 38 Plumbers Union Pension Trust Fund. It will eventually be expanded to include 550 homes with 110 permanently affordable units for formerly homeless people.
The first Navigation Center on Mission Street has served 550 people in about a year, and the mayor’s office says 80 percent of them who have left the Navigation Center have gone on to stable supportive housing or have reunited with friends and family. The Navigation Center concept has been a rare bright spot in the city’s well-publicized battle with the homelessness problem, and it has gained a lot of support since it opened with the help of private funds. Navigation centers offer more support to residents than do traditional shelters, which don’t provide support for partners, pets, and belongings.
“Britain’s historic decision [to leave the European Union] triggered negative economic ripples throughout the entire world, and the United States was not an exception. Domestically, stock markets showed a negative performance the day after the Brexit announcement. Generally, such economic news leads to uncertainty, directly impacting the real estate market. The performance of this segment slows down with declining sales. Brexit news, however, does have a positive outlook for the Bay Area real estate market. Soon after the votes were counted in Britain, the mortgage rates were driven down from an already impressively low point, creating an even more favorable environment for local home buyers. At the same time, international investors are becoming increasingly interested in the Bay Area job sector and its real estate market, which offers a sustainable environment and a strong projected growth. As always, time will show the true effect of Brexit on Bay Area real estate, which historically has shown constant appreciation in the long run.”
Quoted in SFGate.com