AFFORDABLE HOUSING AGREEMENT
Compromise between the left and moderate members of the Board of Supervisors resulted in an agreement to require that any developments approved in the city through the end of 2017 would need to have 18 percent of their rental units be affordable, reported the San Francisco Chronicle; that would rise slightly to 19 percent in 2018, and to 20 percent the next year.
The San Francisco Business Times explained the details: New rental projects have to provide 18 percent on-site affordable units, a reduction from 25 percent; 10 percent of units have to be reserved for renters earning no more than 55 percent of the area median income (AMI); 4 percent of units reserved for 80 percent of AMI; another 4 percent of units reserved for 110 percent of AMI. For new condominiums, 20 percent of on-site units must be affordable, a reduction from 25 percent; 10 percent of the units for people earning no more than 80 percent of AMI; 5 percent for 105 percent of AMI; and 5 percent for 130 percent of AMI.
UP AND DOWN AND UP AND DOWN
The local real estate market’s zooming ahead. It’s cooling down. It’s heating up again. The researchers at Paragon Real Estate Group are giving fuel to the last of those possibilities, noting that most market segments in San Francisco cooled from April 2015 to April 2016, but “almost all of the segments bounced back in April 2017, and indeed the lower-price segments performed considerably better than 2 years ago.”
Paragon’s latest market report says that measurements such as months-supply-of-inventory and average days on market neared all-time lows, and competition has increased for homes costing less than $2 million and condos under $1.5 million. It says year-over-year prices haven’t jumped yet (see “Heated Competition,” below), but it suggests watching the price reports that come in from the houses sold in April that actually closed in May.
There will be a test of the market if the economic expansion pauses or reverses this year. Jones Lang Lasalle reports that it has lowered its estimation of economic growth this year due to various headwinds, such as reduced expectation of fiscal stimulus coming out of a paralyzed Washington, D.C.
The most competitive housing market in the country in April was San Jose, which saw slightly more than 75 percent of its homes sell above asking price. In second place was none other than San Francisco, where 69.5 percent went for more than the list price; the top three was rounded out by another California city, Oakland, with 62.1 percent earning that distinction, according to real estate website Redfin.
Prices in San Francisco rose 0.6 percent between March and April of 2017, notes Redfin; the year-over-year change was actually a decline of 3.1 percent.
CALIFORNIA AFFORDABILITY IMPROVES SLIGHTLY
Housing in the state is a little more affordable than before, thanks to seasonal declines in pricing and higher household incomes, reports the California Association of Realtors (CAR).
“The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in first-quarter 2017 inched up to 32 percent, up from 31 percent in the fourth quarter of 2016 but down from 34 percent in the first quarter a year ago,” noted CAR’s Traditional Housing Affordability Index.
The group estimates that homebuyers in the state need to have a minimum annual income of $102,050 to be able to make payments on the median-priced home of $496,620. But San Francisco, San Mateo, and Santa Barbara were the three least-affordable areas in the state. CAR gave $1.3 million as the median home price in San Francisco, which requires an income of $267,130.
WALK IT OFF
The city announced in mid-May that San Francisco “is the first and only city in the United States where all residents have access to a park within a 10-minute walk,” as reported by the Trust for Public Land’s Park Score.
That comes in handy when the streets are too congested or closed down for repairs.
“San Francisco’s population reached a record of more than 874,000 last year, according to a state report, and its housing growth was relatively brisk for a change, adding 5,000 units. But the population has expanded at nearly twice the rate of housing since 2010. Meanwhile, as the struggle to house teachers has illustrated, the city has been even worse at building middle-income housing than it has been at producing low-income units. With less than two-thirds of the estimated housing need met for at least the past decade, the city would have to maintain the unusual pace of the past year for another five years merely to close that shortfall, to say nothing of accommodating further growth.”
—San Francisco Chronicle Editorial