The market rate and affordable housing presentation from the last Transbay Citizens Advisory Committee (CAC) is available online (ppt file size warning: 26.3MB) and provides a brief overview of the redevelopment area requirement for 35% of all new units to be “affordable” (25% affordable to households earning 60% of AMI and another 10% affordable to households earning 120% of AMI).
Also included in the presentation: a brief overview of the family housing development at 10th and Mission, the senior housing development at 9th and Jessie, and the preliminary “Green and sustainable building design” concept for “115-120 studios for formerly homeless people” at Gough and Fulton (Central Freeway Parcel G).
The next CAC meeting will be held on April 12, 2007 at Yerba Buena Center for the Arts (701 Mission Street, 2nd Floor Conference Room) for those who might be interested.
∙ Transbay CAC Housing Presentation (ppt) [SFGov]
One thing that I wonder about is the HOA fee – even with BMR pricing, the HOA fees would still be $xxx I would think. Would the HOA fees preclude folks who otherwise qualify at 60% AMI (about $38,000/year for a single person) from affording the place? Hmm….
I look forward to seeing some of y’all at the CAC meeting – I think it may be on the 10th (if the item is correct on http://www.transbaycenter.org/TransBay/content.aspx?id=631 ) This is the defining project for the Rincon Hill and Transbay area neighborhood.
[Editor’s Note: Although the CAC typically meets on the second Tuesday of every month, the agenda we received for April’s meeting notes Thursday the 12th.]
The building at Gough and Fulton looks nice. One thing I would be concerned about since I live in the area are the supportive services the “formerly homeless will receive” As someone who has worked closely with the formaly homeless, I can say that providing a person with a home without the propper life skills can be an overwheliming event. Many times people bring in the dilemas that made them homeless to begin with. In current buildings with “formerly homeless” there is an element of crime including drugs and violence. How will this change neighboring Hayes Valley? This is a transitional area and should be supported as such. I’ve seen how well San Francisco has done with other nearby subsidised housing (e.g. : the recent shootings in the Western Edition). I hope this is different. Otherwise, this would not be a place where I would want to stay and raise a family.
Aha … I think I may have confused my Citizens Advisory Committees up. The one I referred to is a different committe, I think. It is a CAC for the Transbay JPA whereas the group meeting on the 12th is connected to the SF Redevelopment Agency. Oy – no wonder our City is accused of being a bit slow to get things done.
One more comment on housing “formerly homeless” – while I’m all for finding solutions to help make San Francisco more appealing, I do hope the City keeps in mind this is a Citywide problem and not a SoMa problem. In other words, SoMa should not have to be the only area shouldering this burden.
I’ve been troubled by the fact that 50% of the former Central Freeway parcels have been set aside as “affordable” (read = low income) housing. The area is already surrounding by crime-ridden projects to the west, and the Tenderloin to the east; now, there will be that much more poverty thrown into the mix. In this idealistic zeal to house the poor, we’re simply repeating the same old mistake of creating high concentrations of poverty in a fairly small area.
What about people who make more money than the BMR requirements yet can’t afford to buy a $500k starter condo? Are they going to get any help from the city?
@zzzzzz “I’ve been troubled by the fact that 50% of the former Central Freeway parcels have been set aside as “affordable””
BMR housing is not affordable. When you combine the loan payment, insurance, etc with the HOA fees (which are often more than my rent just by themselves!) these are still expensive.
Now, I could see an argument that those people are in poverty *because* of their home payments, but that could apply in any neighborhood.
The definition of “affordable” housing is an ever-changing thing. As I understand the current law, however, “affordable” set-asides are limited to individuals and families who earn no more than 60% of median income; in other words, the middle class is entirely excluded. So let’s dispense with the euphemisms and call things as they are: “affordable” housing in San Francisco increasingly refers to low-income housing. There’s no point in claiming anything to the contrary.
Right on g! @zzzzzz thinks he or she is going to be eaten up alive by BMR criminals.
shineyspikeything,
God forbid poor people should have a decent place to live.
Sorry, I meant the last comment to @zzzzzz.
God forbid poor people should have a decent place to live.
Looking at the presentation, I guess the BMR housing isn’t for sale as much as it will be for rent. That makes more sense for folks at 60% of AMI.
I have a long term nieghbor friend who recently qualified for a BMR unit. I have never asked him about his income, but he has a college degree, a union job at a newspaper, and went to Europe last year. In our micro economy, his one bedroom BMR unit equaled a sales price of about $250K, down payment and up front costs of about $90K (borrowed from his union pension plan) and about 1% lower interest on his mortgage. Except for the cut on the interest, the price is near the average home price for the USA and the down above average. So unless you are afraid that too many sports editors, school teachers and Golden Gate Park gardeners will ruin the neighborhood, I wouldn’t be concerned about the BMR’s.
Anonymous:
“Right on g! @zzzzzz thinks he or she is going to be eaten up alive by BMR criminals.
shineyspikeything:
“God forbid poor people should have a decent place to live.”
Oh please, spare me the sanctimony – I’m not impressed. My point still stands: It makes no sense to concentrate poverty in an area that’s surrounded on all sides by impoverished neighborhoods. Decade upon decade of failed experience with concentrated poverty in low-income housing projects and all the attendant social problems answers that question unequivocally. To the extent that the former Central freeway parcels are devoted to low-income *rentals*–which will be rented to low-income individuals, by any standard–it’s just repeating the same mistake–long after everyone should have known better.
Do BMR’s remain BMR in perpetuity? Or do they revert to market rate after a certain period of time?
Do BMR owners get any help in paying HOA dues (which can be quite substantial in some developments)? Do they get any help in meeting other HOA requirements (such as white window coverings)?
[Editor’s Note: BMR units are deed restricted for 50 years after which they convert to market rate. And BMR owners get no additional help with HOA dues, requirements, or special assessments (which can be substantial).]
Salarywoman,
Based on the experience of my friend:
The HOA dues are the same.
There were no issues like window covering requirements, but the BMR’s were slighted in several ways in his development. His unit has carpet were the market rates have factory hardwood floors. The markets rates came with a stainless steel GS Monogram frig where he had to buy his.
Sorry, I think the entire BMR program is a joke. Who’s going to raise a family in a 2 bdrm condo? What happens when someone moves up the income scale and is now making more than the income requirements when they purchased? Who’s going to police these units so they aren’t rented out (I’ve seen that)?
It’s like rent control, a good idea in theory but a mess in practice.
There are various BMR type programs, but generally speaking, there’s a whole convoluted “recapture tax” scheme for if you end up making more money than you did when you qualiified. That’s from my research into the Cal HFA program. Mayor’s office may be different, but generally these BMR things just puzzle me because, as far as I could tell, if you made a small enough income to qualify for the programs, you wouldn’t actually be able to cover the loan, insurance, tax, and the real clincher: HOA fees.
I don’t understand how people do it. Best I can figure is help of friends/family, under-the table work, or substantial savings? But if you’re truly poor, you would be hard pressed to have built up those savings…
I really don’t know. And I looked into it because I don’t make enough to responsibly buy at market rate. But I make too much to buy at BMR. What to do?
Oh, and zzzzzzz, I didn’t say what you quoted me as saying.
But some of this BMR concentration might be to do with the fact that a lot of the fancy-pants new developments opted to do their BMRs off-site? And they have to go somewhere.
The BMR program is mostly mis-understood by those who haven’t read up on the information. In SF low-income is considerably higher that what you would imagine. To qualify, a 2-person household must make no more than $72,950 (that’s below the median income in SF which is somewhere between $85,00 and $90,000 per year).
Then there is the deed restriction business which means that owners cannot leave the property to heirs, cannot rent out the units (short-term exceptions), must certify annually that they occupy the units and finally, the City sets the re-sell price according to prevailing median income levels and the unit stays in the BMR program. Owners do get to keep the appreciation, if any. If wages go up and interest rates go down — it’s a good thing. If wages go down (which they did in 2006) and interest rates go up — you’re likely to lose any money you invested.
There are lotteries for these units going on all the time. Check the Mayor’s Office on Housing for detail.
Once again regarding a little insight about BMR’s I have developed based on one personal friend recently moving into a BMR unit. In his building the BMR owners he has met seem to be in similar situations to himself.
He attended college in SF and has worked for the same company since graduation.
He had lived in the same apartment since the mid ’70’s. His rent was far closer to the montly HOA dues amount than the BMR mortgage.
He is now entering his 50’s with no expectations of sudden wealth, inheritance, or career changes until retirement.
He has obviously never looked at real estate as an investment, and hasn’t started to do so now. The BMR purchase for him means security, it means he will not have to leave the city he has lived in virtually all his life when he retires or if he was not able to stay in the apartment he lived in for so long.
Sorry but that building is ugly.
Ugly?
An understatement.
“[Editor’s Note: BMR units are deed restricted for 50 years after which they convert to market rate….”
I’m curious : when the BMR sales restriction times out after 50 years it can then be sold at fair market rate so there’s likely to be a huge windfall profit at that sale. Who receives this windfall profit ? The lucky owner who bought the BMR just before the sales restriction expires ? Or does the windfall from adjusting back to fair market value go back into the city’s low income housing fund ?
If it is the former then the BMR resale lottery will pack an extra punch for the lucky buyers who purchase at the artificial low price and sell at market rate.
It seems like the latter makes the most sense, allowing the city to reinvest the profit in the artificial spread to keep housing affordable.
thielges I had the same thought
With any sort of regulation there is someone trying to game it, pass another law, and there will be attempts to game that
Well, I’ve been trying to make some sense out of this. Thanks for the answers to my previous post. I have concluded that the main advantage of owning a BMR is, as redseca2 said, security. As long as you keep paying the mortgage and the property taxes, you can stay in the unit. No landlord can evict you (but then again it’s difficult for landlords to evict in SF anyway).
The HOA dues, it turns out, are not a big problem. I have just learned that all a homeowner’s association can do if you are delinquent with your dues is put a lien on your property. And the ability to add fines on top of the delinquent dues is pretty limited. I’m sure most BMR owners pay their dues, but if they get behind it’s not like getting behind with the rent.
I live in a fancy development that did not outsource its BMRs. I think this is a good thing. So far the only problem that we have encountered is the window covering issue I asked about earlier. One BMR owner has installed what I’m sure he thinks are perfectly serviceable drapes that happen to be the wrong color. Turns out there is not really very much the HOA can do about it besides sending letters and imposing a one time fine. Because it’s a BMR we feel uncomfortable about the fine. We don’t want to be jerks so we are actually considering buying white drapes for him. Note to developers: In my opinion, they should have been provided with the unit.
I wasn’t going to share quite so much, but what the heck….
I took advantage of the Mayor’s Office of Housing down-payment assistance program so that I could afford to buy a condo. The big incentives include:
1) the security of having a place that I don’t share with a roommate and all of the roommates buddies who treat the place like a youth hostel
2) I’m building equity instead of throwing rent money out the window – and as I pay down principal on my primary mortage, my “rent” (the interest payments) decrease. As my salary goes up over the years, I should be able to paydown more principal – reducing my “rent” further.
3) I don’t know if this applies to all Mayor’s Office of Housing programs, but I chose to also take advantage of a MCC (Mortgage Credit Certificate) that gives me a tax credit of 15% of the interest I paid on my mortgage.
As far as what the City gets from me – when I sell the place, at the end of 40 years, or when I pay off the down payment assistance, they receive a portion of any appreciation in the value of my home equal to the ratio of the downpayment to the sales price. For the program I used, my unit is bought and sold at market determined prices – which I think is a lot better (if you can afford it with the Office of Housing assistance) than the BMR-priced units where the City determines what price you can sell the place, though the benefit of building equity is still there.
I strongly support these programs and encourage others to give them a shot if they meet the income requirements. Also, check out ACORN Housing for your mortgage – more special deals that way.
Good for you Jamie. Congratulations – owning a home in San Francisco is a very significant accomplishment in my book.
Wow, Jamie, thanks so much for the insight. I have been wondering about these programs for a while. As I said, I looked into some of them, but found I didn’t qualify. (but as I said, still can’t afford to buy a place– I really think it’s the in-between people wo are stuck, but I guess I’m biased.)
“I didn’t qualify. (but as I said, still can’t afford to buy a place– I really think it’s the in-between people wo are stuck, but I guess I’m biased.)”
I’m happy for all the people that have been able to use the BMR programs out there to own their own place, but it seems like the effect of the program will be that only the rich or the (relatively) poor will be able to afford to live in the city because these BMR programs ends up increasing the cost to build new condos in the city. So where does that leave the people in the middle? I make in the low six figures yet I can’t seem to even afford a decent 1 bedroom condo.
I think the biggest issue is just finding out about these programs while you qualify. I only learned about the programs in September of 2006, and quickly jumped on board to close on something by the end of the year since I hoped my salary, with any luck, wouldn’t qualify me in 2007 and beyond for the assistance.
I empathize that many folks are stuck in betweeen, making too much to Mayor’s Office of Housing help (over $76,000 or so for a single person is the 120% AMI, I think) yet not making enough to buy without help.
On the other hand, I suggest folks aim lower for their first home. A studio condo isn’t my dream home by a long shot, but it is a start. I’m happy as can be that I live 10 minutes walking distance away from the FiDi, close to the Embarcadero (great exercise spot), and nearby a good chunk of the City’s public transit lines. There are $379k and up condos (probably some cheaper that aren’t on my radar) out there – not at the Infinity or Rincon One, but humble beginnings that may help lead you to your dream as your salary goes up and you build equity.
Strongly agree with Jamie. The point is to get in the market, get a base to build equity on, and get the mortgage interest deduction.
g – unless you are laden with consumer debt, a good sized studio can be achievable for you. Or look outside the city. I had to. I bought in San Leandro six years ago (steps from BART) and it has doubled in value. I just bought a brand new apartment in the city several weeks ago and will move in late this year after I sell my current place.