A reader wonders about what’s been rising up on the northeast corner of Geary and Spruce (3148 Geary). And we respond: a seven-unit apartment building with ground floor retail.
UPDATE: From a plugged-in reader: “[T]he developer has been involved in litigation for the past two years regarding this project.The developer withdrew the condo map applicaiton at the time the original condo map approval hearing was scheduled to be heard by the full Board of Supes. Members of the Board were made aware of the litigation. The developer has since resubmitted the map and should have no problem with approval at the hearing which is scheduled to happen imminently if it has not already happened.” (We believe said hearing is actually scheduled for next wednesday.)
hmm…does anyone know why the developer could not get the units mapped as condos? unless the city restricted them, mapping to condos is a no brainer.
What’s the rent? Size of the apts? Looks like (from the pics) there is a garage.
Apartments in in SF are kind of a head scratcher to me. If you find one you like, you pay through the nose.
Looking for something that has 2br, 2ba (a rarity), with parking (a rarity), and it’s own dedicated laundry. Haha – good luck to me. And if it’s found, it’ll be over $4k/mo. That’s still less per month than the $900k it would cost to buy a similar place, but seriously folks, who has $4000/mo to blow on rent? that’s $48k/yr. To afford that you’d have to make $74k/year before taxes (at the marginal tax rate). And that’s just to cover the rent! Now how about eating/utilities/clothing/student loans/etc? You have to make over $120k/yr just to live like a schmuck. And that’s for renting.
Now, don’t get me wrong, that’s the simple economics of it – so it’s fair. Supply and demand. Demand for renting is high.
I aspire to live like a schmuck.
Not quite. You can find plenty of 2/2 apartments with parking for around or under $3K/month all over the city. Most 2/2 apartments are occupied by couples or roommates, not singles, and a monthly rent of $1,500 each is manageable for someone making $40 – $50K per year. And most places have laundry in the building.
Dude-
Appreciate the reply. Have a kid and wife. Hence the need for a 2/2. Anyone with a kid will tell you that a shared laundry facility won’t do.
As I said, i understand the economics. The whole roommate thing works against me, as I get to split the rent with……….. myself. Not complaining (though I guess it sounds that way), just giving the perspective of an average Joe. It’s not unfair in any way shape or form.
I rent a condo unit so I get parking & in-unit parking.
Err… that’s in-unit laundry. Although being able to park inside your house would be cool also.
Treeman – have you looked at Glen Park, Sunset, Richmond, Forest Hill, etc.? You can rent a whole house, with your own laundry and garage, for under $3K/month in many of these areas. And definitely under $4K/month. Most aren’t as granite’d as a graveyard nor do they have flaming yards or bidets. But they’re affordable and quite livable. Here’s what a 2 minute search on craigslist turned up:
http://sfbay.craigslist.org/sfc/apa/625259284.html
http://sfbay.craigslist.org/sfc/apa/618127639.html
http://sfbay.en.craigslist.org/sfc/apa/620767489.html
http://sfbay.craigslist.org/sfc/apa/624252172.html
http://sfbay.craigslist.org/sfc/apa/624089494.html
Other options for Treeman include South SF, Daly City, Rockridge, and Lake Merritt, all within 30-45 mins from downtown SF and affordable.
Treeman, how much are you willing to “blow” on interest, property taxes, HOA, and opportunity cost on your down payment?
Assuming your $900K condo and $4000/mo apartment are comparable, I estimate the monthly costs of ownership as follows:
$4,500 interest (assuming 6% 30yr fixed per bankrate.com today)
$848 property taxes (1.13% p.a.)
$500 HOA (guesstimate)
$600 opportunity cost (4% 1yr CD per bankrate)
Of those, the interest and property taxes are deductible, while the opportunity cost is not worth as much because it’s taxable. Adjusting the tax-affected amounts (assuming you’re in the 33% bracket) I get $4,485 per month. It seems like the apartment has a slight advantage…
So is Treeman a troll…or just kinda slow?
I’ve been renting in SF for a long time, and it definitely seems that rents have been rising, as there are an awful lot of folks who otherwise would buy but are now “sitting on the sidelines.” Even with the rise, however, I don’t think that there’s any way that a condo in SF pencils out unless you assume appreciation that is nowhere on the horizon right now. Of course, you would have the “pride of ownership” but I’m not sure that’s all that much when you live in a “unit” and have lots of HOA restrictions sort of like ….an apartment.
Po Hill-
Agreed. I stated $4k/mo rent is still less than the condo. Just commenting that $4k/mo is a lot, and wondering what kind of average person can really make that work.
Wonkster – thanks you sir, may I have another? I was not advocating purchasing as I stated even at $4k/mo, you’re ahead vs. buying. Personally, I think rent and sales prices are inevitably going down. Sales prices – to me that’s obvious – Supply is going up quickly, demand is dried up. Rents are outrageous, but that is what it is – I think that’s much closer to an equilibrium based on supply and demand. It’s just still very high (at least for this guy)
Others- thanks for the tips on places to look. I actually noticed rents are coming down in RockRidge.
The main demand drivers for housing are job growth, and income growth. As the number of jobs increases, and incomes increase, there is greater pressure on prices. We all know the slow supply response in the city, so rents go up. But when jobs and incomes decline, rents in theory should go down. But here’s the rub, with rent control, landlords have less incentive to drop rents. Because rent increases are severely limited, in the long run it is better for a landlord to keep a unit vacant for 6,9, even 12 months to find the renter willing to pay the high asking price. Rent control governs the clear majority of housing stock in SF. This puts pricing pressure on non-rent controlled units as well. Think about it this way. You are looking at two otherwise identical apts. one rent controlled, the other not. You plan to not move for 5 years. Each is offering a 1 year lease, but you know with rent control, your increase is going to be limited to 60% of CPI. So how much of a premium do you want to pay for the rent controlled unit so you can come out ahead of taking the lower cost market rate unit (and taking the risk of higher market rate rents in the future)? Now you understand how the landlord views it as well.
You want cheaper housing, do two things. Eliminate rent control and allow the construction of more housing. Even just eliminating rent control will create more affordability as in a down market, landlords will have incentive to drop rents to rent a unit. But in the end, both responses are necessary – remove price controls and increase supply.
Payin 4000/mon for a 2 bdr is more the exception than the rule. Most 2bdr in the city are between 2-3k/month. You can rent many 3 bdrs beteen 3-4k
True Spencer, but when you want 2 bd, 2 ba, pkg (included), and in-unit laundry all in a nice area of the city that is acceptable for raising a child; your choices begin to dwindle in your price ranges. At least right now.
This site used to house another branch of the superb dim sum restaurant Ton Kiang, whose lone branch is now at Geary and 22nd Avenue.
Jack-
Bingo.
Yes the developer has been involved in litigation for the past two years regarding this project.The developer withdrew the condo map applicaiton at the time the original condo map approval hearing was scheduled to be heard by the full Board of Supes. Members of the Board were made aware of the litigation. The developer has since resubmitted the map and should have no problem with approval at the hearing which is scheduled to happen imminently if it has not already happened.
“You want cheaper housing, do two things. Eliminate rent control and allow the construction of more housing.”
exactly.
the only housing shortage in SF is an ARTIFICIAL shortage. created by rent control and NIMBYism and overly harsh planning processes.
if you don’t build it, and you control it, they won’t come.
Jack and Treeman: at some point you’ll just have to decide whether or not it is “worth” it to you to live like you do.
SF is only worth so much… how much is it worth to you? There is a reason why SF population is dropping.
The developer spent too much $ (~$750/ft) developing these units and will have a tough time selling when/if they do come up for sale. Considering the Geary Street location, he will need to sell the 2/2s for ~$850k and the 3/3 townhomes for ~$1.1 to break even (-commissions). The work quality is nice but the street sucks. Good luck to the likely McGuire agent that will list it.
Treeman, stop whining not only have I had to do the laundry at the laundromat for 18 years, but we only have one bathroom – and we have three kids. At least we have rent control!
Also, I think you can get a good selection for well under 4,000 if you’re willing to live in the avenues or farther out in the OMI/Glen Park/Balboa Park area, or if you drive, you can get a sweet Westlake house in Daly City.
http://sfbay.craigslist.org/pen/apa/627140812.html
I am in a similar boat, married and expecting a kid, we spent the last few weeks looking the city and are now leaning towards renting in San Mateo where for 2500 I can get a pretty nice townhouse.
Sure it would be nice to live in SF but I like my savings more.
Anyone who believes that eliminating rent control will substantially lower prices is naive. Or a landlord/developer trying to manipulate public opinion for personal gain.
Does anyone really believe that landlords will drop prices for new tenants if they get to lift prices on existing ones? Please…That assumes that they have a cap on expected profits. They don’t. They’ll take whatever the market will bear. A high rent isn’t charged to balance low rents elsewhere in a building. It’s charged because someone will pay it.
Booting long-term tenants will increase supply briefly, and lower prices a small amount. But it’s not as if the fresh supply will be doled out only among the current pool of rental-seekers. Many of the displaced tenants will join the demand pool, balancing most of the deflationary effects of the increased supply. Not all of those people will leave the city. People priced out of their 1-bedrooms in the Marina will compete for studios in the Mission.
The argument that rents are artificially high because landlords hold out for months, waiting for a sucker willing to pay big, is bogus.
First, it isn’t documented, so it’s not believable.
Second, only a landlord who’s pretty flush can afford to leave a unit vacant for long. How much pain can they be feeling if they can keep a coveted space vacant instead of renting it for what the market will bear (which, generally in SF, is a lot)?
Finally, if these hypothetical stallers do get their price after waiting months (as the post above claims), it means there is a market for what they were asking. The sucker set the price, not the landlord.
As for the idea that building restrictions inflate rents, have you seen what has happened in Rincon Hill and Mission Bay? Those condos can be rented (without any controls applying), and they will be. In fact, that’s already happening. Check craigslist for all the One Rincon Hill units up for lease.
Condos are the new-construction rental market, here and in places without rent control. See Miami, Philadelphia, Phoenix. Developers rarely build rentals these days because they don’t want to be in property management. (The Geary building is an oddity.)
So we have a lot of potential new rental stock out there. Any argument to the contrary is spurious.
mary,
you would be somewhat correct if prop 13 did not exist – unfortunately it does. Prop 13 keeps carrying costs so low that buildings are oftentimes kept vacant in anticipation of the owner using it for a different purpose. if you owned a building outright (without a mortgage), as many people do here, it costs beans to keep it empty. if you know that you’re going to want to do soemthing else with it in say, two years – why worry with renting it out. yes, you may gain a little bit of income, but you also get a tenant (no short term leases allowed here), and you lose some rights on what you can do with your property
I’ll have to agree with anon on this. I know at least 4 units that are sitting empty, because they don’t want to deal with tenants. And please don’t call me a liar, because my parents own one of these units.
Thanks Goodness these are going to be condos – always happy to see more owners rather than renters in this area.
As a landlord of several rent-controlled apartments in the city, I am looking forward to 5 years down the road when I sell. And yes, my properties will all be mortgage-free by then.
Although my current tenants are nice, I am sick and tired of the myriad of pro-tenant laws in this city. Many other landlords feel the same way and when they do sell, rental units will turn into primary homes for its owners. So to all those landlord bashers, reap what you sow.
mary could use an economics refresher course. not even going to touch that one. regulation raises prices because it restricts access. At 1st rents will rise because the market will bar eit, but over time average rents will begin to drop as there is open and equal access to units.
If prop 13 were to be repealed today there would be a whole lot of other problems. For one, all of the buildings that are mentioned as being paid probably are valued at next to nothing and taxes are very low. Now if a 10 unit building is suddenly valued at $5,000,000, ($500,000 per unit is low given todays market) that calls for close to $60K in taxes, or $6,000 per year added expense on each unit. Others will go up higher. Are you supporters of having prop. 13 repealled supporting paying an extra $500.00 in taxes? Or is the idea that the landlord should pay for that too?
If you buy a property today, you pay the higher mortgage and higher tax base. So I don’t see how this would benefit the buyers.
So if renters will pay more and current buyers are already paying market taxation, who benefits?
Is the short-term pain really going to make a difference, and for whom. The costs of carrying a vacant property are the owners’ business, not anyone else’s, it is private property after all. We don’t live in a communist state although the socialist movement here would certainly cause some to wonder.
Also, the reason some of these units remain vacant or people won’t sell them is because they have to pay capital gains. Makes more sense to use as a second home or for whatever suites the owners.
Repealling prop. 13 is an old argument anyway. Since it’s not changing, it needs to be dealt with as an ongoing reality and not as the silver bullet that will make housing affordable. Look to the costs that the planning deparment imposes and cut that, and you cut a substantial amount of the costs providing housing. Also, stop listening to the “advocates” that do nothing but aggrevate the housing shortage they are fighting. Look at the Armory, 14 years of not good enough and it ends up as a porn studio. GREAT! I loved that outcome.
Treeman, stop whining not only have I had to do the laundry at the laundromat for 18 years, but we only have one bathroom – and we have three kids. At least we have rent control!
What kind of life is that, really? It amazes me that some people are so happy that they got a “great deal” on rent that they’ll give up growing up in order to keep it. I know a family of three crammed into a mother-in-law unit in the Sunset. Sad…
huh? So we’d rather be able to walk or quickly muni to work and live well within our means. What kind of life is commuting four hours a day? Or not having a nice padding of liquid assests in case of a rainy day? Is not having financial worries considered “immature” these days?
The kids, I assure you, are not suffering. Our place is big, just plumbing challenged, and they’ve let me know, repeatedly, that they’d so much rather live in a flat in our neighborhood than nearly anywhere else, no matter how many bathrooms they might get out of the deal.
My point to Treeman is that it’s about priorities. You never have been able to get everything you’d want in a San Francisco rental without paying through the nose, the housing stock (new condos notwithstanding) decidely too old and funky for that. Most people have to decide between location, or bathrooms, or parking, or laundry or pets. Maaaybe you’ll get 3 out of 4 – if you don’t like it, move.
That should say, “three out of four in your desired location.”
view lover,
if everyone was paying the same rate for property taxes, there would a LOT fewer vacant properties and the general tendency would be for property to be used for its highest use.
the idea that we’re all a bunch of socialists because we want everyone to pay their fair share for government provided services (what property taxes pay for) is laughable. A newcomer should have to pay more for police? Fire protection? huh? if you dont like property taxes, fine, lets get rid of them all – but calling the inequity that currently exists “correct” and “protecting the property owner” is bs.
And yes, i would be more than happy to $500 a month more for the short term if it meant the repealing of prop 13 – i would certainly gain A FREAKING TON in the long term.
The pro-tenant laws are out of control. One of my friends lived in a building where the intercom was being changed to a more modern technology, getting the intercom to work through the phone line. He did not like the fact that now he needed to have a phone in order to use the intercom. While he had a phone, he did not believe he should be required to have one in order to have a functioning “doorbell”. He filed a complaint and the building had to stop the work in progress. After a hearing he was able to get the rent cut back because he was actually getting less than what he originally had. The landlord had to go through all of the hearings and then reduced the rent by $25.00 in order to account for this decrease in amenities. And also have the contractors work around his apartment as he was not going to have the system upgraded. After he moved out, I”m sure the landlord then had to upgrade the system at a big expense.
I could not believe it, but that is our system. I’m sure there are others that agree with his position, after all, the other tenants wanted to do the same. I’m sure there are other stories out there.
But in the end, how can a landlord care about the tenants when this is the mindset of many of the tenants and the regulatory board.
anon, is it the rate or the market value of the property that you suggest gets moved up? Either way, it will call for more taxes. YOU would make a ton in the long term, that’s pretty selfish. What about the elderly on fixed incomes, do you have a solution for them? And NO, reverse mortgages and refinancing are not options for everyone, and certainly not just to increase taxes. Are we a socialist society here? I hope not, but this City certainly thinks that way.
And I’m not complaining about it for myself. I bought property in 2003, 2004 and 2007, so I’m paying more than most people. Yes, I’m one of those that many on this site are chearing on to lose more so that they can eat at my bones like a bunch of vultures. Yet my tax base keeps getting higher every year. Problem is that there are many individuals that cannot afford a change in the system.
If you are concerned about vacant lots and empty buildings, are you raising hell about the vacant lots that could be housing but our planning commission and advocates for everything under the sun keep from becoming affordable housing? Those are factors that CAN be changed yet they remain to cause inflict more regulations and keep prices rises.
This particular thread started out as a property where the developer put in $750 psf in construction. Ever wonder how much of that was for time spent with the planning department and appeasing everyone? Much more than the $500.00 you are willing to spend.
As far as market efficiencies, that was something that was tought in economic theory, does the modern financial world really work that way? Bears Sterns gets proped up by our tax dollars. Is that the kind of efficiencies that you are refering to and would like to see more of?
Prop. 13 was implemented a long time ago and this City and state have managed to keep their tax revenues increasing. Targeting for more taxes and displacement in order to make things more affordable is pie in the sky thinking. The property values increased dramatically with the market and the state and City still don’t have enough money, they never will. They’ll just keep creating more 6 figure jobs for City workers and never live within thier means. We have to constantly vote on more bonds to pay for libraries and other basics that should already be covered, but the money always keeps going to something else.
Prop. 13 is always an easy target and ends up with ongoing debate. Is it fair that a person who buys property at current prices has to pay more dollars but still the same 1.16% that someone pays if they bought 10 year ago? Is it fair that a new renter to the City has to pay market rates for a unit that someone else is paying less for because they’ve lived there for 20 years? I don’t know, but any new comer to the state and area should know about the expenses associated with living here and make a decision based on that. Whining about the unfairness is just bs, life is not fair afterall.
Just like many people have had to live and succeed with prop. 13 and all of the other economic realities we face, you should do the same. It IS unfair to punish those that have played by the rules and prospered just to pacify those that can’t or refuse to.
view lover,
property taxes are the most equitable taxes that there are. period. eliminate prop 13 and you gain the ability to cut many other taxes.
empty lots may still sit empty in the city because of our broken planning dept, but the same thing probably wouldn’t happen nearly as often as it currently does on the peninsula, in the south bay, in marin, in the east bay, etc. more development there would put pressure on prices here.
i’m not mad or wishing to “penalize” those that “played by the rules” – i’m simply looking for better rules – the same thing people did when passing prop 13 to begin with.
As has been pointed out many times, you could repeal prop 13 for 2nd, 3rd, and nth properties. The law was written before every other Californian was an amateur real estate investor and wananbe Trump. Leave it in place for primary residences, and repeal it for investments. That ought to appease the seniors and widows. And as a renter, I agree that rent controls need to be done away with as well.