Land Condos Across The Bay'/>

June 27, 2008

They're Not Building Any More Land Condos Across The Bay

"Oakland's condo building boom has ground to a near halt. While construction has continued on existing projects, Patton said no new projects have broken ground during the first half of 2008.

A June report on the East Bay condo market from the Mark Co. lists at least a dozen projects slated to begin construction in 2008 that are now on hold. And work halted on Olson Co.'s City Walk at 1260 Martin Luther King Jr. Way last July and has yet to resume because of funding problems, according to Olson spokeswoman Nancy Green.

Other projects, such as Lightner Property Group's 120-unit 3250 Hollis St. and 100-unit 2847 Peralta St. are ready to break ground, but have been put off until the market shapes up."

UPDATE: From a plugged-in developer: "I own a nearly fully entitled 16 project in a great location by Lake Merritt and it does not come remotely close to penciling out. I figure the market there has dropped 40%."

Oakland developers freeze housing projects [San Francisco Business Times]

First Published: June 27, 2008 2:00 PM

Comments from "Plugged In" Readers

Any news on that Cathedral building, the gothic one in Oakland? That place looked cool.

Posted by: lolcat_94123 at June 27, 2008 2:38 PM

It is my understanding that many of the condo units that were built in the downtown Oakland area in the past year or two have gone rental.

Posted by: location at June 27, 2008 2:44 PM

the broadway grand in "uptown oakland" has recently gone rental. last I heard they were not even 3% sold...

Posted by: Ryan at June 27, 2008 3:52 PM

I own a nearly fully entitled 16 project in a great location by Lake Merritt and it does not come remotely close to penciling out. I figure the market there has dropped 40%.

Posted by: wayne at June 27, 2008 3:54 PM

We looked at condos and apartments in Oakland this spring. And there were a lot of condos for sale. A lot. Meanwhile, luxury apts in places like Jack London's Aqua Via and the Essex on Lake Merritt were hard to get and ran about 2500/mo for a 2 bdrm with one parking spot.

But the condos were very very empty and we felt there'd be some opportunity for buying later in the year. Especially since it didn't feel like anything was moving - except apartments.

Posted by: malachy at June 27, 2008 4:10 PM

I expect to see a lot more condos auctioned off in Oakland, in addition to others being converted into rentals. If you're interested in buying there, patience will be rewarded, imo.

Posted by: Amen Corner at June 27, 2008 6:50 PM

another datapoint: developer friends of mine converted a lovely old brick bldg into 20 lofts off grand ave in west-west oakland, and sales are mucho s-l-o-w. they already converted some to rentals, and are seeing their profit go down the drain.

as above poster said, 'that's oakland.' yet still, i am amazed at the radical difference 7 miles on the bay brige make (vis a vis SF.) imagine investing in a condo in jack london square vs. SOMA, say in 1999. in soma you would have made bank, in jack london, by now you may be +/- where you started 9 years ago. startling difference, especially since oakland has such great potentail to be not only a cool city, but one with solid investment potential as well. buyer beware, and yes, i'll stick to SF.

Posted by: AMinSF at June 27, 2008 10:11 PM

Yikes...that's really not good news about Broadway Grand going rental. If Signature Properties had to make this decision then things are bleak in Oakland. I wonder if Ozumo is still going to open in the retail space below.The Ellington is also in construction in Jack London Square. It's going to be interesting to see whether they convert them to rentals also. It doesn't help that the city government currently is showing zero leadership on crime and other quality of life issues. I'm a big fan of Oakland but if you're thinking about moving there, from an investment perspective, stick to the Blue Chip neighborhoods such as Rockridge, Crocker Highlands or Montclair. Transitional neighborhoods like Temescal or Maxwell Park are way way down...

Posted by: Willow at June 28, 2008 8:12 AM

yup, watch that "creative class", that has been identified as one of the keys to successful cities, move over to East Bay. You just have to read the article in the SF Chron about the GLBT community being priced out of the Castro and other SF neighborhoods to see the direction SF is going in.

So the Artists and Hippies have been driven out of the Haight, the GLBT community is abandoning the Castro, and families with kids are dropping SF like a hot potato who does that leave?

Looks like a chance to get in on the ground floor of the new center of bay area coolness, the East Bay.

Posted by: badlydrawnbear at June 28, 2008 10:17 AM

^^^^Except that with no new housing being built now, Oakland has no chance to really grow either. If it becomes popular with the "creative class", property values will skyrocket and it will quickly become expensive. We need some people to build now, instead of simply waiting for housing units to reach the stratosphere again in five years before new inventory is added.

Posted by: anon at June 28, 2008 10:49 AM

"Except that with no new housing being built now"

It would be fascinating to know just how many units are currently vacant but off the market because they are; investments, vacation homes, pied a terres, second homes, third homes.

Posted by: diemos at June 28, 2008 10:56 AM

^^^There are that many vaction homes, pied a terres, second homes, and third homes in Oakland? I'm sure there are a few, but all of those are not even THAT common in San Francisco, let alone Oakland. Investments? I'm sure there are some, but that won't really affect what I was talking about above.

Posted by: anon at June 28, 2008 11:19 AM

entitled projects don't pencil because of land costs, materials and labor?

purely on supply and demand why can't 250K condos be built here like elsewhere in the US?

Just trying to understand this dynamic. Since they are already entitled it would seem it isn't the protracted process here (or is part of the problem that these are sunk costs that need to be recouped?)

I have recently been working in Uptown Oakland. there seems to be a ton of huge projects still under construction

I also have to say I really like going out over there (it reminds me some of how a place like Docs Clock used to be or the Mission before the clones took over). As everyone else mentions it seems to have so much potential. Much more so than Jack London which I can't stand

Posted by: Zig at June 28, 2008 1:00 PM

yup, watch that "creative class", that has been identified as one of the keys to successful cities, move over to East Bay.

BDB - It's already happening...there's lots of cool stuff over there going on in the arts community, it just generally goes under the radar because of the bad reputation the city has not only in the Bay Area but nation wide.

Posted by: Willow at June 28, 2008 5:43 PM

Many people would call many of the people now moving to the city "creative" types. But I guess creating new companies, websites, etc, is only considered creative in other cities? We only long for the creative types of the past, like hippies, etc. Yet another case of SFers wanting this to be 1965.

Posted by: anon at June 28, 2008 7:20 PM

I think the Bay is more psychological than physical. 7 miles of water is created into some impossible divide similar to a high school playground with the "kool kidz" only allowed on one side. What if there was no bay? (or hills for that matter?) Our unique geography has a lot to do with people's perceptions of the "unique" character of San Francisco. Frank Lloyd Wright's comment about San Francisco still rings true, "without the hills and the water, it would just be another ordinary American city".

We have seen what has happened with the Dumbo neighborhood in Brooklyn, and I think it is looking like a good time to get on the ground floor of Oakland. Why would anyone "creative" want to pay 900,000 to live in a stucco SOMA apt.? If a San Francisco "creative type" is someone who starts IPO's, it might be time for me to move to Rockridge, as I crave more diversity than that. There is a lot of Marina bashing on this site, but to me, the whole city is beginning to take on some of the atmosphere that many feel makes the Marina sterile.

Posted by: anon43 at June 29, 2008 5:24 AM

So a creative class that makes world-changing companies, technologies, etc is less important than some weed-smoking hippies sleeping in dilapidated housing? It is good to know that soon all those Academy of Art kids will be moving from the city, though. You know, since creative types simply can't make it here.

Posted by: anon at June 29, 2008 8:29 AM

"move to Rockridge"

Are we really taking about Rockridge here? Noe Valley East (which I like very much) isn't really the parts of Oakland that I consider this discussion to be about

We are taking about Uptown, Temescal, old Oakland, Adams Point, etc to my mind. Rockridge is completely gentrified

Posted by: zig at June 29, 2008 10:28 AM

We settled in the 1200 Lakeshore Building on the southwest end of Lake Merritt.

While we are liking many things about this part of Oakland (the Parkway, walking around the Lake, the farmer's market, proximity to BART) we also have found there to be more tension on the street than in other places we've lived. Even NYC (5 years in Washington Heights) was more relaxed.

When we mention this to those who've lived here longer they seem surprised to hear it. It seems as if they've lived here long enough to be used to it.

But it also may be new. That this "creative class" discussion is really about people with money finding the city too expensive and moving into area where they haven't been in awhile. Or before.

The murder last weekend near the Lucky on Lake Merritt didn't help much. Nor does news that a local city official who interfered with a police gang investigation is being given leniency regarding her actions. (IMHO she should be at the very least suspended without pay until a complete investigation can be made.)

Posted by: chase at June 29, 2008 12:33 PM

So a creative class that makes world-changing companies, technologies, etc

And how many of those people are living in SF county itself versus the number living in the other 90% of the Bay Area?

I don't know specific numbers, but I do know less and less of them are living in SF county and even fewer are living in Fluj's "real SF" and choosing to live in other, less expensive parts of the Bay Area.

Posted by: badlydrawnbear at June 30, 2008 8:58 AM

^^So, you don't know numbers, but somehow you do know that they are living in other places? Why? Because a friend told you or "everyone you know" happens to be that way? I figure there might be a reason why so many of the companies from down south are running shuttles or opening offices up here (including VC companies), and I also wonder why all of those Mission Bay biotech buildings are filling up with new companies...hmmm, maybe I should ask everyone I know.

Posted by: anon at June 30, 2008 9:14 AM

The fact that the GLBT community can't afford the Castro and crossing bridges, artists can't afford the Haight (or most of SF) and are setting up shop outside of the peninsula, and that families with children are leaving the San Francisco in high numbers for less expensive parts of the bay area is well documented.

I am not arguing that SF doesn't still have a lot going for it but the observation that more and more of SF is starting to become homogenized is not some fringe concept but is reflected in the demographics.

The fact that the East Bay offers much lower cost housing making it much for attractive to the very people who help give any city it's character/color sounds like an opportunity to buy cheap in East Bay and reap some great benefits in a few years as that market turns around.

Posted by: badlydrawnbear at June 30, 2008 9:40 AM

"....The fact that the GLBT community can't afford the Castro..."

What factual evidence is there of this presumption? Yes, more gays are moving to the suburbs and more straights are moving to the Castro, but that's a function of diminishing prejudice and the decreasing need for a "ghetto" to offer protection from the outside world. Moreover, this phenomenon is going on in former gay ghettos in cities all over the country. I'm not aware of any evidence that gays are fleeing the Castro for financial reasons.

Posted by: zzzzzzzzz at June 30, 2008 10:04 AM

Again badlydrawnbear,

I'm asking for facts, not the writing from several Chronicle articles or what everyone you know is doing. There is plenty of evidence to show that quality of schools and large yards are just as big of reasons for families to leave the city than cost.

I agree that we're probably losing artists from the Haight - but we're gaining many other "creative types" in other areas. Why must everyone in this city cling to the past?

Posted by: anon at June 30, 2008 10:21 AM

"I'm not aware of any evidence that gays are fleeing the Castro for financial reasons."

They're not fleeing the Castro. They just can't move there because it's unaffordable to them. Open your eyes. It's the reality, but of course, if you can't find hard statistical evidence, you don't believe it.

Posted by: 94114 at June 30, 2008 10:28 AM

Why is it unaffordable to them? As compared to who is moving in.

Posted by: sparky at June 30, 2008 10:32 AM

The only people that move into the Castro OR most other parts of SF are those that can afford very high rents or mortgages, that leaves many people out, gay or straight. And many people that have lived here for a while would not be able to move here now. Also, housing isn't the only thing that is more expensive in the City, tomatoes are now going for almost $5.00 a pound!

Do some of you really need evidence to see this and where this is going?

Posted by: view lover at June 30, 2008 10:45 AM

So 94114, you have evidence that gays that would like to move to the Castro make less than straights that would like to move to the Castro? Don't gay households on the whole have higher average incomes than straight households? Hmmm, maybe something else going on...just maybe...

Posted by: anon at June 30, 2008 10:47 AM

Do some of you really need evidence to see this and where this is going?

Some of us don't view this as a SF-only phenomenon, but something happening to desirable locales EVERYWHERE in the Bay Area (including San Mateo County, Santa Clara County, Marin County, and parts of Alameda and Contra Costa Counties) and in fact many other places in the US. To claim that most "creative types of old" (read - dirt poor artists) cannot afford a $500,000 unit in SF, but CAN afford a $350,000 unit in Oakland is RIDICULOUS. If there were places to buy in Oakland for $50,000 or rent for $300 a month, I could totally see brb's point - but that's just NOT THE CASE.

Posted by: anon at June 30, 2008 10:53 AM

"There is plenty of evidence to show that quality of schools and large yards are just as big of reasons for families to leave the city than cost"

Have those not been issues since the 1980's?

If we can agree that they have then I guess a decline in familes (which we have been seeing) must be caused by something else

the 2010 census will be pretty surprising. Look for an even older whiter population, fewer school age, perhaps fewer young adults

Look for an African American population to be around 5-6% and for Hispanics to be pushed out of the Mission and Bernal to the Excelsior and Daly City

Posted by: zig at June 30, 2008 10:56 AM

anonymous posters, have any of you been to the CASTRO lately? Go sit in front of Harvest Market,they have makeshift benches out of logs. Sit there for 30 minutes and see how many straight couples with baby carriages pass you by. You will have all the evidence that you need or a pair of glasses!

Posted by: view lover at June 30, 2008 10:56 AM

If citing Chron articles reporting on data in varies studies showing the shifting demographics in SF isn't evidence, then the posters are right, there is no evidence

So feel free to ignore my posts, ignore the news/studies that show SF is becoming more and more homogenized. Feel free to ignore the fact that the people who once made SF "cool" and the place "everyone wants to live" are moving to more affordable areas of the bay.

I am not sure why posters are freaking out about the idea that people might see East Bay having plenty to offer and the fact the you can get the same place for half the money being a big incentive to young, new, or first time buyers, the ones most likely to be part of the "creative class", to move there.

To me, this sounds like a great time to buy something waaaaaay more affordable in another part of the bay area and enjoy all the things SF does/used to offer.

For those that might reply "fine, then move to the East Bay!" I would say, I probably will. I am a relatively young 6 figure earning IT consultant who loves everything SF has to offer but, when I take everything into consideration, I think to myself do I want some small studio/junior one bedroom condo in SF or do I want a two bedroom loft in East Bay?

There is a very good chance that I, and many SF residents like me, are going to choose the East Bay.

Of course plenty of other people will continue to choose SF but you will see more and more of those people being made up of few and few demographic classes, that's all.

Posted by: badlydrawnbear at June 30, 2008 11:03 AM

Correlation is not causation. I have no doubt that gays are leaving SF for the 'burbs (the 2000 census implied that most Bay Area gays *already* lived outside SF). I would just take issue with your claim that the flight from SF is entirely a function of the cost of housing. Why would gays not be motivated to leave SF for the same quality of life issues as everyone else (dirty streets, homeless, crime, weather, etc etc?). Cheaper housing costs PLUS a better quality of life strike me a pretty good reason to leave.

Posted by: zzzzzzz at June 30, 2008 11:19 AM

To anyone who grew up here this stuff is a no brainer

There is no doubt in my mind this displacement is occuring, SF is less diverse and getting older and richer and whiter, Oakland is changing, the Pennisula is more ethinicaly diverse and on and on

And to be honest I think its mostly a good thing and the natural way cities should evolve (and from that stand point SF is not the city the Bay Area is)

We need to wrap our minds around that and build better neighborhoods around the region with better mass transit. This will benifit more people than trying to swim against the tide with regualtion that simply rewards a few. Sf is going to do what its going to do. A tiny central city in a region of someday 10 million can't help but be a place of rich and poor

Posted by: Zig at June 30, 2008 11:24 AM

zzzzzzzzzzzzzzzz,

If you knew what you were talking about, you wouldn't quote the 2000 census since there is no such thing as gays and lesbians in the 2000 census. The only thing close in the 2000 census is unmarried partner households of the same sex. That doesn't begin to take in to account the thousands of single gays and lesbians. So, if you're so anxious to quote statistics, do a little research before you speak your mind.

Posted by: 94114 at June 30, 2008 11:26 AM

"the 2000 census implied that most Bay Area gays *already* lived outside SF)."

The 2000 census did not recognize gays and lesbians. The only thing coming close was "unmarried partner households" which does not take into consideration single gays and lesbians. So much for hard statistical evidence.

Posted by: 94114 at June 30, 2008 11:46 AM

How did this thread turn into a discussion of the "creative class" migrating to the east bay?

badlydrawnbear, is it your assertion that the downtown Oakland condo market is tanking because of all the artists and gays moving in?

Posted by: location at June 30, 2008 12:02 PM

"How did this thread turn into a discussion of the "creative class" migrating to the east bay?"

We're an eclectic bunch.

And migration patterns definitely affect the housing market.

Posted by: diemos at June 30, 2008 12:09 PM

I get that migration patterns affect the housing market, but I thought that artists and gays moving in was supposed to be good for an area.

Posted by: location at June 30, 2008 12:34 PM

So I take it no one has any insight into the Cathedral building? ;)

Posted by: lolcat_94123 at June 30, 2008 12:36 PM

@location 12:02pm

Once,

yup, watch that "creative class", that has been identified as one of the keys to successful cities, move over to East Bay ... Looks like a chance to get in on the ground floor of the new center of bay area coolness, the East Bay.

Twice

The fact that the East Bay offers much lower cost housing making it much for attractive to the very people who help give any city it's character/color sounds like an opportunity to buy cheap in East Bay and reap some great benefits in a few years as that market turns around.

Three Times

To me, this sounds like a great time to buy something waaaaaay more affordable in another part of the bay area and enjoy all the things SF does/used to offer.

Jesus, how many times do I have to say that it sounds like the lower living costs in the east bay are an OPPORTUNITY for buyers to get in on the ground floor of an area that is likely to ATTRACT members of the creative class, which have proven vital to the success of any urban area.

Posted by: badlydrawnbear at June 30, 2008 12:44 PM

In a stable market, "Bohemians" are often attracted to marginal underused areas where they can get cheap space. A neighborhood of funky and cool shops, cafes, art spaces, etc is created. Moneyed pseudo hipsters move into the area driving up rents, the funky shops are driven out of business by rising rents and replaced by chain stores etc. The "bohemians" then move on to the next cheap area and the hipsters are left to wonder why their neighborhood got so boring when it used to be so great.

Posted by: diemos at June 30, 2008 12:48 PM

Well there's no reason to blaspheme. I misunderstood what you were saying. Sorry to have harried you.

Posted by: location at June 30, 2008 12:52 PM

sorry location, it's just very frustrating to post three separate comments where you feel you have stated something fairly clearly multiple times and then have someone else come along and read the exact opposite message.

I promise to try and reign in the blasphemy in the future. :-)

Posted by: badlydrawnbear at June 30, 2008 1:10 PM

For the record - the "creative class" theory of urban economic development is actually rather controversial. Urban economist/sociologist Joel Kotkin, whose articles have periodically appeared in the Chronicle, regularly rebuts that argument with statistics showing many cities with a low "creative class" quotient (Houston and Charlotte, for example) offer far greater economic opportunities to far more people, in part because they're less taxed and regulated. By contrast, most cities with a large creative class - SF included - actually have comparatively modest rates of economic and population growth. So while attracting a creative class might be desirable for other reasons, economic growth should not be on top of the list.

Posted by: zzzzzz at June 30, 2008 1:24 PM

^^^And the Bay Area is unique in that NO city is affordable to traditional "bohemians". I would wager that more of SF's creative class is moving out of California, rather than relocating to Oakland.

Posted by: anon at June 30, 2008 1:36 PM

We have not seen where the new bohemians are going, yet. All bets are off. The Internet has completely changed "cool." Who moves where, all that stuff. We'll see.

Posted by: fluj at June 30, 2008 2:23 PM

The difference is that Houston and Charlotte are both shitholes.

Posted by: Jeffrey W. Baker at June 30, 2008 2:59 PM

Austin looks like where bohemia has moved to me.

But whenever I hear someone say Oakland is SF's Brooklyn, as much I love the charm of the idea, I think, this person has either never been to Brooklyn. Or they haven't been to Oakland.

Posted by: chase at June 30, 2008 5:31 PM

badlydrawnbear,
No worries. Actually after re-reading the thread i feel pretty stupid for misinterpreting in the first place. Blasphemy may have been called for! :)

Posted by: location at July 1, 2008 8:43 AM

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