August 12, 2008
The SocketSite Scoop On 1840 Washington: Demo And 26 New Condos
A plugged-in tipster delivers the scoop on 1840 Washington, currently commercial one-story-plus-mezzanine but soon to be nine stories with 26 condos, subterranean parking, commercial on the ground floor, and a roof deck (all despite the fact that they're still not building any more land in Pacific Heights).
Demolition of the current building is tentatively scheduled to begin August 18th, is expected to last three weeks, and “no wrecking ball or explosives” will be used (good to know and by far our favorite line of the tip).
The new building will look similar to Pacific Place (the building to the right), construction is expected to last 18 months, and they'll be working Monday through Friday from 7:30am to 4:30pm (don't shoot the messenger). Renderings when we have them, tipsters?
UPDATE: It came with a couple of caveats ("This is not a very big or great rendering and I don't know if it is current but here ya go...."), but for now it's the best we can do:
Let's keep 'em coming (please).
First Published: August 12, 2008 9:30 AM
Comments from "Plugged In" Readers
no construction loan - not financeable -- unless they are different from anyone else.
may be prematuire to worry abt noise.
Posted by: Louis at August 12, 2008 9:37 AM
the more housing stock the better.
Posted by: Ben at August 12, 2008 10:03 AM
While it came with a couple of caveats ("This is not a very big or great rendering and I don't know if it is current but here ya go...."), it has been added above.
Posted by: SocketSite at August 12, 2008 11:25 AM
nice neighborhood, and superior to the noisy corner location of pacific place. i'm curious on the floor plan, which sounds like 3 units per level (9 stories for 26 units).
Posted by: condoshopper at August 12, 2008 12:01 PM
"the more housing stock the better."
better for who? not sellers. i've heard very recently about a slew of newly renovated TICs in this neighborhood going to hit the market in the next month. Is district 6 gonna next to see a supply glut like SOMA seems to have?
Posted by: resp at August 12, 2008 12:20 PM
"Is district 6 gonna next to see a supply glut like SOMA seems to have?"
a glut from adding 26 units? there's hardly any supply at all in this area (except maybe $10,000,000 dollar homes that are outside my radar), and there definitely are not many condo developments to speak of.
Posted by: condoshopper at August 12, 2008 12:28 PM
Pacific Place is architecturally very weak. Cheap looking.
Posted by: Jack B. Nimble at August 12, 2008 12:56 PM
More density! More housing!
Posted by: Tweety at August 12, 2008 1:03 PM
condoshopper - maybe you could read my post more carefully. i'm not talking about this building and it's 26 condos. i'm talking about TICs in other multi-unit buildings. converted apartment buildings. buildings that used to be in the rental stock but (due to our idiotic rent control) are now vacant and being sold as TICs. There are way more than 26 coming although I agree that this is may not be a huge glut. it's still directionally more likely to have a negative impact on pricing.
Posted by: resp at August 12, 2008 1:04 PM
resp, duly noted.
there was however a featured article on this site a couple of months ago about a new bldg going up across the corner at van ness and washington.
Posted by: condoshopper at August 12, 2008 1:54 PM
In terms of the major north-south streets, I think that Van Ness is probably the least desirable to be located on or near. Lots of noise. I guess Gough can be bad too, for fear of being run over at 50mph.
My old place was located at Van Ness and Francisco, after it stops being 101, which was infinitely better than something like Washington and Van Ness!!
Posted by: Miniver at August 12, 2008 2:18 PM
A "supply glut" is easily fixed by lowering prices. There is no "supply glut" in SOMA, except for supply at current price levels. Lower prices are better for everyone except sellers in the area. More residents utilizing services in the area are better for everyone (except if you hate waiting in line at Walgreens or having to make reservations in advance at restaurants).
Posted by: Brutus at August 12, 2008 2:19 PM
Not a bad location.
Any word on all the other bldgs that are supposedly going up in the area in the near future as well?
1650 Broadway (34 units)
1645 Pacific (50 units)
Pacific Terrace - Polk @ Pacific (38 units)
1355 Pacific (23 units)
Posted by: bn4 at August 12, 2008 2:21 PM
While I agree that there are more desirable streets (esp. if money were no object), I think some of the posters would be surprised how quiet it can be in a modern mid-rise building such as these being discussed.
Posted by: Alpha at August 12, 2008 3:43 PM
Actually Gough is fine as long as you live north of Sacramento where the 1950's plans to "freeway-ize" it failed and it turns into a much smaller 2-lane 2-way residential street.
Posted by: Jake at August 12, 2008 4:29 PM
there is no "supply glut" anywhere in SF. there are 526,500 renters (800k*.65)who would buy if the price were right.
and since the national average for homeownership is around 70 %, instead of our 35%, we should have 560k homeowners instead of 280K (or at least close to 400K). so i would say there is definitely not enough housing and also a fundamental disconnect in pricing.
Posted by: spencer at August 12, 2008 5:29 PM
to further my point, the planning commission , which screams for affordable housing is keeping prices artificially high by slowing the process.. they should be way more pro development if they want middle class or upper middle class San franciscans to stay here
Posted by: spencer at August 12, 2008 5:33 PM
looks like we've come full circle back to the argument of rent control. IMO there would be a lot fewer than 526k renters and a lot more than 280k owners if there was no rent control and equillibrium housing cost settled at a point lower than it is today.
spencer has anyone here ever provided the stats on the # of those 526k renters that are under rent contorol?
maybe "supply glut" is too strong wording but there's been enough evidence on ss that added supply in areas like soma have impacted pricing beyond the other variables in effect. it can happen in russian hill too.
why do so many people think they have the god-given right to affordable housing in SF whether it's under rent control or under prop 13 or under more government sanctioned affordable housing?
Posted by: resp at August 12, 2008 6:14 PM
Believing in the God-given right to affordable housing in San Francisco is our first line of defense against greedy real estate agents who always have a portfolio of overpriced crap to sell.
All the new stuff built looks like either prisons, aquariums, or Courtyards by Marriott. All the old stuff looks like shacks or effete gingerbread houses. Phew!
We're not buying that line, and we're not buying the inventory. We'll buy two houses--one in San Diego and one in Orange County--for the price of one San Francisco dump.
Take your obscenely priced real estate, in other words, and shove it.
Posted by: Anonymous at August 12, 2008 6:36 PM
"why do so many people think they have the god-given right to affordable housing in SF whether it's under rent control or under prop 13 or under more government sanctioned affordable housing? "
definitely not my statement.
the places are artifically high because of limited supply and limited turnover, anti-development laws and govt programs such as rent control, prop 13 and housing assistance.
if the market were allowed to run freely, the prices would be half of what they are now. i don't think it is a god given right for housing to be affordable, but we should allow equality to reign in the market (no govt interference).
with the current system, owners ahve no fianncial incentive to sell (or than personal reasons), long term renters ahve no reason to buy and new entrants are just screwed.
personally, i choose to rent because the prices cannot continue to be propped up forever, at some point, fundamentals will take over.
Posted by: spencer at August 12, 2008 6:47 PM
Wow, you believe in equality spencer, I wouldn't have taken you for that. You think that everyone should start at the same place in life, with no inherited wealth? That is a pretty extreme position to take.
Posted by: NoeValleyJim at August 12, 2008 8:22 PM
spencer i agree with you that prices here are artifically high because of the governments many ways of suppressing a free market - and that should be changed.
I don't agree that prices are "obscenely high" (which anonymous said) or that there's "not enough housing here" (which you said) - just becuase I don't feel anyone is qualified to make those statements. Personally I'd rather have a less dense SF, have anonymous move to Orange County, and continue to live in my "SF dump" (which most out of town friends would agree with).
My original thought was that supply is going to increase in areas like Russian Hill maybe more than people expect. And I guess I'd rather see elimation of government restrictions like rent control and prop 13 addressed first, before a bunch of new units are built, just to see if we get to true market pricing that way.
Posted by: resp at August 12, 2008 9:11 PM
Yeah, you would think that building more would decrease prices, because that is what they teach in Econ 101. More supply, same demand, lower prices. But that is not how it usually works out in the real world.
In real world cities, when the population goes up, housing costs go up. The only time this is not true is when growth is managed really badly and you end up with a third world class slum.
The one proven way to lower housing costs is to lower population pressure. This is what they did in Chicago and why housing is inexpensive there and throughout the midwest. But the cure is worse than the disease.
Maybe if there were many more walkable, dense urban spaces in America, so there wasn't so much of a premium here on one of the few places that offer that amenity, then population pressure would ease. But I kind of doubt it.
Posted by: NoeValleyJim at August 12, 2008 10:42 PM
The attitude shown by some that the potential customer for San Francisco real estate has few choices, and must pay through the nose for the properties offered, is the flaw in your argument.
It's not 2005 any more, but a dump is still a dump.
Instead of more suckers, you'll have potential buyers saying no, and voting with their feet.
They'll find affordable housing.
Posted by: Anonymous at August 13, 2008 6:37 AM
NoeValleyJim -- actually econ 101 teaches that *other things equal*, more housing means lower prices, which I hope is not controversial.
It also teaches, other things equal, increasing population means higher prices (which seems to be what you are focusing on).
Of course, these things are in a tug of war, along with loose credit (until recently), windfall stock option money, a recent energy shocklet, and no recession in important nearby job centers.
It's pretty clear how that war is playing out in the parts of SF which aren't crappy, but it's far from obvious to me it will always be like that!
Posted by: dub dub at August 13, 2008 7:38 AM
I hope you are not teaching econ anywhere. are you sure you're not a member of the board of supervisors? they tend to believe in the same type of "fuzzy" math. massively increasing housing supply will decrease prices. there is no question about it.
alot of other people who live in other cities also consider them to be "world class" and the best place to live. the emotional piece is the fallacy in your argument. personally, i respect fluj and think he's probably right on what's happeneing day to day. but care much more about the macro long term view than the micro things that are happening on the street. All one needs to know IMHO is that credit was unduly cheap, housing prices are way way out of whack compared to income looking at historical measures (even is SF) and that housing prices are way way out of whack compared to rents looking at historical measures (even is SF). then take a look at the graphs and trend lines, agree that economic principles have held firm for a long time and know (without blind faith) that we will converge towards historical comparisons over time. of course, this would happen sooner if the govt was less involved and if buyers would educate themselves and refuse to buy overpriced properties. I am not counting on either of those.
Posted by: spencer at August 13, 2008 9:17 AM
Since 1990 population had increased in Chicago (as it has since then as well as) while housing supply has been increased massively
Seems almost textbook 101 to me
I agree that it isn't as simple in SF and the whole of the inner Bay Area has a problem with this but I fail to see how we can makes things any worse for new households by increasing supply as you seem to be arguing here
Posted by: Zig at August 13, 2008 10:52 AM
Re: Chicago, I don't think it's simply supply: Chicago has no rent control, condo conversion restrictions, or the tenant protections of San Francisco. There are obvious differences beyond that including geography and economy, and all together these inform the price of housing in both locales.
Posted by: Jake at August 13, 2008 11:17 AM
Its just one case study that sort of informs us that supply can't hurt even in our precious little city, many differences aside
I've read that hosuing prices were stabilized in in established hoods of Vancouver after the constuction of high rise neigborhoods
To lazy to search around much to confirm this
Posted by: Zig at August 13, 2008 12:12 PM
Sure, massively increasing supply would certainly bring down prices, but it is not really reasonable for the City of San Francisco to create all of the supply for the entire Bay Area. Most new supply has been created in the far outer suburbs and some here in The City, but I don't see much new construction being created in the inner suburbs. How many new jobs are we expecting in the region over the next decade? ABAG says 1M by 2020, with 102k in San Francisco alone. Even just building housing for 102k workers and their dependents is going to be a challenge.
And there is lots of evidence that just building $1M luxury condos don't really have an effect on prices anywhere but in that range. In fact, numerous anecdotal examples of "gentrification" indicate that building a large number of $1M luxury condos in an area increases the price of the $300k studio on the margin. I have thought about this quite a bit and it seems that what is happening here is that as the neighborhood improves, the negative externalities (homeless peeing in your doorway) go down, while the positive externalities go up (new restaurants, a grocery store, etc). There is undoubtedly some effect from getting improved services from the government as well (increased policing, more parks).
This is what I mean when I say that a simple minded Econ 101 understanding of house prices is insufficient to model what is really going on. I have never seen a satisfactory attempt to model this, though perhaps one of the Socketsite readers has seen one. If so, I would appreciate a pointer to it.
So yes, the current building boom in the luxury condo market is likely to be a benefit to anyone shopping in or near that market, but I am skeptical about the common claim that it will help the "affordable housing crises." And as I stated, and apparently no one disputes, as cities grow in size and density, they generally get more expensive over the long run.
Posted by: NoeValleyJim at August 13, 2008 12:35 PM
Regarding Chicago (and comparisons to it as opposed to SF or NYC) - Chicago is still almost 20% BELOW its population peak AND there have always been massive areas around Chicago to build on. Part of the reason for relatively high prices in SF and NYC are the fairly high prices in surrounding suburbs and even exurbs.
Prop 13 and rent control do have some blame as well, but if you think that getting rid of both tomorrow would lead to massive building and plummeting prices (if prices were plummeting, you can be assured that building would stop), you're not looking at the whole picture.
Posted by: Brutus at August 13, 2008 1:26 PM
Brutus, ever hear of Wilmette, Winnetka, Kenilworth and Glencoe to name a few? Some of the wealthiest suburbs in the country are in Chicago. Kenilworth makes Mill Valley look poor. Cook County has the second or third highest number of millionaires in America. Chicago had a housing construction explosion and there is more new supply than buyers. We should be so lucky.
Posted by: anon2 at August 13, 2008 1:48 PM
^^^I have no idea what you are responding to with that post. Did I ever say that there wasn't wealth or wealthy areas in Chicago?
BTW - I would certainly hope that Cook County would have the second highest number of millionaires in the US - it is the second largest county in the US. If it had less, that would mean that Cook County would be relatively poor compared to other counties. Millionaires per capita might be an interesting stat.
Posted by: Brutus at August 13, 2008 3:55 PM
"Part of the reason for relatively high prices in SF and NYC are the fairly high prices in surrounding suburbs and even exurbs. "
That is what I was responding to. Some of the surrounding suburbs of Chicago are more expensive than Marin and the Peninsula. You have to go wayyyyy out to get to cheap housing in Chicago, we have Turlock, they have Huntley.
Posted by: anon2 at August 13, 2008 4:12 PM
^^^Those areas are expensive in Chicago because of higher incomes and larger, nicer homes primarily.
Whatever you may think, the VAST majority of housing construction in both the SF area and the Chicago area built over the last fifty years has been in suburbs. The fact that Chicago had significantly more close in suburban land to develop in the first place (and subsequently redevelop) has a LOT to do with lower prices now. It's certainly not all of the story, sure. But neither is the mantra of "Chicago is cheaper because they build more" that gets yelled all of the time on SS. There are multiple factors.
Posted by: Brutus at August 13, 2008 5:48 PM
Construction STILL hasn't started...the building is demolished, it's a barren wasteland now.
Posted by: Whole Wheat Toast at February 27, 2009 8:53 PM
construction is well under way. does anyone have plans etc that they can post??
Posted by: bill at May 6, 2010 10:41 AM