Owners of the pricey condos at the St. Regis live all over the region -- and 60 percent of them don't seem to live at the St. Regis
Owners of the pricey condos at the St. Regis live all over the region — and 60 percent of them don’t seem to live at the St. Regis

By Darwin Bond Graham and Tim Redmond

SEPTEMBER 29, 2014 — When condos in a triplet of luxury towers near the Embarcadero called The Brannan began selling in 2000, wealthy buyers snapped them up. Nine years later, developers of the 58-story Millenium Tower at 301 Mission Street began selling its 419 ultra-luxury condos, among the most expensive residences west of the Mississippi River. Last year, Millennium Tower sold out.

The burst of the dot-com bubble in 2000, and the Financial Crisis and Great Recession that hit in 2008, hardly dented sales of these and other of haute San Francisco addresses built over the last 15 years.

According to supply and demand theory, projects like The Brannan and Millennium Tower add to the total stock of housing, and should help to ease prices across the overall housing market by satiating the demand of high-income San Franciscans for space in the city.

But rather than satisfy some demand for housing at the top of the market and alleviating the city’s affordability crisis, San Francisco’s luxury condos instead are being purchased by wealthy buyers who have a virtually bottomless appetite for super-exclusive real estate. Many of these buyers don’t live in San Francisco; their city condos are second, or third homes, a 48 hills analysis of property records shows.

We reviewed Assessor’s Office records for 5,212 condos in 23 buildings, most built after the year 2000, all of them market-rate residences. We found that absentee owners control approximately 2,034 of these condos – about 39 percent of the total. (We identified absentee owners as having a listed address that is different than the condo residence.)

In some building, the number of absentee owners is above 60 percent.

Many of these condo owners are wealthy Silicon Valley tech entrepreneurs, Marin County lawyers and doctors, and East Bay executives with sprawling multi-million dollar houses in ritzy zip codes like Los Altos Hills, Sausalito, and Lafayette. Some live as far away as New York City, Hawaii, and Hong Kong. It’s unclear how much time they spend in their San Francisco condo homes, or if the properties sit empty much of the year.

Some might be rented out to full time residents, but San Francisco doesn’t keep records sufficient to identify rental units.

We did find some units from the buildings we examined listed on Airbnb and VRBO – for as much as $6,000 a night. Which doesn’t do a whole lot for the city’s affordable housing crisis.

The St. Regis, a 42-story condo skyscraper built in 2005, is one of San Francisco’s most expensive addresses. Former mayor Willie Brown lives on the 35th floor. But approximately 63 percent of the St. Regis’ condos belong to people who own homes – and get their tax bills for the condos – somewhere else.  The fact that they don’t list the condos as their home address for tax purposes is a pretty good sign that they don’t live there.

The St. Regis has the highest percentage of absentee owners of any building we surveyed. One condo in the St. Regis is owned by a Napa Valley Winery. Another is owned by the vice president of a Palo Alto software company who gets the tax bill for his San Francisco condo at a $6.6 million Atherton mansion.

“This data points to the irony that when discussing the eviction crisis in San Francisco, so many, including so many in tech, are quick to assert that development is the solution,” said Erin McElroy of the Anti-Eviction Mapping Project. New development for absentee owners does not solve the housing shortage, especially for poor and working-class residents.”

The Infinity Tower is an ultra-luxury building -- and a second or third home for many on the Peninsula
The Infinity Tower is an ultra-luxury building — and a second or third home for many on the Peninsula

Rincon Towers, a pair of skyscrapers, the first of which was built in 2008, has attracted hundreds of outside buyers to San Francisco’s hot residential luxury market. Half of the 376 condos in the One Rincon Hill South Tower are owned by property collectors with a different listed address than their condos. Many Rincon condo owners own homes in another part of San Francisco – or, more often, completely outside of the city.

The Rincon Towers’ developers branded their buildings as the “pinnacle of luxury.” Most absentee Rincon condo owners reside in Silicon Valley cities including Palo Alto, Menlo Park, Hillsborough and Mountain View.

Earlier this year Sotheby’s real estate agent Gregg Lynn told the San Jose Mercury News that many of his clients seeking condos in the city are well-off residents of San Mateo and Santa Clara counties.

“They have a place in Palo Alto, their kids are making a decision about where to go to college, and the parents are thinking about getting a place in the city and spending more time here,” said Lynn.

More:

Bryant Kowalczyk of SF Luxury Realty said many of his clients are from Atherton, Hillsborough, Los Gatos and Los Altos. “It’s a residence in lieu of a hotel. They have all their stuff there, their clothes are where they left them. They know the doorman. They know where to get their car to head for the airport. It hits to the affluent lifestyle, and there’s definitely a demand for it.”

And, of course, when those owners who see the condos as a hotel room aren’t in town, the place is empty – again, doing nothing for the housing crisis.

Even older condo buildings are filled with housing that serves as second homes for the wealthy. The Summit at 999 Green Street, atop Russian Hill, was built in 1965 and is home to famous San Franciscans like former Secretary of State and Bechtel executive George Shultz. But more than half the owners of condos in The Summit own another house or apartment in San Francisco or outside the city. One condo in The Summit is owned by a banking and shipping executive from Hawaii. Another is the property of a Wall Street lawyer whose main residence in Delaware is a 6-bedroom mansion set in a salubrious Wilmington neighborhood.

Owners of 999 Green condos live all over the country
Owners of 999 Green condos live all over the country

Infinity Towers was built near the Embarcadro in 2008. The grandson of Walt Disney owns a condo in the Infinity, but his main residence, according to property records, is a million-dollar house perched on a hillside above the Los Angeles exurb of Calabasas, flanking a vineyard. About 40 percent of The Infinity’s 650 unit luxury condos are owned by people who don’t live there.

If these units are rented out, in at least some cases they aren’t going to permanent residents. We found listings for a number of the city’s most luxurious condos on Airbnb and VRBO.

A unit in the Millennium Tower was listed on VRBO for $11,100 a month. Another unit in that building was offered on Airbnb at $12,839 a month.

And those are bargains: An Airbnb listing for a One Rincon Tower Penthouse offered the place at $6,905 a night.

Again: Possibly owners who travel a lot and want to rent their places out while they’re gone. Also possible: Owners who use the places as pieds a terre, and rent them out the rest of the time – as short-term rentals to tourists.

The propensity of the wealthy to collect second, third, fourth homes, and so on, is well known. Larry Ellison, the billionaire chairman of Oracle, owns an estate in Woodside, a mansion in Pacific Heights, dozens of houses in Malibu and Lake Tahoe, and even the entire Hawaiian island of Lanai.  Mark Zuckerberg’s $10 million Dolores Heights mansion is just one residential property in his collection. The Facebook billionaire owns a house in Palo Alto, and last year Zuckerberg purchased four adjacent homes for $30 million.

Earlier this year Bloomberg News reported a sales surge of second homes in the Hamptons as Wall Street financiers sought luxury homes to spend their bonuses on.

But gains in wealth and income for the top one percent aren’t trickling down to the majority of San Franciscans. Instead stagnation of wages and spiking home prices and rents are fueling a housing crisis. San Francisco continues to see an exodus of households earning less than $100,000 a year.

And based on the data we’ve compiled, it’s hard to argue that Mayor Ed Lee’s policy – which calls for building unlimited market-rate housing – is going to do much for the affordability crisis. “This is critically important information, and it makes the trickle-down argument for housing absolutely absurd,” longtime activist Calvin Welch told us. “For Ed Lee to talk about a city for the 100 percent is an easy and stupid formulation, since he’s building housing only for the 1 percent.”

Said McElroy, “While we need to protect the rent-controlled housing that exists in San Francisco, we also need to invest in housing for poor and working-class San Franciscans – not out of county speculators and investors.”

Editor’s note: 48 Hills reviewed property records for 23 market rate condo buildings, most of them in the luxury class, most built after the year 2000. We identified absentee owners in each building as those whose listed address (where the tax bill is sent) was different than the condo. We could not identify which of these condo units owned by a person or company with a different main address are rented out to full-time San Francisco residents because the city does not keep sufficient records.

 

St. Regis – 188 Minna Street

90 units

57 absentee owned, 63%

 

Four Seasons – 765 Market Street

142 units

85 absentee owners, 60%

 

999 Green Street

112 units

61 absentee owners, 54%

 

Millenium Tower – 301 Mission Street

426 units

213 absentee owners, 51%

 

Portside I & II – 38 Bryant

220 units

111 absentee owners, 50%

 

Rincon Towers (One Rincon Hill) – 425 1st Street

376 units

189 absentee owners, 50%

 

The Metropolitan – 333 1st Street

342 units

160 absentee owners, 47%

 

BayCrest Towers – 201 Harrison Street

287 units

135 absentee owners, 47%

 

The Palms – 555 4th Street

300 units

125 absentee owners, 42%

 

1170 Sacramento Street

71 units

30 absentee owners, 42%

 

Infinity Towers – 338 Spear

650 units

258 absentee owners, 40%

 

Ironworks – 1221 Harrison Street

28 units

10 absentee owners, 36%

 

The Brannan – 229 Brannan Street

336 units

125 absentee owned, 37%

 

Radiance – 325 China Basin

99 units

33 absentee owners, 34%

 

Bridgeview Towers – 400 Beale Street

245 units

77 absentee, 31%

 

SOMA Grand – 1160 Mission Street

Built 2008

246 units

76 absentee owners, 31%

 

The Madrone – 435 China Basin Street

329 units

95 absentee owned, 29%

 

631 Folsom

117 units

33 absentee owned, 28%

 

Yerba Buena Lofts – 855 Folsom Street

200 units

52 absentee owned, 26%

 

Park Terrace – 325 Berry

111 units

27 absentee owners, 24%

 

Arterra – 300 Berry Street

269 units

45 absentee owners, 17%

 

Espirit Park – 801 Indiana Street

147 units

19 absentee owners, 13%

 

829 Folsom

69 units

8 absentee owned, 12%

 

  • landline

    Again, great work.

    As late stage capitalism devolves into modern feudalism, all industries, goods and services, including housing, reflect this trend.

    Once upon a time, the elites lived in castles surrounded by moats while the rest of us toiled for them. Now, they live in various castles guarded by doormen while the rest of us toil for them.

    2014 meet 1014.

    • Dave

      Yes, really great work.

      Finally, some hard data showing that the wealthy often own more than one home. Are ya there, Mr. Pulitzer?

      And think about it…when people Airbnb an apartment for $6,000 a night they only pay $840 in TOT taxes. How is that possibly going to cover the fact that they might ask a police office for directions? $840 for a whole day?

      And these other people who pay upwards of $40,000 a year in RE taxes and aren’t even here to use city services?

      Once again, Tim Redmond has illustrated the chronic disease of wealth in San Francisco.

  • Desert Rose

    All this article really proves is your envy and biased position. Doesn’t look like you’ll be content until everyone is equally poor and destitue. They tried that already, it doesn’t work, remember? Apparently it’s the job of the “rich” to comply with your world vision though. As long as there is 1 “poor” person in SF you will continue to berate the “rich” and demean their freedom to own real estate. Oh why oh why can’t we all be poor????

    • Russo

      Don’t be daft. Questioning an extreme imbalance of wealth is not advocating for extreme poverty.

      • Sam

        The article wasn’t a criticism of our diversity of economic outcomes at all. It was merely seeking to argue that building expensive homes doesn’t help poor people, which is true but obvious.

        But no doubt Desert Rose was thinking of how many socialist nations are mired in poverty. Having “balance” and “equitable distribution” often just results in nobody being prosperous. Making rich people less rich doesn’t make anyone else less poor.

    • Eleen Tigur

      Yeah, sorry that’s not really making any sense.

      Way to play that mysterious “tax” victim card…

  • Desert Rose

    Also hilarious that you didn’t do the same study for non luxury/new buildings throughout the city. That might have disproven the very (slanted) point youre trying to make. There are thousands upon thousands of rent controlled rental units where the tax bill goes to a different address. The owners don’t live there and yet they are rented out to long term residents. The owners in that case are subsidizing all those tenants.

    It’s just a shame there is no real fair and unbaised, thoughtfull information here. These articles are meant to inflame. You admit right off that you have no data about what % of the 60% units are rented to long term residents so what exactly is your point?

  • Sam

    There are some obvious flaws with the survey. Some of them you appear to be aware of. You admit that you have no idea whether these units are empty or not, but that is a much more crucial factor than whether the registered owner gets his mail at a different address somewhere.

    For example, I use a PO Box for all my mail so it would appear to you that I do not live in the home I own when in fact I do. Did you discount all mail addresses that are really accommodation, convenience or business addresses? I’ll bet not.

    Again, the fact that I use another address says nothing about which of my homes is my primary homes. In fact, the idea of a primary home is merely a voluntary election I make for tax purposes. It may have nothing to do with where I live most of the time.

    Further, you make no distinction between homes that are used for part of the year and homes that are always vacant (relatively few, I suspect).

    Also, what about people whose primary home is in Sf but have vacation homes elsewhere. That’s the exact opposite of what you counted i.e. cases where SF’ers make housing elsewhere more expensive while living here. There may be even more of those showing that the effect you claim is a wash.

    Or many of these units are rented out, so people are living there.

    All that said, even if I accept the idea that a two million dollar code doesn’t help the poor, so what? it doesn’t do them any harm either – it’s simply something they cannot afford either way. And these wealthy non-resident owners still pay a LOT in property taxes and HOA fees, so they help the local economy and tax-base while using zero city services.

    Your work needs some more work, some revision, and a more logical analysis.

  • Sam

    Oh, as a further point, I notice those Airbnb listings you quote are for monthly rents. That deflates another one of your common claims that Airbnb listings are really hotels. That might be an argument if the listings were for overnight, week-end or week stays. But if these lets are month-to-month lets then they aren’t hotels by any definition. No TOT is due and the stays are perfectly legal even by the city’s weird invasive and unenforceable rules.

    Could it be that much of the gnashing of teeth about Airbnb is misguided?

  • This study neither proves nor disproves the points made in the article or other comments. What this study does show is that we lack sufficient data to understand the state of real estate in San Francisco fully. We record owners and owners’ addresses so that we can levy taxes against property. We don’t and cannot tax profit or loss from rental so ignore that data. The federal government does record that data. We don’t but probably should tax parking spaces. The state does register car so they have that data. Utility companies record electricity use and know when a unit is occupied or vacant. Sufficient data probably is available but the ability to access and join it in a meaningful way is missing.

    • Eleen Tigur

      Umm.. hello and welcome to state vs federal data collection?

      are you new to this?

  • “Many of these condo owners are wealthy Silicon Valley tech entrepreneurs, Marin County lawyers and doctors, and East Bay executives with sprawling multi-million dollar houses”

    How do you know that or are you “assuming” Tim? Does it even matter what the profession of the owner is (for you to try and make your point)?

    “Said McElroy, “While we need to protect the rent-controlled housing that exists in San Francisco, we also need to invest in housing for poor and working-class San Franciscans – not out of county speculators and investors.”

    Again, its safe to assume wealthy people buy expensive real estate. What do luxury condos have to do with rent controlled housing? These condos are exempt from rent control.

    Do you remember from your previous articles on housing how much it costs SF to build ONE unit? That is why SF does not build more ” housing for poor and working-class.” SF has its large pool of rent controlled units as well as privately built BMRs for the “poor and working-class.”

    I usually read your articles with an open mind Tim, but this one is a blatant troll. Slow news day?

    • Sam

      There is a fundamental difference being doing real investigative journalism and this kind of partisan journalism.. With real journalism you do the investigation and then determine what the conclusions are. But Redmond is compelled by his ideology to start with his conclusions and then try and back-fit the data to suit his theories.

      This leads to the well-known phenomenon of confirmation bias, where Redmond notes everything that supports his cause while ignoring anything that refutes it. Those who share his view and read a piece like this (so far, only Landline according to the comments) coo with delight as he reads what he wants to believe, while the rest of us systematically destroy the evidence and logic he outlines.

      I’d stop short of asserting that advocacy journalism is dishonest journalism, because I think Redmond does genuinely believe some of this stuff. But the bias inherent in such an approach is undeniable, and Redmond, Graham and McElvoy fall head-first into the trap.

      To your other point, yes, it is mindless and meaningless to trot out cliches about wanting more affordable housing, because it’s blind to the adverse economics of subsidizing everyone who thinks that they want to live here but cannot afford it.

      There will never be enough money to do that, meaning that getting BMR housing will always be like winning the lottery. And why should it be? The best way to build affordable housing is to get the developers to pay for it by allowing them to build homes that most of us can’t afford.

      The rest of the whining is just the usual envy manifesting itself, and the wet dreams of those who seek to confiscate any sign of success and prosperity.

      • Y

        “whining”. “envy”.
        Check.

        • Sam

          Read “complaining” and “jealous” if you prefer, but the traits and trends seem real enough.

          • Y

            I read what you wrote. There’s a policy against ad hominem insults. “Seem real enough” does not give me, you, or anyone a pass. Thanks.

          • Sam

            There’s no ad hominem attack there and in fact I was agreeing with Jimmy. I simply was drawing attention to the need to clearly differentiate cases where a poster is genuinely motivated by compassion and justice, and those cases where the motivation is the mindless resentment of those who have more. Advocacy journalism can tend towards the latter, as noted.

            The article here does come across in places as an ad hominem attack on the wealthy rather than a reasoned and balanced piece about housing policy. So I’d venture that your sympathy for ad hominem victims is rather dependant on your own politics.

          • Y

            There’s certainly no explicit attack on the wealthy. No use of the words ‘greedy’, ‘octopus’ or such. I can’t tell you what the authors think (and I’m sure they would appreciate it if you didn’t either), but here’s what I think: I don’t blame the rich for buying luxury pieds a terre. I do blame City planners and politicians that permit this development to come at the expense of the non-rich. In other words, I am not anti-rich; let them do their thing, as long as it doesn’t hurt others.

          • Sam

            That’s fine, but I would dispute that building a multi-million dollar condo does any harm to the poor. It’s either neutral to them, or else they benefit from the extra taxes and perhaps new jobs and businesses thereby created.

            That’s why I talk about envy because the assumption in some circles is that if the rich have more, the poor have to have less. But there is no evidence that that is true, and the poor in rich America are much richer than the poor in poor countries, proving that prosperity really does trickle down.

            Baking a bigger pie benefits the poor more than trying to slice a smaller pie differently. Detroit has no rich people or million dollar condos. Are you suggesting that it is better to be poor there simply because you can buy a home there for a dollar?

          • Y

            There’s the issue of whether building lots for the rich causes economic harm to others, and I think it does, but that’s not a simple issue, and I won’t get into it now.

            As I read this article, the issue is that the city touts all new construction as helping alleviate housing shortages for the middle class; but building very expensive housing does nothing for that, and especially if no one is actually living in those places.

          • Sam

            But where in Tim’s “investigation” does he demonstrate that ALL new housing is for the super-wealthy and therefore NO new build helps alleviate housing costs?

            Nowhere. He has cherry-picked the most luxurious and expensive developments in the very best neighborhoods and then he concludes that those particular new homes do nothing for someone who isn’t wealthy.

            Well sure. But what about all the mid-range housing that gets built, like the various projects sprouting along mid-Market, in the Mission and elsewhere? OK, they’re not exactly cheap but the wealthy aren’t going to be buying them either. They are for middle-income working people, and those new homes do increase supply in the mid-income range. But Tim ignores them in favor of only the gold-plated projects.

            That’s why the piece smacks a little of “bash the rich” to me. Thousands of new units around the median rents and prices do help with affordability. A few hundred luxury ones don’t but so what? They do no harm either.

      • Eleen Tigur

        Wait… Really?

        What is your honest. perspective and willful assumption about 48hillsonline?

        Are you really “upset” that Tim Redmond can report with his own bias… own his own blog? with regard to any subject not just those that slap your face?

        Really?

        Did you perhaps miss the change in the 1980s about the political economy of the media and the subsequent transition to the internet and commodity journalism?

        For all your “definitives” it is surprising you don’t have your own blog.

        Because you clearly don’t seem to get what is going on.

  • Great work, yes. We should ignore those comments that ascribe envy to the author of this straight forward analysis of luxury property ownership. This data is a great start to all of us understanding how to approach building and maintaining affordable units of housing, part of which is building market rate housing for ownership and rentals. Clearly, luxury condos satisfy a market demand, but just as clearly they are not relieving much of the housing shortage for those who need to live and work in the City. This article is a significant contribution to helping us make more effective housing policy.

  • Brandon

    I’m confused. Even if only half the units are owned by locals, that’s still a plus for housing in the city. And certainly some percentage of the remainder is rentals. And all are paying taxes, and the non local units are using fewer services. And all of these new condos had to have some offsetting market rate units, probably mostly offsite or into the fund.

    Is your point that you don’t want these built because they’re only for the rich? That was true if owned by locals or not.

    Frankly, I don’t see how its possible to build housing in bulk in this city that’s not for the upper end. Any housing that’s for sale at this point that’s not artificially controlled is going to be too expensive for most.

  • Y

    It’s not just that luxury housing doesn’t alleviate the affordable housing shortage. Every luxury building uses up land which could be used for building affordable housing. It actively pushes affordable housing out.

    • Sam

      no it doesn’t, because you taking no account of the money that would be needed to build that “affordable” housing. It takes money to buy the land and then money to construct the units.

      It’s not like there are billions of dollars lying around waiting to build BMR’s if only there were some land. there is in fact plenty of land for potential use, but there is no money for affordable build, because they are not affordable to build at all. They are simply subsidized and there is a limit to the amount of such subsidies.

      • Y

        I’d be sympathetic to such arguments if I saw actual numbers to support them. During the recession, developers managed to lower the percentage of required affordable housing, and it hasn’t gotten back to the previous rate during the boom.

        Moreover, the value of land depends on zoning. If a piece of land is zoned for affordable housing only, it will be cheaper.

        No one expects developers to take a loss. The choices are a. profits to developers and cheaper housing, and b. huge profits to developers and expensive housing.

  • Mark G.

    Is there a similar survey of the income/wealth profiles of people living in rent controlled housing? I recently discovered that my extremely low-rent, long-term tenant owns income property. It’s infuriating in light of the fact that I am being forced to subsidize their housing.

    • Sam

      Mark, you are absolutely correct. In fact I am living proof that people do that, as I did the very same thing for many years. I had a doozy of a rent-controlled deal. So when I could afford to buy a building in SF it made economic sense to keep my rent-controlled flat and rent out the building that I owned. As long as my rental was my primary home, I kept rent control.

      Another example showing the anomalies caused by rent control is a case where you own a condo or building that is exempt from rent control. and you also own a TIC or building that is not exempt. What you would then do is live in the home that would otherwise come under rent control. while renting out the home that is exempt. And in fact I know someone who does exactly that.

      Put simply, you want to be a rent-controlled tenant and/or a landlord of a non rent controlled unit. Best of both worlds. But why does city policy so encourage these games?

      • Eleen Tigur

        Sam you are absolutely correct!

        But what are you doing about it?

        Is there a particular policy or upcoming ballot measure to explain or extricate you as a “victim” of these “games”?

        Or should we continue to regard your comments as those of an ineffectual bipolar possibly schizophrenic individual – are you “living proof” of that?

        • Sam

          I never said I was a victim of any games. In fact I play the games very well.

          I was raising a question about why we have public policies that encourage game-playing and un-natural behaviors. I can profit from policies but still think that the policies are wrong-headed. It’s called being a pragmatist.

          But if you are happy with the status quo, then good for you. We have something in common.

    • MysteryRealtor

      Four Words: Means. Tested. Rent-control.

      • Sue Hestor, at some point claimed that the city has no system in place that tracks what happens to affordable units after the original low-income tenant moves out. I believe she was on the Mayor’s task force to review the program, or at least the affordable housing downtown program. They also discovered that the idea people would live and work in one neighborhood and not need to commute is a farce. There is no correlation between who lives and who works in the neighborhoods.
        Remember what happened to the planned economy in Soviet Union. It did not work because people are not predictable. Planning to control people doesn’t work here either.

  • This is great information. I would love to know the stats on Redwood City, which is exploding with high end housing and “no” affordable units being built, City employees and the construction workers that build these monstrosities have to live elsewhere. (And I’m a tech lawyer, and totally disagree that Mr. Redmond wants everyone to be poor or to redistribute wealth, or equalize incomes, yada yada ya). It’s about planning with some decency, to allow all demographics to live in all Bay Area cities, so we can ease the environmental and life-impact negative effects of long-term commutes. I choose to live on the Peninsula and work in the City, but I can’t even find affordable housing on the Peninsula. The developers claim that One Marina ( where they evicted a 400 slip marina to have a clear view of a 10 acre lake for condo owners, and ripped out the docks so it’s empty) they claim that this development is “sold out” or “4 units left”. I would love to know if that is really true, if they are local, if they are corporate owned etc. It is all information that leads to supply-demand analysis and whether the permits and decisions by the local planning commission were prudent.

    • Sam

      You say there is no affordable housing in the Peninsula but then you say that you live there. So clearly there is housing there that you can afford. And there is not even any rent control in the Peninsula so that doesn’t explain it either.

      Can you explain the public policy imperative of subsidizing the housing costs of someone who works as a lawyer in the tech industry?

      There is in fact plenty of affordable housing in the Bay Area, but everyone wants to live in the best parts of it. Hence the problem i.e. people wanting what they can’t have.

      • Y

        It’s not just about “living in the best parts of the area”. If all you can afford is Vallejo or San Leandro, that means an extra hour or three of daily commute that you are taxed with, coming out of your limited off-time.

        • Sam

          Of course,value is all tied up with location. The better locations cost more which is why not everyone can afford them. In some other US cities the desirable areas are further out but, with SF they are closer in.

          But even then if you have kids, or go to the mountains a lot, or like the countryside, or prefer shopping in malls and big-box stores, or prefer driving to transit, those further our areas may still work better for you. There’s a town or place for everyone in the Bay Area, even for those who cannot afford Pacific Heights. I hear that gays like Vallejo and that families like San Leandro, to take your examples.

          Diversity is important for the Bay Area as a whole. I’m not convinced that it is important for every single community and micro-neighborhood to have the exact same pre-determined quota or mix of different demographics.

          • Y

            My point is that if you’re not rich, you increasingly don’t have a choice. And that is a recent problem, therefore not an unavoidable universal one. Twenty years ago you had poor and rich neighborhoods in SF, in Oakland, on the peninsula, in San Jose, etc. Say you worked in SF, and didn’t make that much: you could have a cheap house in Hayward and have a long commute, or you could rent a small apartment in SF and take a short Muni ride to work, or something in between, like Berkeley. Now that choice is gone.

          • Eleen Tigur

            In the end of the day… election day.. it is not really important whether or not you are personally convinced, it just is the will of the people.

            Would you rather live in a democracy or some place where you could dictate social and economic policy?

          • Sam

            It’s our democracy that created the situation that Tim is describing here. I’m glad that you are happy with the results of our democracy. So am I.

  • Brandy

    I just want to know why if someone works fulltime in the city and has kids that goto school in the city and the family is a productive part of life in the community…there isnt housing affordable for them to residebin the city????? This makes no sense and is unfair…the ppl in power are pushing families out of the city with the current rental market. When I talk to family members about what a 3bd rm unit goes for in SF they cant believe it as its comparable to what alot of ppl pay for a mortgage on an entire house. Get it together San Francisco…do what’s right!

  • I freely admit that some people may have bought these units to rent out. I have found, though, that most people who become landlords these days set up LLCs to do it; provides much legal protection. There are some LLCs at these buildings, but many units are owned by people who live somewhere else. Also: Don’t forget that the Mercury News reported on the marketing — the building managers and marketers freely admit that their buyers are often looking for second or third homes.

    It would be nice to know how many units are rented out; the city ought to require that data, but doesn’t.

    The concept of wealthy people buying urban condos for part-time stays (and leaving them vacant, or renting them to tourists through VRBO or Airbnb) is nothing new. The extent of this in SF is, I think, news, but you can hardly argue that what I’m suggesting is a strange or radical interpretation of the facts.

    And if market-rate units are supposed to help bring prices down, this suggests the strategy isn’t working.

  • There are lots of issues and I don’t know that people not living in their luxury condos causes more tightness in the affordable rental market. But…we not wealthy residents are often stuck in our rent controlled apartments. We cannot move unless we are sure we want to leave the bay area. Also the construction of luxury and expensive housing in all parts of the city is not pleasant to live near or drive around. It is dirty and loud and inconvenient. I’ve said it often. “Who are they building this city for” Not anyone in my group of friends that’s for sure. But we still have to live in a perpetual construction zone. Jobs whatever, I bet most of the people working construction in this city don’t live here or pay taxes here or shop here so the construction isn’t contributing to the economy except in city fees and property taxes. How long do you thing it will take for that money to “trickle down”

  • Aaron Goodman

    “GREEN-$-GREED”
    AB32 + SB375
    promising a green and environmental future, but instead lots of materials, lots of construction, and lots of destruction, just so specific people can mount their next real estate conquest.

    bet you lots of the units belong to politicians hell-bent on flipping their salaries through real estate “speculation” as well.

    its housing, its supposed to be for providing a roof over one’s head, not just to promote some form of green-environmental living, that is non-existent in these new developments…

  • It sure doesn’t take long for the paid whining crowd to show up, does it? Great investigative work – THIS is journalism!

    • Dave

      Yeah, this is awesome!!!! Anyone who disagrees with us must be getting paid to do so!

  • Actually the underlying question is a perfectly valid one: is the housing stock being added helping to address San Francisco crippling housing shortage? But the data presented is is not sufficient to draw any particular conclusion and, it must be said, Graham and Redmond’s skirting of the insufficiency of their data borders on intellectual dishonesty.

    Fundamentally, the most important question is whether the units are sitting empty or not. That means knowing whether they are being rented and whether or not in reality they are the owner’s principle residence (even though their stated residence may be elsewhere). If either of those cases are true, then those units are in fact adding to the SF housing stock, and at least for high end units (and lets face it in SF all new, market rate units are high end units) the construction those buildings has worked to alleviate the shortage, even if insufficiently.

    However, even if it is not the that the case that units are being occupied (either by the owners or by the a renter), it still may be true that the construction of the builds has provided downward pressure in the residential market: presumably had those units not been purchased to provide an investment vehicle or pied-à-terre, then some other existing unit would have been, further constraining SF’s housing supply.

  • It is pretty obvious that not that many full time new residents have moved into the market rate high-rise towers, but it is good to see some facts on which to base our suspicions.
    Urban planners are displacing families and the small businesses that support them, by replacing low-rise buildings with towers of market rate housing. Who is benefiting from this?
    SF voters passed Prop M to limit heights and density because they wanted to protect the integrity of the neighborhoods and the views, but courts ignored Prop M, failing to protect Parkmerced’s thousands of affordable housing units. The developer will be kicking them out soon, unless something radical happens.
    How is it that Prop E, that brought us the overbearing SFMTA, is so powerful, and Prop M so easy to overrule? How do we change that?

    • Kraus

      Your statement about Park Merced is false.
      Not one person who has a rent-controlled unit in Park Merced will be “kicked out.”
      Park Merced will be built-out in phase.
      Everyone of the existing residents that desire to stay will get a new unit –that is far better constructed, both seismically and in terms of energy and water efficiency at the same size (or larger) at exactly the rent-contolled price that they are presently paying.

      • Sam

        Interesting. When that tenant eventually leaves or dies, does his or her unit then drop out of rent control, since it is a post-1979 construction?

      • There is a history and many opportunities for the owners of Parkmerced to renege on their affordable housing agreement. Riverton Homes, owned by Stellar Management, presently one of the owners of Parkmerced, had a bad faith agreement with their tenants. The owners of Parkmerced have a history of bad business practices.

        http://www.huffingtonpost.com/2010/02/04/riverton-houses-foreclosu_n_449496.html

        When the present owner sells Parkmerced, the lease with any renter must be renegotiated. At this time affordable housing can be eliminated, reduced in number or become more expensive.

        There is no precedent for an apartment being torn down, then being rebuilt and offered to a resident at the same affordable housing rate. The owner of Parkmerced, realizing the agreement they made is costing them money, could go to court and try and have this agreement over turned. Remember, they have a history of bad business practices.

        Should a rental agreement last until a resident dies, their apartment will return to market rate housing. The developer, interested in money, is not concerned with protecting the affordable housing stock in San Francisco. This is the job of City government. Therefore, all affordable housing in Parkmerced will become market rate housing eventually. Presently, Parkmerced is the largest affordable housing community in San Francisco.

        • Sam

          It’s broader than that. Eventually all rent controlled homes in SF will vanish because no new ones are being created and because eventually every one will become vacant.

          At that time, either a new unaffordable market rent is demanded. Or the unit is used for short-term lets or sold as a TIC.

          Historically control of rents has only worked short-term, during times of war or emergency. You cannot demand that owners of rental properties permanently subsidize the lifestyles of their tenants. If governments want rents subsidized, they should ask the voters to raise taxes to achieve that, as with section 8.

          • Sam, your first paragraph above makes no sense.

            You ignore the argument about rent control in Parkmerced and move on unimpeded in your disdain for rent control.

            $70,000 annually is not enough money to be considered middle class in San Francisco. That being said, all the jobs that make up the infrastructure of San Francisco; police, fire fighters, nurses, teachers etc. require rent control for these people to live in the City. Your scenario, of people living elsewhere, works fine until there is another earthquake or similar tragedy in San Francisco and no one is able to return to help.

            Your solution of raising taxes is unusual for a Conservative. With all the money in real estate, can’t 30% affordable housing be part of the developers obligation for building. Seems fair to me.

          • Sam

            My point in the first paragraph was to your comment about how eventually the Park Merced units will lose rent control. In fact, all SF units will, for the reasons cited.

            Most of our cops and fire workers already live outside of SF, and for reasons other than just cost. They generally are more suburban types anyway. And I can see why a cop would not want to live where his beat is.

            And it is very unlikely that all routes in and out of the city would be inoperable in a quake, That’s never happened before and certainly should not be a factor here. Half a million people commute into SF every day. That horse has bolted.

            I never said taxes should go up. I said that IF you want to subsidize the rents of some people, then it is better that the voters agree that obligation be broadly-based. Rather than pushed onto a relatively small number of landlords who then, very understandably and predictably, exit the business and convert the homes to another use.

            About 90% of economists agree that price controls don’t work. The reasons are obvious.

          • Forgive me this post is late.

            It is disturbing to hear your lack or concern and unsympathetic reaction to the people that live outside San Francisco , that work here. Your cavalier reply, that they live outside of San Francisco is by choice is bogus. If we use teachers as an example, that work 8 hours a day, grade papers another 2-4 hours then have to travel 2-4 hours to get to work, we can see this is not an excellent work situation. Police can live in areas other than where they patrol. Your reply is careless, without thought and without compassion. Your attitude assumes people with money, are all we should care about If teachers, firefighters, police and nurses were not important, they would not be called infrastructure!

            Your belief San Francisco is not vulnerable to earthquakes shows you have not been here long or read about earthquakes here. The Loma Prieta Earthquake, which caused considerable damage in San Francisco, had its epicenter near Santa Cruz, a good distance from here. Did you live here then? During that quake, part of the Bay Bridge fell down and the Cypress freeway collapsed. This new bridge we have, with the cables suspect, may be stronger but I would not count on it. During the weekends, when repairs are being performed on the Bay Bridge, San Francisco is at a standstill. Reasonable people do not travel during those times. BART is crowded and the trains are exceptionally long. I feel lucky every time I travel under the bay by BART. It seems in an earthquake, where a tube would be moved dramatically, it could fail.

            In my opinion, an earthquake with an epicenter in San Francisco or Hayward, would be calamitous. In the area now called Parkmerced, during the 1906 earthquake, a trestle was separated vertically 4′ and horizontally 14′. This type of movement could easily damage all bridges into San Francisco as well as the BART tunnel.

  • SFrentier

    These expensive condos do lower, or help contain, overall rent levels in the city. It’s easy to say that these condos are for the rich, so how do they help the common man. But if SF had less of these, wealthy people would be forced to compete for the other available housing, i.e. the one now used by regular folks.

    The other idea tossed around, that the city should use this land for affordable housing, is not based in reality. Ok, have the city or a non profit buy a plot, and put on it affordable housing. It’s private property, remember? Who’s going to fund all this?

    Lastly, how about doing a study on how much us private landlords subsidize SF tenants, with rent controlled apartments? Count the total number of RC apartments, figure out the average RC subsidized rent, subtract that from the average market rent, and multiply. Pretty sure it’s a BIG BIG number!

    The Rent Control Industrial Complex has been very hard at work creating more tenant rights and further restricting landlords. All this does is make for less available RC units, as property owners do things like: airbnb, rent to family/friends, sell units off as tic’s, sell the building to a tic/condo converter, keep their units off the market, etc., etc.

    • Sam

      The two biggest factors driving the city’s housing shortage are rent control and NIMBYism. Both suppress the supply of housing.

      But Tim can’t accept that and so instead tries to blame a relatively small number of wealthy people who choose to buy in SF. Does he really believe that if we built no expensive homes that everyone could be housed more cheaply.

      And of course he ignores the rest of the Bay Area, much of which has much cheaper homes.

      • GREED is the driving force behind the housing crisis When is enough enough? The folks who established Eastern Neighborhoods United Front (ENUF) started fighting the parking meters but foresaw the real problems were going to be displacement and the takeover of our neighborhoods. So here we are. GREED is winning. All you have to do is join the GREED team to climb on top if that is how you want to live your life. There are some people who prefer to fight to change the system rather than succumb to it.

  • IMinitforme

    St. Regis – 188 Minna Street

    90 units

    57 absentee owned, 63%

    Well now….I guess one of the 57 absentee owners must be AL GORE! ……OMFG

    the horror…….the horror.

  • Blue Panther

    The sad truth is when a city or neighborhood gets too popular with the wealthy, it becomes BORING.

    • Sam

      So being poor makes you more interesting? How, exactly?

      I don’t think so. Generally people who are smarter, more knowledgeable, more experienced and who have drive and initiative tend to do well financially as well. And once they have money, they can do more interesting things like travel overseas, try new experiences, and so again become more interesting.

      While those who are poor can’t afford to go places, see things, do things, and much of their time is spent merely surviving rather than growing and developing into a fully-rounded person.

      Most people would, if granted a wish to meet anyone they want, would choose someone successful and affluent. And if granted another wish, would want to be wealthy and successful themselves. If money is such a curse, why does everyone want more of it?

      The good news for you is that there are lots of dirt poor towns across America, where you can go and never be bored at all, presumably.

      • Umbersmirch

        Holy s***, did you just say that?? That the poor are not “full-rounded” people? I was on board with much of your input in this discussion, Sam, but when you go there you show your true colors.

      • Sam

        No. What I was actually saying is that it can be more difficult for poor people to achieve well-roundedness if only because it takes much of their time and effort to just get by. While the wealthy have more spare capacity and better access to experiences and exposures that aren’t available to most people.

        Blue Panther started this all off with his claim that wealthy people are more boring (something that Redmond has said in the past as well). My point is not only that that is not true but, if anything, the wealthy are more interesting if only because they have more opportunities to be.

        People who are successful at work tend to be successful outside of work as well.

        • marcos

          The only true experiences to the neoliberal are experiences which are part of an economic transaction. That which happens outside of the confines of commerce are not legitimate experiences, not until they are appropriated, cleansed, sanitized, reified and packaged up for sale.

          Hanging out in Naples Italy last week adjacent to a dirt poor teeming slum strewn with trash, slathered with graffiti and populated with unpredictable people drinking alcohol in public, it is clear that livability in urban spaces are does not require any special sidewalk widening, street treatments, luxury condo densification or commercial activity. It simply requires housing for real people who live in neighborhoods and make up community to be given space to live their lives.

          In fact, the livable city boosters here would have heart attacks were they to spend a moment in such an authentically livable environment that was not transacted as a packaged experience.

          • Sam

            So a filthy, crowded crime-infested Neapolitan slum is your model for a successful urban environment?

          • marcos

            We encountered no crime to speak of, not once did we ever feel remotely threatened anywhere in Italy ever. People seemed happy in their homes, the streets were “vibrant” and a pleasure to be around, narrow streets, dense housing, no parking, people drinking on the sidewalks in parks around fountains, trash and graffiti everywhere. That’s livability.

          • Sam

            Naples has always had a high crime rate. It’s possible that you did not notice it because you were in the busy tourist areas. Then again, much of the crime there takes the form of things like fraud corruption and tax evasion, which aren’t things you see out on the street so much.

            Either way, I don’t think Naples is a model we wish to follow, no matter how nice your vacation was.

          • marcos

            In Rome and Naples, two cities that are actually lived in by Italians, there was the kind of street life which San Francisco’s planners and urban boosters say they want on one hand, but which bring with them problems that they say they abhor on the other. Public drinking, graffiti, narrow sidewalks coexisting with cars and scooters, few bicycles, and trash a plenty.

            This is the bait-and-switch aspect of boosterism, promising the good stuff to residents while delivering none of it and delivering the good stuff to the politically connected without prior disclosure of the promises.

            This is the hallmark of the neoliberal tollbooth economy.

          • Sam

            There are plenty of livable cities that don’t have a high crime rate or abject squalor. I’ve no idea why you equate the two.

            Take a stroll around Santa Barbara, Bath, Lugano, Adelaide or even Mill Valley. Safe, clean and very livable.

          • marcos

            Bring a book.

          • Sam

            Why would I need to? You make the mistake of thinking that the places you just happen to individually prefer (mostly shit-holes, it seems) are somehow better examples of urban planning simply because you personally prefer them.

            How much credibility do you think you have when you cite 16th and Mission as an example of a vibrant neighborhood and Italy as a good example of sound governance?

            Last time I checked, nobody has entrusted decision-making power to you. You only get one vote.

          • marcos

            Either we do things your way or we want to live in a shit hole. How much credibility do you think that you have when you joust at straw persons when your case has been demolished?

          • Sam

            Planning by the last-place-you-went-on-vacation is unlikely to persuade anyone here or elsewhere.

            Advocating squalor as a desirable urban quality is ridiculous.

          • marcos

            You really hate happy people who don’t have to pay for their happiness, don’t you?

          • Sam

            So your best argument is that the people who hang out at the 16th and Mission BART plaza represent the pinnacle of human happiness and achievement?

          • SFrentier

            I think you’re both missing the point. The difference you describe is cultural. American interpersonal culture is largely private, bland, fake, up tight, suburban, etc. Italy, and most of Europe has a much more open city street culture. (FFS, this even includes Germany!) So no matter how hard SF, or Manhattan tries to have the outside-open-interactive elements of any European city, the efforts pale in comparison.

            Hint: it’s the people populating the places, not the places themselves.

            Look, America has a lot of great things to offer, particularly along the lines of liberty, privacy and advancement. But street life, and a true caring among people in casual interactions is not one of them.

          • Sam

            Good points, SFRentier. The great thing is that the world offers us options. You like Europe with its streetlife, collectivism and socialism? Great. You can live there.

            Prefer the US with its low taxes, rugged individualism and greater opportunities to get rich? Then stay.

            I don’t demand that any place be any particular way. I just want places to be different so I have some damn options.

          • marcos

            Urbanist boosters claim many benefits of their luxury condo projects. One of them is adding densities to create a livable urban streetscape that creates a sense of community. Such activated streets were the norm here up until the suburbanization trends of the second half of the 20th century. There is nothing cultural going on here. It is just that the boosters want nothing of the sort. They want to repress an activated streetscape via neoliberal discipline while adding densities and making bank.

          • Sam

            marcos, your undue emphasis on those who get a return by taking big risk on RE development is well wide of the real point.

            Developers build what they know people want. So if you want to stop developers building new homes you need to stop people wanting them.

            What is your strategy for convincing people who want to buy new homes that they should not?

          • marcos

            In California, local governments get to adopt land use plans and ordinances to promote the orderly development of communities, not to satisfy the demands of real estate investors and Wall Street. The current land use plans call for certain policies in order to meet these policy goals. Research like this proves them wrong. In that case, if there is political will to enact policies to achieve goals and those policies are not achieving those goals, then if the goals are still supported, then the policies need to be changed.

          • Sam

            So, in other words marcos, you don’t care that people want to buy these homes. You want to frustrate their dreams for no reason other than that in your own slanted personal idiosyncratic viewpoint, you wish to impose your view of urbanity upon others without regard to their wishes. IOW you don’t care about what people want or about their freedom to make lifestyle choices, because “you know best”.

            I think you should run versus Lee next year on an anti-growth, anti-homes, NIMBY regressive platform and see how many votes you get.

          • marcos

            You really can’t get through a thread without deviating from the topic at hand to personalizing the issues, can you? This article presents research about who is buying condos that we’re told are going to add supply to drive down costs to address the local housing crisis, blowing a hole in that case. We’ve been sold a bill of goods on transit oriented development, adding supply to reduce prices and building livable neighborhoods served by transit. The entirety of the cases made by boosters are revealed as a bait-and-switch farce. Now that we have evidence of these lies, it is time to make political hay out of them to contest and win elections to put San Franciscans in the driver’s seat to contain developer corruption.

          • Sam

            marcos, you misread the article. It cites only the most expensive and exclusive projects and it is perfectly obvious to anyone that their construction will not help house the poor (except insofar as BMR units are created and the tax-base is increased, which isn’t trivial).

            Nobody ever claimed that building a few homes at 2 million would help house the poor. They were built because there is a demand for them and our buoyant economy creates prosperity for many, and those people deserve an appropriate place to enjoy their success.

            What has had more impact on affordability is the much later number of more moderately priced units that were not cited here. RE values haven’t gone down but that is because there has been a general uplift in values. Prices would be even higher without the new supply.

            Homes in successful desirable cities that cannot spread will always be expensive. But that doesn’t mean we should give up and build nothing. We need to build more homes at all price points.

            High prices come from short supply, and the two biggest factors that inhibit suply are NIMBYism (for new owned units) and rent control (for rental units)

            It is YOUR policies that have causes the higher prices, not mine.

  • Peter

    Having unoccupied luxury condos for the absentee owner wealthy in the midst of San Francisco’s housing affordability crisis is an ongoing insult to the San Franciscans who have trouble affording to live here. Where are some civic-minded squatting groups who can arrange for these market rate monstrosities to be occupied by S.F.’s less fortunate?

    • IMinitforme

      I say we start with Al Gore’s empty apartment…….any supporter???? Occupy Al….Occupy Al…..Occupy Al…….

  • Scott

    I am one of “those” 2,034. My Story: I am a Second Generation San Franciscan that now lives on the Peninsula. I bought my condo (with a loan), several years ago before the latest real estate boom started with good advice from my Real Estate agent. It is an investment – a good place to put a large chunk of my life savings. I do rent it out at market rate to a full time resident. While we are “absent”, we are still involved in the local community and are actively involved in making that neighborhood a better place to live. Once reason I purchased this condo (again with advice from my agent), besides the great area, was that it was not rent controlled, but it is also a place that I hope to live someday. (I am not sure I could afford to live there right now)

    Am I part of the problem?

    Maybe. I do not consider myself “Elite”. I do not live in a Million dollar home and I am not part of the 1%- I also do not think I am taking someones home.

    The issue is complex. I have friends who have been evicted, and I also have some who have moved, but keep their below-market apartment. (abuse happens on both sides)

    The system is broken. SF has made it so only the “rich” can afford to buy the new construction since that is only what developers can profitable build. Because of rent control – any affordable unit stays OFF the market (who wants to give up that 1400/mth 2 bed in the mission?). Lots of people richer then I, live in these rent controlled units. We have an artificial supply constrains on both ends – low rent leading to low turnover and high costs to build new.

    The “real” rental market is small because of that.

    Frankly as a landlord, I like that – I am sure to command high rent and my condo value will keep going up. All of these “control” policies contribute to keeping supply low (rent control, high taxes, costly building) More control (like Prop G) will only make things worse buy further drying up supply.

    By easing rent control – make it means tested, for example, and building more is only going to increase supply and lower rents.

    • Sam

      True, Scott, SF’s housing policies suppress supply and turnover, leading to remarkable profits for those who take a risk and commit capital to SF property.

      I regularly criticize SF’s policies only because I think are genuinely bad for low and middle income San Franciscans. And not because it’s not great for me personally and financially.

      The only way to really lose money on SF RE is to get stuck with long-term “lifer” tenants who are addicted to their rent-controlled deal. You’ve been careful enough to avoid that and, after a learning curve, I’ve now achieved the same status.

      Rent control will die of its own accord – several thousand RC units vanish every year and no new ones are being created. The other big driver of high housing costs – NIMBY land use policies – shows no sign of going away, however.

      So it’s a fairly safe prediction that SF will always be expensive. It’s just the way it is.

      • culturedsf

        I think addicted is pejorative. People who have rent control are not addicted to control. It is a pretty hard decision to figure out what you would do if you had to move and couldn’t afford market rent in SF. How far would you have to move to find similar or affordable rent. What would you do for a job if you had to move very far away to find that rent. I always hear this kind of renter bashing. It’s just not impressive.

        • Sam

          I’m thinking of the kind of comment I’ve heard a number of times when someone brags about their “sweet” rent control deal.

          It’s not that they can’t afford a market rent. It’s just that they can get away with paying less and decide that they are going to never ever move to save $$$.

          So sure, for some it is about survival here. But for others, it is about greed. Why isn’t it means tested?

          • culturedsf

            @Sam I don’t see why means testing couldn’t work out depending on how they calculate it. Perhaps by tax return. I would like to see the rent control situation transitioned out slowly using ideas like means testing to see if you should be receiving a rent subsidy or not. However, I would not support evictions due to failing the means test. Hopefully it would mean that the person who can afford more rent would be raised to the level that is logical. It used to be that you would pay only 30% of your income in rent. Now even with rent control for many it is 50% or higher.

          • Sam

            New York City has means testing for its rent stabilization and, as you suggest, it works off of your 1040. I recall seeing a figure of 150K a year as the cutoff, which is actually pretty high for what is effectively a welfare program.

            Nobody gets evicted if they start earning more than 150K. They just have to pay the real rent.

    • SFrentier

      Yup, I’ve been saying that a long time. SF rent control policies, the tireless anti landlord legislation poured out by the BOS, and the plethora of “housing” activists have been fantastic in raising SF property values, as well as marginal rent rates! As a landlord you just have to be saavy and work the system (just like many rent control tenants do.) It’s a pleasure being able to retire early with just a handful of well managed properties. Thanks guys! Campos, keep up the good work too!

  • Kathleen Dooley

    Great article. I want to add that this situation is not limited to high rise condos. I live in a four unit condo on Telegraph Hill where only 2 units are occupied full time. One is rented out for a year at a time to the highest bidder and then kept off the market for 6 months at a time so the owners can enjoy weekends in SF. The other is kept by a mega rich person who uses it as a quasi hotel for employees and guests. This person also owns a 3 story home on the Hill, amongst his other properties around the US which sits empty most of the time. What this causes is a building where people have no personal investment or interest in the life of the City and feel free to treat it like a hotel and the live in owners like concierges. You never know who will be occupying these 2 units so we are frequently running into total strangers in a small building. There are many, many apartments and homes here that are no longer regularly occupied except as hotels for the super rich.

    • SFrentier

      That’s terrible Kathleen! I propose a new ordinance: tax properties that are not fully occupied by the owner or a tenant. Or, make them available to low income folks, homeless or transients. I’m sure a non profit entity can manage that. It’ll be simple: either owner pays a tax (we have a precedent, 24% like prop Q), or hands a set of keys to a designated non profit for management whilst they are away. Campos, RU listening? I love it!

      • IMinitforme

        I say we start with Al Gore’s empty apartment…….any supporter???? Occupy Al….Occupy Al…..Occupy Al…….

    • Sam

      Kathleen, if you own a property, you are free to live there or not. One thing that would be much worse than high rents would be to live in a place where the government could just seize your home and give it to someone who they think is more ideologically worthy.

      Sounds like you own a unit in this building as well. Why don’t you move out and let a low-income colored family of color live there? Wouldn’t that be more noble?

      • mlyon01

        Someday we *will* be able to seize those 2nd and 3rd homes and let “low-income colored families of color” live there. I can’t wait.

  • Aaron Goodman

    The problem is that the 30000 housing units cannot be supported by the insufficient infrastructure, like MUNI. We cannot build our way out without taxing business interests and institutional groups and business money adequately..

    The trains and roadways are already at a slog, it takes real envisioning and not just profits.

    That mean see need people in place to promote community based planning.

    Not stool pidgeons on the planning dept. and comission, who rubber stamp whatever the developers want.

    • Sam

      Aaron, if we are to believe Tim’s claim that many of these units are unused, then there isn’t much extra load on the infrastructure, because the owners aren’t using city services.

      Moreover the kind of people who buy a 2 million dollar condo as a third home are probably not going to hop on a Muni bus very often. They can probably walk to most places they need to go when in the city.

      We will find out in November how willing the voters are to throw more and more money at Muni when they appear to waste all the money we’ve already given them.

      As for the planners, they are appointed by those whom we elect. So if you don’t like the results then it is our fault for electing the appointers. If you want to change that system, you will need to vote differently and convince a majority of us to do the same.

      • The voters will decide soon.

        We have three transportation bills, (A, B, and L) that are essentially a referendum on SFMTA’s anti-car policies to vote on this November. We also have Prop G, which may not be the perfect way to address the housing crisis, but is the only choice the voters have to been given.

        Empty units do not vote and many new residents who have no clue about the issues will not vote either. We shall see whether people trust the government’s plans to displace thousands of citizens to make room for dense (stack and pack) housing along public transit corridors.

        We shall see how many people support the agency that wants to use their tax dollars to force them out of their cars. Some prefer to live in a more friendly benevolent society.

        That about sums it up. The SFMTA has its head firmly planted in the sand and we assume the voters are going to kick it in the a**

        One of my favorite headline stories this week, and there were a lot of them, was the one about Supervisor Wiener requesting a hearing to find out what the SFMTA plans to do before the new trains arrive in 2017. Paul Rose’s answer was that they have ordered new trains.

        • Sam

          If the MTA funding attempts are opposed by lefties like you and fiscal conservatives like me then they are doomed to fail. Personally i am quite happy to see dysfunctional systems like Muni starved of funds. Investing in your losers is a bad investment strategy.

  • marcos

    The way you check for owner occupancy in the assessor’s file is to see if they claim the homeowner’s tax exemption which an owner can only do on a single home in California that must also be their primary residence.

    • Sam

      Designating which of your homes qualifies for the exemption doesn’t imply anything about where you spend most of your time. Nor does an analysis of such exemptions cover cases where the owner’s other homes are outside of CA, nor those cases where the exemption is claimed but the unit is left vacant or rented out.

      • marcos

        You are right, we should not presume that speculators will follow the law.

        • Sam

          If buying a condo in SF is speculating then you are a speculator.

          Speculators tend not to hold long-term. Tim provided no figures for the average hold time for these units or whether they are being flipped.

          • marcos

            Either you are purchasing a home in which to live or you are a speculator, purchasing a home purely for its investment potential. Sure, you might stay there on occasion, but you live elsewhere.

          • Sam

            Many of these buyers do live there, at least some of the time. And many people buy a home both for its utility and because it is a good investment in the long run. Your model is too simplistic.

            I don’t think it is any of my business what you do with your home. I’m not clear why you think it is your business what others do with theirs.

          • marcos

            Because we are being told that entitling new market rate housing production will lower housing prices for SF residents. It will not if this luxury housing is snapped up by absentee speculators.

          • Sam

            New supply cannot be built in the numbers necessary to lower prices because of NIMBY land use restrictions. However, any new supply will soak up at least some of the demand.

            So, heads we win; tails we don’t lose anything.

          • marcos

            The policy goal is to make housing more affordable. If the policies do not meet those goals upon which the policies were enacted, then those policies should be revisited unless the goals have changed. You can’t move the goalposts and expect the policies to still work towards those goals.

            There is not enough real estate finance capital in place such that housing could be produced fast enough to sop up demand and lower prices even under a regulatory environment specifically configured for such a purpose.

          • Sam

            marcos, where exactly does it say that THE goal of SF’s housing policy is to make housing more affordable?

            In fact, where does it say that housing policy has one and only one goal?

            The reason we build new homes is because there is a demand for them, and because our population is growing.

            It is clear that it is desirable that some types of housing should be affordable, at least to the segments of workers that SF needs and who, for some reason, cannot commute into the city like hundreds of thousands of other people do.

            But you are very very wrong if you think affordability is the only goal. And these new units are clearly as affordable as they need to be because they all sell or rent.

  • SFrentier

    Here’s a lovely article from the NYT about foreign condo buyers. Most are not 1%ers btw, but hard working and successful foreigners and immigrants. I don’t think these people homogenize neighborhoods. Matter of fact they make them more interesting, even if they don’t conform to your post 60’s-boomer-liberal-ideals. So let’s show some understanding and sympathy to these new buyers, instead of the negative and suspicious tone his article presents. I welcome making SF more international in flavor!

    http://www.nytimes.com/2014/10/02/business/owning-a-piece-of-america.html?hp&action=click&pgtype=Homepage&version=HpSumSmallMediaHigh&module=second-column-region&region=top-news&WT.nav=top-news&_r=1

    • Sam

      Progressives claim to love diversity but the reality is that diversity to them means only more people like them and less people who are not like them!

      • SFrentier

        Well they actually like ethnic diversity too…but tend to feel more comfortable when that diversity component is made up of poor people. Easier to feel better about oneself when helping out those in need. A successful and independent minority person? What the hell do they do with that?

  • ray

    if the tenant’s union was anything but representing greedy tenants, they would go for means testing, so tenants making $100K, $200K and up a year, or owned real estate or had large other assets, did not take up apts. Seniority if the determinant, only, here. Work outside the city? make a lot? No worry, if you got here first, you keep the low rent, and the apt off the market, with increasingly stronger protections for your rights to take up one more apt which otherwise would be a whole lot less rent than the types of units this article is bitching about are not rented out to san franciscans. But, that would be fair and the tenant activists want one thing: to keep what they have, not fairness.

  • Jay

    Gonna keep hope alive that the law will work for me, first. My landlords who are so-called “professionals” t had the ability and means to make things right over a year ago and they refused. Now they made mistakes and must pay. As a longtime resident of this city who is also going through a job crisis as well, I do not feel “entitled” to live where I live but you bet your butt I have no sympathy for these people. No respect and i hope to ensure their collegues know. that is, if they extended negotiations. DISPLACEMENT is insane in San Francisco and it’s really sad.

  • medalist

    regardless of where they live I know for sure the property taxes are going to the City and State to fund all the programs we all hold dear. Actually this study, however flawed, should be a plus for all those with SF nostalgia: you get increased tax revenue and affordable housing tax dollars without all the smug, over-entitltled, characterless, banal rich people using up the city recourses.

  • Hi, Ray, let me make you a bet: If we did means testing for both tenants and landlords, the Tenants Union would go along. What I mean: If a landlord is a multimillionaire, he or she clearly doesn’t need to collect much rent. So the rent his or her tenants pay should be reduced. Can we agree on that?

    • Sam

      Tim, anyone in business measures his returns in percentage terms, reflecting the capital he has at risk.

      If i can get 10% per annum return from stocks (the average for the last century or so) by sitting in an armchair, why would I ever leave my home to get less than that from SF RE?

  • Oh, and then we could do means testing for Social Security (Warren Buffett doesn’t need it; many poor seniors need a lot more and should get higher payouts). And for health insurance (Bill Gates doesn’t need it, lots of poor people need lower rates). And how about pay scales? No CEO NEEDS to make 130 times the salary of his or her lowest-paid employees.

    I’m liking this means-testing thing, Ray.

    • Sam

      Tim, SSN isn’t welfare. It’s a contractual insurance system, meaning that what you get out of it depends on what you pay into it.

  • Uh, Sam … I think I was making a larger point. Didn’t some famous guy once say something like “from each according to his ability, to each according to his needs?” The original means-tester. I learned about him in college, I think.

    • Sam

      Tim, that is exactly why the richest 2% of Americans pay more than half of all taxes.

      However, we are talking here about the willingness of investors to finance rental housing in SF. Two thirds of SF residents depend on that willingness so why on earth would you want landlording to be an unprofitable enterprise?

      Again, if SF RE yields me less than 10% pa, then most likely my tenants are not going to find another sucker to replace me when I decide it is no longer worth the hassle.

  • SFrentier

    Tim, what are you smoking? So I went with my poorer neighbor to el farolito last night. I gladly paid $8 for a super buritto, but strangly, they refused to give him a discount on his. He mentioned means testing.

    WRT rents in the city, don’t you get it? ALL the apartments rented out from whenever to 3 years ago are now significantly under current market rent. That is probably 70-80% of the total. How many of those are with long term tenants that are working class or artists? Maybe 30, 40%?? And the other 30-40% are rented out to people making more money, including those fabled software engineers you guys love so much. I’m sure they are happy you are saving them $1000+ on rent per month. But that means that a significant portion of apartments are rented at a discount TO PEOPLE WHO DONT NEED IT! That is why means testing is necessary in a small, constricted market like SF.

    Look, you, SFTU and guys like Campos keep increasing the marginal rent rate. And I learned a long time ago that the only skill I need to have as a LL in SF is to magically pick tenants that will move on and not need to keep an RC apartment forever. You guys keep marginalizing small landlords with the laws you attempt to promote/pass and your anti LL attitudes. Many LL’s are scared shitless and consequently: airbnb, keep units vacant, sell off as tic’s, sell to a tic developer, rent only to friends/family, etc. And others like me that are not scared work the system, just like many tenants do on the other side. (Oh, and before you try to accuse me of being a bad LL, my tenants love me. I’m very fair to them, and I have never had a negative relationship with any of my tenants. They aren’t too keen on all the red tape this city attempts to throw up as well. They are happy to work with me one on one in a manner that is fair to both of us. It’s like all you guys from the Rent Control Industrial Complex, including the rent board, don’t exist 🙂

  • Arcelia Gallardo

    So?

  • http://sfist.com/2014/09/30/almost_half_of_newly_built_condos_i.php

    Almost Half Of Newly Built Condos In S.F. Are Second Homes For Peninsula Wealthy, Others
    four-seasons-view.jpg
    The view from a $11M condo at the Four Seasons. Photo: MLS via Curbed

    Anecdotally most of us have understood for years that the San Francisco luxury condo market is attracting buyers from afar in search of second or third homes or pied-a-terres, much like the Manhattan condo market. This phenomenon is newer for S.F., however, relatively speaking, and it forms a core piece of the progressive argument against Mayor Ed Lee’s supply-and-demand solution for the city’s housing crisis. Now, 48Hills has done the property-records legwork and has the data to show for it: On average, 39 percent of condos built since 2000 have absentee owners, and for newer buildings like One Rincon Hill, that number is 50 percent or above.

    48Hills found in property records that, unsurprisingly, high-end spots like the Four Seasons residences (765 Market Street) and the St. Regis (188 Minna Street) had upwards of 60 percent absentee ownership — something which makes sense when you consider the fact that the developers were building concierge-served penthouses on top of luxury hotels that would be attractive to out-of-towners. The Millennium Tower with its 426 units has 213 absentee owners, or exactly half. They also note that a few of these properties with views can be spotted regularly on Airbnb and VRBO, renting for crazy amounts like $6,905 a night.

    But what does this mean for San Francisco’s ongoing housing shortage and the mayor’s ballot initiative to set a 33 percent goal for affordable housing? Well, it fuels the fury over the notion that the only housing getting built is not serving the needs of the existing San Francisco middle class. The left has been arguing for years that these high-end units are getting snapped up by wealthy tech elites moving up here from the Peninsula or other cities, and the remainder of them being bought by well off empty-nesters from the North and South Bay who want to spend more time in the city, and jet-set investors who spend the majority of their time elsewhere.

    The difficult piece of this argument is that for the vast majority of real-estate markets in the U.S., including popular resort areas that draw second-home buyers, the law of supply and demand is readily evident to the people who sell real estate. The market fluctuates, prices are kept in check by a finite amount of demand. But for places like Manhattan and San Francisco which are both thriving business centers and desirable playgrounds for the wealthy, not to mention desirable hangouts for rich people from abroad, there is always going to be a complicated layer added to the supply-and-demand theory that forces prices up and keeps demand strong via outside sources. There is no question that the middle class in San Francisco (defined here, basically, as people who make less than $150,000 but more than $60,000 a year) is left with few options except to rent, buy fixer-uppers, or to wait for the promised “middle-income” housing that Mayor Lee has given much lip-service to in the last six months.

    Perhaps you should, in fact, be more angry when developers try to skirt what minimal affordable-housing requirements we have now.

    And you can take the 48Hills data as you will — either to fuel your outrage or to inform your pragmatic view on the ongoing, economic- and population-booming roller coaster we’re on. And keep these figures in your back pocket the next time this topic comes up in conversation, which it probably will at least two more times this week, assuming you leave the house much.

    Related: Affordable Housing Compromise Reached For November Ballot
    New Condo Tower 181 Fremont Skirts Affordable Housing Requirement

  • Tad

    There really is no denying that most rich people are BORING.

    I’ve been to their parties. I have seen the inside of their closets.

    One has to go outside and take a breath of fresh air after spending time in their company.

  • 101SF

    You lost me at “Erin McElroy.”

  • AWildLiberalAppeared

    This “study” is bogus. It has no way of differentiating between people who rent out their homes and people who actually have a vacant unit.

    But of course, this site will put out NIMBY Propoganda, because that’s all Tim knows how to do.