SPUR study, flawed as it is, shows a serious problem. Will someone wake up the Commission?

This chart shows where there are high levels of housing units that are pieds a terre, only rarely occupied
This chart shows where there are high levels of housing units that are pieds a terre, only rarely occupied

By Tim Redmond

UPDATED BELOW

JANUARY 27, 2014 – The San Francisco Commission got a report on vacant high-end housing last week, although nothing happened and all the panel suggested is that the situation ought to be monitored.

The report came from San Francisco Planning and Urban Research Association, which used census data and American Community Survey data to conclude that there are roughly 9,000 units of housing in the city that are occupied only as occasional pieds a terre.

Another 9,000 units are held off the market for other reasons, the report says.

We’ve done similar research, using different data; we only checked 5,212 condos in 23 buildings, and found at in some cases as many as 60 percent were owned by people who didn’t live there. Overall, 32 percent of the new units had absentee ownership.

I’ve got some disagreements with the SPUR report, which I think may not reflect the full extent of the problem. And the report doesn’t call for any specific action.

But let’s stipulate for a second that SPUR’s data is completely accurate (and even SPUR doesn’t try to do that). If there are 18,000 housing units in San Francisco that are habitable and not available for rent or ownership for people who work in the city — that’s a serious problem, no?

Particularly since the mayor’s strategy for addressing the housing crisis relies in significant part on building 30,000 new units. If many of those units remain largely unoccupied, his strategy isn’t going be very successful.

Commissioner Michael Antonini said that the SPUR report was nothing to worry about, since the percentage of units that exist largely as occasional occupancy in SF is lower than, say, Napa or Miami. But seriously: The fact that people who own vacation homes in other places (the Russian River, say) is very different from large numbers of units in a place like San Francisco being used for something other than housing.

UPDATE: Commissioner Kathrin Moore called me today to note that she wants the Department to do its own study, because she found the SPUR report biased and flawed. “We can’t make policy based on someone else’s data that we don’t trust,” she said. “I want the department to give us their own data, which we can then work from.”

I freely admit, and we’ve said all along, that the 48hills analysis was only part of the picture. Some of the units we identified as owned by absentees might be rented out. We took a sample, and focused only on new buildings.

There is simply no perfect source of data on who is living in high-end housing in San Francisco. The city doesn’t register housing. Nobody checks if units are empty. Any investigation of vacant units is going to have some drawbacks.

That said, the SPUR report has some serious flaws.

The data for the ACS is based on a relatively small sample size (perfectly adequate for national and even local trends, but not so good for much smaller questions). As both SPUR and ACS admit, people who don’t live in a unit are less likely to be contacted, interviewed, and counted.

By definition, anyone who owns a pied a terre and isn’t there very often won’t be around to get the survey in the mail, won’t be interested in responding, and will be undercounted.

Then the report suggests that there’s not such a big problem with international rich speculators buying up trophy properties in San Francisco … because if you look at Trulia data, most of the searches come from within the United States.

I’ve spoken to some realtors who deal with high-end properties in San Francisco. They think that’s beyond silly.

No Russian billionaire who wants to move his money into a pied a terre in San Francisco is going on Trulia. He (or his lawyer) is contacting a top-level real-estate firm, which isn’t checking Trulia either. A lot of these places never actually go on the market.

Pacific Union, I’ve been informed, has recently started doing “China initiative” webinars. If there wasn’t a lot of international money coming in, why would one of the town’s leading high-end realtors, be targeting Chinese investors?

I spoke with Gabriel Metcalf, the head of SPUR, and asked him about all of this. He agreed with me that the data (including his organization’s data) isn’t complete and there needs to be a lot more study of this issue.

And he agreed that while the report somewhat downplayed the problem, if indeed, there are 18,000 units held off the market, that’s a significant number, and a serious issue, and there ought to be a policy solution.

Sup. is talking about that – he’s exploring the question of a vacant-units tax or fee, which would apply to all empty housing. (While 48hills looked at new buildings, there are probably pieds a terre in every rich neighborhood in the city.) I don’t think you could set that tax high enough to deter billionaires from buying property that they will never live in – but you might slow it down a bit around the edges, and the city would be sending a message that this is not an appropriate use for scarce housing stock.

It might also – if set at the right level – bring in a significant amount of money for affordable housing.

 

 

  • Tim, Please change the comment policy. Sam and his pretend friends posted dozens of times in the previous post. His overposting ruins the comments section. Thanks.

    • Runforthehills

      Yes, change the policy so commenters stay on topic…*cough cough*

      • Sam

        Yes, my proposal would be to remove any comment that criticizes another commentator rather than addressing the topic.

        • Then you would be the first to go.
          Huzzah!

          • Sam

            Not at all. I always post on-topic unless and until someone gets bitter and personal, and then I will counter. But I am never the first to drag this forum into petty spats and vindictiveness.

          • You are frequently the first to attack the individual from behind your veil of anonymity when you lose on the substance of the debate.

          • I only “attack” trolls who are trolling.
            If the shoe fits, wear it.

          • Sam

            marcos, your failure to provide any evidence for your claim is noted.

          • The absence of evidence is not the evidence of absence especially for that which is self-evident.

          • Whatever gets you through the night, Sam…..

          • Sam

            Ah, so your best argument is that it is obvious that you are right?

            IOW, you think you are right! Gee, who doesn’t?

    • KnowsBetter

      Okay, so … the best imaginable result of a pied-a-tierre tax, in terms of availability of SF housing, would be that a handful of high-end condos north of Market get rented or sold to wealthy owner-occupiers, instead of left empty.

      In other words, it would provide housing supply benefits roughly equivalent to … building a couple buildings full of high-end luxury condos! Yet one of these an awesome thing for SF, and the other is evil incarnate.

      Is this about actually helping lower/middle class homeowners in SF, or is it just to make you feel more like you’re sticking it to some rich people?

      • Sam

        The latter, obviously. It clearly doesn’t help any lower income people if a few millionaires have to pretend to live in their SF homes. These homes are beyond the means of all SF residents who are not wealthy.

        Also I am not at all clear how the city could tax vacancy. It cannot be a special and selective property tax hike as that would fall foul of Prop 13. All the city could do is give a discount for owners who occupy their homes, and I feel fairly sure that is not what Tim has in mind.

  • Hitman

    This report is an understatement. There are many landlords in North Beach and Telegraph Hill that leave there units empty. After all, why would they bother when the juice is not worth the squeeze. From a landlord’s perspective, as soon as you rent out a rent controlled unit in SF you might as well plan on writing a $50,000+ check sometime down the line because nobody moves without a payout. Too bad there cannot be middle ground because the communists on the board have convinced all of you suckas that Rent Control is good for you because the Gestapo is all knowing.

    • GarySFBCN

      I don’t believe that there is anything that can be done about this, other than to recognize that new buildings are not going to solve the housing crisis. The only thing that will work is to lobby Sacramento to have citywide rent control on all rental units and to ban AirBnB rentals for more than 90 days a year.

      • W.C. Whiner

        > new buildings are not going to solve the housing crisis

        Lack of new buildings seems to have created it.

        If people need housing, let’s build more.

        • GarySFBCN

          No lack of new buildings in NYC. And no signs that rents are going down. Better to build housing where new development has been prohibited near the campuses for the tech companies.

          • W.C. Whiner

            The data suggest you are, er, wrong about NYC:
            https://www.dropbox.com/s/csivcozghcyrn5e/NYC%20HVS%20data.pdf

          • GarySFBCN

            How does vacancy-rate data prove me wrong? I was discussing rents.

          • W.C. Whiner

            If you build enough housing, vacancy is stable.

          • W.C. Whiner, the problem in any multivariate system is that when you engineer to maximize any given variable, then other variables become limiting factors.

            In this case, there is nowhere near sufficient infrastructure at hand, in the pipeline or planned that can service the amount of new residential units required to impact price.

            There is no free lunch and you cannot simply do the math without taking all variables into consideration and expect useful results.

          • Sam

            Guest, transit-oriented development is the default standard in SF for precisely this reason – it minimizes any alleged infrastructural lag.

            The eastern neighborhoods plan has been wildly popular and successful by embracing these important principles.

            “Densify where we can; beautify where we cannot” is the near universal mantra of the city’s sharper and more experienced minds.

          • W.C. Whiner

            Let me translate from Bureaucrat to English.

            ‘We had every year almost 30,000 permits for housing, and we built a tremendous amount.. what we haven’t figured out is the question of gentrification.’

            ==

            ‘We held housing growth below 1% a year in the tightest urban housing market in the country, and now I have to cover my ass. Look, a yuppie!’

          • W.C. Whiner

            Guest, there is indeed no free lunch. How this changes the verity that if people need housing you need to build it eludes me. If it makes you happier, for ‘build housing’ you may read ‘build housing and add sufficient attendant infrastructure, transit, amenities and services to meet marginal needs,’ or whatever approved phrasing you prefer.

            On the Peninsula where so many new jobs have bveen created? Yes. In the city? Yes. Around local transit hubs? Yes, please.

            It boils down to, build housing.

          • Guest

            “‘We held housing growth below 1% a year in the tightest urban housing market in the country, and now I have to cover my ass. Look, a yuppie!’”

            There is no evidence that the capital was in place over those years to have built out to the point that added supply would have come demonstrably closer as measured by price to sating the demand that arose in the past four years by the triple whammy of 1) profitable tech firms (Apple, Google, Facebook, Genenetch, Salesforce, etc) 2) unlimited foreign capital seeking a safe haven and 3) the unprecedented $11b if venture capital allocated to firms in SF last year alone.

            The problem is at the scale of 1000, SF ended up building 1 and had it built 10, there would still be insatiable demand and high prices. Housing supply is inelastic relative to demand in San Francisco and no amount of previous construction nor construction moving forward can possibly address price under these circumstances.

          • Sam

            Guest, you assume that we build new homes only because we think that will make homes cheaper. I do not know of anyone who supplies new housing on that basis.

            New housing gets built for one very simple reason – we the people want new homes. And that is proven by the fact that all these new homes get sold or rented.

          • W.C. Whiner

            The quote you posted was from New York. 30,000 units are less than 1% of New York’s 3,400,000.

            There is no such thing as insatiable demand. The statement that ‘no amount of.. construction.. can possibly address price’ is incoherent. Housing supply is inelastic to demand, though. That’s zoning and Planning. It is coherent to argue that the government the city actually has not only has not done but would never have done enough to address housing.

            That’s a very different argument.

            Closer to home, jobs in information and finance:
            http://research.stlouisfed.org/fred2/graph/?g=YHj

            Look, a techie venture capitalist!

          • Guest

            Demand for housing is insatiable relative to the practical carrying capacity of a practically water-locked city. These are not absolute academic theories, they apply in the real world based on environmental constraints that are never contemplated by classical economics, conveniently written right off of the books.

            Ted Egan said it would take 100K units put into place now to see measurable downward pressure on price. As those 100K units were being purchased each successive buyer would find themselves instantly under water if what Egan says is true. Developers would find themselves likewise in an economic quandary if the rental or purchase prices of their units were to fall after the construction economics had been locked in. Risk adverse developers and banks would never operate under such presumptions.

            Taking Egan at his word, were the rules of capitalism suspended and 100K units were to materialize immediately and they did show measurable downward pressure on price, then how long would those units hold prices down before growing demand pushed them back up? Nanoseconds. How will those people move around the City and region given gridlock and lack of transit infrastructure? Where will these people get their water from? Even if SF conserves, each new mouth needs water. And where will their shit go? Into the ocean? How about green and open space? What about life essential neighborhood serving businesses that are priced out of the City due to rising prices.

            Nope, none of this pencils out under a cursory analysis. The capital was not there to build in anticipation of this triple whammy. The capital is not here now to build to sate demand and push down prices, that is not in the interests of those who make their money off of selling or renting housing. Under the rosiest practical construction capital, infrastructure and demand scenarios, housing supply in San Francisco is functionally inelastic relative to demand.

            And there is no evidence that luxury condo dwellers would otherwise move out to exurban sprawl or even in many cases to existing San Francisco housing. Those markets are segmented and there is no evidence of any cascade effect of consequence. But don’t let me stop the boosters from spinning cascading partial justification to make a quick buck.

          • Sam

            Guest, again, we do not build new homes (nor anything else) for the sole reason of lowering the price. We build them because people want them.

          • W.C. Whiner

            Demand for housing is anything but insatiable, or have you forgotten what happened to rents after the previous tech bubble burst? Here, let me refresh your memory:
            http://research.stlouisfed.org/fred2/graph/?g=YIC

            Real rents dropped 7% from 2002-6. The city lost 30,000 population and added 10,000 units. Lower demand, higher supply, textbook result. How strange!

            Given the 2002-6 experience but a better economy, adding 100,000 units probably pressures prices for five to eight years. If the job market turns, a dozen.

            Transit, water, sewer, open space? Valid concerns. We’re not Hong Kong, though. We have room.

            Practically everything you think about housing market dynamics is wrong, but you have the politics: people are shortsighted. If supply is inelastic, that is politics: zoning, planning and a nearly absent government segment, except for homeowner tax subsidies.

            Me, I am tired of people I like leaving the neighborhood because they can’t afford it. A quick buck doesn’t enter into it. If I wanted a quick buck, I’d just sell our place and join them in the suburbs.

          • Guest

            Yeah, the dot.com speculative bubble popped and venture capital drained out of the region. Perhaps a collapse in aggregate demand due to economic crisis is what led to the drop in rents?

            http://finance.yahoo.com/echarts?s=^IXIC#{%22range%22%3A{%22start%22%3A%222000-01-03T20%3A00%3A00.000Z%22%2C%22end%22%3A%222015-01-02T20%3A00%3A00.000Z%22}%2C%22scale%22%3A%22linear%22}

          • Guest

            Select, copy and paste that mess-a-json-uri into a browser to see the NASDAQ flatten out at the same time that rents fell.

    • GarySFBCN

      Gestapo and communist. You really are ignorant.

    • jch

      Hitman,
      I’m not a landlord, so perhaps there is something I’m missing here. If you are a landlord why hold on to an empty property, paying property taxes and maintenance, when there are more productive uses for your money? What is the business case for this?

      • Sam

        jch, there are a number of valid reasons to not rent out a unit. Off the top of my head:

        1) You wish to use the unit occasionally as a pied a terre or for friends, family or visitors

        2) You may need the unit to be vacant in the future and know that a controlled tenant will be difficult to dislodge.

        3) You plan on selling the unit as a TIC and a vacant unit will sell for much more

        4) You have been burned by rent control in the past and quite simply do not want to deal with it.

        5) You need a tax loss.

        So yes, you forego some rent. But then many property owners do not live paycheck to paycheck, and can easily afford to leave a place vacant. They have to pay tax on any rent, but can offset any losses against other income.

      • jch

        I’ll take my answer from Hitman. I’m no longer reading Sam’s posts.

        • Sam

          LOL, if you are not reading my posts, how are you replying to them?

      • medalist

        The units are worth more ‘dead’ than ‘alive’

  • The rent-control advocates, NIMBYs and the rest of the “progressives” who do not believe in the right to own and control private property and demonize housing providers are the major cause of S.F.’s housing problem. The above mentioned who want all rental housing to be public housing should look at the condition of public housing in S.F. Your way has only acerbated the problem. Try the free market. It works.

    • Charlie

      We have a population of old, retired hippies with nothing but time, and the urge to protest. What you end up with is classic NIMBYism

    • marcos

      As it is written in scripture, amen.

  • mark

    the only travesty going on here, is that the SF Planning commission had to spend ANY time at all on such a silly thing. and what a ridiculous idea of a vacancy tax…..BWAHAHAHAHA! seriously?!?

    • 4th gen SF’er

      I don’t think it would hold up in court.

  • David Carlos Salaverry

    Tim, you really, really do need to change the comment policy!

    The previous David Talbot post garnered thoughtful comments, pro and con. But the Sam-Spam makes it painful to read the comments section, even though I sometimes agree with his content and believe his POV has a place.

    Who has the patience to go through all the utterly predictable Sam garbage, the ten comment deep flame wars he starts which almost always get the utterly predictable nasty replies from progressives with a temper? And having gotten the progressives goat, he becomes instantly smarmy about “civility.”

    I try to add to the 48Hills comments by limiting my presence, by responding thoughtfully and by being as respectful as possible when I passionately disagree. Who wants to order drinks at the bar where an opinionated bully holds sway, gassing everyone within ten feet with beer laden breath?

    Enough already. Hire someone to moderate. That’s as important as reporter-writers and it will help create the community we all need.

    • Fishchum

      Then maybe the onus should be on the “progressives with a temper” to check themselves? If someone’s post on an internet message board is capable of causing ones temper to flare, then maybe THAT person is the problem.

      • David Carlos Salaverry

        No, Sam-Spam needs to be controlled. In a public venue– for instance a classic New England town hall meeting– no one is allowed to monopolize. This isn’t merely rude, it destroys community.

        Socially normal people control themselves in public. But those who cannot control themselves, who have an internet form of Aspergers Syndrome, need to be controlled by moderators.

        From Wiki description of Aspergers: “A lack of demonstrated empathy has a significant impact on aspects of communal living for persons with Asperger syndrome… difficulties in basic elements of social interaction, which may include a failure to develop friendships … a lack of social or emotional reciprocity…”

        “People with Asperger syndrome display behavior, interests, and activities that are restricted and repetitive and are sometimes abnormally intense or focused… ”

        “Abnormalities include verbosity, abrupt transitions, literal interpretations and miscomprehension of nuance, use of metaphor meaningful only to the speaker, auditory perception deficits, unusually pedantic, formal or idiosyncratic speech, and oddities in loudness, pitch, intonation, prosody, and rhythm.”

        Hmmm… have we diagnosed Sam?

        Again, I have no problem whatever with Sam’s content, nor would I want his POV to be absent from the mix. But his abnormal intensity, his verbosity, his lack of empathy, his literal interpretations and lack of nuance, etc. destroy community.

        • Sam

          David, first you say that:

          “I try to add to the 48Hills comments by . . . responding thoughtfully and by being as respectful as possible when I passionately disagree.”

          In your very next post you claim that another commentator must be mentally ill.

          Maybe you should follow your own advice.

        • 4th gen SF’er

          You’re advocating for stifling of dissent on a discussion board. That is frightening and it is exactly why progressives are losing battles in SF. This is one of the biggest problems. This attitude appeals to no one outside of a very small percentage of the population at large and a tiny percentage of the population in SF.

          Stifling comments will include Tim not getting blog hits. People will move on. An echo chamber never works either.

          • GarySFBCN

            Nobody wants to stifle dissent. What most of us want is Sam to be limited – say to 5% of all posts.

          • Sam

            Gary, I am not responsible for others not posting, and so cannot control the percentages in the way you appear to imply.

            I encourage you to not read the comments of anyone with whom you disagree.

          • GarySFBCN

            @Sam, I was responding to 4th Gen, not you. You are a shitstain on this blog and I want nothing to do with you.

          • Sam

            Gary, I don’t care who are responding to. If you make bogus arguments, I will slap you down.

            You might want to work on your anger issues.

          • Guest

            “I will slap you down.”

            “You might want to work on your anger issues.”

            Unreal!

    • Runforthehills

      Oh my, how easily people in this forum get their panties in a bunch. It takes a millisecond to scroll past the name Sam if you don’t want to read his post.

      • Sam

        This is key. Those people do not want to simply ignore a post or a poster. They want to silence that poster so that only their view gets publicity, and disagreement is censored and suppressed.

        • Russo

          Please don’t be disingeuous, Spam. You know that many,many people have complained about your pathological posting, at numerous blogs. I wouldn’t say it’s a mental illness, but it’s certainly a personality flaw.

        • Sam

          Wrong on several counts, Russo.

          1) I do not post on “several” blogs. In fact, only one apart from this place.

          2) I don’t know about “many, many” people complaining. A few have but significantly they have all been extreme left-wingers. It’s really the content and the quality of my arguments that they fear and seek to censor. A few have also expressed support for my comments.

          3) Unless you are a trained psychiatrist, I would keep your amateur diagnoses to yourself and try posting about the topic here instead of your apparent obsession with me.

  • W.C. Whiner

    Don’t dis the ACS. The science of surveys is well established. The ACS is the gold standard survey of the US. Your census of 5k condos was excellent, but you missed 380k other units in SF. The only way to handle them is a survey. I’d trust the ACS a dozen times before I trust anecdote.

    As for a vacancy tax, I have long wanted one. Executing such a tax is another thing altogether, though. Totally vacant units pay, but what about occasional occupancy? What if you are retired and travel? What about tenants who, er, make the most of the rules? It doesn’t seem easy to me.

    • Guest

      Self reporting is rarely honest. If it were, then most men would, well, you know.

    • 4th gen SF’er

      It might be the “gold standard” but it asks intrusive questions. I know this for a fact because I got the ACS in the mail and it scared me. I googled what to do and tons of people say that they threw it away. I threw mine away. They came after me, but LEGALLY they can’t force anyone to fill it out. The regular census? No problem.

      • W.C. Whiner

        The ACS adjusts for nonresponse. The numbers are as good as they get. Not perfect, certainly, but good enough for this discussion.

        Civil servants at the Census, the BLS (who with the Census administers the CPS, where we get employment statistics) and the Fed are not out to get you, they are civil servants doing their jobs, and they do them well.

        I am jealous you got an ACS form. I’d love to fill one out.

  • Fishchum

    Why is this an issue? When did owning a pied-à-terre become illegal? Enacting a policy against this (if that would even be possible) would yet be another band-aid by government and more than likely produce some unwanted consequences. If this is “not an appropriate use for scarce housing stock” then maybe we should look at ways to encourage development instead of penalizing existing homeowners?

    • W.C. Whiner

      We should: the first words of housing policy should be, build more.

      But that doesn’t mean you shouldn’t make pied-à-terres expensive.

      • Guest

        The first words of housing policy should be for the City to subsidize the purchase of all currently affordable as in rent controlled housing at risk of upscaling as quickly as possible for transformation into owner/occupant run community land trusts.

        • Sam

          Hmm, let’s see. Assume 200,000 units of controlled rental housing at an average of $500,000 each.

          That’s a mere $100,000,000,000. Or a tenth of a trillion.

          • W.C. Whiner

            $100B? Cheap. The city should do it.

            The City only has $4B debt outstanding currently, so getting that bond done might be an actual stretch.

  • Question: how many pieds-à-terre are rent-controlled rentals? If you’ve rented for over 20 years and move out of the city, it’s almost a no-brainer.

    As for a vacancy tax, it would be trivial to avoid: just rent the vacant place to your kids, or someone else you trust not to go all Michael Keaton-in-Pacific-Heights on you. Or are you planning on extending that to tenants as well?

    • Sam

      Fazal, you make a good point. There are really two main categories of vacant unit:

      1) New condos that are bought as second homes

      2) Old units that are subject to rent control

      For the first, those units are not subject to rent control, and are not affordable by any means. Therefore whether they are vacant or not does not affect lower-income folks who need homes. They cannot afford them anyway.

      For the second, the real problem is rent control. Old untis that are not controlled, like converted condos, are rarely left vacant.

      • Not quite what I meant. I have heard stories of people who used to live in SF in rent-controlled apartments, have since moved to Marin, but retained their cheap rent-controlled apartments for when they visit the city because paying a few hundred bucks a months is cheaper than a couple nights at a hotel. Absentee tenants, in other words, not absentee landlords.

        Anecdotal evidence to be sure, but it would be interesting to know actual numbers, just as it would be interesting to know how many rent-control tenants make above the median wage. I know, I used to be one (moved here in 2000), until I got married and moved into a bigger non-rent-controlled place in 2008.

        One of my young cousins just moved into the city, and I am shocked at how much she is paying for a 1BR in the Tenderloin (almost double what I used to pay for my 1BR in Nob Hill). Ultimately, comfortably-off people unduly benefitting from rent-control, whether they live there or are absentees, take housing stock off the open market and make life much tougher for newcomers, who are not all rich techies, contrary to popular opinion.

        • guest

          Thanks for the fairly tales, Fazel. I’m surprised you didn’t mention the other fairy tale that landlords are keeping 40,000 housing units off the market because: “rent control,” even though SF rents are among the highest in the world. The way landlords and their apologists spin stories around here, you’d think they all started out in life riding the short bus.

          But for others who prefer facts instead of fairy tales, no one is “living in Marin” or anywhere else and keeping a rent-controlled housing unit in SF since it’s against the law. Any tenant whose apartment is not their primary residence does not – repeat DOES NOT – get the benefit of rent control. The landlord can raise the rent to a market rate if such tenants actually exist.

          You can be assured that landlords and their management companies are always sniffing around to find out if tenants are really living in their units 24/7. If not, they will file a rent increase notice to market rate under Rent Reg 1.21.

          It appears we have another landlord liar posting on 48 Hills. Who could have imagined something like this happening here? I’m completely shocked.

          • W.C. Whiner

            I also prefer fact to fairy tale. Here is a fact:
            http://www.sfrb.org/modules/showdocument.aspx?documentid=2703

            ‘The tenant’s petition alleging an unlawful rent increase.. was granted as the ALJ found that the tenant still permanently resided in the subject unit as well as in Lyons, France..’

            Okay, okay, you got me: it’s Lyons, France, not Marin.

          • Sam

            It’s not illegal to have a SF RC unit AND another home elsewhere. The tenant just has to to be careful to keep things like voter registration and DL at the rented address so that they can prove it is their “primary” residence.

            I know one person who does exactly that, although the place they own is in Tahoe.

          • @W.C. Whiner
            That’s hilarious – the guy is a classmate of mine.

            @guest
            I use my own name, I don’t hide behind pseudonyms or accuse others of being “landlord liars” without a shred of evidence. Quite frankly, one would have to be certifiably insane to get in the landlord business in SF. The only reason I bought a SFR home here is that it isn’t covered by rent control should I leave the City and be unable to resell it at an acceptable price.
            As for the 40,000 units Tim/SPUR mention, he makes it clear a great many are luxury apartments bought as pieds-à-terre by a global wealthy elite. They were never going to be offered for rent, and would not be covered by rent control. Rents are exceedingly high because over half of the 340K housing units in the city are rent-controlled, and new arrivals like my cousin have to fight for what’s left.
            It would indeed make no sense for a landlord to withhold a market-rent apartment, but it makes perfect sense for a landlord who wants to sell or convert a rent-controlled apartment building to slowly drain it of tenants by attrition, so they can flip it without having to go through an Ellis, as the restrictions an Ellis places on the conversion makes it less attractive to a prospective buyer. When I was still looking for a place to buy, I would automatically exclude TICs, Ellised buildings or those still occupied by a tenant. Life is too short to endure those headaches.

  • noevalleyjim

    You seem to have the peculiar belief that a unit that is not owned by the person living there is empty. Don’t you think that there are any landlords in San Francisco?

    A majority of housing in San Francisco is owned by people who do not live there, about 60% in fact. All your study proved is that new construction is more likely to be occupied by the owner than the average San Francisco housing unit.

  • Mr. Toad

    I’m not convinced a vacancy tax is the way to go, although significantly reducing speculators and pied-a-terres should be a priority. It’s beyond stupid for Mayor Lee and his staff to constantly say “let’s build more housing” and then watch most of the units being built for millionaires, with a significant number of units bought as investment assets for non-resident speculators who may not even visit the unit one month out of the year. Mayor Lee’s policies are not solving any housing issues facing the bottom 80% of SF residents, but merely exacerbating the affordability issue since these high-end housing units merely help further gentrify the city.

    Instead I’d build on what Obama proposed in the recent SOTU speech and focus the changes at the state level. The housing speculation and vacant unit issues in SF are similar to those in nearby communities and throughout the state, so it really needs a state solution. Start denying some of the lucrative tax benefits for these non-resident owners, including denying a step-up in tax basis for all property that isn’t used as a person’s primary residence. Deny interest write-offs and phony depreciation deductions on all housing that isn’t a primary residence. Impose very high capital gains taxes (at least 50%) on all housing that isn’t a primary residence. These changes would have a measurable impact on housing affordability and availability in the state, including SF. These tax changes would also raise substantial tax revenue that could be used to build significant housing in appropriate locations near existing transit nodes. The tax changes can be enacted at the state level regardless of what happens in Washington with Obama’s recent tax proposals.

    SF housing activists need to get out of their bubble. The housing affordability and availability issues affect all 100 cities in the Bay Area and throughout the state. Focusing the effort regionally and statewide helps build stronger coalitions that are fighting for the same things – housing that is used primarily by families to live and raise a family, and not as another bauble in some millionaire’s investment portfolio, with the constant threat of eviction when the landlords and speculators decide to flip the property for a high pay-off.

    • Sam

      Mr Toad, I think you are confusing the alleged “problem” with vacant units and units that are rented out. Most of your ideas target not just those who own vacant units but also those who offer their properties out for rent.

      If you raise CGT and property tax for these homes, and disallow depreciation, then many landlords who currently rent out their units will withdraw them. As we have seen with 35 years of rent control, making landlording into a less attractive business directly and obviously has the effect of reducing the number of homes for rent, which drives up rents.

      Your ideas are just more of the same ideas that have been failing for 35 years. They deter the very people who would otherwise make housing available.

  • W.C. Whiner

    Inspired by the intriguing assertion that new buildings are not going to solve the housing crisis, I went to the Housing Vacancy Survey and took a quick look. It seems rental vacancy rates in the area have been cut by more than half, to below 3% at 3Q2014:
    https://www.dropbox.com/s/gdjgf3shvrzntsv/HVS%20data.pdf

    Here’s an idea: when people need housing, perhaps we should build more.

  • Sam

    Tim, how are the lower income residents that you wish to help going to be helped if, say, it were made illegal to leave a unit vacant?

    How would those lower income folks afford that million dollar condo in SOMA?

    Banning pied a terres (even if that were possible) won’t help those who cannot afford it anyway.

  • GarySFBCN

    One of Sam’s posts made me think of solution: Eliminate the ‘tax loss’ of any unit intentionally kept vacant. Make the landlord prove that they are trying to rent it by requiring that advertising, etc, be submitted with tax forms.

    I support a landlord’s right to keep their units vacant. But not at the expense of all taxpayers.

    • Sam

      Gary, the tax loss I am referring to is for state and federal income taxes, so a local initiative would not effect it.

      And in fact a landlord theoretically has to be able to demonstrate that he has made some effort to rent out a unit in order to take that loss, so the tax loss cannot be perpetual without engaging in some marketing effort.

      If a landlord keeps advertizing a unit at a very high rent so that it never lets, I suspect that will generally work.

    • mike

      Gary,

      Actually a tax loss is not available for rentals that are not actively “for rent”. The IRS could challenge the loss under audit and would assess penalties and interest for the tax shortfall. However requiring landlords to submit evidence that they are actively marketing the unit with each tax return would seem to be overkill. Just as the IRS doesn’t require submission of receipts for medical expenses, you are generally presumed to be following the law until proven otherwise.

    • medalist

      You already must provide burden of proof on federal returns to claim vacancy loss.

      • Sam

        True, but only upon request, i.e. an audit.

        If you monitor CraigsList ads you notice the same places for rents month after month, usually at a very high rent. My guess would be that that landlord would, upon request, provide copies of all those ads as a sign that they were actively seeking to rent out their unit in good faith.

        Taking a tax loss doesn’t involve making any affirmative declaration. A landlord simply totals his income, his costs, and then computes the tax due on the difference. If there a loss that is declared but, with depreciation, there is often a loss anyway. It’s not unusual at all.

        Particularly if he keeps one unit vacant in an otherwise rented building, then the costs will be the same but the income will be less. It will not look to a casual observer that he is leaving a unit vacant or deliberately taking a tax loss.

  • Private property? What a quaint notion. Maybe the City and County of San Francisco should declare itself a principality, buy out all “private” property owners, and rent the infrastructure out on a sliding scale. The first priority would be to ensure that people who were born or have lived here for at least 10 years have preference in housing (and all other social services). Yes, housing is a social service, a necessity of life, not a “profit center,” and should be cheap or free (as should food, transportation, and healthcare). Then the City could gouge the corporations and millionaires for rents and fees and taxes, and the resultant dollars used to build more intentional communities, otherwise known as neighborhoods, both within the City and in other locations.

    • Sam

      Too bad about the takings clause in that pesky Constitution huh?

      • Whose “constitution?” Oh, the country that stole a continent, slaughtered its inhabitants, destroyed it’s ecology, built it’s wealth on slave and immigrant labor, and is presently trying to start WWlll?
        Maybe “we” should take a lesson from the former Soviet Union, and self-organize into semi-autonomous republics. California would be the 5th or 8th richest country in the world; what do we need with the literal and figurative swamp that is Washington D.C.? San Francisco might be the 100th richest country in the world. Autonomy!

        Anybody hear about the news in Greece, the birthplace of “democracy?”
        The pitchforks are coming…..

        • Sam

          Yes, you should immediately devote all your time and energy towards secession. Great idea.

          Greek stock and bond markets have been in freefall since their election. I’m really glad the far left won because there is going to be a lot of entertainment value there as their banking system fails and there is massive capital flight out of the country.

          • Greece isn’t going away anytime soon.
            The USA Empire? Very soon.
            With the Almighty Dollar leading the way…..

          • Sam

            Whatever gets you through the day, TK.

    • Runforthehills

      I kept waiting for the punchline…

  • Kathleen Dooley

    I live on Telegraph Hill and more and more of the homes and apartments here are being purchased by people who only use them occasionally. In my 4 unit condo, one is empty unless the owner has a friend in town staying there. Out of the homes immediately adjacent, out of 5 buildings, 3 homes are empty 90% of the time . This does not make for a feeling of community. These folks don’t care what goes on in this town as these places are no more than expensive hotels for the rich who pop in once in a while . One unit sold for 3 million dollars and the new owners have only stayed one weekend in a year.

    • Sam

      Kathleen, if those owners lived in their units instead, how would that help the housing problems of lower-income folks?

      If they made them available for rent or sale, how could those low-income folks afford them anyway?

      Absent answers to those questions, your comment really just comes across as general resentment that some people can afford more than one home, AKA envy.

      • Kathleen Dooley

        I have no illusions that any housing on Telegraph Hill helps lower income housing. I am commenting how having so many uninvolved neighbors leaving their residences unoccupied really destroys any sense of community , something as a 25 year resident of the Hill, has always been one of the best things about living here. It used to be that we knew our neighbors but now we just see empty buildings and the occasional guest who has to be reminded what city they are currently in.

        • Peter Norton

          I think the less telegraph hill dwellers we actually have living in San Francisco the better. Napoleon Peskin and sidekick Nancy, along with the rest of the THD have done more to harm the health of SF than a thousand “greedy developers”

      • W.C. Whiner

        Community matters, and empty neighborhoods die. I wouldn’t enjoy my block nearly as much units around me mostly were empty.

        Build enough housing and rents will come down. Make it relatively expensive enough for nonresidents to occupy housing and fewer units will be occupied only occasionally. There aren’t that many such units, but there are a lot more of them than Ellis units this last decade:
        https://www.dropbox.com/s/olp0d4m3w63ueby/SF%20vacancy.pdf

        • Sam

          Kathleen and WC, I would agree about the community thing. That’s a shame.

          But even so, I’m not sure we want laws that compel and impose community on neighborhoods. At best, I’d like to see incentives to re-occupy homes rather than punishment for those who do not.

          In any event, Tim’s point here is about how these vacancies allegedly impact housing, rather than any more fuzzy and ethereal sense of community.

    • RDN

      Sounds great to me. I would love the quiet that vacant units in my building would offer.

      • Sam

        That’s true. but vacant units can attract crime, squatters, homeless people, petty criminals, graffiti and blight. So it’s a two way street.

      • 4th gen SF’er

        That’s exactly my thought. NO NEIGHBORS? That’s a bonus, a big one. Peace and quiet at last!

  • mark

    ARG!!! Where’s the UNSUBSCRIBE button?

  • Restrained Poster

    Spam alert: I count 25 postings out of 95 as of 1/28, 9pm. That’s more than 25% of all posts.

    http://truth-out.org/news/item/7284:infiltration-of-political-movements-is-the-norm-not-the-exception-in-the-united-states

    CIA SIMPLE SABOTAGE MANUAL (1944) (WARNING to anti-gov paranoids: link is to CIA website)
    (The best sabotage techniques money could buy in 1944)
    https://www.cia.gov/news-information/featured-story-archive/2012-featured-story-archive/CleanedUOSSSimpleSabotage_sm.pdf

  • Whoops. Sounds like a plan to spend a lot of money of a study is starting to take root. You may not be able to fix a problem, but you can sure spend a lot of money studying it. Here is another idea that might open up a few new units.
    Quite a few people keep properties off the market because they don’t want to be landlords under the current rules. There is no upside to renting if you don’t need the money, but there are a lot of objectionable laws that could be fixed to make the landlord/tenant relationship more of an even playing field for both.

  • Jean

    Just a small fyi: from my house I can see two vacant buildings. One is a 4 unit apt. unrented for probably 15 years and the other a small earthquake house with the long time owner living in just the basement apt. – both longtime local people. Location: if you drop a pin in the center of the S.F. peninsula you’d probably hit one of the buildings.

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