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Saturday, September 25, 2021

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UncategorizedHere's what the private housing market creates

Here’s what the private housing market creates

Turn 12 high-end units into two billionaire penthouses? Sure — that’s what the “market” wants. 

The future of housing in SF. And this is suppose to help?
The future of housing in SF. And this is suppose to help?

While we continue to fight over whether there ought to be more “market-rate” (read: luxury) housing in the Mission, and whether there is any rational supply-and-demand element in the equation, Tishman-Speyer is giving us an excellent answer.

The developer building the Lumina towers at 201 Folsom Street now wants to turn the top floors into the kind of massive penthouse apartments that are being sold to international billionaires who never really spend much time living there.

According to Socketsite (thanks to Sfist for the tip):

At the extreme, the eight three-bedroom units across the 41st and 42nd floors of LUMINA’s Tower B could be combined into one mega-duplex measuring over 20,000 square feet, while the four three-bedroom units atop the 37-story Tower D could become a single 9,000-square-foot penthouse, “depending on market demand.”

This is going to help solve the affordable housing problem?

Even if you argue that rich people need housing too so they don’t evict tenants in the Mission, this is just nuts – only a tiny, tiny, fraction of the people in the world will be able to afford these penthouses. And if they sell for $20 million or so, do you think the developers of other “market-rate” building won’t notice and start to convert normal condos into these giants?

And why is this allowable when Sup. Scott Wiener wants to slow down “monster houses?”. What we have here is a plan to turn 12 new units into two.

And it’s being done because of “market demand.”

You couldn’t ask for a better case study in why the “market” isn’t, and won’t, solve San Francisco’s housing crisis.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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115 COMMENTS

  1. As a person with libertarian leanings and believer in markets, I think that the writer is correct that “luxury housing” does not fulfill the mission of “affordable housing” that we are being sold. It is true that additional units will increase supply and theoretically lessen demand, in the real world, it is all about politics and money. Government has been enabling this “gold rush” economy on the backs of the middle class and working poor. The rezoning, special grants and waivers have all benefited a small handful of political insiders. The marketplace in real estate and political economy are DISTORTED by these self serving cronies. It is NOT A FREE MARKET. It is a market to benefit the political and economic elite at the expense of the community.

  2. Disinformation is the last refuge of the coward. None of the links I provide are “malware.”
    Endless repeating the same lie dos not make it true. Please, get a life and stop wasting our time.

  3. Bald-faced lies about your malware site? LOL. Oh yeah. Sure. How about next time just linking to an actual article instead of to your malware site? Then we wouldn’t think you’re a creep.

  4. Then maybe “Americans” should pick up a history book and count up the number of beheadings, lynchings, tortures, murders, and outright genocides it has committed to steal this land from the original inhabitants (many of them children and women), and is continuing to this day around the world. They also visited this treatment on the people they stole from Africa; and some form of this treatment continues today in the form of Officer Involved Shootings, among other things. “They” don’t hate us because of our “freedom” (to be a wage-slave). They hate the fact that we are attempting to destroy their civilization and steal their oil. See: Iraq, Afghanistan, and Libya.

  5. Americans don’t much like people who think that beheading people and killing kids are good ideas.

    My point was that terrorism and crime make voters more right wing.

  6. So you are equating violent criminals and terrorists (most of whom are a creation of Hollywood, the MSM, or the CIA) with progressives? History will not blame the millions of deaths and the humanitarian catastrophe that is the present “Middle East” on progressives. Most of the problems in the world are a result of former European colonies and/or individuals fighting for self-determination against the Agents Of Greed. Want to stop “violent criminals and terrorists?” Make the banks stop laundering their money. You know, the banks that “we” had to bail out because apparently nobody knew what the fcuk they were doing. Or DID they…..?

  7. What “non-democratic” methods?

    In fact I do understand how a democracy is supposed to work. In your definition, “most people” want endless wars, declining wages relative to…well, everything, to pay extortionate prices for bad to mediocre healthcare and education, polluted food, water, air, and soil, mindless entertainment (well, maybe that one), and to give their tax-dollars to private, “capitalist” cartels? “The people” did not request or vote for these developments; they are the result of the agenda of a very small group of wealthy individuals acting through trans-national corporations that literally laugh at the notion of “illegal.” See the current HSBC scandal for a glimpse into how your “free market” really works.

  8. I suspect that the murder of thousands of people by violent criminals and terrorists might have been a factor as well.

  9. So you are seeking to justify non-democratic methods because your ideas are not popular enough to win elections?

    Do you understand how democracy functions? It means we get the government that the majority want, which may not be the government that you personally want.

  10. p.s. And the assasinations of JFK, RFK, MLK, Malcolm, Moscone, and Milk had a chilling effect on many people who otherwise might have been more “progressive.”

  11. Being misled by public officials, lied to by the MSM, and not voting because you see the game is rigged is not the same as “broad support.” But you’re right, “America” has never been “liberal.” That’s OK, because the real solutions to our problems will require RADICAL action. Divestment, strikes, boycotts, and occupations resulted in civil rights and the end of the Indochina adventure; and hey can work again.

  12. KH may I remind you that before the very liberal gay influx into SF and the liberal hippie influx into SF that SF was very very conservative? Shocking for newbies to realize this, but SF was Republican till 1968. The Irish & Italians were pretty much righties back then. But we all need to move on from radicalism, really. SF was conservative way longer than LA was at that time. LA had a Democrat black mayor. Not us in SF till much much later.

    SF is going into a much more moderate, much less radical period again.

  13. Guest6:10, I can’t opine on ‘Americans’ but I can say that local progressives seem like parochial center-leftists.

    Dwight Eisenower was more radical.

  14. Even if the city owns the land, that doesn’t make it any cheaper to build a home there. Consider this.

    Cost to build a home if the city doesn’t own the land: $500K ($250K for the land and 250K for the build)

    Cost to build a home if the city owns the land: $500K ($250 for the build and the $250 the city forgoes by not selling the land)

    There is no free lunch.

  15. Many of us didn’t move to SF because it is “progressive” or “diverse”. But because it is a great place to make money.

  16. None of which could have happened without the broad support of the voters. The real sad truth is that Americans aren’t progressive or even (by global standards) liberal.

  17. The assassinations of Moscone and Milk was the beginning of the end for progressive politics in this City. DiFi’s “Manhattanization” of downtown was the next phase. And the selling off of public assets, the renting of public space, and the abdication of responsibilities for health, education, housing, food security, and infrastructure to NGO’s, (which are also the private sector) may be the final nail in the coffin. Unless the Old Guard of the left gets with the program and recruits some youth and enthusiasm into the “movement,” the music stops…..

  18. In fact, I think it would be beneficial if there was an honest discussion about San Francisco’s policies and where they land on the progressive scale. It could be fun.
    1. We are as progressive as Mississippi when it comes to education funding, maybe we spend $500 more per student but we are right down there near the bottom of the list.

    2. We are as progressive as LA when it comes to food (lots of gluten free options and organic but not as Farm to Table as Sonoma county).

    3. We are as progressive as Guatemala when it comes to income inequality.

    4. We are very progressive when it come to politics associated with sexual identity which is great and should come as no surprise as Peter Thiel the libertarian co-founder of PayPal is gay and one of the early executives of FaceBook is also gay (I don’t know his political association) and San Francisco’s most effective political movements revolved around the rights of gay people.

    5. In terms of gender issues, it is hard to tell as Silicon Valley is known for its bro-culture, anti-family policies, and egg freezing but also prides itself on being a meritocracy.

    6. In terms of childcare, income distribution, free quality PreK- college education, free medical care, support of the arts, and housing San Francisco is radically more conservative than France, Germany, and Finland.

    How progressive is San Francisco?

  19. The city also owns unused sites which they could partner with developers to develop for city workers and other professionals. One site is on 43rd Avenue in the Sunset. It was a former school and now sits vacant and unused. It would be the perfect spot to build some units for SFUSD employees as it is close to the N-Judah and many schools.

    Right now is the perfect time for the City to develop its own housing stock. The economy is in a boom cycle, interest rates are low, and SF is home to 20 billionaires. It seems that the City could use this momentum to issue bonds and create a private/public partnership to build housing for City employees and other professionals whose wages are not in-step with those in finance and some parts of technology.

    Once the City build the housing, the units were become assets that were publicly held and would become assets for the wage-earning public for future generations.

    The cost of developing in SF is high because land costs a lot to purchase and because of getting the permits approved. If the city constructed its own units on its own land, the costs would be reduced.

    Income inequality means that the market is failing to distribute wealth to sustain the majority of wage earners. It is therefore the governments responsibility to intervene so people doing important social functions like teachers, nurses, and doctors have housing stability even if their wealth is not competitive with entrepreneurs. In the past, the market worked well because the way in which wealth was created was different and because we had a progressive tax structure which naturally slowed the accumulation of wealth at the very top. That is why we had the middle class.

    Our market no longer functions this way because our tax code favors the extremely wealthy and technology has opened up a global market for high-speed ad sales which is where Google, FaceBook, and others gain most of their revenue. The sale of banner ads which transpire in milliseconds generates billions of dollars in revenues for these companies but they really don’t provide any significant social services. If you have a child, you want a qualified teacher not a banner ad. If you get in a car accident, you want a trained doctor in a well equipped emergency room not a cat video. We need to address the housing system not from the old market perspective but from the new global economy.

  20. You are right. San Francisco is no longer a liberal or progressive city. We are so liberal that our income inequality has been compared to apartheid South Africa. Our economic and housing policies reflect conservative policy decisions. Yes, radical SF is a thing of the past. I guess the next question is what will be like to live in San Francisco and will it be able to retain its real estate values and cultural pull as these conservative values become more entrenched and they become the day-to-day reality of the city. One could argue with our current income inequality, failing public sphere, and lack of housing for wage earning members of society, we’re seeing the beginning of what it will be like. The question is: will rich people still want to live here when all the economic, cultural, and professional diversity of the city is flushed out and the city government act as courtesans to the new aristocracy? I guess we will just have to wait and see. Maybe SF is the next Balboa island?

  21. Honestly, the argument is actually over about “what are we going to build”, we are building, and we’re going to change the face of SF. Doesn’t matter what Campos proposes, he’s just barking into the wind. The entire board will be replaced soon enough with much more moderate people. Either the supervisors get on that train to be re-elected or they will be run over. Radical supervisors are a thing of the past. In fact, in SF, radicalism is a thing of the past.

  22. I tend to agree with your first point, as the City seems to give priority to the lowest income earners first. Those at median wage have fewer choices. The problem with this solution is simply to build a unit costs at least $500k in this city. Maybe these units could be produced in areas away from downtown, in the south part of the City or along the 101 and 280 somewhere where land is cheaper? Can the City waive the entitlement fees for permitting the units, which I hear cost $150-200k alone? Would these complexes be mixed market rate or entirely BMR (thinking about housing projects) ? I’m trying to think of other solutions besides forced inclusionary zoning or a funding from BMR opt-outs.

  23. Do you think items in a store should have a variable price depending on how much money you happen to have?

    Are you suggesting that everything is means tested?

    And how much would these government subsides need in extra taxes?

  24. Considering he hasn’t passed any significant legislation and has had zero impact on the Board, I agree with your viewpoint now.

  25. Thank you for your comment. It helped me clarify my thought. I mean wage-rate housing. Housing that is priced on actual wages. So if you were wanting to house school teachers the rental or purchase price would be based on their actual wages. We need housing that is wage targeted based on local wages across a variety of professions. Market rate does not provide housing for people who work here in a variety of profession as it is based on a global economy which is currently marked by extreme income inequality. Thanks!

  26. SciLaw, if Campos had never gone into politics, to a first approximation his house would be worth exactly what it is now, so the ‘extra’ is $0.

    Bill was being kind.

  27. I’m still convinced many of the trolls, especially Sam/Guest are malware. They are so predictably knee-jerk reactionary it’s actually funny. Sometimes. But mostly just annoying, which is their intent.

  28. you’re hilarous, dabston. so true, so true. the trolls here remind me of the kind of the mad, weird, lonely boys who’d tackle everyone smaller than them and fart on their heads for fun. only they’ve grown up and are here. –erika

  29. What time do they let you out of your padded cell?

    Whenever you/Sam realize your arguments have been punctured like a child’s ballon,
    you(s) start attacking people. I win again!

    TrollKiller – 5
    Sam/Guest/Trolls – 0

  30. Somehow the affordable housing mob have taken NIMBYism on board and now they cannot back out of it without losing face, even though they realize the huge contradiction there is insane.

  31. The city needs to set its housing priorities to reflect need, professional diversity, and future sustainability. First priority for housing should be for market rate housing for people who work here, especially public sector workers like teachers, small business owners, people who provide necessary public service like doctors and nurses, and people who provide intellectual wealth like journalists, artists, musicians, curators, dancers, and others. Second priority should be rich people who may or may not live here but use the city and its amenities for pleasure. Third priority should be foreign investors.
    With all of the money in San Francisco, the city should be able to work with developers to achieve these goals. The city could combine funds with developers to help create more market rate housing, especially for city employees.
    There are many ways to do this and the city should not give away its most valuable resource – which is the city itself – without providing for its own public service employees and without thinking about the future needs of the general population.

  32. Guest 9:57, the Copper House sale was the highest ever in the neighborhood. If that’s how you run comps, please send me your contact info — I have a house to sell you.

  33. “I think that the libertarians are envious of people who can live real lives without relying on the market for everything, including existential solace.”

    Typical leftwing fantasy. Oh like the bs net neutrality that just went into effect? So, it’s ok for the poor to have the gov’t up in all of their affairs, because that’s what it means. They certainly make good sheep and continually vote Dem for their freebies. And it shows.

  34. As others have pointed out, this story is actually a argument *for* building more luxury condos not against. There is nothing to suggest that the buyer chose to purchase property in SF because of the special features of those units. Most likely he decide that he wanted to buy in SF and then looked for space that was most suitable. Had the luxury condos not been available he could have purchased a couple adjacent low rise rental buildings and Ellis Act evicted the occupants and upgraded them himself. SF would have been permanently out 12 rent-controlled units and would have had to content with 12 displaced households scrambling to find housing with a newly diminished supply.

    If you want to rail against the grotesque and ever growing income inequality in the US (and world-wide) you’ll get no complaint from me. If you want to propose restructuring California tax code to make it more costly to buy-up residential units and leave them unoccupied, I’m 100% for it. Want to agitate for a gigantic building program of subsided bmr housing again I could get behind that.

    But to continually decry the building of ‘luxury’ units which has 100% overlap with mark rate units these days, is incomprehensible to me

    Hello! The construction of those units is the only way BMR units are funded. It’s exactly the same thing as wanting to stop *all* new construction in SF. Apparently with some belief that if no more units are built for a year or two all the techies are going to move out and go home and we can go back to the good-old-days.

  35. No one cares why you moved here. You can move right back to NYC and take the other NY’ers with you. You’re not wanted here, and besides NYC is actually CHEAPER than SF to live.

  36. There’s always SFist for you, but they do not have many posters, and SFist bans the rw. Unfortunately, by doing that their #’s go down and they’re boring as hell. Also new libertarian/rw people show up and then get banned again. It’s really boring. And even WITH the banning half the commenters are rw….hmmm. Guess that’s not a good fit.

    I think you’ll have to understand that SF is changing. Stifling voices by the right is not acceptable if you want to have a popular blog – ie, no one reads Mission Local, people are reading Valleywag less and Pando less, but places with more open content like Tech Crunch, Vice, etc are getting loads more people reading them. Why? Because people like to debate each other. Content is really boring, but commenters can bring a LOT to the table.

  37. Yeah, that part you got right. You’re not nearly smart enough to work in tech.

    He’s right about the rest though

  38. You think I’m going to click on your site and give you my IP address, while adding malware to my machine?

    Think again, my SRO-dwelling friend.

  39. Wow. An actual Big Fat Liar Troll. Trying to steer people away from facts that contradict your “opinion.”

    Pathetic.

    Anyway, I’m sure Tim/Admin would delete a post such as you describe.

  40. Bill, please try again. Even wiki has it right:
    ‘According to historical legend, [laissez faire] stems from a meeting in about 1681..’
    Adam Smith was born in 1723.

    On markets, to spell it out: when I said markets are ‘tools’ I was on the side of regulation.

    And back to Smith: you really should read him. He would be the first to agree that morals and economics are not separate.

  41. Bill, it makes perfect sense that Campos would find a way to dovetail his dubious ideological biases into an investment strategy.

    He must be smart, the way he pursues the American dream through capitalist speculations while criticizing the American dream for political ends.

    The former builds his retirement while the latter pays his bills. He learned a lot at Harvard, evidently.

    You seem to know a lot about treatments for mental illness though. Interesting. Sanity comes from being in tune with society and it sounds like you are a lot more at odds with this nation than I am.

  42. Oh now I see your point – Campos’ consistent values through his entire political career exist only insofar as he planned to buy a house one day and make a few extra grand off the sale. What patience and foresight! To attribute to Campos the false equivalency of what Jeb Bush is doing with fracking is so under-minded it borders on completely delusional.

    I think it’s time your caretaker revokes your computer privileges 🙂

  43. I am not sure how this proves up any “anti-market” argument about housing. In addition to the your false logic of using anecdotal evidence to support an argument, you are also just picking the wrong example. Here you are taking the most extreme example of super-luxury housing and acting as if it reflects the typical housing unit being built in San Francisco. No, it does not. Also, no affordable housing units are lost by a dozen super-luxury units being combined into one giant unit.

    Exactly how many middle-class or working class families ever lived in the giant estates of Pacific/Presidio Heights or in the Art Deco penthouses of Nob Hill/Russian Hill? You have the exact same situation with the Lumina penthouse–it was never going to house middle-class or working class people, no matter how small the units. Even when broken into 12 units, you still have super-luxury, multi-million dollar housing that would never serve as housing for the working class or middle-class.

    Persuade me with facts, not emotional arguments based on extreme examples.

  44. OMG, still putting links to your SPAM site? Don’t click on the link. There’s nothing to read. It’s TK’s SPAM site where he tries to collect money from people who click on the link. THERE”S NO CONTENT THERE.

  45. Again, Bill, you misunderstand, probably deliberately.

    The point is that Campos is now arguing against new supply of any market rate homes in his neighborhood, while sitting on a very tasty piece of real estate there.

    So he personally profits from a policy change that he clams he is only doing for others.

  46. “On the contrary” to what, Sam?

    So first it was envious poor people who hate luxury housing. Now it’s wealthy property owners who hate building more because they want to enrich themselves. You’re quite a shape-shifter, and a hypocritical one at that because the “class warfare” you’re always so quick to call Tim out on, happens to be what you espouse most in your comments.

    It’s possible it’s really a distinction between people who value a diverse, equitable housing stock and those who want housing to be as lucrative as possible for speculators.

  47. Adam Smith is where the concept of “free market” comes from and the free market IS theoretical and practically meaningless, hence regulation everywhere. Hence the market as we know it. Hence you adding an “s” to it and making it “markets” – a concept that is real.

    And morals and economics are not separate realms.

  48. Bill, laissez faire lackwits have Adam Smith wrong:

    ‘If Smith of popular repute is the ‘father of capitalism’, the advocate of ‘market forces’, the enemy of government regulation and believer in something called the ‘invisible hand’ to produce optimum economic outcomes then he would be a disappointed parent. All his work is deeply steeped in moral philosophy.’

    http://www.gla.ac.uk/about/history/fame/adamsmith/transcript/

    Smith was a first class thinker. Market fetishists are not worthy to shine the brass plaque on his statue.

    Markets are not theoretical and practically meaningless. Markets are excellent, powerful tools. One of my favorite reads on humans and market exchange is The Economic Organisation of a P.O.W. Camp from Economica 1945:
    http://www-rohan.sdsu.edu/~hfoad/e111su08/Radford.pdf

    Since we humans make markets in everything, and well, we might as well take advantage of it. Is the housing market broken? Certainly. Let’s fix it.

  49. Hmm, it is perhaps significant that Ammiano, Redmond and Campos all have sweetheart real estate investments in the same neighborhood.

    It informs much of what they propose, I suspect. Being a politician is one of the few jobs where you can actually skew things to favor your own investments and get away with it as long as the link isn’t too direct.

  50. Campos is over in Bernal, yeah. I doubt his place is worth 1.5, even in the current overheated market. Zillow thinks 1.36, and I think of Zillow’s algo as a cap.

    In the long run, buildings in favored locations, like Mr. Campos’s place up top of Bernal Heights, will be worth the most if there is lots of small, dense development in the city. In the short run, naturally, it’s all about the undersupply.

  51. On the contrary, Bill. There are a good number of SF homeowners who are endlessly NIMBY. They understand that the less new supply of nice homes there are, the more their own property portfolio is worth.

    There are many here like that, including Welch, Hestor, Redmond and even Campos (who I read yesterday somewhere owns a $1.5 million home).

    Sweet deals huh?

  52. King, here’s the difference between when I use the word “market” and when you use the word “market”.

    Bill: “Market” means current economic conditions and regulations

    King: “Market” means some theoretical and practically meaningless concept coined by Adam Smith in the 18th century, since debunked as a viable economic model for anything resembling reality, and only used as a talking point by Fox News, Republican sell outs, and conservative online commenters

  53. Ha, I own a home in SF and park my BMW in the garage. All my clothes and furniture are made in Europe or the US. My tastes aren’t all that different than those for whom SF is hell bent on building luxury housing. They couldn’t make me look “bad” if they tried. However, you just assumed I’m poor and rent right? Because that’s your stereotype of people who care about housing equality. Open your mind a bit.

    And to use your words, “successful” people living in “fabulous” mega-condos do a good job of making themselves look bad.

  54. Also, we DON’T let the market determine housing. Every market rate developer is forced to build or otherwise pay for BMR housing.

    The developers of the building at 201 Folsom have to pay for the construction of about 110 BMR units (17%) as an alternative to including 78 BMR units (12%) on site.

    And there are matching funds involved so this luxury building should result in over 200 BMR units getting built. These are units that the free market has no interest in.

  55. Bill, you totally missed my point. Without that 240K a year in extra revenues, those (two) city workers might not have a job at all.

    The market doesn’t determine all housing, but it does a pretty good job of building the maximum amount of housing that doesn’t require we the taxpayers to subsidize it.

    If the city then wants to build more housing over and above that, it can ask the voters to approve paying more in taxes so that some cheap housing can be built.

  56. Tim’s point here is very simple and straightforward. I think some commenters may be reading too far into it and injecting their personal bias.

    His point is that if you let the market determine housing, it will be luxury housing. That’s it, and it’s true.

    And to Sam who said “If it sells for 20 million, then that is 20K a month in property taxes. That will pay the salaries of a couple of city workers, right? Is that a problem too?”

    The answer is yes, it is a problem, when the city workers can’t afford to live in the city they work in.

  57. Tim, you contradict yourself.

    First you claim that market-rate condos are “luxury” here:

    “While we continue to fight over whether there ought to be more “market-rate” (read: luxury) housing . . ”

    But then you claim they are “normal”:

    ” . . do you think the developers of other “market-rate” building won’t notice and start to convert normal condos into these giants?”

    Which is it? Are market rate condos normal or luxury? Or is luxury the new normal because of the fabulous economic success that our city has achieved?

    You seem confused.

  58. Rejecting new housing because it can only be afforded by those with more money than you is classic envy. It needs no further analysis.

  59. Libertarianism really doesn’t favor the rich over the poor at all. It simply favors the government not trying to control who succeeds and who fails.

  60. I think that the libertarians are envious of people who can live real lives without relying on the market for everything, including existential solace.

  61. You dismiss the concern over housing for the non-rich, concern over height limits, and concern about new, supposedly critically-needed housing being sold as vacation homes to people who will keep them vacant 10 months a year as ‘envy.’

    That is emblematic of tactics used to destroy any possibility of reaching ‘common ground’ on the issues that face San Francisco.

  62. That’s true, Jeff, but never under-estimate the power of envy among the smaller-minded. After all, it was that kind of spite that killed eleven million for affordable housing just because a few merchants of envy were offended that someone might have a nice home (8 Washington).

  63. Yes, it’s important that thousands die in a natural disaster just so that your personal opinion of what a city should look like is perpetuated.

    You should have moved to Kansas.

  64. The Lumina is a 650 unit complex. If they make a change reducing 12 units down to 2, that’s a 1.5% reduction in units built. Furthermore, if 5000 units are built in the city in a year, it’s a change of .2% in the grand scheme of things.

    Projects can’t go back to committee every time there’s a change that has a <2% impact on the total number of market rate units in the original plan. That would be ridiculous and a waste of everyone's time.

    It's fine to think it abhorrent that someone might buy a 9000 square foot condo for occasional use (like a modern-day Newport "Cottage" or something), but it's not worth holding up 646 new units because of two mega-units. Literally no one wins in that scenario.

  65. Tim, a better analysis for the Left is that developers are going to see that larger “trophy” apartments are in fashion and also only develop these larger units… while the city with get it’s 20% BMR units the number of BMR units will go down when since there are less total units to start with. (i.e.: 100 regular units = 20 BMR units vs. 50reg units & 10 “trophy” units = 12 BMR units.)

    I wouldn’t even refute those numbers.

    BTW as far as Lumina is concerned since it was under construction I’m sure they cant reduce the number of BMR units even though the number of units may be reduced buy combining units.

  66. High rises are so ugly. I moved here from NYC because I didn’t want to live in a skyscraper tomb, never seeing sun or ocean. It’s about time for a big earthquake though, right?

  67. Guest10:01, what is true:
    – regional permitting is much too difficult
    – public spending is the useless interest deduction
    – private mortgage financing broke in 2008
    – real wages have stagnated

    While these provide a headwind, that does not mean you cannot produce housing. We produced enough to bring rents down quite recently:
    http://research.stlouisfed.org/fred2/graph/?g=12cw

    If we did it before, we can do it again.

  68. Why is it important that the average person can afford to live in a very un-average location?

    Especially when we have cheaper suburbs as an option for where the workers we need can afford to live?

  69. At the rate that new housing can be proposed and financed, it cannot be produced fast enough to bring housing prices back into line with wages. It might slow the rate of increase in price but not by much and will not ever lower prices to where the median income can have any hope of affording to purchase or rent.

  70. I hope you find a place where your opinions are never critically examined and critiqued. Sounds like that is important for you.

  71. Guest 9:21, Tim is a fine journalist. He shares a blinkered analysis of the housing market with lots of people, left and right. The problem is not political, it’s bad post hoc intuition: ‘we built housing, but prices are up; increasing supply must not reduce price.’

    Here is what people see:
    http://research.stlouisfed.org/fred2/graph/?g=12ca

    ‘Thousands of units permitted, and rents keep going up!’

    Here is what they forget: population growth.
    http://research.stlouisfed.org/fred2/graph/?g=128t

    Population far outstripped permits since 2007.

    Almost everyone will be smart enough to see reasonable paths forward once they have the facts. It’s hard to otherwise.

  72. Tim’s articles are like shit for the right-wing flies. It is somewhat entertaining, but the same free-market arguments are tiresome. I’m shopping for a new blog to read.

  73. Tim, this is what happens when you do not build. Population in the area outstripped permits (never mind builds) by 34,000 units since 2007. That is the whole story.

    When you undersupply a market in an unequal society, the 0.002% overpay, and the supply-and-demand element maximizes profits with luxury for them. A moratorium doesn’t better the dynamic, it worsens it. Undersupply hurts everyone but the rich.

    Absent aggressive public building, you must harness the market. The single most important thing you need is lots and lots of building. Everything else is window dressing.

    If you must change unit mix by fiat, tax luxury and subsidize modest construction.

  74. To be fair to Tim, he is a good journalist. He doesn’t genuine investigating. He even fact-checks, which is almost unknown on the left.

    The problem he has, and shares with many on the left, is that his political outlook is so skewed that it gets in the way and undermines his undoubted journalistic skills. It’s not that he lacks the expertise to report objectively, but rather that his desire to persuade rather than inform, and prejudice the topic, gets in the way.

    The left likes to think it is smarted than the right. That’s not nearly as true as they like to think, but the real problem is that they often dilute their smarts. Just look at Campos. Harvard and all, and yet some of his comments are barely worthy of a room temperature IQ, so clothed and distorted as they are by racial bias and class warfare.

    If you can’t look at something fabulous, like this penthouse, without getting into a bad mood, you may be in wrong line of work. Or in the wrong city.

  75. Yes…converting 12 multi million dollar condos into 2 super expensive penthouses will not solve the affordable housing crisis.

    Nor will the fact that the penthouse buyers will pay the city $20K a month without even living here and they will have displaced….nobody.

    Seriously, someone needs to investigate why Tim has never been given a Pulitzer

  76. “And if they sell for $20 million or so, do you think the developers of other “market-rate” building won’t notice and start to convert normal condos into these giants?”

    Normal? I thought those other condos were “luxury” you’re demoting them to normal to make your argument?

    “This is going to help solve the affordable housing problem?”

    Not everything we do in this city has one and only one motive, which just happens to be the topic you endlessly obsess about.

    This penthouse is being built because there is a demand for it. Problem? It’s not as if we would build 100 affordable units if we didn’t build this penthouse. WE would in fact build nothing. Or less if we lose BMR funds as a result.

  77. Tim, I assume you wrote this although you didn’t put your name to it.

    The truth is that a one-time super luxury unit like this doesn’t effect the general housing issue either way. It’s just a new home for someone who is super wealthy. It’s a symbol of everything you hate, I know (success, prosperity, anything nice that a rich person has that you don’t). But that is all it is.

    If it sells for 20 million, then that is 20K a month in property taxes. That will pay the salaries of a couple of city workers, right? Is that a problem too?

    And how many BMR units did this entire project generate? You hate that too?

    See, a lot of good comes from attracting the world’s super-wealthy. but you won’t see that if your eyes are clouded by envy. If you walk around getting irate every time you see any manifestation of success, the days must feel very long indeed.

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