Skip to content

Through the cracks journalism

The latest catch.

Some strange rumblings in the SF economy

May 28, 2015

by Tim Redmond : 48hills – excerpt

Too much office space — or too little? Is the rent too damn high even for tech workers? Is it time to take a little break here?

MAY 27, 2015 – I keep hearing strange rumblings these days about the San Francisco economy, stuff that ought to be grounds for at least some discussion in the public sphere.

For one thing, while the mayor and some in the tech industry complain about a lack of office space in the city (and developers are converting industrial space to offices, often without permits, as quickly as they can), the SF Business Times is reporting that there’s a glut of space coming on the market as existing companies either consolidate or decide SF is too expensive and go somewhere else.

As more companies ditch their office spaces, it raises alarms for a potential commercial real estate downturn, as I detailed last month. Those alarms may blare more loudly now that these potential listings put sublease space at about 1.7 million square feet, San Francisco’s highest total since the tail end of the recession in the last quarter of 2009.

Me, I don’t see a commercial real-estate downturn as any cause for alarm; cheaper office space might mean less of a land grab for what is now Production, Distribution, and Repair space.

But it’s worth talking about in light of the fact that I’m hearing lots of talk about the Prop. M development limits and how they might “stunt” the job market.

here’s too much office space? No, there’s not enough. Whatever: Prop. M brought an immense amount of sanity to the commercial office market in San Francisco. At the time it passed, in 1986, office towers were springing up everywhere, driving out other possible uses for scarce space (like, for example, housing) – not because there was such a demand for offices but because a glut of investment capital was fueling an unsustainable boom.

The market eventually crashed, and cities that didn’t limit office development (like Houston) were hammered. SF survived better than most because we made sure all of our economic eggs weren’t in a single basket.

And if we hit the Prop. M cap, and things have to slow down a bit, then they ought to slow down. It’s a good early warning system of a bubble out of control.

And so, maybe, is this(more)

I call it too much too soon. Whenever that condition arises you always have a correction. In this case it could be that so many people are fed up with traffic they are moving out. Or it could be the rising rents are driving them to reason. I talked to a lot of people at Carnaval and most of them are no longer living in the city. They left because of rising rents. It is no longer worth it to stay is the message I got.

RELATED:
Has San Fran Commercial Space Bubble Bursting? Schwab Ending 327,000 Sq. Ft. Lease

San Fran is a booming town—apartments go for $4,000 or more. It has the most expensive commercial property and homes. This is a city that loves taxes, regulations and even has a $15an hour minimum wage that is being implemented—even though 14,200 people will lose their jobs and the cost of products and services will go up. To survive San Fran you need to be either filthy rich or on welfare—the middle class has left.

Now we are seeing large firms sub-leasing their footage and either consolidating or moving out. We need to watch to see if this is an opening trend or just an anomaly.

“A Charles Schwab (NYSE: SCHW) spokesman told the Business Times that it is looking to sublease its 327,000 square feet at 215 Fremont St. so it can eventually consolidate into one building at 211 Main St.

Square just put 50,000 square feet on the market from its 1455 Market St. space, Bloomberg reported. That would reduce Square’s leased space there by one-fifth and comes soon after neighboring tenant Rocket Fuel Inc. also put a big block of space on the market after revenue and hiring slowed.

As more companies ditch their office spaces, it raises alarms for a potential commercial real estate downturn, as I detailed last month. Those alarms may blare more loudly now that these potential listings put sublease space at about 1.7 million square feet, San Francisco’s highest total since the tail end of the recession in the last quarter of 2009.”… (more)

The Agenda, May 26-31: Round One in the Mission Moratorium battle

May 26, 2015

by Tim Redmond : 48hills – excerpt

Democratic Party will debate the issue; expect fireworks. Plus: Public hearings are part of civic life. Get used to it. By Tim Redmond MAY 26, 2015 – So now even that radical left-wing rag The Wall Street Journal has weighed in on the housing crisis in major US cities, mostly NY and SF, and concluded, in part, that too much luxury housing has an impact on existing rents and “is adding to the rent squeeze.”

The Journal isn’t exactly calling for a limit to new high-end housing, but the paper has helped identify the problem.

And it’s a critical time: The proposal for a moratorium on luxury housing is heading for a huge, high-stakes showdown at the Board of Supervisors June 2. Sup. David Campos, the sponsor, convinced his colleagues that the item should be heard by a Committee of the Whole, meaning all 11 supes will hear what should be hours of testimony for and against the idea before voting on it.

In the meantime, we will get a preview of the arguments, and the organizing, Wed/27 when the proposal comes before the Democratic County Central Committee. Already, the emails out of SFBARF and GROW SF, two groups that want to build as much dense housing as possible, with no regard for the price, in the desperate hope that eventually prices will come down (we should live so long), are pumping up the DCCC meeting and urging opponents of the Campos plan to attend and speak.

And there will likely be a huge turnout from the Mission, where the often disparate groups of merchants, tenants, and community groups seem to be in remarkable agreement on this one.

In fact, there’s a growing sense in the Bayview that the Mission Moratorium ought to extend to other parts of town.  So there may be some folks from that neighborhood coming out to speak.

The DCCC vote won’t have any direct impact on the supes – but if the panel supports the Campos plan, it will be a big boost to the organizing efforts. And some people who so far have been able to stand on the sidelines on this one – like Assemblymembers David Chiu and Phil Ting and state Sen. Mark Leno – will have to either abstain (and look like they are ducking) or take a stand.

Also on the DCCC agenda: Early endorsements of City Attorney Dennis Herrera, District Attorney George Gascon, and Treasurer Jose Cisneros (clearly a response to the unnecessary early endorsement of the mayor) – and a 15-minute Q and A with Sheriff Ross Mirkarimi.

The meeting starts at 7 pm, 455 Golden Gate Avenue…(more)

How will the Mission housing moratorium affect rents? Supes want to know

May 23, 2015

By Cory Weingberg : bizjournals – excerpt

What’s the latest weapon in the political fight brewing over a proposed temporary halt on Mission District market-rate housing? A call to action from two moderate supervisors – to the city’s chief economist…

Supervisors Mark Farrell and Scott Wiener, who are aligned with Mayor Ed Lee against the Mission’s Supervisor David Campos’ proposed moratorium, said Monday that they want the San Francisco controller’s office to measure citywide economic effects of the proposal…

Egan’s office typically releases studies on legislation deemed to have “a material economic impact” on the city, like the so-called Airbnb law restricting short-term rentals. The report is likely to spell out what Egan’s office has written multiple times: that increasing housing supply puts “downward pressure” on market rents and housing prices, and adds to construction spending in the city.

But how much tangible impact would a moratorium really have on the housing shortage or on people who must move because of rising neighborhood rents? The effects that either side claim likely won’t live up to the amount of political sparring a moratorium will generate…

Campos and advocacy groups like Mission Economic Development Agency are worried that construction could ratchet up land prices as more large sites are bought by market-rate developers instead of being held by the city or nonprofits for all below-market-rate units. They’ve been exasperated by sky-high land prices in the Mission already, like when a developer last summer paid a record price per buildable unit for a 16th Street property.

Affordable housing advocates in the city say the moratorium would have little effect but could mean a big difference for their ability to acquire affordable housing sites.

How to pay for that land acquisition is another story, though presumably a few sites could use money from the mayor’s proposed $250 million housing bond. Affordable housing builders have also struggled to get projects built because state redevelopment funds have evaporated and construction labor costs are rising.

The moratorium, meanwhile, would spur the Planning Department to study new inclusionary requirements or higher fees from market-rate developers to pay for affordable housing. Mission housing advocates like Campos also contend that current market-rate units deliver a meager portion of affordable units – about 7 percent of the units in the pipeline.

“With that pause, it puts everyone on notice from the city to the community activists to the market-rate developer that you have this limited time period to achieve solutions to a particular problem,” said Fernando Marti, co-director of the Council of Community Housing Organizations, which is working with Campos’ office on the legislation…. (more)

RELATED:
Mission moratorium: 5 strategies San Francisco could use to build affordable housing

How to Fight City Hall and Lose

May 21, 2015

R.G. Davis : potreroview – excerpt – (first published in 1991)

Every Thursday at 1:30 p.m. in City Hall Room 282, the San Francisco Planning Commission oversees the incremental destruction of urban culture. Ecologists who advocate saving every piece of pristine open space usually avoid the massacre, as they have difficulty with the ugly practices of private property and land exploitation. Whereas environmentalists, those who accept packing the cities – infill housing – hoping for a surrounding greenbelt, merely slow the destruction. They visit occasionally to discuss mitigation statutes. 

When I first visited Room 282 in early 1990, I sat like an open-mouthed tourist surveying the tea-party. The “Mad Hatters” attracted my attention. They were, I learned, the voice of neighborhood concerns. At first I looked upon them as oddballs. But as I became involved, I too began to sound like one of them; a wild voice raised in opposition to the vast assortment of developers and their architects, lawyers, bankers and real estate speculators along with the agencies of the municipal government and the Mayor. 

The few people who habituate City Hall in the name of protecting the neighborhoods are old guard resistor protectors who have little or no sense of ecology or open space and have become a part of the freak show one encounters at the public trough. These volunteer neighborhood voices who know the machinations of the commission are mostly connected to The Coalition for San Francisco Neighborhoods, composed of 53 local groups, which emphasizes retaining “the character” of the neighborhood while developers pound them into smaller and smaller spaces… (more)

Development Continues to Outstrip Infrastructure

May 21, 2015

By Ben Taylor : Potrero View – excerpt

Since passage of the Eastern Neighborhoods Plan in 2008, which seven years later is ushering in upwards of 9,000 new housing units to the Potrero Hill area, concern has been mounting over the lack of infrastructure improvements being made to accommodate the 20,000 to 30,000 new residents that the Plan will ultimately bring.  

While the Plan called for “a full array of public benefits to ensure the development of complete neighborhoods, including open space, improved public transit, transportation, streetscape improvements, community facilities, and affordable housing,” so far the area has seen none of these promised benefits, even as many developments are either on the market already, or nearing completion.

“The bargain that has been made for the past two decades has not been upheld, which is that if we take on this development, if they put all this housing where industrial stuff was before, we will actually get the parks, the schools, the stuff, that you need to make a neighborhood liveable,” Potrero Boosters planning and development chairman Tony Kelly said.  “Not to say that Potrero Hill’s not liveable, but is it going to be liveable when you triple the population, in the same space?  Because if you add up all these plans, that’s what we’re talking about. ”

Kelly claimed that while the plan was designed to handle 7,500 to 8,000 new units over a period of fifteen to twenty years, the San Francisco Planning Commission has already approved enough projects to reach that level, with no sign of stopping.   While less than a half-dozen developments have been completed since 2008, the Planning Department’s third quarter 2014 Pipeline Report shows that there are 4,701 units in the pipeline, well more than initially anticipated.

“It’s an open question what happens when the last unit covered by the Eastern Neighborhoods Plan gets built,” Potrero Boosters president J.R. Eppler said. “Does that mean that all of a sudden every other building permit gets denied, and the planning process stumbles to a halt?  We don’t have a post eastern neighborhoods plan solution, and we’re going to need one sooner rather than later.”

The Potrero Boosters is among a number of local advocacy groups, including Save the Hill, Grow Potrero Responsibly, and Friends of Jackson Park, who are working to get the eastern neighborhoods’ infrastructure needs met.  So far, though, they’ve seen little progress, either by City Hall or District 10 Supervisor Malia Cohen… (more)

Read more…

On Guard: Don’t listen to the Mission housing moratorium smear tactics

May 19, 2015

The Mission moratorium has a simple premise: Hit the pause button on new, market-rate construction, and give city government time to craft a plan to halt evictions and help preserve the Mission, while simultaneously helping it grow. The moratorium in and of itself won’t halt displacement, but as Gabriel Medina of the Mission Economic Development Agency, a local nonprofit, told me: “We need to have a pause to be able to make a plan.”By sfexaminer – excerpt

Supervisor David Campos, said a moratorium on market-rate housing in the Mission would lead to the implementation of home-saving tactics.

Remember that old line from “Field of Dreams,” whispered to Kevin Costner in a wide-open field? “If you build it, he will come.”

If Costner was standing in the Mission, the line would be “If you build it, they’ll evict people.”

As developers increasingly look to the Mission to build trendy new housing for tech workers, people are losing their homes at unprecedented rates: 8,000 Latinos were displaced from the Mission from 2000 to 2010.

That’s part of why hundreds stormed City Hall on Friday, demanding a moratorium on new development in the Mission.

“It was incredibly powerful for hundreds of people to go to the seat of power in San Francisco and let our voices be heard,” Maria Zamudio of the advocacy group Causa Justa Just Cause said. But “it was a continued frustration that we’re not being listened to.”

More than 500 protesters stood on the balconies and filled the grand staircase. They then crowded outside Mayor Ed Lee’s office, but faced a closed door. The Mission’s disenfranchised were met by silence from The City’s elected leader…

The Mission moratorium has a simple premise: Hit the pause button on new, market-rate construction, and give city government time to craft a plan to halt evictions and help preserve the Mission, while simultaneously helping it grow.

The moratorium in and of itself won’t halt displacement, but as Gabriel Medina of the Mission Economic Development Agency, a local nonprofit, told me: “We need to have a pause to be able to make a plan.”…

The moratorium needs nine votes out of 11 at the Board of Supervisors to pass. Five supes are definite aye votes, while two are definite no votes: Mark Farrell and Wiener. But the remaining four supes might swing for it: Malia Cohen, London Breed, Katy Tang and Julie Christensen.

Urge your supervisor to address the moratorium on its merits, and not distort the message.

Take action

Do you support the Mission Moratorium? Email the swing-vote supervisors — Cohen (Malia.Cohen@sfgov.org), Christensen (Julie.Christensen@sfgov.org), Breed (London.Breed@sfgov.org) and Tang (Katy.Tang@sfgov.org) — and tell them. And, as always, remain On Guard…(more)

Building for all: Nonprofit and developer team up for hybrid approach to housing crisis

May 19, 2015

By : sfexaminer – excerpt

For the first time in The City, a private developer and nonprofit are teaming up to building housing for the formerly homeless on the same site with market-rate housing.

The housing crisis in San Francisco has, if nothing else, prompted developers to think outside the box.

For the first time in The City’s history, a development firm has teamed up with a nonprofit organization to offer supportive housing for formerly homeless individuals and families, on the same site where market-rate housing will be constructed. It’s a move supporters hope will inspire future projects to follow suit.

But some feel the proposal at the decrepit and run-down Civic Center Hotel, owned by the Local 38 Plumbers and Pipefitters Union, will not provide enough below market-rate homes in the thriving mid-Market area.

San Francisco-based Strada Investment Group has teamed up with Community Housing Partnership, The City’s only nonprofit that exclusively provides supportive housing to formerly homeless individuals and families. The firm and nonprofit will transform the hotel into a nearly 600-unit mixed-use development of multiple buildings, along with vehicle and bicycle parking and open space.

 Supportive housing is for individuals, families and seniors who are exiting homelessness and typically earn less than 20 percent of the area median income, which in San Francisco is $71,350…
“Strada was very courageous to make this decision; deciding to do supportive housing, especially in a moment in time when homelessness is such a concern in San Francisco,” said Gail Gilman, executive director of Community Housing Partnership… (more)
Follow

Get every new post delivered to your Inbox.

Join 132 other followers

%d bloggers like this: