McGoldrick Strikes…well, not gold, that’s for sure

Update: Pay close attention to this statement “2 or more units built on one lot OR on adjacent lots”.   We are checking with our sources to translate what exactly that means. Answers

Supervisor McGoldrick is now proposing to include ALL housing
developments in the Residential Inclusionary Affordable Housing Program.  That means that all projects from a single family home up to multi-unit developments will be subject to Inclusionary Housing, no exceptions.

“Supervisor McGoldrick’s Proposal to Expand the Residential Inclusionary Affordable Housing Program

Planning Code Section 315

San Francisco currently requires developers of new housing projects of 5 or more units on one lot, or 10 or more units if on more two or more adjacent lots, to meet certain affordability guidelines of below-market rate units.  Supervisor McGoldrick is proposing legislation to expand the requirement to buildings of 2 or more units built on one lot or on adjacent lots. 

Timing:  These requirements go into effect as soon as the proposed legislation is passed and will apply to all projects of two or more units that have not yet received their first site or building permit. 

Permits and Timing:  You must be diligent in finishing your development once you get your permit, because if your new permit expires and you go to get a new permit, the new lower figures apply. 

Compliance via In-lieu Fee:  The in-lieu fee calculations have not changed, except they would apply to developments of 2-4 unit projects.  In-lieu fees for 2-4 unit projects will be calculated based on the fractional result of 20% of the project’s units rather than a higher number reached by rounding up to the closest whole number.  In other words, a developer of a four unit project would need to dedicate one whole unit to below-market housing (either on-site or off-site) if they opted to comply via construction, but would owe a fee equal to only 80% (4 x 20%) of the cost of construction of a unit if they opted to comply by paying an in-lieu fee.  In-lieu fee rates are displayed on the City website for the Mayor’s Office of Housing at www.sfgov.org/site/moh_page.asp?id=36090 and included here.

Unit Size:

Studio

1 bedroom

2 bedroom

3 bedroom

Fee:

$116,031

$173,633

$250,913

$356,959


The fee is typically adjusted annually on July 1 of each year. However, the next fee schedule will be published as early as spring of 2007. “

-Editor’s Note: To fight this, please go to City Hall Room 263 at 1pm.

The Skinny on the Grand (Soma Grand)

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There’s been a lot of chatter about this property and all the new developments popping up in SoMa, Mission Bay, South Beach, Rincon Hill, etc., so we’re going to tell you what we know about the Soma Grand.  We actually know A LOT more than what we’re printing, but we’ve promised not to disclose certain information.  We are not the media, and we don’t care about “breaking stories”.  We just want to educate everyone on the TRUE San Francisco market. 

In no particular order or prose:

  • 246 Units
  • “Lifestyle Condos” thanks to Joie de Vivre Hospitality (check their website)
  • Located at 1160 Mission b/n 7th & 8th Streets (sales center at 1085 Mission @ 7th)
  • 2 restaurants at street level
  • 22 stories, 245ft.
  • lot size: one acre
  • 504 parking spaces
  • 2 retail spaces totalling 5,000 square feet (4,000 and 1,000)
  • Developers: AGI Capital, www.agicapital.com,  and TMG Partners, www.tmgpartners.com, San Francisco
  • Contractor: Webcor (good cycling team too), www.webcor.com
  • Architects: Architecture International, www.arch-intl.com, Mill Valley
  • Landscape Architect: Royston Hanamoto Alley & Abey, Mill Valley
  • Sales Team: Pacific Marketing Associates, www.pmateam.com
  • Move in: October/November
  • First release in April at which point they will accept 3% deposit
  • Junior 1 Bed- $400,000+ (there’s only 4 so don’t get excited)-618 square feet
  • 1 Bedrooms (some plus den)-$500,000-$700,000, 650-848 square feet
  • 2 Bedrooms-$750,000-$1,000,000, 1126-1172 square feet
  • 3 Bedrooms-$950,000-$1,400,000, 1300-1528 square feet
  • The primo unit looks to be the 3bed, 2 bath on the S/E corner of the 22nd (penthouse) floor with a wrap-around terrace priced around $1.4MM or $750-$800/square foot
  • Everybody will get parking (how is tbd)
  • HOAs: 1bed high $500s, 2 bed low $600s, 3 bed mid $600s-700s
  • HOAs include (please verify with sales team): House Keeping (twice monthly), Concierge, Gourmet Tea and Coffee service, Wireless Internet, DVD lending Library, Restaurant Reservations, Monthly wine tastings, Virtual community bulletin board, Exclusive community value card, Friends and Family discount to local Joie de Vivre businesses
  • Units start on 5th level, which is 60 feet up (read below why this is a factor)
  • South East View will be the money views
  • Apartment Building on West side is in city Planning, nothing is set in stone but views to the West could be blocked at some point in the future and those units will most likely be sold for less.  The designer of the building is the same as for the Infinity, so it could look sweet.
  • There is a lot across the street from the Soma Grand that is approved for development of condos.  That’s the bad part.  The good part is that the height limit is 60ft (the case for buildings south of Mission), and remember the Soma Grand doesn’t have units below 60ft.  So there should be no effect on the views to the south.   [Update:” There is a 65′ height limit which extends along the south side of the

    mission street corridor from 6th street to 9th street. Going further

    south the height limits drop off into 50′ and 40′ zones. East of the

    project, on both sides of 6th street, is a zoned as 85′ height limit.”

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  • Here’s the other thing nobody really points out, but is obvious if you just go by.  Soma Grand is right next door to the newly built Federal Building.   Could that affect value?  Definitely, but we’ll have to wait and see how.  There could be around 3000 people in and out of the Fed Building on a daily basis

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  • What a “Banyan” has to do with selling condos is besides us, but we can always appreciate good art (subjective!)

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What about the neighborhood?  It is no secret that 6th Street is anything but prime location, and Soma Grand is close to it, but things are looking up.  There is a ton of development planned in the area, and the only way to make a bad part of town good is to bring the good in.  This is a good way to do it, and the Soma Grand looks to be promising, and a fresh approach (“lifestyle condos”) to an old concept (high-rise condos).  There are no guarantees in life and we certainly have no clue where the market is going (get the sfnewsletter for more info on that), but it is safe to say that the bigger the risk, the bigger the reward can be.   If you plan on purchasing at Soma Grand, make sure to do your due diligence, have someone represent you (costs you nothing!),  and at the very least, tour the ENTIRE neighborhood in the morning, noon, evening, and late at night before handing over your deposit.

Ask an Expert, New Development Condo or Pacific Heights (Jeny Smith)

“I’m thinking of buying either a condo in one of these new high-rise buildings like Infinity, One Rincon, or Soma Grand, but I love Pacific Heights. Where do you think I would get the best appreciation?”-Jacki
____________________

As answered by Jeny Smith, eco-Realtor, of Hill & Co. Real Estate www.sfgreenagent.com

To answer your question in short, I believe you will get better appreciation in Pacific Heights compared to one of the new developments.

However, we do need to remember that appreciation is the increase in value of a property over a certain period of time, due to such things as capital improvements, supply and demand, inflation, and other factors.

Capital improvements?
In a new development, capital improvements are already accounted for whereas if you buy a cosmetic fixer in Pacific Heights you have the opportunity to add-value to the property.

How long are you planning to own this property?
To realize a positive return on your investment, 3-5 years is a safe bet in the San Francisco market. Remember though, real estate really is a long term investment, ideally, something you will hang on to for future passive income.

A nice condo at one of the new developments can someday turn into a corporate rental or pied-a-terre, aka city home. These condos will continue to be desirable because of their many amenities such as security, fitness room, swimming pool, etc. Most Pacific Heights homes don’t have these things.

Supply and demand?
If you want to sell your condo at the same time as someone else in a large building complex you may have to lower your price to attract more buyers. A lot of the Pacific Heights homes are in smaller buildings with less competition.

Other factors?
Location, location, location. Pacific Heights has been, and always will be, a highly desirable area, whereas the neighborhoods of South Beach and Soma are still in flux. They are slated for more planned city improvements over the next 5-10 years. The Infinity and One Rincon are in a somewhat cleaner area than the Soma Grand; the Rincon is on supposedly safer ground than the other two. Some would say it’s cooler to live at someplace like the Soma Grand with its Joie de Vivre personality (with luxury hotel services, including housekeeping, full service concierge, yoga & massage studio, meditation garden, fitness center, club house for entertaining etc.) as opposed to the more conservative Pacific Heights neighborhood.

Ask an Expert, New Development Condo or Pacific Heights (Sally Rosenman)

“I’m thinking of buying either a condo in one of these new high-rise buildings like Infinity, One Rincon, or Soma Grand, but I love Pacific Heights. Where do you think I would get the best appreciation?”-Jacki
____________________

As answered by Sally Rosenman of Hill & Co. Real Estate, www.sallyrosenman.com

Dear Jacki,
 
Thanks for asking about the difference in value between South Beach (and one would have to include Mission Bay) and Pacific Heights.  This is really like comparing apples and oranges.  Pacific Heights is an “old” neighborhood with eclectic styles in homes and walking distance (depending) to Lafayette, Alta Plaza or Julius Kahn Parks and the various stores & restaurants on Union, Chestnut and Fillmore Streets.
 
South Beach & Mission Bay are a hot “new” style of neighborhood -a more edgy, less of a true neighborhood feel to them and most of the buildings are mid- to high-rises with not a whole lot of difference between their facades.  But there are a lot of differences, in my opinion, between the finishes and the care in which the various buildings are built. Many high-rise units have views of Downtown SF, the Bay or The Channel southward. More and more of the Developers are putting in berms and green areas between their buildings giving the areas a bit of a park-like feel. Starbucks, Safeway, Whole Foods, Border’s Books, Acme Chophouse, MoMo’s, Azie  plus the AT&T Ballpark, The Metreon, Embarcadero, Ferry Building and more coming in to the area are helping to give it a more “neighborhood” feel but not like  that of Pacific Heights.  Also there is easy access to the Bay Bridge and Highway 101 for commutes to jobs outside the City. 
 
In the past 6 months, 71 condos (not TICs) have sold in Pacific Heights ranging from the smallest studio to the largest multi-level flat, with or without parking from $398,000 to $9,000,000 for 2320 Broadway.  5 sold at the asking price, 33 sold under asking and 32 sold over.  5 sold at an unpublished price.
 
In the past 6 months, in Mission Bay, using the same parameters, 19 condos sold. 1 condo sold over asking, 10 at asking and 8 under the asking price.  Most were resales with perhaps a few new sales at 260 King (and I am not sure because I do not follow that complex.)  All of the new Developments like 235 Berry and the Arterra in the 300 block do not show up as Developers try to sell them without using the MLS.
 
In the past 6 months, in South Beach, 99 units sold as resales, 68 under asking, 19 over, 10 at asking and 2 with non-published prices.  Again, this does not include The Infinity or One Rincon or The Watermark, etc. It is hard to say exactly what with all the new construction because their sale prices are not published in the MLS. Many Developers are offering rebates of some kind to help spur sales. Is there a glut of units in these areas?  Hard to say b because the area appeals to many people who not only love new construction but like the various amenities and proximity to various areas I mentioned.
 
As you can see, both areas are showing an uneven market in sales. I believe there will always be buyers for both areas because of the two different lifestyles.  It remains to be seen how South Beach and Mission Bay fare over the next ten years. I suspect it will always be an area of choice for many people.  Frankly. both areas will rise and fall with the real estate cycle.  I would pick the area that you like the best and go with that.  I do not think you can make a mistake with either one.
 
Cheers,
 
Sally

Ask an Expert, New Development Condo or Pacific Heights (Shanendoah Forbes)

“I’m thinking of buying either a condo in one of these new high-rise buildings like Infinity, One Rincon, or Soma Grand, but I love Pacific Heights. Where do you think I would get the best appreciation?”-Jacki
___________________
Answered by Shanendoah Forbes of Arroyo & Coates, email: sforbes@a-c.com

Pacific Heights…. Hands down. It is all about charm and the “real” San Francisco rather than the “new” San Francisco. I would say that your best indicator is ZIP CODE.

Ask an Expert, New Development Condo or Pacific Heights (Alexander Clark)

“I’m thinking of buying either a condo in one of these new high-rise buildings like Infinity, One Rincon, or Soma Grand, but I love Pacific Heights.  Where do you think I would get the best appreciation?”-Jacki

__________________

Answered by Alexander Clark, founder sfnewsletter, and editor of the sfnewsletter and sfnewsletter BLOG

That is a loaded question if I ever heard one, and not too long ago, maybe a year or so, I answered something similar from another couple.  My answer now is the same.  There is one factor you must consider…time.  How long do you plan on holding.  With the amazing amount of new development happening at all those new places, if you plan on selling within 3-5 years, you could get stung….badly.  But at the same time, you would be getting in on the ground floor down there, and it could be a good calculated risk.  The bigger the risk, the bigger the reward. 

There is so much supply coming on the market down there, it is going to be hard to fill it all up (although they’re doing a pretty damn good job so far.)  But in Pacific Heights, they just aren’t building anything else.  Very seldom anyway.  Plus, Pacific Heights has that aura, or charm, and that “status” attached to it.  I’ve had several clients that wouldn’t even consider looking in Presidio Heights, because it wasn’t Pacific Heights.  Kind of like the 90210 thing.  Lame if you ask me, but real.  So…my answer is Pacific Heights is the safe gamble, but some risk in a new development could lead to larger rewards.  I’m still kicking myself for not picking up a one bedroom loft at 200 Townsend when they were selling for $465k.     Good luck.