While the application deadline and lottery for the 170 BMR (100% Median Household Income) condos at 888 Seventh Street has come and gone, the remaining fifty-four (54) market rate condos should hit the market next month (September). Rough pricing from a tipster:
Junior One-Bedroom Homes – Priced from the Low–Mid $400,000s; One-Bedroom Homes – Priced from the Low-Mid $500,000s; Three-Bedroom Homes – Priced from the Mid $700,000s. All prices…include one deeded parking space.
And while the mix of market rate to below market rate units might catch some by surprise, do keep in mind that the majority of BMR units at 888 Seventh Street fulfill the off-site BMR requirements of The Infinity.
∙ 888 Seventh Street: BMR Deadline (11/17/06) [SocketSite]
∙ 888 Seventh Street (f.k.a. 601 King) [SocketSite]
∙ Same Location, Building And Amenities (Just Without The Views) [SocketSite]
How much of a premium does an Infinity market rate buyer pay for this BMR scheme? In other words, how much are market rate units less affordable to potential buyer? I wonder if I am priced out of the market since a 2 bedroom would cost $850K (which I could stretch to afford) is now at $1MM due (which I cannot afford) to this BMR scheme.
Wow, I wonder who will buy these units. I like the location, near Showplace Sqaure and close enough to PH and SOMA but transportation is pretty spotty in that location. At nite, this place is dead. A plus is, I guess you are close enough to Harvest Market, Whole Foods and Safeway?
What about resale? How will it affect it considering there’s 170 BMR and only 54 market rate? I’m all for BMR’s and I think the best way for the City to move forward is to have buildings 100% BMR instead of the 15% per building. How can someone buy a BMR and afford and HOA’s at One Rincon?
Exactly. I would argue that San Francisco’s BMR program is aggressively removing the middle class from the city. If you make less than $32k each as a couple, you can buy a BMR for around $200k. The next step up, if say you make $35k each, is around $750k+, partially because of the BMR program, which of course is not at all affordable for people in a wide gap above that level. The net result: no middle class homeownership. If you are not poor or wealthy, this city does not want you.
Typo,
I feel really sorry for you since you can only afford an 850k unit. Would you rather have a BMR’s salary? Then you would have even less choices.
Get a life!
At least the definition of “affordability” for these BMR units is 100% of the AMI – in other words, “affordable” to the average wage earner. That seems very much the exception for BMR units, which typically are aimed at a much lower income strata.
bummer:
exactly, middle class people totally get the shaft in san francisco. I’ve been saying this for many years. Wealthy people don’t need further assistance, and low income gets all kinds of breaks / programs in SF. But what about the hard-working middle class who earns a bit too much to qualify for low-income breaks but can’t afford to buy anything. The city really has its priorities messed up.
solution: 1) find a girlfriend or boyfriend that makes at least $100,00 to $200,000 a year (depending on your income) so you can afford to buy a 1 or 2 bedroom condo; OR 2) find a girlfriend or boyfriend with $0 income with 2 – 3 kids so you can buy a BMR unit.
Solution number 3:
Rearrange your priorities so you are not obsessed with being able to afford an absurdly expensive condo when you can be spending or saving that money more wisely. Maybe you can spend that money on investing in real estate somewhere else more affordable.
3) take a job with a salary that qualifies you to purchase a BMR unit, buy a BMR unit, then find a way to get yourself a pay raise above the AMI threshold.
More seriously, is there anything in the BMR purchaser requirements to prevent, say, a medical doctor completing a residency that’s making under the required salary threshold to buy housing at BMR pricing, even if said resident will most likely make well above six-figures after completion of the residency?
LOL Mark.
LOL 94114.
what a morning.
This might be helpful to you BMR hopefuls and number crunchers:
http://www.sfgov.org/site/moh_index.asp
g- no. this is a huge flaw in the program as designed because it allows fully upwardly mobile professionals to get a unit. There is no requirement for owners to sell if their income rises. There are many affluent people in this city who own income restricted units that they bought when they were first starting out. BMR pied a terres. Gotta love that.
Guess who’s a BMR owner? … our very own Supervisor Chris Daly. He and his wife bought when a supervisor’s pay was only $30k and considered partime. a year later; he sponsered legislation to increase their pay to over $100k. Looks like Chris Daly knows how to work the BMR system!
Or, maybe I could stop subsidizing others so that I, instead of them, could own in SF.
Typo,
You’re blaming the wrong people for your problems.
It’s greedy developers and not the city which is responsible for the high price of condos in new developments. If developers built only BMR’s they’d still make money.
94114 –
Would love to see the business plan that would lead to a profitable BMR-only approach.
They’re called “below market rate” for a reason: they’re, um, below market rate.
94114,
Developers only build when they think they can make money — that’s how capitalism and economics work, no matter how CCSF and some its residents like to pretend they don’t. And with the f’d up housing and zoning policies we have here distorting the market, this is what we get.
Because of our policies, SF is becoming a bedroom community for executives working on the peninsula, and the servants, housemaids and nannies that service them.
Typo’s blame is on the mark, unfortunately.
Government regulation and NIMBY CEQA abuse is responsible for high housing costs in California, not “greedy developers.” Stop drinking the Kool-Aid, hippie.
I doubt that building only BMRs without subsidies from taxpayers and market rate buyers would make any money, given the high cost of land and entitlements in SF. As it is, building BMR units requires a high amount of subsidy from taxpayers and market-rate buyers who pay BMR costs passed through from developers in the form of higher prices. Perhaps you could make a pittance, but who would invest money in building risky condo towers when you could make more investing the same money in “risk-free” treasury bonds? This is a simple exercise in evaluating tradeoffs between risks and rewards.
Perhaps 94114 and like-minded people would like to go into the development business building condos at 3% profit?
So, back to my original question — what do folks think the per unit premium because of funding BMRs is? If there were not BMRs, and hence more developer could get into the market, would prices for market rate units drop 5%? 10%?
while I agree that the BMR program in its current state is misguided, I don’t think that the BMR units are raising the price of the market rate units. Developers are going to sell the units for the highest price anyone is willing to pay. With 888 7th, these are off-site BMR’s for Infinity so it’s difficult to see how they really impacted pricing. Infinity charged the whatever it thought the market would bear, it simply makes less profit as a result of the BMR’s- though it would have made no profit without agreeing to build them.
Even for buildings in the 10-15% on site BMR requirement, I don’t think everyone else pays more. The developer would just sell the BMR units (often only a few units) for the same price as the other units. The BMR program just requires developers to agree to accept less money then they otherwise could make in exchange for getting the right to make any money at all.
If by “greedy” you mean transacting a business where the intent is to make a profit to support my family by selling at market-determined prices rather than purposely going broke undertaking an inherently risky venture where I’m personally vested, well than paint me with that brush!
The premium should be fairly easy to estimate. One way to look at it is to say that a developer has to sell the whole building for a price of $X to cover costs including costs of capital, risk premium, etc. If there are 15 BMR units at 200k and 85 MR units at 800k, the average price per unit (X/100) is 710k. That means the MR buyers each pay a subsidy of $90k and the BMR buyers each receive a subsidy of $510k.
I think anono is right. It is doubtful that reducing the BMR requirement would result in lower prices in a seller’s market.
Here is an example of how BMR requirements raise market-rate prices:
Say for example, SF raised the BMR requirements to 99%. Going forward, developers making a budget for a potential development would discover that, when factoring in land costs, the low selling prices of BMR units, architecture/engineering costs, rising construction materials prices, labor costs, etc., they would need to sell the tiny market-rate portion of the development at a very high price to pencil out a profit that justifies investing their capital in less risky investments. No development would pencil out, and development would cease. As time goes by and the housing supply remains stagnant while demand for market rate units build, raising prices of market-rate homes until they reach a point where a developer could build a pro forma with an acceptable profit. In short, raising BMR requirements reduces the amount of future development, which shifts the supply curve and creates a new market equilibrium at a higher price. Other NIMBY policies have similar consequences on housing prices.
As prices go up, those who are not subsidized and cannot afford the new market equilibrium (the middle and upper-middle class) leave the city.
In a few years will we be hearing stories of buildings with a majority BMR units falling into disrepair because the HOA can’t or won’t raise enough money for adequate maintenance? Think of how that might affect resale value for the minority non-BMR owners.
This is actually an interesting point. There was an article in the Chronicle (I think) about the problems of an owner of a BMR unit who had been hit by large increases in HOA dues, and by special assessments for the building itself. While the latter shouldn’t happen in a new building, I wonder what financial affect, if any, there might be on resales in a building where a large majority of the units are BMR?
“In a few years will we be hearing stories of buildings with a majority BMR units falling into disrepair because the HOA can’t or won’t raise enough money for adequate maintenance? Think of how that might affect resale value for the minority non-BMR owners.”
In a few years we will hear about a group of people so obsessed with BMR’s that they couldn’t get a life. The poor souls blamed BMR’s for all of their problems.
Just remember, those “world class cities” in europe and elsewhere we always want to compare ourselves to always have even more agressive programs to help lower income residents than our silly little BMR’s.
Who’d want to live next to a BMR if there is no incentive to improve the property when they move? How does that affect the comps?
Unless this development intends on self-managing (not likely, given the number of units and difficulty doing so in general) the HOA dues alone here in SF are equivalent to small mortgage payments in smaller towns around the country. While a starter $500-ish (my guess) HOA dues will have to be ponied up for BMR and MR alike, over time HOA’s go nowhere but up, and to the point of the Chronicle article about the person at 333 Grant in a BMR who could no longer afford the HOA’s, isn’t there a HUGE probability of this happening to MULTIPLE people in this development? THe HOA dues aren’t subsidized…seems like a problem to me in any development with 15%+ BMR…let alone 50%+ at 888 7th…correct me if I’m wrong.
If this development “fulfills the BMR of the Infinity”, I wonder whether there is any legal connection between the HOA of The Infinity and this building, i.e. do they share a single HOA? i
Instead of trying to do all this BMR stuff, SF should simply relax zoning restrictions and build more units… period.
Thank god for the development that will (hopefully) occur in the Rincon Hill and Downtown neighborhoods.
More units = more supply = lower price. Simple supply and demand.
I’m always happy that the citizens of SF try to think about those less who are less affluent… but building in SF is a NIGHTMARE, partly due to all the barriers to building, restrictions, regulations, etc.
Not every neighborhood in SF is “historic”. I hope they keep opening up the non-historic areas to EASIER development. With time, prices will come down and the average joe can buy again.
HOA dues do tend to go up, but that’s to be expected. As insurance rates climb, the HOA has to cover the premium. And as buildings age, repairs need to be made.
The truth is that there are good HOAs and bad HOAs. Getting stuck with a bad one (especially getting nailed with unplanned assessments) can be brutal.
For the reasons amused states, I would be extremely hesitant to buy here at all. With 170 BMR units and only 54 market rate units, the BMR owners will forever dominate the HOA. Because, by definition, they tend to be poorer (indeed, quite strapped), you can bet that any attempt to assess fees for anything, even routine maintenance, will be an uphill battle and this place will quickly deteriorate.
I just have to say that i am nauseous after reading some of these blog postings. The City and especially BMRs ARE NOT doing away with the middle class. Has anyone actually read the requirements for owning a BMR? Units range from $200K-$260K. A 10% down payment is still $20K-$26K. Last I checked, POOR FOLKS can’t exactly come up with that expense.
Maybe it’s time that some of you actually quit making assumptions as to who is moving in to these places and actually find out. I think you will find that most are either teachers or young professionals just starting out in their fields…….and probably the architects who designed and built the buildings.
888 BMR Buyer: congrats. Teachers are a great use of these units, if that is what you are. I would rather see your salary increased, but that may be politically difficult. It remains that many traditionally middle-class professions are considered too well off for these units. For example, an entry level policeman with a stay-at-home spouse and a child makes two much to qualify. Even a couple who both work full time as Safeway checkers would be considered too wealthy. I think these are strange decisions, in some cases making for a >100% marginal tax rate, in addition to distorting the market in the way others have discussed on this thread. Better to build more housing for all.
An entry level S.F. police officer makes 75K a year? 100% median income limits for BMR from Mayor’s office of housing:
“For developments that received their first site or building permit before September 9, 2006:”
Income
One Person 60,500
Two Person 69,200
Three Person 77,850
Four Person 86,500
For developments that received their first site or building permit on or after September 9, 2006:
One Person 56,200
Two Person 64,250
Three Person 72,300
Four Person 80,319
yep:
from http://www.sfgov.org/site/police_index.asp?id=27855
The current annual entry-level salary for Police Officers is: $71,526-$90,298
high cost of living in San Francisco, and there is a lot of crime for them to deal with. I’m glad they are reasonably compensated, wouldn’t it be nice if they could afford to live here too!
THANK YOU 888 BMR Buyer!!!! I am absolutely sickened by the comments of some of you (jw2200 – ugh!) You act like people who can afford ONLY $200k are the scum of the earth. They must SMELL too. Oh, poor them that they couldn’t save a NORMAL 20% down payment of $160k! (or, more likely, don’t have a mommy and daddy to GIVE them the money). Sickening. Wake up people, 99% of the world can’t afford the monthly payments on a $200k home, let alone a $800k one! And let’s all remember that only 10% of San Franciscans can afford it also. We only have a 30% homeownership rate because the other 20% resorted to teaser rates and/or are paying 70% of their income to a mortgage. And as 888 BMR buyer said – I AM one of those architects who could barely afford a BMR. My investment/savings account currently has $32k in it (prob. less after this week on Wall Street) and I never got payed more than $44k by an architecture office. I now work for myself and I struggle to get YOU people who own these $1+ million homes to actually pay their invoices on time. In the last 5 years my adjusted income has been between $6k and $20k. Reality check, please.
For you who keep whining about developers not making money – bulls**t! When have any of you met a developer who wasn’t rich? Developers are some of the most wealthy people in the WORLD. Ranger Rick/M – you act like you are struggling to put food on the table (I assume you’re a developer). To think that developers aren’t making bank on even 100% BMR projects is absurd. Construction costs are SO much lower than the price/s.f. of even BMR units. The only leeway that I’m going to give any developer in SF is that they are paying too much for the land and therefore need to charge higher prices. BUT, all developers are willing to pay these land costs because history shows they will get stupid people to pay outrageous prices and that will offset the land costs. That is just another way that developers have screwed the residents of this city. I’d like to see one who refuses to pay for a parcel because the proforma shows that they couldn’t make a reasonable profit by charging prices that the average person could afford. I’d like to see a development start out with the goal of charging $150k/unit and base what they are willing to pay for land off of THAT. Never gonna happen because developers are all greedy bast**ds. I hope to be one oneday.
Bravo, rg!!!!!!!
Nice rant, rg – feeling better now?
Jw2200’s point still stands – what happens to maintenance in a building where the majority of the units are BMR’s and the owners can’t afford increased HOA dues? The whole premise of BMR’s is one of income redistribution – the market rate buyers subsidize the BMR’s with purchase prices that are higher than they’d otherwise be. So what happens when a cost like HOA dues can’t be redistributed? 888 7th could easily fall into a rapid decline.
“So what happens when a cost like HOA dues can’t be redistributed? 888 7th could easily fall into a rapid decline”
You are pathetic.
Teachers and Architects get salary increases just like everyone else so they’ll be able to afford increases in HOA’s. These are middle class people, they’re not on welfare.
My issue with the BMR program is that though it attempts something worthy, it’s prone to fraud (owners renting out their units–happened in my last condo) and it distorts the market, making housing more expensive for everyone.
No-one is saying that people making less than 200K/year are scum. But the reality is that this is an expensive city, and if you’re making 20K/year you probably shouldn’t be looking to buy in SF.
I bought a unit at the Infinity and there’s no way you’re going to convince me that my purchase price didn’t subsidized the BMR building.
It’s also important to note that the BMR prices of about $220K is equivalent to the average home price in the U.S. Millions of homeowners manage to put on new roofs, repaint etc… when the time comes. At 888 7th, there will be over 200 units to share expenses with and the building will come funded with a basic reserve account as required by law. Even if a major expense occurs, say 200K repair, it will cost the individual units less than $1000 to fix, and this is much less than average single family homeowners have to pay to make a lot of the onging repairs to their homes.
A little perspective would show that concerns over maintenance should not be that great. The BMR owner in the chron feature was getting assessed to pay- in part- for luxuries like a 24 hour door man etc… That is very problematic and will always be a conflict in expensive buildings with only a small number of BMR units. Projects like 888 7th will be fine just due to the sheer number of units to share expenses with.
“I bought a unit at the Infinity and there’s no way you’re going to convince me that my purchase price didn’t subsidized the BMR building.”
Don’t blame the BMR program for you being a sucker enough to buy an outrageously overpriced unit at the Infinity.
SFPD – I know that’s the start and I dont feel sorry for their salaries and affording SF – they can get a LOT of overtime.
Plus who wants to roll around the same town that you consistently take in criminals for fear of backlash taken out on your stay at home spouse and kids?
Most SF police officers I know own thier home(s – yes some own two or more). In San Mateo County.
I don’t think the limits are that bad – I think this is for say, maybe:
– entry-level office person and their entry-level partner
– a average income person and their parent working part time
– a average income person and their grad student fiancee
-a mid-high income single parent with a child
the possibilites are endless – and don’t inch everyone out or label their sense of pride of ownership based on income.The city’s BMR lenders are very strict, no stated income, no adjustable/balloon/interest-only etc. – so if they qualify, then they can buy. Plain and simple – for them of course.
Don’t blame the BMR program for you being a sucker enough to buy an outrageously overpriced unit at the Infinity.
I actually bought probably one of the lowest priced unit in the entire complex (smallish, ~$775 sq/ft).
94114, you sure are bitter.
I’m not bitter at all. I’m a homeowner in SF and I love this city. I just get tired of people ragging on people less fortunate than themselves.
Developers of these huge projects are laughing their way to the bank, with or without BMR’s. They’re still raking it in.
I actually bought probably one of the lowest priced unit in the entire complex (smallish, ~$775 sq/ft).
Mike, if you dont mind me asking but did you buy in the mid-rise? I thought the one bedrooms had some value. Thanks in advanced.
Mike, if you dont mind me asking but did you buy in the mid-rise? I thought the one bedrooms had some value. Thanks in advanced.
Yes, building C.
The city’s median salary limits have decreased since I locked in to 888. When I ran the numbers a few months ago, a $60K salary with $40K in the market gets you a $200K unit/ $200/month HOA dues and the ability to pay your utitlies and buy food…..and god forbid you have student loans.
The cheapest BMR unit at 888 was $200K for a 500SF studio. The 1 bedrooms went for $240K. Parking spaces were sold individually at $35K a piece.
zzzzzz and jw2200…..I’ll keep you both in the loop about the condition of the building over the years. But also keep in mind, this building has no amenities. Sure there is the common maintenances, but the lack of amenities should help to keep HOA dues from increasing exponentially.
94114…..thanks for subsidizing my unit. Maybe I’ll have you over for a housewarming party—-you buy the food and beverages!
94114 –
You never followed up on your assertion that developers can/will make money building 100% BMR developments.
Still waiting to hear how (the greedy horrible bastard) developers will make money selling their product for less than the cost of creating it.
By the way, calling people “pathetic” and “sucker”, telling people to “get a life”… you seem bitter at minimum.
I find it funny that homeowners want to call the only people with their feet on the ground “bitter.” Anono makes exactly the point I was thinking about all today – $220k is the median home price in the US (not to mention that it buys an average 2300s.f. home with a yard, not a 500s.f. studio). All these people don’t let their homes fall into “disrepair.” God, that’s insulting! These are the people out pushing the lawnmower every weekend. I’m sure that the HOA on 888 is plenty to take care of the building. Yes, maybe it won’t pay for a 24-hour doorman, but I’m sure that the buyers will survive.
Mike, I can’t even believe your incredible disrespect and arrogance. I do HOPE that your money went to help the BMR residents. You should be happy that your money helped those less fortunate than you. Instead, you treat your fellow human beings as less than you. (And, I think you’re a sucker).
Amused – “Still waiting to hear how (the greedy horrible bastard) developers will make money selling their product for less than the cost of creating it.” Who ever said that the cost of building units is greater than a BMR price? You either have NO experience with development and are just brainwashed into believing that it actually costs $800k to build a unit in these towers, or you’re a developer trying to justify your own greediness. Think about it – how can $220k build 2300s.f. of home, ground-up, with basement/foundations, garageS, roof/attic framing, etc. in most of the US, but it can’t build 500s.f. of plain space in SF? Let alone that that 500s.f. is being mass produced with hundreds of other units that is further keeping the prices low? I’m just puzzled by how some people can rationalize the completely irrational. Guess that’s what happens to your brain when you’ve spent $775/s.f. on something that isn’t worth it.
“94114…..thanks for subsidizing my unit. Maybe I’ll have you over for a housewarming party—-you buy the food and beverages!”
I assume you meant Mike. 888 BMR buyer, I’m on your side.
I hesitate to jump in here at all….
I’m afraid Mike is wrong..he didn’t “subsidize” the bmr units. Anono (and others) are right…the price of market-rate condos in the infinity is (duh) set by the market. The BMR requirement basically diminishes the developer’s overall potential profit. In good times, the developer will take on the risk hoping that the profits on the market rate development will more than cover the bmr costs. Because BMR requirement diminsh profit potential, the requirement has the potential of stopping or slowing overall development sooner than it otherwise would when the economy goes south.
I am VERY AMUSED by some of the “all developers are rich” rant. Yes, some developers get very rich. Some developers also lose it all. I expect we’ll see some of the latter over the next few years. Development is a high risk game, ladies and gentlemen! Not for the faint of heart! Particularly in San Francisco…
Mike, I can’t even believe your incredible disrespect and arrogance. I do HOPE that your money went to help the BMR residents. You should be happy that your money helped those less fortunate than you. Instead, you treat your fellow human beings as less than you. (And, I think you’re a sucker).
Puhleeze. The city requires BMR units to be built for many developments. Developers are in the business of making money. If they don’t make enough, the won’t build, and housing will become scarcer, and costs will go up. By essentially taking much of the profit motive/potential out of a significant portion of inventory (the BMR units), OF COURSE it causes the price of the “market rate” condos to go up. Seems like simple econ 101 to me. My purchase price didn’t directly subsidize the BMR units, but it DOES contribute to the increasing market rate price (much as rent control causes rents to increase). As others mentioned, the city should make it easier to build, increasingly supply, and thus reducing costs. The planned economy model doesn’t work.
And my money DOES go to help the less fortunate–to the tune of thousands (and thousands) of property taxes I pay (paid) every year, to fund city services, etc.
Anyway, spare me the self-righteousness, you don’t know me. And for the record, I have nothing against BMR buyers. I just think the whole system is misguided, I don’t fault people for taking advantage of a sweet deal. I’m also a currently renting, so you can’t hate me for being rich 😉
rg –
What the hell are you talking about? Now you’re talking about my knowledge of development and how much I spent per square foot? You don’t know anything about me. From your posts, you don’t know anything of real estate or developing either.
If you can’t understand why it’s more expensive to acquire land and build in San Francisco than Topeka, I’m afraid we’re never going to see eye to eye. Have you EVER tried to build something in SF? The bureaucracy, time and expense is staggering.
You and 94114 seem to think that developers are duty bound to provide an endless supply of housing at below market rate. This is the most patently absurd idea I have ever heard. As curmudgeon pointed out, developers can lose vast sums of money in an instant. Some are going to do just that in the current credit squeeze.
You assert repeatedly that all developers are rich and that all people who own a home in SF are stupid. From the length and content of your posts, I think you could stand to do more thinking and less typing.
Wow…these posts are very informative.
Yes, developers do lose money–however with the San Francisco market, it’s not as prevalent because the units sell like hotcakes. Developers lose out when units don’t sell because they are paying marketing costs, taxes, etc when the units sit there empty. I think a good example of this could be 200 2nd Street, Harborwalk in Oakland–they are still selling units (I get e-mails almost weekly).
888 BMR Buyers: Congrats. It’s nice that the city is doing something to help its residents (0.5% of it’s residents) become homeowners. I think the program can be commanded for helping people build good credit and getting them out of the absurd rental market. But with any program that helps people, there are always pros and cons. Give or take a little.
Infinity Buyers: Congrats. You can afford the housing prices in San Francisco. Please don’t judge other 90% people who can’t afford it. I don’t believe your prices are inflated because of the BMR programs. Your prices are inflated because the developers are selling you a “lifestyle” as opposed to a “condo”. With your $1M you buy a doorman, heated pool, granite counters, and the luxury to brag that you own a luxury high rise in SF.
As for me: Unfortunately, my income was $5k over the limit to buy a BMR. I’m a struggling commoner who works hard and just wants to own a little piece of SF. Perhaps someday the city will create a prgram where all the flippers are limited to own only 1 property and forced to sell all their income properties for reasonalbe rates, I shall buy. Until then, I’ll continue dreaming.
Here’s a good article to read that’s very informative on the funding and construction for 888.
http://california.construction.com/features/archive/0610_Feature1.asp
amused – you’re dodging the question of whether you are a developer or not by trying to put me down. I put my experience and knowledge out there and don’t hide behind my posts. I know plenty about real estate and development and I build in SF on a daily basis and have, from small residential projects to large office buildings, for almost 10 years. Do you build in SF or are you just brainwashed? I am so sick of the justification that it’s more expensive here “because they’re not making more land” (ah, it’s called building UP, which we haven’t done yet) or “bureaucracy, time and expense is staggering” (it’s difficult to entitle ANY project. Stop whining!). I’ve already stated that I think land prices are too high and that that starts off the development process on the wrong foot. It’s the same situation as SFHs – everyone was willing to shell out more $ on speculation it would appreciate. So what is this “eye to eye” that I’m supposed to see? That “the Bay Area is different” and we should pay these high prices because “it’s a world-class city”?
Give me one name of a developer who has gone under in SF in the last 10 years. Really, I’d love to learn about their experience. The developers of these OneRincon/Infinity/Mission Bay projects are not losing ANY money. San Franciscians have filled their coffers for decades to come. My point was that it hasn’t been “risky” for any SF developer for a long time. Of course it’s a risky business, and yes, this credit crisis will hurt many, but if they couldn’t see that coming, than they deserve to be weeded out. I mean, every capitalist on this site wants to say, “the MARKET sets the prices!” to justify the outrageous level we’ve gotten to. Did it elude everyone that the supply of people who can afford a 1/2 million, let alone million+ dollar home was going to dry up? This crisis has just waken us all up to what AVERAGE people can afford. The REAL problem will come when there’s thousands of new condos on the market and no buyers. Another thing we’re definitely “not making more of” is young millionaires who want to move to SF.
Here’s my take…
WHY BUY A BMR?… I’m a young professional who works his way up the chain and would like to follow in his father’s footsteps of real estate investment. How could I possibly afford the 20% down on an $800K+ home in San Francisco, however? Certainly not now. My plan is to buy myself the BMR while I qualify. The City does not restrict future purchase of other property under the BMR program; as such, as my income increases, I’ll be flipping houses or renting homes right and left as my salary (promotions, marriage, etc.) dictates. I hope to keep the BMR as a primary residence for a while to capture depreciation savings, mortgage interest tax benefits, and low payments.
INCOME AND LIFESTYLE… I’m all for the NYC doorman lifestyle. It’s apparent that some people have their noses pointed a bit higher than normal since there’s an assumption of no upward mobility among BMR purchasers. Who ever said that we aren’t junior peons at investment banks or consulting firms or the next dot com? Who ever said that our parents, friends, or family aren’t filthy rich themselves and have a well-defined financial plan for us that accounts for a BMR purchase as part of our individual desire?
HOA DUES… I’m all for increases in HOA dues. I’d prefer that we have some really great roof access in the future, a doorman for when I get home late (from my banking/consulting job) and can’t pick up packages while I’m working, a household membership at UCSF Mission Bay Bakar Fitness Center. Assuming upward mobility (and inflation and other unexpected or planned expenditures), why shouldn’t HOA dues increase? Certainly, I consider myself a progressive; as such, I’ll weigh any consideration of an HOA increase carefully.
not sure people at 888 are going to have to worry about rasing HOA dues anytime soon, and how far can they go up. i mean they are already an industry low and $300. I mean what’s the max you will see in the next 5 to 10 years a 25 or 50 dollar increase. Well hopefully the owners of the units income will increase by that amount as well.
Buying BMR units are not any issues at all. Indeed, we need more BMR units in San Francisco. However, if you’re thinking of buying a market value in a majority bmr units, you might want to think twice for the re-selling property value and growth in that neighborhood.
The problem with 888 7th street, the building is located right next to the caltrain station, behind garbage trucks, and gravel company. You can’t move the caltrain tracks. That itself has already separated from the rest of mission bay. Unless they build an underground station. Garbage trucks are a major noise factor. If you’re buying one of those units facing the courtyard, you’ll see the thick windows glasses shielding from the view outside? Yes, that is to prevent the noise from garbage trucks at wee morning. The gravel company is here to stay. They are very profitable business and are not willing to sell anytime soon. Furthermore, there is no neighborhood here. There is no land to build any restaurants, stores, or bars. The neighborhood has already surrounded by high-end designer/furniture stores, rail tracks, garbage trucks, and gravel company.
If you’re thinking to buy a unit at this place, my advice is to keep this place at least more than 5-10 years. It will grow but just a few major drawback factors that might take some time.
Well, the first buyers are moving into 888. Any more comments?
How about the flourescent lighting that shines into all those windows that look directly out on each other? How about the bike path that ends at a tree? How about no bike parking for residents!? Nice planning!
Wow. Are there any new arguments here that weren’t identical to what’s been said in these type of BMR debates over the past two decades?
Let me see if I can sum this up.
Pro-BMR view: Good for the city, it’s important to help people who aren’t rich, the “greedy” developers can afford it, and people who don’t like it are moneyed types who are just plain insensitive to the plight of folks with lesser means.
Anti-BMR view: It raises the price of market rate units, drives out the middle class because we’re subsidizing people below the middle class, it allows shenanigans like Chris Daly buying a BMR and then abusing his power by raising his own salary and keeping his BMR unit, and generally involves picking winners and losers by some means which ain’t necessarily “fair.”
Seems to me all of the above is true, but each side only wants to acknowledge its own arguments.
Personally, I think a lot of people in Burma would be delighted if they could spend their time debating with a bunch of people rich enough to afford a computer whether $200K for a home is a lot or a little. More people may die in Burma from the cyclone than the entire population of SOMA.
pro-BMR: at least acknowledge that the BMR program involves picking winners and losers, and that it’s philosophically worthwhile despite that because it sets a tone that we’re not going to let the free market let people fall through the cracks, even if we can’t save them all. And if all the while you’ve been criticizing greedy people here you haven’t yet donated anything to Burma relief, do it NOW so you can really get your priorities straight. Even if it’s just $5 and you skip the toppings on your SF burrito for one day.
anti-BMR: Please try and come up with something other than the absolutely unoriginal “let the free market work” thing. If you haven’t figured this out, there will always be people who care enough about poorer folks to try to do something to help them, so the only way you can deal with that is to come up with a proposal to help poor people that’s better than “do nothing” and better than what you don’t like about theirs. If you don’t care about people of lesser means, then nobody can help you, and He will deal with you in the next life. And stop complaining about things like unpaid HOAs. If you own a market rate unit in any of these developments, the loss of value on your home, as set by the “market rate” in the coming housing downturn, will far eclipse any unpaid HOAs.
It’s Memorial Day folks. Let’s remember those who died so that we can type away safely on our computers and get all hot and bothered in the richest country on the planet.
Does anyone has comments about the Design Center in 888 7th St? (i.e.) The quality and pricing of its products; Refrigerator, Washer, dryer, and Blinds?
Few questions:
Does the condo complex have plans to enhance the bland amenities? like add building security or a fitness or business center. It seems like there’s a lot wide unused empty spaces in the hall ways.
What is the projected forecast for property resale for a market value unit and BMR unit?
What are the rulings if the unit must be a 100% Owner occupied?
I bought a market rate place at 888 7th. I love it. You get so much for your money compared to any other place in the city. BMR shmeeMR – I like having a variety of people living in the building – families, not just single yups. The bike path is still being developed. I bet the garbage truck station is gone soon and the gravel company is kind of cool, if you ask me. This neighborhood is hot and getting hotter. Not sure how the people in Burma feel about it but I know I dig it.
OBAMA!
I bought a market rate place at 888 7th. I love it. You get so much for your money compared to any other place in the city. BMR shmeeMR – I like having a variety of people living in the building – families, not just single yups. The bike path is still being developed. I bet the garbage truck station is gone soon and the gravel company is kind of cool, if you ask me. This neighborhood is hot and getting hotter. Not sure how the people in Burma feel about it but I know I dig it.
OBAMA!
I recently bought a market rate condo at 888 – the building is great. Well designed, and thoughtful. As for Market Rate and BMR issues, it will all shake out eventually. I know you get a great deal on the market rate places. It’s nice to have a mixture of incomes living under one roof. There are families, children, pets – it’s like a neighborhood. Better than single, silent yups IMHO.
The appliances and fixtures aren’t high end but they are nice enough – can always upgrade. Besides, it’s not a high end place – look up the architect – he’s done some cool projects and this is another one – practical and forward thinking.
its nice to have diversity if they get along. what do you mean market rate and bmr issues will shake out eventually? shake and bake? or
shake, rattle, and roll?
This is a big financial investment for some people. the shake out eventually does not sound confident.
its nice to have diversity if they get along. what do you mean market rate and bmr issues will shake out eventually? shake and bake? or
shake, rattle, and roll?
This is a big financial investment for some people. the shake out eventually does not sound confident.
gglas: I think the point of not having amenities is to keep the HOA down since most of the building is BMR. The HOA can be a killer on some buildings. Look at The Montgomery which just released some BMRs with $700 HOAs – that’s half the mortgage right there! If you want a gym, both Gold’s and World are within 3 blocks and you can pay $30 a month.
How will the re-sale value of a market value propery in a majority bmr units environment compare and survive? What is the likelihood the market value unit will still become desirable?
There’s an awful high percentage of bmr’s in the building that I believe is not the city’s housing norm. how did that get approved?