With 2,806 applications for Bridge Housing’s new 60-unit below market rate building at 474 Natoma Street off Sixth, the Natoma Street Family Apartments, 98 percent of the applicants will need to keep looking for an affordable new home in San Francisco.
Targeting families with incomes of between 40 and 60 percent of the Area Median Income, $42,000 to $63,000 for a family of four, rents for the 60 apartments on Natoma will range from $700 for a studio to $1,600 a month for a three-bedroom.
The lucky two percent of qualifying applicants selected by a lottery will begin moving into the South of Market building in late January.
I’m surprised that there’s *only* 2800 applicants for brand new apartments at a bargain price.
The oversubscription should send a signal that the subsidy doesn’t need to be nearly as generous to be successful.
The question we all need to ask is out of these 2,806 how many are truly at the BMR level. I say this as there has been a spate of people rigging their paperwork to get these desired places as the developers do not dig deep enough into backgrounds. Personally I am against mixing the BMR equation in with the full price general development and applaud those developers who pay to exit or in the cases of Market Street find and develop a lot down the street to house BMR candidates.
What’s really messed up is that you’re considered “lucky” to get an apartment just off 6th St?
Looks like the lucky 2% are almost as lucky as the 1% OWS are so upset about.
Almost.
“The oversubscription should send a signal that the subsidy doesn’t need to be nearly as generous to be successful.”
Aren’t you missing the point? BMR concessions are supposed to offset the damage to affordable housing that the luxuryloft craze is causing. That demand for BMR housing swamps the demand for luxurylofts should set off some siren bells, but no, lets keep building condolofts for hedgefund speculators and foreign investors.
Most developers don’t intentionally build “Luxury” condos. However, with the high cost of land, the difficult approval process and exaction fees, union labor and the cost of materials, developments costs are already $500-600 per square feet. Then add holding costs, marketing, brokerage and a decent profit taking into account the considerable risk of developing anything in San Francisco. No wonder units are being sold at $1000 per square feet. The subsidy for affordable (BMR) units is estimated to cost $100-150 per square feet on the market rate units.
People use the word “luxury” any more to define ANY kind of housing that they, personally, cannot afford. The word has become a dirty word. A word, by many, has come to define everything they think is wrong with San Francisco.
MSTBLD has it just about right. Costs will keep rising. Nothing will ever get “affordable” (not my definition), because of our small land mass and our desirability.
BMR’s are hardly the answer. Moving to somewhere you can afford is the answer.
“The question we all need to ask is out of these 2,806 how many are truly at the BMR level. I say this as there has been a spate of people rigging their paperwork to get these desired places as the developers do not dig deep enough into backgrounds.”
Not sure to what extent it’s a spate or a perpetual problem. Here is a link to some stuff I previously wrote about BMR experiences:
https://socketsite.com/archives/2013/10/3000_a_month_for_the_venn_on_market_1000_a_month_for_so.html#c536478
Needless to say, my confidence in the BMR system is not super high.
“…damage to affordable housing that the luxuryloft craze is causing.”
Is this actually the case? Many people seem to assume that building more luxury housing will make other housing less affordable, but that’s a very complicated question that even an economist would have trouble answering with certainty, let alone an amateur commenter.
anon:
It’s actually a simple question, but it’s beyond the level of Econ 1 and 2 that most people took, and it is ignored in prevailing neo-classical texts because it breaks the little models that their theory rests on.
Calling it complicated is a good way of not having to try to understand something that might not easily conform to one’s belief system (and neo-classical economics are assuredly a belief system, cause it sure aint no science).
When you add high-price housing to the market mix, you raise the median cost, average cost, and price per sq foot, and these become target rates for existing sellers and lettors, and for new development seeking to attain even higher rates.
Luxury housing is only fungible with other luxury housing. Building expensive units in a poor neighborhood raises the cost of the lower end housing, and as more wealthy people buy the expensive units, those prices go up, too. The feedback loop only ends when the bubble economy which drives luxury building in poor neighborhoods finally pops.
This has been true of real estate for hundreds of years. It’s not complicated, but it isn’t as simplistic as the childish resort to the phantom “inviolable law” of supply and demand. Whenever anyone starts screaming “violation of the law of supply and demand!”, you can bet the house that that person is ripping someone else off.
Don’t agree two beers.
All new housing built in SF is essentially “high cost”. Where is it not?
We can’t build “low cost” housing because we’re not a low cost city, period.
Go to Vegas, or Phoenix or Dallas, etc. for that.
BMR housing is still high cost. Artificially lowering the cost of it (the rent) is simply playing with the market and solves nothing. Not to mention all the people here in SF who game the system to get into BMR housing.
The number of “gamers” you worry about are dwarfed by the number of units bought by hedge-funds, REI trusts, Chinese nationals, and other speculators on the bubble bandwagon. Let’s see what happens to the new-unit market if you limit it to owner-occupiers.
As far as “playing with the market,” I=if you want to get the gummint out of the market, let’s eliminate the mortgage interest and depreciation deductions, lower FHA insurance limits, gut government flood insurance, revoke Prop 13, wipe out the twitter-style tax breaks, and end all the other credits and tax breaks that prop you guys up.
It’s always government intervention in the free market when something might interfere with the escalating prices you guys benefit from, but not a peep from you guys about the myriad government mechanisms that put the “propped up” into property.
Great comment two beers. SF is the Manhattan of the west, and will only grow less accessible.
But how about some kudos for the building here: Regardless of the par-boiled economic theories proffered on this site, there is now a handsome concrete building added to the city’s building stock!
“The Manhattan of the West” it may be in terms of being a compact dense area but there is a much larger city 450 miles south that has long been considered the West Coast Capitol since about 1950. I think we are more like Boston than a giant world capitol like NYC.
The reason to compare us to Manhattan is because we are becoming an urban Disneyland for the rich .
No^. San Francisco is the practical capital of a very large, very powerful region. Los Angeles is also its practical regional capital.
My favorite Christopher Hitchens article was of his astonishment at the provincial civic narcissism of San Francisco with inhabitants comparing it to London , NYC and Paris all the while closing their eyes to the much larger more important elephant in the room……Los Angeles. L.A. Is so enormous with so much creative capital that it does not need to tell itself it is important . San Francisco would look much better if it just let its charms speak for itself.
There is a more “city like” feel to SF that sees people make that mistake. But dismissing LA is nonsense. So is not acknowledgizing SF’s, and when I say SF I mean it as the cultural capital of the Bay Area, Central California, Northern California, the Sierras, and Southern Oregon, incredible ability to punch over its weight class on the world stage for 20 years or so now.
“The reason to compare us to Manhattan is because we are becoming an urban Disneyland for the rich”
Thx for clarifying Nonaanon: That’s what I meant by the comparison.
They are also both bound by water, and much denser than their tepid, surrounding regions that would be completely forgettable if not for the Main Event (exempting key moments in Brooklyn & Oakland).
How’s that for provincial civic narcissism!
Manhattan is a cautionary tale for those clever supply/demand theorists: they’ve been building like gangbusters there – rezi towers popping up like mushrooms, and prices aren’t dropping. They’ve never been higher.
rubber_chicken – so what’s the solution, then? Should we not build at all?
“Let’s see what happens to the new-unit market if you limit it to owner-occupiers.”
You can see the effect of limiting condo’s to owner-occupiers by looking at sales in developments that are part of the MOH Second Loan program. These units can be bought by anyone (no income limits) but they all have CC&R’s that limit renting them out. People with certain incomes can qualify for the 2nd loans but you do not need to qualify for the 2nd loan in order to buy. Techincally the city can substitute a qualified buyer in whenever a unit sells, but I haven’t seen it actually happen.
The result is that the units go for roughly 80% of the cost of similar places in the neighborhood.
Thanks for that info, Rillion. It’s fascinating that the very small segment of the market with a required-occupancy clause already has prices slashed 20%. As a thought experiment, think what the effect would be if the clause applied to the _entire_ market.
I’ve read several estimates that speculators account for about 40% of the market. It’s probably not a stretch to say that, shortly on the heels of the mother of all housing bubbles, we’re in a new mother of all housing bubbles
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