The Deal Of The Century: Three New Condos Under $270KJune 4, 2014
Three of the 22 new condos at 2200 Market Street – the building which rose on the site of the former Leticia’s/Thai House restaurants and has been dubbed “The Century” – are Below Market Rate (BMR) units which are now on the market and priced at $227,198 for the 849-square foot one-bedrooom and $266,987 for the two two-bedrooms which measure 873 square feet apiece.
The prices will not be bid up but potential buyers will have to qualify and likely enter a lottery for the chance to buy. And to qualify, potential buyers can have household incomes of up to 100 percent of the Area Median Income which is currently $67,950 a year for an individual or $77,700 for a couple.
Applications for the three units (#204, #206, and #306) are due by June 30 and the lottery is scheduled for July 8.
Comments from Plugged-In Readers
I think it’s ridiculous. They should all be market rate.
For those two qualifying buyers, what an amazing place to own.
I too think it’s ridiculous. They should all be below market rate! Plenty of market rate and above for the likes of you to choose from!
With that income, and that mortgage, you’re gonna had negative disposable income. This program is kind of a joke of itself.
Perfect for somebody with a couple hundred thousand in the bank yet a small yearly income. Excellent for trust fund kids!
When you apply, they look at all of the assets you own, including what is in your bank account. It’s not just based on your current income level.
I just don’t understand why San Francisco’s middle class is excluded from the affordable housing program… This false dichotomy of below-market-rate and market-rate housing is absolutely absurd as it completely ignores middle-income earners who make more than the arbitrary BMR income and the market-rate income, which today stands around six figures.
Those are cheap even for BMRs. The mortgage on $230k is around $1200 which is perfectly doable.
Could you rent it at market rate (Which would be around $3,000 a month) pocket the profit, and then use that to buy a home in another location, like the East Bay or Sac, and have 2 homes for the price of one, none of which you are paying for?
Under this program, you are not allowed to rent it out. You must use it as your primary residence and will be checked periodically. Also, if you sell. a few years down the road, you cannot sell it for a profit.
Any idea what the condo monthly fee is on top of that?
per the Mayor’s website:
Unit 204: $444
Unit 206: $447
Unit 306: $447
And that’s likely an artificial rate established by the developer. New condo owners often discover, once they take over control of their HOA, that the finances they were given by the developer are seriously underestimated.
I hope this is not o.t. but I really like the scale and massing of this building as well as the use of windows and balconies. This building does not scream for attention, does not pretend it is in Miami or Los Angeles, and has successfully adopted the existing neighborhood vernacular in a contemporary way.
Also, I agree completely with “R”‘s comments. For those of us low six figure professionals who are not in start-ups or tech the BMR guidelines are insulting.
“not in start-ups…”
The vast majority of start-up employees are flat broke.
Taxpayers, more than half of whom make less, should not be subsidizing “low six figure professionals”. Developers raise the price of market rate units to cover the cost of required BMR units (and other city requirements). So if there were no BMR program you might be able to afford a market rate unit.
I’m guessing that developers are selling their units at market rate anyway. Now, I agree that the BMR program causes fewer units to be built, thus raising the market price, but this nonsense about developers “passing on” the costs is not true. Units sell for the highest amount that the market will bear, regardless of whether or not a developer has to build BMR units.
I don’t think that the few bmrs sprinkled here and there are affecting the market much. If these were market rate they would still go for top $$$ since the current demand is very very far from being satisfied. Maybe this extra supply would lower prices by a few Ks. But getting the middle class back in the market? Maybe during the next downturn. That’s my bet.
What about “low six figure professionals” in start-ups? Why does it matter if they are in startups or not? I mean, come on people.
BMR units are for suckers. What is the point of owning a unit if you cannot profit? You might as well become a rent-control landlord.
It’s the lotto for rent controlled housing. Plus the housing is new. Seems like a pretty decent deal if you qualify.
Several years ago, I had a one year window where I was within the income requirements. If I had won the BMR lotto I would currently be living in SF at half at what it should really cost, and my income now is about 3x what I was making back then. I would be perfectly happy with a BMR unit in this type of situation.
I sold my BMR in 2013 after a 5 year hold for a $60,000 profit. Used it to buy a home in the east bay at market value.
Crass, simply crass.
That’s not crass, that’s exactly how the program should work! Moving someone from subsidized housing to market rate. What’s crass are the people who buy a BMR, move to market rate and keep the BMR as a pied a terre or for other family members or rent it out at market rates.
Making a profit off owning a subsidized housing unit because one was NOT able to afford a market rate unit is gaming the system. Just does not seem right and seems completely crass and self entitled.
The Mayor’s Office of Housing sets the sales price when a BMR goes on the market, not the owner. Would you care to offer details on how you made a $60K profit? If not, I’m calling shenanigans.
It could be because MOH increased the resale prices and price is set based on whatever is in effect at the time of the sale, not at the time of the original BMR purchase. Long story but our HOA ended up taking control of and selling BMRs through MOH that had originally been rented out for a while. We were able to sell at the then current BMR price (based on 90% AMI) as opposed the price from many years before (based on 60% AMI) which was indeed substantially lower. I would think that MOH wouldn’t allow this for someone who already owned the unit but it may be administratively easier to sell all units at a single set price because all of their financial approval requirements would be based on the price.
This is false. BMR owners have significant restrictions on re-selling the unit. The price is fixed. You can’t sell for $60,000 more after five years.
Yes, the Mayor’s office sets the resale price because it must be sold to a buyer who meets the MOH income guidelines (and has assets for a down payment, is pre qualified for a loan, etc.). The price is based on what a person making 100% of the area median income can afford. Not sure how the city makes that determination but the area median income the year I sold was higher than it was the year I purchased. The difference is “appreciation.” Plus I was paying down the loan for 5 years. Make sense?
also if you are a low to middle income person who might qualify for BMR, make sure to not save any money by living frugally and responsibly, because once you have accumulated some hard-earned savings over the years it could disqualify you for BMR through their “asset test” (it’s more advantageous to remain remain broke).
[From the Chronicle, which opposed Prop B]. “Opponents of the measure, including the Chamber of Commerce, construction unions and real estate interests…” That is all you need to about the opponents.
[Also from the Chronicle] “The measure will require voter approval for any new building on Port of San Francisco property to exceed existing height limits, which typically range from 40 to 80 feet but can be as low as zero and as high as 105 feet.” Seems perfectly reasonable – don’t propose a blot on the landscape and it won’t require voter approval.
High rises = big profits for developers, they are not the answer to SF’s affordability problems. For that there should be smaller, approx. 4-storey, low-cost developments in the burbs (Balboa Park for instance). Develop these “forgotten” areas into villages. Cheaper than high rises and much more family friendly.
Yes, because I’m sure that all neighborhoods like Balboa Park will welcome their neighborhoods being bulldozed and redeveloped as 4 story buildings.
I am not sure how your comment is relevant to the article? Also, you do realize that the ballot proposition only concerns buildings that are directly along the shoreline? It does not impact most of the proposed housing or commercial projects in the city. It does hamper the planned redevelopment of Pier 70 and the giant parking lot owned by the Giants. It is likely the parking lot will stay a parking lot for longer and Pier 70 will just be built at a lower density and probably with less affordable housing. I do not understand where you getting that just because housing developments involve lower height buildings they are cheaper? The most expensive residential properties in the city in Pacific Heights and Sea Cliff are built at very low densities and rise only about 2-3 stories.
Wow that’s really gross — like hiding money in the unlivable city. San Francisco is not a game show on free cable.
if you make low 6 figures, then you are at least smart enough to know you cant afford to buy in SF. why not look elsewhere in the bay area.? no one is going to subsidize anyone makin over 100k , nor should they
If I have my bearing correct, the units on the second floor (204 and 206) are on the Market Street side closest to Beck’s and directly above Project 22 (video arcade bar) proposed by Blackbird owners. P22 hasn’t received CU permit yet but hopefully will because it will be a great companion to Bandidos which is the Mexican restaurant in the other part of the ground floor space. I guess being on the second floor is why these units were chosen for the BMR program.
Do you have to be a first time home buyer?
You DO NOT have to be a first time home buyer. As long as you haven’t owned any homes within the past 3 years. That information will be verified by the city when you submit your FULL Tax Returns for the past 3 years.
SF’s BMR pgrm is a joke. Rent control for home owners. Plus, the city gets way up your ass about every detail of your life. Can’t rent it out for profit. Can’t sell later for profit.
But there’s gotta be a way to game the system. How about, your income qualifies you. You get in. Then magically you earn a lot more bread a year or two later. Or, if you’re single, can you get a 2 BR, live in 1 and rent the other room? (How will they know, if you’re still living there?) That roomie will cover the monthly nut.
There’s gotta be a way to game the system. Any ideas?
I am not so sure. Imagine you’re a market rate owner paying your huge mortgage + HOA and taxes. If you see the BMR underachiever game the system I’d bet he’d be reported very quickly.
Plus BMRs are a bit like a pain in the HOA’s tush. The HOA assessments are very expensive for BMR owners, because they get no discount whatsoever. 5K in special assessment for them is not the same as 5K for a market rate owner.
There’s a simple term for these.. BMR’s. And the reason why the property has only 3 units like this is probably because of some loan/financing/legal or other cause. Remember a BMR will never be able to be resold at an increase. Even if it triples in value, the owner can never sell it for this. As a real estate agent, I can tell you this is NOT a deal. There are so many other programs/options.
Some BMRs can be resold at market price after 30 years of ownership.
Even if it can not be resold, can it be inherited?
Even if it can not be inherited, people can live in it for the lifetime. It seems to 10 times better than a rent controlled apartment.
Once these are purchased, no one really checks to see if they are rented out. The rules only say the are “intended” as primary residences. The city would have to go to court to force a sale and they may not even be able to do it. Only the HOA may really care and even then it depends on whether the tenants are any trouble. The bottom line is they own the unit and will be able to do with it what they like- they just can’t sell it outside of the BMR program. My understanding is the MOH can allow inheritance but the heir would need permission to change the deed. I think these units are a trap for a lot of people.
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