One percent assault the waterfront

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Condos for the one percent: the 8 Washington project

While the 99 percent are fighting to hold onto a crowded encampment at Justin Herman Plaza, two new condo projects are moving along in San Francisco that would give the one percent specatular views from their mulitmillion-dollar homes on the waterfront.

And as much as OccupySF has been a challenge for Mayor Ed Lee, his administration's response to giving choice parcels to some of the wealthiest people in the country will test his housing policy and his political independence.

The Port Commission is holding preliminary meetings on the 8 Washington project, which is about as direct a conflict with the city's General Plan and housing needs as anyone could ever imagine. The developer wants to build 165 of the most expensive condos in the city's history, aimed entirely at the very, very rich. Many will no doubt be used as pieds a terre for people who will live in San Francisco only a few weeks of the year. The project will do nothing to address the desperate need for affordable housing and housing for the middle class.

Rose Pak, the Chinatown business consultant who was central to Lee's campaign, told me a few months ago that she supports the project. Marcia Smolens, one of the city's top lobbyists, is working on it. There will be big money and clout pushing this -- even though there is no rational reason why San Francisco should ever approve it.

And while BeyondChron claims that gentrifcation and overdevelopment isn't so much of a problem these days because "financing ... development is more difficult than ever," the developers don't seem to have noticed. A Nov. 11 story in the San Francisco Business Times (you can only get a few paragraphs if you don't subscribe) explains that "developers are starting to plan new projects again after more than three years of inactivity" --and one of the biggest is a 284-foot, 160 unit residental highrise at 75 Howard Street. There's a parking garage now on the site, which would be demolished to build condos that one expert told the BizTimes would sell for 1,000 a square foot.

You got that? A 1,000 square-foot one-bedroom unit would go for $1 million.

So we have two major waterfront projects -- both of them high-end luxury condos, both of which would have just lovely views of the OccupySF encampment -- moving forward while the barricades go up and the mayor decides when to evict the protesters. A classic battle for the soul of the city. Who's side will Ed Lee be on?

Comments

I'm surprised by all the people who support these condos making comments on this article. SF has become a very financially segregated city, and an incredibly expensive place to live, LETS BRING BACK THE MIDDLE CLASS! its haaaard to find a decent spot to live unless you are a millionaire.

Posted by Guest on Nov. 15, 2011 @ 5:39 pm

Look, if you're not a millionaire you're not going to live in a waterfront condo in downtown San Francisco. Deal with it. It's called life.

Posted by District 3 Vet on Nov. 15, 2011 @ 11:00 pm

I'm not sure most of you could be more myopic or more openly envious. Particularly you Tim. Have you ever met a market rate housing project in sf that you didn't feel was going to ruin the soul of the city? This is the best use of the land, which houses surface parking lots and one of the most expensive fitness clubs in San francisco. Is the sfbg really taking up the causes of the telegraph hill dwellers? The middle class will never be housed on this site, any protests of this have no idea how development works. There is no proposal for a park on this site. If you're going to oppose based on that idea, might as well oppose the plans based on the idea that the site would be best used as a grove for money trees

Posted by Guest on Nov. 15, 2011 @ 9:05 pm

75 Howard is currently the site of a multi-story parking garage, at least 7 floors, NOT a surface parking lot-- in a city with an incredible lack of available parking. The picture you keep trying to paint is very different from reality. If your argument is so strong, why do you feel the need for hyperbole and mendacity?

Posted by SentPacking on Nov. 16, 2011 @ 6:17 am

Are you just that bad with reading comprehension? The entire article is about 8 washington
There's one mention of the Howard building which is not a surface
Lot. 8 Washington has a surface parking lot and an exclusive health club currently get with it!

Posted by Guest on Nov. 16, 2011 @ 6:50 pm

How slanted can you get? You fail to mention that as required by law, the developer will reserve a % of units for below market residents. In addition to those families, The City as a whole benefits from increased tax base. Instead of this lot being used by only an exclusive few as it is today, many more will benefit from a more productive use.

And yes, I am part of the "99%".

Posted by Guest on Nov. 15, 2011 @ 9:24 pm

..as noted above, the City gets jacked on the tax revenues. These puff projects are not worth the pittance we gain from them.

Posted by Aragorn on Nov. 15, 2011 @ 9:51 pm

You didn't own the land - therefore you don't have a right to gain anything from either its sale or its development.

A deep part of of the current malaise impacting this country is people like you - people who feel entitled to "gain" something despite doing nothing. When riches and success don't magically fall into your laps you look for others to blame, not recognizing that the problem is not the 1% - it's YOU.

Posted by guest on Nov. 15, 2011 @ 10:09 pm

No one has the right to own it and selfishly profit from it.

Even legally, all of it previously of it was, and much still is, the property of the City.

Our elected officials therefore have no right or legitimate business tossing it for a song to private Wall Street developers so that the latter can milk it for their own greedy benefit to the detriment of all the rest of us.

You are on the wrong side of history 'guest'.

Posted by Aragorn on Nov. 15, 2011 @ 11:53 pm

Most land in the city is private. and even where it is public land, like port property, the city has an obligation to get the maximum return on that asset. Property is subject to market forces and anyone is free to bid for the land.

Posted by Guest on Nov. 16, 2011 @ 7:10 am

And never should have been made private in the first place. It is time to annex all of it back.

Posted by Eric Brooks on Nov. 16, 2011 @ 12:46 pm

is theft...

Posted by Eric Brooks on Nov. 16, 2011 @ 10:15 pm

Wth is a puff project ? The development will bring in 165 new additions to the city tax roll for perpetuity. Additionally there will be below market rate dwellings as part of the project. This is really the most knee jerk NIMBYism that I've seen on this site. I suppose I shouldn't be surprised that Tim Redmond does Aaron Peskins bidding.

Posted by Guest on Nov. 15, 2011 @ 10:24 pm

Yeah...Aaron Peskin, a true Progressive hero. You would never catch him living in a place that only millionaires could afford...oh...wait...never mind.

Posted by District 3 Vet on Nov. 15, 2011 @ 11:05 pm

And a puff project is one which creates profit on paper for large investors while bringing little or no benefit to actual residents, workers, or our City budget.

Stadiums, are a good example. As are market rate condos, which we already have coming out of our ears; when we instead need tens of thousands of units of affordable housing.

Posted by Eric Brooks on Nov. 16, 2011 @ 12:13 am

For a development like this, you have a million or so of annual property tax.

You have hundreds of jobs constructing it, and tens of jobs maintaining it.

Small businesses will grow in the immediate area: cafes, florists, dry cleaning places and high-end stores too.

Shops and restaurants in the city will have 200 new, affluent residents spending money there.

And 15 BMR untis will be built somewhere (not there, most likely, as that would make little sense).

The money isn't there to build "tens of thousands of affordable homes". But outside money can fund enough new MR housing to take the pressure off the existing stock, which will make existing housing relatively cheaper.

Posted by Guest on Nov. 16, 2011 @ 7:08 am

What you are leaving out of your equations is that as thousands of wealthy immigrants move into the city, they drive housing costs up drastically and push both legal and illegal gentrification, which shoves thousands of -lower- income residents -out- of the city.

Those wealthier immigrants are often simply using San Francisco as a bedroom community for jobs in places like Silicon Valley, meaning that a large portion of what those new residents spend every day, is spent outside of the city. And wealthier residents also put a lot of their money into luxury items and financial investments and speculation, all of which provide far less value to the local economy than the spending of working class residents, who generally spend almost all of what they make in the local economy.

So it is far more important, to retain the middle and working class residents that we have, than it is to keep building money sucking projects for elite immigrants who spend less of their money in San Francisco.

Finally, what you are describing is an endless growth model of development. The planet and our local community cannot handle endless growth. We need to radically reform San Francisco such that it becomes a stable, and environmentally sustainable infrastructure which is not based on incredibly destructive endless growth.

Posted by Eric Brooks on Nov. 16, 2011 @ 11:53 am

to housing prices if they only buy newly-built condo's. The same situation would be the case if those condo's hadn't been built and they never came.

But of course, some of those condo's will be sold to people who would otherwise have bought existing stock. So new build does help to reduce prices by increasing supply. It also means less Ellis'ing of buildings. Sadly, we can't build enough to bring the prices down a lot though.

And don't knock Silicon Valley. If that were in another part of the country, it's very possible the entire Bay Area would be much poorer. You'd have lower home prices but so what? There'd be hundreds of thousands less well-paid jobs.

Posted by Guest on Nov. 16, 2011 @ 12:21 pm

What you are claiming is simply false. The effect of those new market rate housing mega projects is to continuously drive housing costs up.

Posted by Eric Brooks on Nov. 16, 2011 @ 12:50 pm

So why does the law of supply and demand work in such an inverse mode??

Posted by District 3 Vet on Nov. 16, 2011 @ 1:09 pm

1) Direct demolition of lower cost housing directly displacing those residents out of the city and raising housing costs

2) Gradually encroaching demolition of thousands of units of rent control housing

3) Infusions of new wealthy immigrants rapidly filling up the new housing, making any gains of increased stock evaporate

4) Artificially withholding tens of thousands of units vacant, to create a false supply reduction

5) Monopolization (i.e. the Lembi family) and collusion

Posted by Eric Brooks on Nov. 16, 2011 @ 1:21 pm

Thanks for the clarification..

My bad, on points 1 and 2 I missed the part about the developers of 8 Washington planning to demolish lower cost and rent controlled units. I totally missed it.

On point 3 I had falsely assumed that at least some of the people moving into 8 Washington would either move from elsewhere in the city or they would move to 8 Wash instead of another market rate option in the city. I wasn't aware that the 165 tenants would not occupy SF housing at all if not for 8 Wash.

Sorry, but point 4 makes no sense whatsoever and 5 is really borderline.

Posted by District 3 Vet on Nov. 16, 2011 @ 9:46 pm

How is the addition of over 165 new payee's into the cities tax roles for the life of the project little or no benefit?
Homes for people? no benefit? Homes which might have otherwise been poached from existing stock? no benefit?

I have a question for all you people blabbing about how we need to build tens of thousands of units of affordable - where is this supposed to happen? I cant recall a single time in my twelve years here where the guardian backed a single large housing proposal. So lets here where we build these tens of thousands of units in SF and how they will get built in a city where all it takes to stop development cold is a single complaining neighbor.

Posted by bob on Nov. 16, 2011 @ 6:32 am

This units will have unobstructed views of the SF bay. Forever.

There is very little real estate in SF where this is possible, making these units far, far more valuable than some pedestrian $1.5 milllion 1000 sq. ft. SOMA loft. An unobstructed eastern exposure (SF sunrises are far more beautiful than its sunsets), looking over the bay, Treasure Island and east bay hills, and a short walk to the Ferry Building where the 1%ers have world class restaurants and high-end stores at their command. This real estate is so valuable that there are few other places ON EARTH that would be as desirable by the elite of the elites.

This is the type of unit you put in your investment portfolio and let your kids, grandkids, and business associates use it as the untimate party unit. When America's Cup is in town, these units will rent for over $20-$40,000 A WEEK, more than most of us pay for housing over an entire year.

I'll guess the top units will fetch closer to $5,000 a square foot, but we don't have to guess. Doesn't the Assessor's office have the purchase price data of units neat the waterfront over the last 20 years? By reviewing the Assessor data for units that have views of the bay sold in the area roughly from Montgomery/Battery/2nd St. Sts. eastward to the waterfront, with Pier 39 and Pier 40 as the north and southern boundaries, we would have a much clearer picture of the values of these units.

Assessor Ting is always talking about how city finances are negatively impacted by housing units owned by out-of-town speculators and corporations because Prop 13 keeps the property values low, so maybe he can help pull this information together for review. It should be a fairly simple search query to get this information from the city's property tax databases. The data will also show if the units are owned by full-time residents (a 'homeowner's exemption' will be noted), and a list of the names of the corporations, investment partnerships, and wealthy families that own these munti-million dollar properties.

At a minimum, this project is a great example of how the 1%ers live in an entirely different world from the rest of us. San Francisco is their bitch, while the rest of us are left to bitching about it on chatboards. The same story plays out across the globe on a daily basis, where those who own the most valuable land control the world.

Posted by Guest on Nov. 16, 2011 @ 9:19 am

expect to see the upper floor units in particular to exceed that. And a grand per sf isn't that much when you compare SF to comparable world-class cities that are space-constrained e.g. Manhattan, London, Hong Kong, Tokyo etc.

One wealthy person buying one of these units will provide the City with more revenue than a dozen regular residents. If we are serious about wishing to fund social services and public sector benefits, then we need to compete with other cities for these super-rich folks.

You may not like them, but you need them a lot more than they need you.

Posted by Guest on Nov. 16, 2011 @ 10:13 am

Brown is the mayor, and yes, he is taking the City to 2 million permanent residents housed in condo towers. And guess who's controlling the pay to play? This is the name of the game in SF--at least as long as Willie is here.

Posted by Charley_sf on Nov. 16, 2011 @ 9:52 am

Developers like those seeking to build 8 Washington game the system and minimize those 'inclusionary housing' requirements; and as Tim points out, we need 60% affordable housing, not 15-20%, to make this city economically sustainable.

The current system is a recipe for a dismally failed city, which turns into a condoized big box strip mall, with a proto Disney Land on our former parks and waterfronts.

Posted by Eric Brooks on Nov. 16, 2011 @ 1:03 pm

As the former administrator for the City's inclusionary housing ordinance, I wanted to clarify this. The planning code says that the Developer must pay a fee for affordable housing- or he/she also has the choice to build the units on-site or off-site. If the the units are build onsite, the obligation is 15%, if they are built off-site or if the pay the in-lieu fee, it's 20%. At this pricepoint, it is very unlikely that the developer will build the units onsite, because paying the fee, even at the greater 20% would be cheaper. If the units are built off-site, then the code says that they must be built within a 1 mile radius of the project. I haven't looked up up, but this would probably include Treasure Island, I'm guessing. If they chose to pay the fee, then it would go into the fund at the Mayor's Office of Housing and they would put it into non-profit developed affordable housing projects. MOH is never the sole financer of these projects- they need much more subsidy; usually State or Federal (tax credit) or other monies. Because land costs are the largest cost in a project, more affordable housing gets build in neighborhoods with lower land costs (not the waterfront!). As construction has significantly slowed down since 2007, MOH sorely needs money for affordable housing construction, as do the non-profit developers who survive on development fees. A project like 8 Washington would generate millions of dollars that are sorely needed. I am not advocating for the project, I'm just saying, it's more complicated and nuanced than that the project does nothing for affordable housing. Under the law in San Francisco, it must.

Posted by Myrna on Nov. 16, 2011 @ 11:08 am

Thanks Myrna, I always wondered how the ordinance worked. So this might be 'only' a few million. Obviously no one project will solve the shortage by itself. I think of this one and Redmond's opposition to the larger 555 Washington where we subsequently lost $13 million for affordable housing. I do wish that there was a way to get Redmond in a room with the families that could have benefited from this housing so that he could explain to them why it was more important for him to block a development for wealthy people. I also wonder how many families need to be denied affordable housing so that Redmond can feel good about getting up on his Progressive soap box. 20? 30? 100???

Posted by District 3 Vet on Nov. 16, 2011 @ 11:39 am

You should ad some wizards and goblins, too.
Then you can invite yourself.
Because you're a Troll.

Posted by Guest on Nov. 16, 2011 @ 12:44 pm

housing on prime waterfront sites as you note. And it might impact the marketability of high-end condo's if there is an "on-site ghetto" in their midst.

There is however a huge amount of cheap, under-utilized waterfront property in SF. It's the entire area from Mission Bay to CandleStick. If we really wanted affordable housing, why not build both market-rate and BMR towers there? I suspect you could add 100,000 units in that corridor which would have far more impact for affordable housing than all this social engineering.

But of course the NIMBY's won't stand for it. They have too much vested in the current hosuing shortage.

Posted by Guest on Nov. 16, 2011 @ 11:18 am

Well, "guest", for years the opponents of affordable housing have used the argument that BMR units bring down property values. In fact, the opposite is the case. The zip codes and census tracts that had the greatest concentration of BMR units being built during the 90's and early 2000's saw the greatest percentage increases in property values in SF - this was South of Market, South Beach and China Basin. Despite the developers complaining about it, buyers in San Francisco have accepted this as a fact of life - its been 10 years since this has been in the code and 20+ years since the Planning Commission started adding housing requirements to planning approvals. The folks who buy BMRs are hardly "ghetto", in fact, even at the lower price, it's still homeownership and still out of reach for many, many San Franciscans.
Because affordable housing development is non-profit developer driven, San Francisco doesn't have an effective way to make its housing plan promises into a reality that is equitable in terms of more desirable land distribution. Other places like New York have been able to be much more proactive and effective in integrating affordable housing into the fabric of the City.

Posted by Myrna on Nov. 16, 2011 @ 11:42 am

Myrna writes:

"The zip codes and census tracts that had the greatest concentration of BMR units being built during the 90's and early 2000's saw the greatest percentage increases in property values in SF - this was South of Market, South Beach and China Basin. "

Well, of course. New construction will take place in the most desirable areas! That doesn't mean having poor people there increases home values!

But you're correct that there aren't the funds to build affordable housing because ir needs to be subsidized. Same with anthing that is artificially made too cheap.

And the city's dire fiscal situation merely makes that situation worse. So it's either market-rate housing or none.

Posted by Guest on Nov. 16, 2011 @ 12:17 pm

The reality is that, even if it's private property, the city has the right to control land use. That's well established. And remember: If 20 percent of new housing money goes for affordable housing, that means that 80 percent of all new housing is for the very rich. There's no reason that the city couldn't create a very reasonable policy and say that all land use decisons on housing are going to follow the general plan -- that is, 60 percent of all new housing will be BMR. If we're going to plan and zone for 2000 new housing units in the next five years, 1200 of them must be BMR, which means we'll only allow 800 market-rate units. And until the BMR catches up with the high-end condos, no more high-end condos will be built.

Developers can make a buttload of money building this luxury stuff in the city, and if you tell them that they can't build any more until the make a serious effort (NOT a 20 percent effort) to help us with our affordable housing needs, that until then, the till is shut off, you're going to see some very creative proposals on the table.

The affordable housing Myrna is talking about doesn't even make a dent in the city's needs. We can decide as a community that we want to be a city that has room for working-class people (like the hotel workers who make the tourist trade possible and can't afford to live in their own city, or the teachers and nurses and ... you get the point) or we can decide to be a city for the rich. Those are choices, policy choices.

Posted by tim on Nov. 16, 2011 @ 12:14 pm

no development would take place. A 15%-20% requirement is a compromize between what the developers would do if they could - build no BMR - and what is achieveable.

The city can control land use but only up to a point. If they over-regulate it then you get the same situation as if you over-regulate anything else. Developers just go elsewhere and all those tax dollars get lost.

We should be grateful they want to build here. Go visit Detroit and ask them if they#d love a project like this.

Posted by Guest on Nov. 16, 2011 @ 1:00 pm

Developers are making profits hand over fist. Upping the BMR housing requirement to 60% would amount to nothing more than a higher tax on those massive profits.

And if those Wall Street financiers try to game the system by refusing to build, we can simply eminent domain the damned property and build affordable housing ourselves.

Posted by Eric Brooks on Nov. 16, 2011 @ 1:53 pm

of total state ownership, because at this point even Cuba is legalizing the ownership and sale of private property.

Eric your fevered dreams and ranting are really nothing more than the stuff of nightmares.

Posted by guest on Nov. 19, 2011 @ 4:40 pm

God, how is it possible to be so stupid.

Posted by Patrick Monk. RN on Nov. 19, 2011 @ 5:27 pm

Nope. I'm perfectly ok with individuals, families, and nonprofit collectives owning the actual lot and buildings in which they personally live (which is what Cuba is now allowing).

I'm -not- ok with individuals or corporations owning the land and buildings in which -other- people live; especially when they are doing so to make a profit.

Posted by Eric Brooks on Nov. 19, 2011 @ 6:38 pm

You do realize just how far your own head is up your ass right?
You propose things that would make Mao ZeDong blush. Were you the retard who spray painted "smash the state" in hipster christ superstars office before he quit?

Posted by John Galt on Nov. 19, 2011 @ 7:04 pm

Because the entire city is run by condo or coop boards in which owners are shareholders. And they're not run as non-profits either. And a lot of them don't live there full time either.

Posted by guest on Nov. 20, 2011 @ 1:23 pm

and so would fall under the allowable criteria that I described.

Posted by Eruc Brooks on Nov. 20, 2011 @ 1:47 pm

and "non-profit" to mean just that. Condo and Coop boards in NYC are not non-profits and many people live in those residences part-time.

Posted by guest on Nov. 20, 2011 @ 2:28 pm

You know exactly what I mean asshole, and you are simply raising a red herring bullshit rebuttal that has nothing to do with what we are talking about. The purpose of those coops and condos are for people to live in, not to make profit.

It is when land and building owners financially accumulate land and buildings (simply because they can buy it) solely as a way to make profit off of people, that property essentially becomes theft of other people's money through sales or ongoing rent.

Posted by Eric Brooks on Nov. 20, 2011 @ 4:14 pm

Basically you're talking about absentee owners. You know - you don't need to write paragraph after paragraph filled with cliches when you're saying is that you oppose absentee ownership.

Nothing wrong with saying that. I don't know how easy it is to prohibit (under our current capitalist system it's impossible) but there is probably merit to your argument.

Posted by guest on Nov. 20, 2011 @ 5:12 pm

Than arguing that the rich should charge whatever the hell they wish to the lower classes for housing, just because they have the advantage of 'owning' the land, when in a fair society, the rich would not be -able- to own the land and selfishly profit from it in that way.

And for the record, calling someone an asshole because they are behaving as one, is stating the truth, not an act of aggression.

Posted by Eric Brooks on Nov. 20, 2011 @ 5:28 pm

You're omnipotent. Infallible. The great and powerful Eric Brooks.

Posted by guest on Nov. 20, 2011 @ 8:16 pm

you've lost.

You were a joke already. Now you're a bad joke.

Posted by Aragorn on Nov. 20, 2011 @ 9:19 pm

Using a non sequitor personal attack.

I am a bad joke.

Posted by Aragorn on Nov. 20, 2011 @ 11:12 pm

It is getting sooo boooring reading the crap incessantly regurgitated by these TeaParty apologist trolls for the 'staus quo' who have no understanding of the political, economic, social reality of our town. But I guess that's one of the costs of what little freedom remains, even dogs get to shit and have their 15 second day.

Posted by Patrick Monk. RN on Nov. 16, 2011 @ 4:00 pm