Median Price of a Bernal Home Jumps 57% Since 2013

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According to the latest market report from Paragon Real Estate, the median price of a home in Bernal Heights now stands at $1.4 million. Our friends at CurbedSF wrote up the summary:

Although neighborhoods like Bayview, Bernal Heights, and Glen Park are considered to be among the more affordable in the city, they have all seen tremendous appreciation over the past two years. Back in April 2013, the median price for a Bayview house was just $447,000. It grew by 7.4 percent to hit $480,000 in 2014 and then soared 31.2 percent to its current $630,000. Bernal, of course, has been widely talked about as a hot neighborhood, and its prices reflect that reputation. In April 2013, you could get a median Bernal home for just $880,000. That number grew by 31.2 percent to $1.154 million in 2014 and has now grown another 19.6 percent to hit $1.38 million this year. Glen Park has seen similar trends, growing from $1.205 million in 2013 to $1.835 million now.

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What’s the cause of the this dizzying price appreciation? Even a high school student can explain it to you: Mr. Supply and Mr. Demand aren’t moving in parallel, and they haven’t moved in parallel for a long time. There are a whole lot of people who want a place to live in San Francisco, but there are very few places available for them to buy. Curbed looks at the issue citywide:

As always, low inventory is part of the issue in San Francisco. New listings this spring barely topped 600 per month, compared with about 700 per month last year and 800 two years ago. And while 3,454 new-construction housing units were completed in 2014, the most in the past 20 years according to Paragon’s tally of Planning Department figures, it still isn’t enough in a city where the economy is booming and new residents are flooding into town.

Bernal seems to have had a particularly low number of listings of late. According to this March 2015 summary by realtor and neighbor Danielle Lazier, there were just 9 properties listed for sale in Bernal in March, which represented a 53% decrease from the year before. And when houses do come on the market in Bernal, they tend to sell with neck-straining quickness. Neighbor Danielle’s data says that in March, Bernal homes sold after an average of just 15 days on the market, or 50% faster than a year before.

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CHARTS: Paragon Real Estate and SFHotlist

David Campos Introduces Proposal to Make Mission Housing Even More Expensive, Homeowners and Landlords Even More Wealthy

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As you probably know, Bernal neighbor David Campos represents District 9 on the San Francisco Board of Supervisors. Yesterday, he introduced a proposed ordinance that would deliver a windfall to Mission District homeowners and provide new incentives for Mission District landlords to evict existing tenants.

Supervisor Campos calls his proposal a “Temporary Moratorium on Market Rate Development,” and he says it is intended to halt displacement and maintain diversity in the Mission. In reality, it will almost certainly do the opposite. The San Francisco Business Times broke the story about the Campos proposal:

Voters will be asked in November whether to halt market-rate housing construction in the Mission District if neighborhood activists have their way, the Business Times has learned.

Edwin Lindo of the San Francisco Latino Democratic Club said Monday that a coalition of affordable housing and progressive groups soon will submit a potential ballot measure to the city attorney that would delay market-rate housing projects in the Mission for up to 18 months.

They would then attempt to collect the roughly 9,400 signatures needed to qualify the measure for the ballot.

A draft of the ballot measure, obtained through a public records request by a neighborhood activist, showed that the moratorium would apply to projects larger than 20 units. The moratorium would apply to the entire neighborhood, not just the 24th Street area on the south side of the neighborhood considered a Latino cultural district, as had been previously floated by Supervisor David Campos.

“Our goal is not to stop all development. Our goal is to stop incredibly large development that focus exclusively on market-rate housing,” Lindo said. “We need a pause to ensure that if developers are going to build in our city they’re going to figure out a way to build affordable housing, even if that could be cutting into their 15 to 20 percent profit margins.”

Many economists, urban policy groups like SPUR, and policymakers like Mayor Ed Lee and Scott Wiener have all said this kind of strategy will exacerbate the neighborhood’s problems. With a shriveling pool public dollars available to build affordable housing, the city has looked toward more market-rate development to pay for housing for low-income residents through inclusionary laws and fees.

The SF Chronicle adds the measure “would implement a 45-day moratorium on planning approvals, demolitions and building permits for multifamily residential developments in a 1½-square-mile area. It could be extended for up to two years under state law.”

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You don’t have to be an economist, or an urban policy wonk, or or a government policymaker to envision why this proposal from Supervisor Campos and progressive allies will put lots and lots of money in the pockets of existing Mission District property-owners. All you have to do is take a moment to consider this graph:

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The housing gap graph (which comes from this video) shows that San Francisco’s population has been growing steadily for several decades, but our supply of housing has failed to keep pace. The housing deficit has grown more extreme with each passing year, which has made housing more expensive for San Franciscans at all income levels, across the board. This effect is called supply and demand, and supply and demand is sort of like the law of gravity, in that even if you don’t much like it, you still can’t realistically hope escape it.

The local economy is booming and San Francisco’s population is growing rapidly, so the only real way to make housing more affordable for everyone is to increase the overall supply. That’s a slow and imperfect process, to be sure, but if your goal is to reduce displacement, stabilize prices, and create opportunities for all San Franciscans across the board, there’s really no viable alternative. Building more affordable housing is something we absolutely must do, but increasing the overall housing supply and increasing the amount of affordable housing is not an either/or proposition. Indeed, by law market-rate housing development actually provides substantial funding for the creation of more affordable housing.

Supervisor Campos’s moratorium offer no proposals to provide additional funding for affordable housing, nor does it propose a way to offset the affordable housing funds that will be lost by blocking the construction of market rate housing. And he has had nothing to say about accelerating construction of affordable housing projects that are already on the table, like the proposed building at Cesar Chavez and Shotwell that your Bernalwood editor is eager to look out upon.

Supervisor Campos and his NIMBY allies say the goal is to reduce evictions and displacement, but that doesn’t hold much water either. Their opposition to new housing development has been fierce — even when absolutely no one would be displaced by the construction, and even when projects contain a substantial number of affordable housing units. In March, for example, activists shouted down a proposal to build 291 units of market-rate housing with an additional 41 units reserved for middle-class buyers on the squalid site next to the 16th Street BART station that is today occupied by a chain drug store and a Burger King. Last month, many of the same activists disrupted a proposal to build 115 units of market-rate housing on the site of a semi-abandoned warehouse at 2675 Folsom near 23rd Street.

There is one surefire way to make housing in The Mission even more expensive: In a transit-rich location with two BART stations, several arterial MUNI lines, and excellent freeway access, where demand for housing already vastly exceeds supply, blocking the creation of new housing will only make existing housing even more precious. And that is what Supervisor Campos proposes to do.

So if the moratorium makes no logical sense and is unlikely to do much to address the housing affordability crisis, what purpose does it hope to serve? On the 48 Hills site, Bernal neighbor Tim Redmond described the scene yesterday as Campos announced his plan:

The existing zoning, under the Eastern Neighborhoods Plan, “has failed the Mission,” [Campos] said, pointing out that 8,000 Latino residents have been lost in the past decade. The population of the Mission was 52 percent Latino a decade ago; now it’s down to 40 percent.

That tribal logic may be the most candid explanation Campos has yet provided. The proposed moratorium mirrors Calle24’s effort to create a legally-protected Latino enclave along 24th Street, but it seeks to extend privileged incumbent status to an area that includes almost all of the Mission District. Progressive power brokers may have a weak understanding of housing economics, but they sure know how to rewrite the rules to protect their turf.

It may be true that San Francisco can’t really build its way out of the current housing crisis. But it’s definitely true that we can’t not-build our way out of it either. As San Francisco adds thousands of new residents each year, every delay and every postponed project means housing gets even more expensive as competition intensifies for whatever housing already exists.

That’s a miserable state of affairs longtime renters, new residents, and would-be home-buyers alike. But if you already own property in the Mission (or North Bernal, for that matter), the moratorium proposed by David Campos and progressive activists will have you laughing all the way to the bank.

PHOTO: David Campos, via 48 Hills

Dispute Unsettled, but Bocana Neighbor Departs Home After Huge Rent Increase

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Yesterday was a sad moving day for Neighbor Deb Follingstad, who had to leave her home at 355 Bocana after receiving a now-infamous 315% rent increase notice from the landlord, Neighbor Nadia Llama.

ABC7 updated the story last Friday:

Follingstad’s home is understandably a mess since the May 5 deadline to move is just days away. She says leaving her home of 10 years hurts. She explained to 7 On Your Side, “It’s so painful and I’ve had to uproot my life in a month.”

A move out sale Follingstad held attracted a steady stream of people. Until she finds a place to live, she plans to couch surf and house sit. Beyond that, her future is murky.

“I don’t know anymore. I can’t afford to live here. A lot of my friends can’t afford to live here and it’s pretty heartbreaking the way the city’s changing,” Follingstad said.

The home is registered as a single family home and the landlord believes it’s not covered by rent control laws.

Tenants rights attorney Joe Tobener calls this eviction by rent increase. He said, “It’s an easy way for landlords to try to get tenants out, to increase the rent.”

Tobener plans to file a lawsuit on Follingstad’s behalf. He is charging landlord Nadia Llama with wrongful eviction.

PHOTO: Top, Telstar Logistics. Below, Neighbor Deb Follingstad via ABC7

Two Homes Tell a Brain-Melting Story About Bernal Heights Real Estate

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Our real estate-obsessed friends at the CurbedSF blog posted two stories this week that provide a snapshot portrait of the current (OMFG) state of the Bernal residential home market.

Coming just after this week’s (OMFG) update on the state of the Bernal residential rental market, the basic story in the residential home sales market is probably easy to anticipate. But let’s go through the motions anyway, if only in the spirit of science and inquiry.

Snapshot One is a remodeled shoebox on Peralta just south of Cortland that was just flipped for a staggering $400K (?!?!?!) above its asking price and doubled in value over the course of a year. Here’s a split view of the home before and after the remodel:

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CurbedSF says:

The little house at 853 Peralta Street sits a mere stone’s throw away from the 101 freeway. It isn’t at the heart of trendy Bernal Heights, but that didn’t stop flippers from fixing up the once-simple house and selling it for $1.75 million. That price is more than double what the flippers paid last April, when they bought the home for $830,000. At that time, the home had the original fixtures from its 1977 construction, including a kitchen squished into one corner, a brick fireplace in another, and a red plank back deck. The house was given a makeover that left it with an open plan, a new kitchen, and a freshly landscaped backyard.

CurbedSF has a cool slider widget-thingy that lets you view lots of before/after shots of this house, so click through to play along.

Snapshot Two is a funny little house on Prospect near Coso:

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CurbedSF sayeth:

There’s something off-kilter about the little blue cottage at 22 Prospect Avenue, on the north slope of Bernal Heights. And it’s not just the wide-set windows, whose lower-than-usual placement gives the facade a somewhat downcast expression. Inside, the two-bed, one-bath home reveals itself to be an oddball cross between a woodsy cabin and some sort of loft. The rafters are exposed, and more than a few walls look as though knotty wood panels (or possibly laminate?) have been rigged up below the ceiling. There’s a pair of stainless-steel sinks in the bathroom, and one bedroom has a weirdly institutional vibe, with streaky carpet tile and a ceiling that wouldn’t look out of place in an office or classroom.

The home—which clocks in at 1,314 square feet, per property records—is listed for $789K, a modest $600 per square for what the brokerbabble acknowledges is a fixer.

What our friends at CurbedSF were really trying to say (though perhaps they didn’t know it) is that this Bernal Heights house is a classic Bernal Heights-style home — only it now comes with a price tag inflated by several years limited housing inventory. Here’s an interior view:

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Anyone care to guess what the sale price for 22 Prospect will be? And what it will look like 18 months from now?

Rents in Bernal Heights Up 24% Since Last Year

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San Francisco’s population is growing rapidly, but we haven’t built nearly enough new housing to keep pace with our City’s growing popularity. The result is predictable to anyone with a basic grasp of supply and demand: Renting a place to live in San Francisco has become nose-bleedingly expensive.

But what about Bernal Heights? For insight on our hyperlocal rental market, the data geeks at Zillow offered to crunch some numbers for us. Bottom line: The rent is too damn high! Median rents in Bernal are even higher than in San Francisco overall, having climbed by 24% in the last year alone. Oof. Zillow’s Tali Wee sent us this summary:

Renting in Bernal Heights is more expensive than the median rent in the San Francisco metro. Currently, the median rent price per month in Bernal Heights is $4,326. For comparison, San Francisco rents are still steep at $3,088, but significantly less than Bernal Heights.

These local prices increased 2.1 percent since last month alone and a whopping 23.6 percent in the last year. If you’re a renter in Bernal Heights, you’ve likely experienced major hikes in your rent throughout the past few years. If you’re looking for a rental in Bernal Heights, anticipate prices to remain expensive throughout the year.

Also in Bernal Heights, home values appreciated 13.8 percent since last year. If renters are planning to buy, it’s becoming more and more difficult to save a down payment because rents are so expensive. Plus, purchasing a home becomes out of reach as values appreciate and prices rise; the median home value in Bernal Heights is $1,127,500. These values are forecasted to grow another 5.1 percent throughout 2015.

Right now, renters pay about $3.25 per square foot, about three times the national rate ($1.10). Across the country, renters are applying an average of 30 percent of their monthly incomes on rent, and an astronomical 44 percent in San Francisco.

Renters thinking about buying in Bernal Heights can breakeven on the upfront costs in approximately 1.3 years. Zillow’s breakeven horizon shows the length of time it would take for the costs of renting to exceed the total costs of buying the same property. So, renters who adore the Bernal Heights community and who plan to stay longer than 1.3 years are financially better off buying then renting – especially as home values appreciate, which increases returns on their investments.

Ellis Eviction Halted on Ellsworth, But Cesar Chavez Residents Remain on Notice

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According to the the San Francisco Rent Board, the number of Ellis Act evictions in San Francisco declined by almost 50% last year. However, the number of for-cause evictions rose by 7%.

Here’s the data from the Rent Board’s 2015 Annual Eviction Report (PDF):

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The report also provides this citywide summary:

During the period from March 1,2014 through February 28, 2015, a total of 2,120 eviction notices were filed with the Department. This figure includes 145 notices given due to failure to pay rent, which are not required to be filed with the Department. The number of notices filed with the Department this year represents a 7% increase from last year’s total filings of 1,977. The largest percentage increase was in eviction notices for illegal use of a rental unit, which increased from 42 to 91 notices. Owner/relative move-in eviction notices increased from 273 to 343 notices. Breach of rental agreement notices increased from 607 to 738 notices. Unapproved subtenant eviction notices increased from 17 to 20 notices, and nuisance eviction notices increased from 349 to 401 notices.

Closer to home, Beyond Chron tells the story of some Bernal Heights neighbors on Ellsworth (near Cortland) who were able to successfully resist an attempted Ellis Act eviction :

New owners of 261-261A Ellsworth Street purchased the property in February 6, 2015. Ten days later they served the long-term tenants, including 82 year old Alberto Lopez, with Ellis Act notices of termination.

On March 31, 2015, the Tenants’ attorney, Raquel Fox of the Tenderloin Housing Clinic,  provided formal notice of entitlement to an extension of the notice period based on Alberto Lopez and his wife’s senior ages. On April 19, 2015, the  Landlords’ lawyer told Fox that the new landlords were rescinding the Ellis Act. The communication included a copy of the Request for Rescission of Ellis Act Notices. On April 20, 2015, the Tenants executed the Declaration of Tenants Continued Occupancy.

The quickness of the Lopez victory means it will not join the ranks of other high-profile Ellis Act evictions. But it sends another message that Mayor Lee’s tripling of Ellis eviction defense funding has had a huge impact. These tenant legal victories show that Ellis cases are not a slam dunk, and help slow the current rising tide of such actions.

On Bernal’s north side, Mission Local reports on a large-scale Ellis eviction effort targeting residents of the 12-unit building at 3301 Cesar Chavez (at South Van Ness).

At 3301 Cesar Chavez, tenants in the 12-unit building near South Van Ness received Ellis Act eviction notices in February. “I’ve lived through six different owners of this building,” said Doña Margarita, a senior who has rented in the building for 52 years. “Because of my age, I can’t just live anywhere.”

Beyond Chron reports that the building at 3301 Cesar Chavez is owned by Robert Imhoff, a property-owner with a rather long history of eviction attempts.

Hovering over all of this is the fact that San Francisco added more than 11,000 new residents in 2014 alone, as the City’s population has soared to new all-time highs. San Francisco’s unemployment rate stands at a 15 year low, but we’ve been running a chronic housing deficit since the 1990s. Oh, and San Francisco rents are currently the highest in the nation.

How can we reduce evictions and improve affordability in the long term? More housing please!

PHOTO: 261 Ellsworth via Google Maps.

KQED: Lama Family Feud Lies at Heart of Big Bocana Rent Increase

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Veteran reporter Dan Brekke knows how to do the legwork required to crack a story open. These days he works for KQED, where he just published a remarkably detailed report on the Lama family dispute that lies at the heart of the now-infamous 355 Bocana rent-increase controversy.

Brekke’s reporting largely confirms rumors that have been rippling through Bernal Heights for the last few days, to the effect that as a result of the family feud, Bernal neighbor and 355 Bocana property owner Nadia Lama hoped to evict Neigbor Deb Follingstad, because Neighbor Nadia herself needs a place to live.

Brekke reports:

Superior Court filings show that Nina Gelfant and Gayle Worrell alleged they were forced from their one-bedroom, one-bathroom, 720-square-foot Cortland Avenue apartment [in 2013] after the Lamas raised the rent from $1,650 to $4,250 — 157 percent.

The suit argued that the rent increase was far above market rate and designed to get Gelfant and Worrell to leave so that Lamas could sell the property.

That sale, [tenant-rights lawyer Joe] Tobener suggested in a trial brief that outlined more than $1 million in potential damages, was triggered by a battle among Shukry Lama’s heirs over the property he’d left behind when he died in 2012.

“Chuck Lama’s heirs were fighting over their share of the inheritance which demanded selling properties or having the heirs occupy them as residences,” Tobener’s brief says.

That alleged squabble also appears to have played a role in Nadia Lama’s dramatic increase of Deb Follingstad’s rent.

In September 2013, she filed a probate petition in Superior Court seeking to compel her sister Claudia, the overseer of several family trusts set up by [deceased family patriarch] Chuck Lama, to account for the family’s assets. Assets named in the petition and exhibits include a small Cortland Avenue market, Chuck’s Store, the store’s liquor license, eight residential properties in San Francisco, one in Burlingame, and unspecified real estate in Chile.

The court proceeding resulted in an agreement last Dec. 31 in which the three Lama sisters and their three brothers, along with some of their children, agreed to close the family trusts and distribute their assets.

The property Nadia Lama was to receive includes a 2006 Toyota Avalon; $25,000 to pay the legal bills she’d incurred; a little more than $750,000 in cash due upon the sale of two of the family’s properties; and finally, the Bocana Street residence occupied by Deb Follingstad and the $7,500 to hire a lawyer to evict her.

The agreement also requires Nadia Lama to vacate her current home, a couple of doors up from Follingstad and still owned by her siblings, by the end of April. If she doesn’t, the document says, she’ll have to pay $4,000 a month rent to four of her siblings who will continue as owners; and if she does anything to interfere with their renting out the home she’s supposed to vacate, she’ll owe her siblings $10,000 in damages.

Kudos to Dan Brekke and KQED for the excellent work following the paper trail. Read Brekke’s full report on the KQED website, right here.

PHOTO: Telstar Logistics