Housing In San Francisco Is So Expensive Some People Live On Boats (#GotBitcoin)
Move onto water is latest sign of affordable-housing crisis. Homelessness has become such a big problem in the San Francisco area that waters outside the city are increasingly crowded with people living on makeshift boats. Housing In San Francisco Is So Expensive Some People Live On Boats (#GotBitcoin)
Housing In San Francisco
The homeless population floating off the coast of wealthy Marin County, just north of San Francisco, has doubled in recent years to about 100, according to authorities. The ragtag collection of some 200 barges, sailboats, and other mostly decrepit vessels in which they live and store their belongings is a sign of an affordable-housing crisis in California that is being felt particularly acutely in the San Francisco Bay Area.
The boating homeless include some who are employed but say they can’t afford to live on land, some who prefer the independence and others who are jobless or mentally ill. The seafaring life isn’t easy for any of them.
“It’s not a free ride. It’s a lot of effort to be out here,” said Kristina Weber, who moved onto a 54-foot vessel she purchased for $15,000 because she couldn’t afford rent for a studio apartment in Sausalito, a town 10 miles north of San Francisco, that had grown to $3,000 a month.
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People who live on the land nearby complain Ms. Weber and her neighbors have brought crime and poor sanitation, the same problems that accompany homeless encampments in nearby cities that have sprung up amid soaring housing prices driven in part by the region’s technology boom.
The median price for an existing single-family home in the San Francisco Bay Area has nearly tripled to $940,000 from $327,000 since 2009, according to March data from the California Association of Realtors, amid a surge in technology jobs over the same time.
Local residents complain that boats sometimes break away from anchor lines in storms, endangering the occupants as well as the properties of waterfront homes into which they can crash. Many aren’t securely anchored and are attached to smaller vessels in which residents store gear and other belongings.
Authorities call these water-dwelling homeless “anchor-outs,” because they permanently anchor their crafts outside of marinas in violation of local laws that typically set mooring limits of about three-days. They have become a growing problem in pricey coastal locales from Fort Lauderdale, Fla., to Honolulu, Hawaii.
In San Francisco Bay, anchor-outs have been a tradition since the California Gold Rush. But local authorities have been moved into action as the numbers have grown over the past decade.
More than 40 boats were removed after a multiagency crackdown along the Oakland waterfront in 2013 and another nine were sent away in April of this year, said Brock de Lappe, harbor master for five Oakland marinas.
“They are taking over a public resource,” Mr. de Lappe said.
With crackdowns elsewhere in the area, many anchor-outs started showing up in the waters between the Marin County cities of Sausalito and Belvedere over the past few years, said Beth Pollard, executive director of the Richardson’s Bay Regional Agency, which has jurisdiction over the area.
Rather than push the homeless out, her agency is trying to make sure the boats stay secured to authorized moorings.
That approach has infuriated people like Jim Robertson, who said runaway boats have collided with his home 16 times over the two decades he has lived there—including one collision with his dock that cost $20,000 to repair.
“Nobody is looking for special treatment, just the enforcement of laws on the books,” Mr. Robertson said.
His neighbor, Connie Strycker, said anchor-out residents come up on her deck asking for food and water. “They’re all filthy, because they have no place to bathe,” said the 86-year-old.
The city of Sausalito in 2017 withdrew from the Richardson’s agency in protest of its hands-off policy. Since then, it has reduced the number of anchor-out boats in its waters to 20 from 77.
This summer, Sausalito plans to start a pilot program of subsidizing marina space to eight of the boats.
Sausalito Police Chief John Rohrbacher said many in the latest influx of anchor-outs are dangerously inexperienced on the water. “There are some really good people out here, but they’re just living a hard life,” he said.
Ms. Weber said she has found living on the water to be more difficult than she expected. The 40-year-old has to row a small boat to shore a quarter mile away for supplies. Three days after moving aboard the “Phoenix” last October, it sustained extensive cabin damage from a fire she alleged was intentionally set by another anchor-out.
Few anchor-outs have been on the water as long as Greg Baker, who lives alone in a 41-foot sailboat called the C.A. Marcy that is anchored in several feet of mud.
The former tugboat captain agrees there are too many people on the bay who don’t know what they’re doing. He hopes to change that through a community association of anchor-outs he helped form recently to push for safer practices.
Moving, he said, isn’t an option for him.
“There are two ways I’m leaving: in a black body bag or handcuffs,” said the 80-year-old, rubbing his whiskers as a stiff breeze tossed the surrounding waters.
Group Living Gets More Affordable, In 30 Square Feet
Some shared quarters forgo perks while others shrink private square footage to the size of tanning bed.
A new breed of companies offering shared accommodation for roommates are trying to tackle the question of how to deliver affordable housing to low-wage workers.
They are part of a small but growing real-estate business known as co-living, in which developers offer shared bathrooms and private bedrooms that can run to less than 100 square feet. To compensate for the cramped quarters, building owners often offer such perks as housekeeping service, organized ski trips, yoga studios and cooking classes.
But as the popularity of co-living has grown among young professionals over the past half-decade, the cost of those amenities and spending on new construction have made these living quarters less than cheap. Bedrooms in big cities typically start at more than $1,500 a month, pricing out nearly all except workers making at least $70,000 a year.
A few startups are hoping to change that with rents about half the price, making them affordable to workers in the service sector or artists and other creatives starting out.
If this next wave of co-living companies is successful, it would represent one of the first models to emerge in decades that bring low-price housing to pricey U.S. cities without relying on a public subsidy.
“I think it could be a significant solution. It’s not the whole solution by any chance,” said Carol Galante, faculty director of the Terner Center for Housing Innovation at University of California, Berkeley.
Some building owners are doing so by renting space in existing homes and forgoing many of the typical co-living perks. Others are shrinking the private square footage each resident gets to the size of a tanning bed.
In Atlanta, PadSplit helps owners of single-family homes rent out individual bedrooms. Its average tenant earns about $20,000 a year and pays around $600 a month for rent.
Atticus LeBlanc, who founded the company in 2017, said his tenants have needs very different from those of the typical co-living tenant. “This is the only attainable housing solution for them realistically, at least without subsidy,” he said.
Antionette Chancellor, a 44-year-old truck driver, moved into an eight-bedroom house managed by PadSplit in May. After her daughter left home, she was looking for a place that she didn’t have to worry about leaving empty during her travels for work.
Ms. Chancellor said she loves the location, close to work and Atlanta’s downtown, and enjoys cooking for her seven roommates.
She pays $145 a week, which she said is a welcome change from the $1,400 a month she paid for the apartment she and her daughter had occupied. “I wish I’d known that five years ago,” she said. “I would have had a big savings account.”
Tightly packing lower-income tenants into a home has some of the challenges of rooming houses and single-room occupancy buildings, or SROs, which became synonymous with drug use and poor living conditions. As a result, many cities have tightened regulations to discourage unrelated people from living together in one residence.
PadSplit rents rooms by the week, meaning it could run afoul of rules designed to regulate Airbnb and other vacation rental companies. Mr. LeBlanc said regulatory issues will be a challenge as the company looks to expand to more cities.
New York City is set to announce Tuesday winners of a competition it held seeking proposals for affordable co-living projects, reminiscent of the SROs the city once clamped down on.
Common, which pioneered the trendy millennial-oriented co-living model, will join with affordable housing developer L+M Development Partners Inc. to create more than 250 co-living beds in East Harlem. The development currently is set to receive a tax abatement but no other public subsidy.
Residents making less than $37,000 a year could end up sharing a kitchen and bathroom with well-off professionals. The development will offer the same perks as a typical Common building, from weekly cleaning service to free Wi-Fi.
Louise Carroll, head of the city’s Housing Preservation and Development Department, said the model could easily be replicated on other sites and ultimately help the city produce more affordable housing with less subsidy.
“We’re not going to have to do anything different, except maybe spend less,” Ms. Carroll said.
San Francisco-based Bungalow has quietly grown to be one of the country’s largest co-living companies, with a model of dividing up existing homes. Rents are slightly higher than PadSplit’s but still well below most new development co-living companies. The company currently has 3,000 occupied bedrooms in 10 markets, up from 450 bedrooms a year ago. Rents range from roughly $700 to $2,500 a month.
A Los Angeles-based company is serving residents with incomes similar to those of Bungalow’s customers but with a more artistic bent. UP(st)ART’s properties are rich with amenities, including recording and photo studios, theaters and free acting, dance and music classes.
UP(st)ART compensates for the added costs by packing residents in like crew members on a cruise ship in 30-square-foot pods. They rent for about $750 a month.
The company plans to open its eighth location in November. Jeremiah Adler, founder of UP(st)ART, said it is still a temporary solution, with residents staying six months on average.
“We are great when you are young and broke,” he said. “You want to be able to bring a date home eventually.”
RV Living Grows As Latest Consequence of Housing Crisis
Residents complain as streets fill with vehicles serving as homes for people who can’t afford rent.
The RVs started arriving on Continental Circle about four years ago. Now they line one side of the half-mile-long street in this Silicon Valley suburb.
Across the Western U.S., rising home prices have pushed more people who can’t afford houses or apartments to live in vehicles, including RVs. In Los Angeles, 16,500 people called a vehicle their home last year, according to local counts. In San Francisco that figure was 1,800, up 45% from 2017, and in Santa Clara County, which includes Mountain View, the number nearly tripled over that same time frame to 1,747. There are no reliable national figures on the trend.
“We are seeing that it is cheaper to live in your car or RV than to rent,” said Candice Elder, executive director of East Oakland Collective, a local nonprofit in that city where about 1,400 people lived in recreational or other vehicles last year.
An estimated half a million people are homeless in the U.S., with the problem most acute along the Northeastern seaboard and West Coast where housing costs are highest, White House officials said in a 2019 report. If the problem has an epicenter, it is the San Francisco Bay Area, the nation’s most expensive housing market, where median housing prices have nearly doubled to about $1 million over the past eight years, according to real-estate listing service Zillow.
As with homeless encampments that block sidewalks, RV living is creating its own tensions. Residents on the streets where people park the large vehicles complain that sewage-tank dumping and drug use are common and that there are no parking spots left for them.
“I don’t think there’s anything compassionate in enabling people to live on the streets,” said Shari Emling, a Mountain View resident who has advocated for restrictions on RV living. The city, which is home to the headquarters of Alphabet Inc.’s Google, had about 300 people living in vehicles last year, triple the number from 2016.
Homeless advocates say living in an RV is considered a step up by many people without shelter from living on the street, even though most of the vehicles are old and in poor condition. “However, it provides a little more safety and a little more barrier from the elements,” Ms. Elder said. “They can also lock it.”
In Seattle, where an estimated 2,147 people live in vehicles, the city is weighing a plan to tow and destroy unsafe RVs. The Bend, Ore., city council last year passed an ordinance to shorten the time vehicles can be parked in any one location to three days from five. Los Angeles in July reinstated a ban on people sleeping in vehicles overnight.
Celerina Navarro earns $1,400 a month as a housekeeper in Mountain View, where her two younger children attend school. She moved her family into a recreational vehicle four years ago after her landlord increased the rent of the room they lived in to $1,200 a month from $800. The average rent for a studio apartment in Mountain View is $2,247, according to Apartments.com.
Along with some other families living in their vehicles, Ms. Navarro parks her RV next to a city park so her children can play and use the restrooms.
I let my daughter draw a little at night with the light from my phone, but we have to go to bed early,” said the single mother, who like many of her neighbors doesn’t have a generator for power.
Under pressure from frustrated residents, the Mountain View city council in September passed an ordinance that would ban RVs on most city streets. About 70 vehicles would be allowed to move into designated lots on a temporary basis. After a petition drive by activists, the ban has been put on hold pending a public vote on the ordinance in November.
The RV population exploding across the West is forcing communities to reconsider what it means to be homeless. The U.S. Department of Housing and Urban Development still counts those living in RVs as unsheltered, the same category as those living in tents or subway tunnels.
Several local governments have begun to treat RVs as a special case, creating parking lots with portable toilets or showers to temporarily accommodate them. But those efforts have so far tended to be small in scale, such as San Francisco’s Vehicle Triage Center, intended for 30 vehicles.
“It’s full now and there are currently 26 vehicles,” said Kelley Cutler, an organizer at the Coalition on Homelessness.
Decades-old RVs and campers, which make up the majority of those seen on city streets, can often be acquired for a few thousand dollars, not much more than two months’ rent in many of the West’s expensive cities. While RV parks often provide electric and water hookups, RV owners say parks tend to discriminate against older vehicles, leaving the streets as the only option.
“It gets really, really cold here at night,” said Mountain View RV owner Jan Stevens, before cutting off her generator on a recent chilly evening to save the remaining natural gas.
Margaret Abe-Koga, mayor of Mountain View, insisted some RV dwellers weren’t living in RVs by necessity, but rather to save on rent. “We want to help those who don’t have other options, but the folks who choose to live in RVs, I don’t think there’s sympathy for that,” she said.
San Francisco Property Owners Fight Their Taxes After Covid Cooldown
The city’s slow rebound has businesses appealing their assessed values.
San Francisco is one of the biggest laggards among U.S. cities trying to bring back workers and revive their business districts. Now, some companies want their property taxes to reflect what could be a permanent reshaping of the one-time boomtown.
Dropbox Inc., fully embracing remote work, filed an appeal to have its building’s assessed value cut by half. The recent buyer of the iconic Transamerica Pyramid is seeking a 50% reduction in the tower’s taxable value. Even the vaunted Golden State Warriors aren’t immune: The developer of the NBA team’s arena wants to slash the complex’s assessed value by more than $1 billion.
The appeals process marks one of the first indicators of how San Francisco building owners are adapting to a pandemic that emptied office towers, shut down shops and sent people fleeing to cheaper areas. A drop in taxable values raises the prospect of a longer-term hit to the city’s coffers, particularly given that many of the tech hub’s companies are permanently adopting flexible work.
“The uncertainty of the office occupancy affects everything,” said Ken Rosen, professor emeritus who specializes in real estate at the Haas School of Business at the University of California at Berkeley. “It affects retail, restaurants, the whole range of things.”
Notices went out in July for assessments as of Jan. 1, the first period reflecting the effects of Covid-19. By the end of the formal appeals process in September, taxpayers representing roughly $50 billion of assessed value challenged their figures for 2021, up by about 25% from the previous year, according to an analysis of data provided by the city’s appeals board after a public-records request from Bloomberg News. Such values provide the basis of tax bills and revenue for the city.
The values encompass taxable business items such as fixtures and vehicles, though the bulk of the dollar figures being appealed are tied to land and building assessments. The appeals often are from property owners and related LLCs, but also can be from tenants with a responsibility for paying property taxes.
While the taxpayers are unlikely to win exactly what they want, and the reductions may be temporary, their efforts underscore San Francisco’s lasting struggles from the pandemic.
The region has recovered less than half the jobs it lost during the outbreak last year, compared with the U.S. average of 80%, according to federal data. Employers such as Salesforce.com Inc. and Twitter Inc. are shedding office space and letting people work from home for the long term.
Other job hubs around the country are facing similar reckonings. New York City cut the market values it uses for tax assessments for some hard-hit sectors, like hotels and retail, by more than 20% on average and it still faces appeals by some property owners who want more.
But San Francisco, which has weathered busts before, appears particularly vulnerable. More than a fifth of all office space in the city’s downtown was vacant at the end of the third quarter, compared with 16% nationally, CBRE Group Inc. data show. The area has the lowest share of workers back at the office among 10 U.S. cities, according to swipe-card data from security company Kastle Systems.
“What we’re seeing right now is more pronounced in San Francisco,” said Ted Egan, the city’s chief economist. “If we enter a period where we really have permanently reduced office demand, then we could see a permanent reset on rent, which would in time translate into lower property values and potentially lower assessed values.”
Those seeking reductions include Wells Fargo & Co., which wants $307 million off the assessment of its taxable property in its hometown, including a 50% cut on a tower it occupies on Market Street.
The Westin St. Francis Hotel, which survived the monumental 1906 earthquake, said its assessed value should be slashed by $768 million. That’s the second-highest dollar reduction being sought by any applicant, following the basketball arena’s $1 billion request.
A spokesperson for Wells Fargo said the bank continually assesses its real estate footprint and costs, “which includes engaging with officials regarding property valuations in line with common industry practices.”
Representatives for the Golden State Warriors’ Chase Center, which opened in 2019, didn’t respond to messages seeking comment. Calls and emails to the tax agent for the Westin St. Francis weren’t returned. Dropbox didn’t comment.
A spokesperson for Michael Shvo, who led a group that paid $650 million for the Transamerica Pyramid last year, declined to comment. The owners are asking the city to reduce the assessment across four properties to $367 million.
California permits temporary one-year reductions in assessed values because of market changes, which Brenda Goodrich, director of the Northern California practice for tax-services firm Ryan LLC, is handling for her clients.
The value typically reverts to the original figure, but she sees the potential for a “cyclical appeal situation” especially for downtown office properties if vacancies continue to run high.
“The stabilized occupancies for downtown office probably will not come back to pre-pandemic levels, and that’s going to impact the market value of those properties,” Goodrich said.
Building sales are still recovering from a drastic slowdown at the start of the pandemic, making it tough to know exactly how investors are valuing properties.
Even so, initial indications are that prices are down, with the average price per square foot of downtown offices dropping about 34% in the first nine months of 2021 compared with the same period last year, according to data from Real Capital Analytics.
Still, San Francisco, along with other local governments in California, is cushioned by a law that ends up limiting its pain in downturns because valuations for property tax purposes are often well below market prices. And even if the appeals board agreed with the opinions of the applicants in all of the pending cases it’s facing, the city would lose just $598 million in revenue, which it can absorb given its $6 billion general fund.
Meanwhile, corporate policies more than a year into the pandemic remain in flux. “There are growth factors that look good for the city’s economy,” said Egan, noting strong venture capital activity this year, for one.
“You could look at this as a check on overheating,” said Laura Ratz, an economist and assistant director at Moody’s Analytics. “It’s been an incredibly expensive area. If people do truly leave and not come back, that will alleviate some of these price pressures and might actually be a good thing long-term.”
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