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RE: [Valley_Eye] Is Anyone Using this Site?

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  • Linda McKay
    I m less happy about the Inclusionary Affordable Housing program. My concerns: 1. It costs the developers about $300,000 per affordable unit; all these costs
    Message 1 of 8 , Jul 25 7:48 PM
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      I'm less happy about the Inclusionary Affordable Housing program. My concerns:
      1. It costs the developers about $300,000 per affordable unit; all these costs are passed on to new buyers; prices at Executive Park are relatively much lower than other parts of the city - at what point is the housing overpriced and we're at risk for having too many unsold units (especially when the market is cooling off)?
      2. Sophie is talking about charging developers in Bayview/Hunter's Point/Vis Valley to build even MORE affordable housing than developers in other parts of the city. It's hard enough to find quality developers out here; Signature had difficulty in getting financing for their development because of the location - shouldn't we make it easier for developers to build quality bldgs? Why - if the profits are lower here, would we ask more from them? Why not more from the fancier parts out town where profits are higher?
      3. If the city takes their cut first (Vis Valley fee, extra affordable units), it is harder for us to negotiate for lower density. If their profit is cut, they have to make it back with more units.
      4. Finally, the city keeps changing the rules on developers regardless of where they are in the process. So - if they are a day away from getting Planning Commission approval (after years of work), the city can add a new fee or requirement that completely changes how it pencils out. There should be a point at which developers can plan with more certainty.
      Anyway, my 2 cents. You can read staff and consultants reports on this issue on the planning web site - http://www.sfgov.org/site/planning_index.asp
       
      Linda
       

      From: Valley_Eye@yahoogroups.com [mailto:Valley_Eye@yahoogroups.com] On Behalf Of Edie
      Sent: Tuesday, July 25, 2006 4:44 PM
      To: Valley_Eye@yahoogroups.com
      Subject: [Valley_Eye] Is Anyone Using this Site?

      I just sent Sophie an email regarding the Inclusionary Affordable
      Housing Program to show my support but to also let her know that
      developers can't keep building in other areas of the City and only
      build their affordable units here! If you agree please send her an
      email....
      Also, have other's been added to this site...Bob, can you invite
      Cynthia Cox and Betty Parshall? If you need more info please let me
      know...Thanks, Edie (again)

    • rmorine@aol.com
      I m inclined to agree with Linda. Affordable housing is a good thing, but the word affordable has evolved into subsidized housing. The cost of each
      Message 2 of 8 , Jul 25 8:48 PM
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        I'm inclined to agree with Linda. Affordable housing is a good thing, but the word "affordable" has evolved into "subsidized" housing. The cost of each "affordable" unit adds to the cost of market rate units.  So every time the city adds to the affordable percentage, the cost of market rate housing in new developments increases incrementally making it harder for families to buy. The same concept applies to the fee ordinance. The cost is generally carried forward to the purchaser of the market rate unit. In Ex Park the $4.58 fee adds about $4,500 to the cost of a unit. That may seem small but consider also that these new residents will be paying property taxes at slightly higher rate as long as they own the unit. They get hit two time by this fee. AND the buyer of the affordable unit can never sell it for what a market rate unit could sell for because the price is resditected for 50 years. So they may get a "affordable" unit but can never see the windfall profit that market rate buyer experience.

        The most distressing thing about fees and more inclusionary housing is that takes away from the community's ability to bargain with developers. They have less wiggle room.

        my 2 cents

        Russel
      • tara hui
        I have to disagree. Developers are going to charge whatever the market can absorb to maximize profit. Therefore, it is market condition not cost that
        Message 3 of 8 , Jul 25 10:41 PM
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          I have to disagree. Developers are going to charge whatever the market can
          absorb to maximize profit. Therefore, it is market condition not cost that
          determines the sale price. Fees and affordable housing has little impact on
          the housing prices compare to interest rate and other economic indicators.

          In terms of not being able to sale the unit for a windfall; is that such a
          bad thing? BMR programs are meant to assist people who otherwise will never
          enjoy the security of owning their own homes; not to arbitrarily "help" some
          people make a buck.

          In terms of bargaining with developers. Catering to their demands has never
          helped in anyway to benefit the community; by definition, it never will.
          Better approach would be to come up with cohesive plans as a community; that
          way, it expedites the process and results in developments that the community
          will welcome and can live with, which benefit both the developer and the
          community.

          Tara



          >From: rmorine@...
          >Reply-To: Valley_Eye@yahoogroups.com
          >To: Valley_Eye@yahoogroups.com
          >Subject: Re: [Valley_Eye] Is Anyone Using this Site?
          >Date: Tue, 25 Jul 2006 23:48:51 EDT
          >
          >I'm inclined to agree with Linda. Affordable housing is a good thing, but
          >the
          >word "affordable" has evolved into "subsidized" housing. The cost of each
          >"affordable" unit adds to the cost of market rate units. So every time
          >the city
          >adds to the affordable percentage, the cost of market rate housing in new
          >developments increases incrementally making it harder for families to buy.
          >The
          >same concept applies to the fee ordinance. The cost is generally carried
          >forward
          >to the purchaser of the market rate unit. In Ex Park the $4.58 fee adds
          >about
          >$4,500 to the cost of a unit. That may seem small but consider also that
          >these new residents will be paying property taxes at slightly higher rate
          >as long
          >as they own the unit. They get hit two time by this fee. AND the buyer of
          >the
          >affordable unit can never sell it for what a market rate unit could sell
          >for
          >because the price is resditected for 50 years. So they may get a
          >"affordable"
          >unit but can never see the windfall profit that market rate buyer
          >experience.
          >
          >The most distressing thing about fees and more inclusionary housing is that
          >takes away from the community's ability to bargain with developers. They
          >have
          >less wiggle room.
          >
          >my 2 cents
          >
          >Russel
        • Edith Epps
          My point was only that it seems that developers use VV as the area to build their affordable housing for their quotas here and build the rest of the
          Message 4 of 8 , Jul 26 8:59 AM
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            My point was only that it seems that developers use VV as the area to build their affordable housing for their quotas here and build the rest of the developement in another part of SF...for instance, the units on Bayshore....are the low end units for the developement I heard at Potrero Hill.....ee

            Linda McKay <lmckay@...> wrote:
            I'm less happy about the Inclusionary Affordable Housing program. My concerns:
            1. It costs the developers about $300,000 per affordable unit; all these costs are passed on to new buyers; prices at Executive Park are relatively much lower than other parts of the city - at what point is the housing overpriced and we're at risk for having too many unsold units (especially when the market is cooling off)?
            2. Sophie is talking about charging developers in Bayview/Hunter' s Point/Vis Valley to build even MORE affordable housing than developers in other parts of the city. It's hard enough to find quality developers out here; Signature had difficulty in getting financing for their development because of the location - shouldn't we make it easier for developers to build quality bldgs? Why - if the profits are lower here, would we ask more from them? Why not more from the fancier parts out town where profits are higher?
            3. If the city takes their cut first (Vis Valley fee, extra affordable units), it is harder for us to negotiate for lower density. If their profit is cut, they have to make it back with more units.
            4. Finally, the city keeps changing the rules on developers regardless of where they are in the process. So - if they are a day away from getting Planning Commission approval (after years of work), the city can add a new fee or requirement that completely changes how it pencils out. There should be a point at which developers can plan with more certainty.
            Anyway, my 2 cents. You can read staff and consultants reports on this issue on the planning web site - http://www.sfgov. org/site/ planning_ index.asp
             
            Linda
             

            From: Valley_Eye@yahoogro ups.com [mailto:Valley_ Eye@yahoogroups. com] On Behalf Of Edie
            Sent: Tuesday, July 25, 2006 4:44 PM
            To: Valley_Eye@yahoogro ups.com
            Subject: [Valley_Eye] Is Anyone Using this Site?

            I just sent Sophie an email regarding the Inclusionary Affordable
            Housing Program to show my support but to also let her know that
            developers can't keep building in other areas of the City and only
            build their affordable units here! If you agree please send her an
            email....
            Also, have other's been added to this site...Bob, can you invite
            Cynthia Cox and Betty Parshall? If you need more info please let me
            know...Thanks, Edie (again)


          • rmorine@aol.com
            Keep in mind this is more of a discussion on new development because single family homes and older buildings don t face these challenges. …. The market
            Message 5 of 8 , Jul 26 9:21 AM
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              Keep in mind this is more of a discussion on new development because single family homes and older buildings don't face these challenges. ….

               

              The market determines the maximum sales price but actual costs, (fees, labor, materials, insurance, interest rates…) determine minimum sales price. If there were no “affordable” units cost would be equally disturbed to all units, when “affordable” units are mandated, the costs are the same but aren’t equally distributed. Those costs are transferred to the market rate units. Even a not for profit builder would have to do this if they built a mixed income building. Affordable units can not be built without a subsidy, the only question is who pays that subsidy and how much they pay. So you can make the argument that developers make up the money when the unit sells way above the actual cost to build the unit, but that doesn’t change the fact that the cost is transferred to the market rate unit and those buyer underwrite the affordable units. I’m 100% behind the concept of inclusionary affordable housing but we have to understand that by including household X you are potentially excluding household Y.

               

              Not making a windfall profit is absolutely ok. The point was that the buyers of BMR units can never have that option because of the way that systems works. Part of the security of owning a home is the knowledge that in most cases its the best investment one can make.

               

              I agree with your last statement in that developing a community plan is the way to go, but once that plan is developed you then "bargain" with developers, planning, and elected officials to ensure that as much of it as possible is enacted. Nobody get everything they wanted. The community wins some we lose some. Its not about catering to developers demands, its about understand all sides of the equation.

               

               Russel

            • Linda McKay
              I completely agree and am glad that all 4 developers at Executive Park state their intention to build inclusionary housing on site. The City may encourage
              Message 6 of 8 , Jul 26 12:37 PM
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                I completely agree and am glad that all 4 developers at Executive Park state their intention to build inclusionary housing on site. The City may encourage developers to build offsite because they actually have to build more units if they take this option. This might be a win-win for the city & developer (more units, less cost to developer if the new site is in a cheaper part of town), but not necessarily a win-win for neighborhoods who are targeted for all the off-site inclusionary housing.
                 
                Linda


                -----Original Message-----
                From: Edith Epps
                Sent: Jul 26, 2006 8:59 AM
                To: Valley_Eye@yahoogroups.com
                Subject: RE: [Valley_Eye] Is Anyone Using this Site?

                My point was only that it seems that developers use VV as the area to build their affordable housing for their quotas here and build the rest of the developement in another part of SF...for instance, the units on Bayshore.... are the low end units for the developement I heard at Potrero Hill.....ee

                Linda McKay <lmckay@earthlink. net> wrote:

                I'm less happy about the Inclusionary Affordable Housing program. My concerns:
                1. It costs the developers about $300,000 per affordable unit; all these costs are passed on to new buyers; prices at Executive Park are relatively much lower than other parts of the city - at what point is the housing overpriced and we're at risk for having too many unsold units (especially when the market is cooling off)?
                2. Sophie is talking about charging developers in Bayview/Hunter' s Point/Vis Valley to build even MORE affordable housing than developers in other parts of the city. It's hard enough to find quality developers out here; Signature had difficulty in getting financing for their development because of the location - shouldn't we make it easier for developers to build quality bldgs? Why - if the profits are lower here, would we ask more from them? Why not more from the fancier parts out town where profits are higher?
                3. If the city takes their cut first (Vis Valley fee, extra affordable units), it is harder for us to negotiate for lower density. If their profit is cut, they have to make it back with more units.
                4. Finally, the city keeps changing the rules on developers regardless of where they are in the process. So - if they are a day away from getting Planning Commission approval (after years of work), the city can add a new fee or requirement that completely changes how it pencils out. There should be a point at which developers can plan with more certainty.
                Anyway, my 2 cents. You can read staff and consultants reports on this issue on the planning web site - http://www.sfgov. org/site/ planning_ index.asp
                 
                Linda
                 

                From: Valley_Eye@yahoogro ups.com [mailto:Valley_ Eye@yahoogroups. com] On Behalf Of Edie
                Sent: Tuesday, July 25, 2006 4:44 PM
                To: Valley_Eye@yahoogro ups.com
                Subject: [Valley_Eye] Is Anyone Using this Site?

                I just sent Sophie an email regarding the Inclusionary Affordable
                Housing Program to show my support but to also let her know that
                developers can't keep building in other areas of the City and only
                build their affordable units here! If you agree please send her an
                email....
                Also, have other's been added to this site...Bob, can you invite
                Cynthia Cox and Betty Parshall? If you need more info please let me
                know...Thanks, Edie (again)


                
                
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