What about residential? I thought prices were high but manageable. New mortgages are all over 5% now, that makes those all too common $2-4 mil house prices insane.
San Francisco braces for commercial real estate crash
91–100 of 622 posts
Re: San Francisco braces for commercial real estate crash
#92Earlier quoted context omitted.
Maybe SF should relax the legal requirements of residential space, then? If they choose not to build sufficient housing... they can at least choose to use what they have. A windowless room with a community bathroom doesn't sound appealing, but at a certain price point it's better than nothing.
> Maybe X should relax the legal requirements of Y That's a slippery slope. Lots of legal requirements exist to protect someone. Legal requirements for windows are pretty reasonable to ensure people have at least some bare minimum of access to natural light in their home, rather than just living in a box.
Seems to me like lots of people in SF would rather live in an indoor box than an outdoor box.
Why not let those without homes choose if they are willing to take the risks associated with ignoring those rules over l king on the streets?
Re: San Francisco braces for commercial real estate crash
#93Earlier quoted context omitted.
Why "wasted" ? Does everyone need to live with the least amount of space possible?
There is a large difference between a preference and a mandate. The city of San Francisco requires this development pattern. It is not known whether the owners prefer it or not. The existence of pre-down-zoning apartment buildings in this area of town suggests that the preference is not universal.
The majority of voters and neighborhood groups strongly prefer the current policy.
Prevent new housing and complain about prices is the dominant position. And elected officials comply. Democracy is functioning.
Re: San Francisco braces for commercial real estate crash
#94Earlier quoted context omitted.
Maybe SF should relax the legal requirements of residential space, then? If they choose not to build sufficient housing... they can at least choose to use what they have. A windowless room with a community bathroom doesn't sound appealing, but at a certain price point it's better than nothing.
But that is also key to the problem: the cost to convert these buildings is already prohibitively expensive, and converting them into dormitories cannot possibly recoup the cost. It's like how sometimes it just doesn't make sense to refactor code because it is fundamentally designed for a different purpose. Sure you can grind it out but will it be any better or cheaper than starting fresh?
It's not prohibitively expensive... office to residential conversions have already been done in many cases.
Of course the specifics of the building matter a lot, but it's certainly cheaper than ground up net new development.
And even if the conversion leads to abnormal units per modern standards, it will still get occupied at the right price.
Seems a no brainer to rezone most office space to residential. Free market will figure it out. You can bet buying these commercial properties at firesale prices will open up a profitable path to residential
Re: San Francisco braces for commercial real estate crash
#95This is a labour union issue and not a prop 13 or even a NIMBY issue.
https://sfstandard.com/housing-development/labor-unions-have...
Those commenting here don’t understand how labour unions in CA have the Senate and Assembly by the balls.
As long as the public keeps focusing on imaginary enemies amongst themselves and we keep lobbing ‘prop 13’and ‘nimby’ balls at each other, we lose.
Nobody here on HN is going to be able to live in the new high density housing. It is meant for affordable housing and to move vote banks from other counties. Oldest universal political trick from the books to stay in power.
Who benefits from high density subsidized housing homes for those who can’t afford living in the most expensive cities in the state? How is it helping the homeless or the economically vulnerable? Who is being served here?
There is a bigger picture. There are more powerful forces. They just want the voters fighting amongst ourselves while they decide our fate.
Re: San Francisco braces for commercial real estate crash
#96Earlier quoted context omitted.
Modern office buildings only have plumbing available in the center of the building. The flooring is designed to function as a highly efficient membrane. If you start punching holes in the flooring to place plumbing and toilets away from the central core you weaken the floor membrane to the point where it loses the required structural integrity. If you try to build raised flooring to provide space for the plumbing the…
Every place I've ever lived had plumbing in the walls. Now, it also had it in the floors, so your point is well taken. But I seriously doubt that a central plumbing stack is a serious holdup on plumbing out an entire floor. Then again, I don't have any real experience, so I'm very much being optimistic here without actual hands-on knowledge. I could be very wrong, and would love to hear why!
> Every place I've ever lived had plumbing in the walls.
In every wall and under every floor? How many sinks did you have?
Re: San Francisco braces for commercial real estate crash
#97Earlier quoted context omitted.
Can they be converted into huge units with an open floor plan and bathroom/kitchen near the center? If someone can figure out how to make it look cool, office conversions could be the 2020s version of the warehouse loft.
Sublime. All of the people who hated working in an open office are screaming at the idea of living in one.
I am very over getting together in people’s open plan kitchen + living/family/dining room homes and being unable to have a conversation because 10 people’s voices are bouncing around one room with 10ft ceilings when there is enough space for 2 or even 3 separate rooms. And the TV volume is on for some reason. And the exhaust above the stove is on. And the kitchen faucet is running.
Re: San Francisco braces for commercial real estate crash
#98Boston is recovering quite well, as biotech, healthcare, and education need physically present people (for now at least). SF was so insanely focused on tech that it collapsed quite suddenly.
If I owned a $1 million+ property in SF I would be selling ASAP - the pain is just getting started
Re: San Francisco braces for commercial real estate crash
#99Earlier quoted context omitted.
Turns out prices have to go down when the fed doubles rates. By my math, a 30% correction is needed to make up the difference in terms of monthly affordability - meaning a $500k house at 6% is the same as a $750k house at 3%.
Yeah, but a lot of people are willing to bet that rates won't stay high for long. If the average person is buying a house to hold for 7 years - and you're expecting only 2 years to be at elevated rates before you can refinance at 3% or less - then you'll settle for a lot less than a 30% correction. Does your 30% figure doesn't include property tax - or mortgage interest deduction? If you include those - I'd imagine y…
“There was a statistician that drowned crossing a river... It was 3 feet deep on average.”
I think we’re going to see a lot of new things this recession. The high inflation preventing ‘quantitive easing’. Usually the middle class can bear all kinds of hardships but from my observations they’re reaching a point where they’re tapped out and can bear no more. Many landlords think they’ll simply raise rents to cover increases in interest rates because renters are less able to buy their own property due to the same high rates. But tapped out renters cannot afford the higher rents for long and landlords will have to take a bath. If we go into a reverse wealth effect deflationary spiral we can’t lower interest rates to get out of it due to the risk component of interest will start to dominate over the risk free rate.
Re: San Francisco braces for commercial real estate crash
#100Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
Most offices have physical layouts that make conversion to residential difficult to impossible. Big things like lots of interior square footage without windows and plumbing only to a few central locations. And while some or even most of this is fixable, major renovations are a ton of cost and effort to convert them to something that will still be expensive and weird, if even possible to meet the legal requirements of…
maybe it's the new ware-home? (warehouse home)
similar gluts caused a really vibrant music scene in Berlin