Housing for the rootless superrich

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Where billionaires buy pieds a terre

When San Francisco looks at building ultra-luxury housing -- places like 8 Washington -- and some city officials and "experts" say it's going to help meet the housing needs of the city, we ought to look at what's happening in Manhattan. There, high-end housing is being flooded with people who don't live in Manhattan, won't live in Manhattan, and will at best hang out there a few weeks a year.

Only 10 floors have been completed in what is intended to be the tallest residential building in the Western Hemisphere — a slender, 84-story tower on Park Avenue at 56th Street in Manhattan. But the top penthouse is already under contract for $95 million. Other buyers have snapped up apartments on lower floors for prices that are almost as breathtaking. While their identities are not known, it is likely that many are the rootless superrich: Russian metals barons, Latin American tycoons, Arab sheiks and Asian billionaires.

Why does that matter? Other than the fact that, according to developers, "Only about a quarter of the units will be occupied at any one time," which doesn't make for street life, community or even much in the way of economic benefits? Here's the problem:

The growth in high-end projects in Manhattan comes as housing for the working and middle class is in increasingly short supply in the city. These buildings are proving so profitable that they are warping the local real-estate market, making it more difficult to put up more-affordable housing.

Developers have long complained that the prices of land, construction materials and labor are high in New York, even if they are somewhat less expensive than in London or Hong Kong.

But builders of ultraluxury apartments have much more latitude on costs because they are securing spectacular prices for their projects.

As a result, the luxury building trend is driving up the overall cost of land in the city. Several developers maintained that they could build moderately priced housing only if they could get significant tax breaks.

Sound familiar? There is, one New York architects say, "only two markets, ultraluxury and subsidized housing." San Francisco is also an international city, and prices here are even better than New York. So don't be surprised if, in a city that doesn't seem a bit concerned about how much new housing costs or who the buildings are designed for, we reach Manhattan-like levels of insanity.

 

 

Comments

poor or middle class, or even "nornal wealthy" will be seeking, so it really is a non-issue. It's not as if we don't build these super-units, that instead hundreds of BMR units will instead be built. That won't happen.

In fact, these high-end projects bring in affordable housing setasides - 11 million in the case of 8Wash.

So, Tim, it is counter-productive to let your personal dislike of successful people distort logic here. If we don't build units for the super-wealthy, they will go elsewhere and there was an article in the Chron this week-end about all the Chinese buying in Seattle and Vancouver, plus LA of course.

These super-wealthy may not spend much time in SF, but their money helps a lot, and they are very unlikely to consume many services, so are the perfect resident in some ways.

Posted by Guest on May. 20, 2013 @ 1:31 pm
So?

" If we don't build units for the super-wealthy, they will go elsewhere..."

Good. Maybe we can build housing for people who will contribute something to the community other than their property taxes once a year. Your repetitive idea that the only meaningful metric for people is their net worth is really getting tired.

Posted by Hortencia on May. 21, 2013 @ 6:57 am

If 8Wash doesn't get built, that money does not instead go to build "affordable" housing. It goes to another city.

So either we build 8Wash and use the 11 million setaside to build affordable homes. Or we dont and get neither.

Plus those wealthy residents will pay millions in property tax each year, plus sales tax, create jobs etc. far more than those low-income residents you seem to prefer.

Diversity and tolerance doesn't equate to "no rich white people".

Posted by Guest on May. 21, 2013 @ 7:10 am

And I think people who buy homes here should be part of the community. And let's be serious: There is a lack of space in this city, as in Manhattan, and the more you give to luxury housing the less there is for everything else, including cheaper housing. You don't think these high-end towers have driven up land prices and had an impact on everything else? You're crazy.

Give up this "hate success" shit. There are many wealthy people who have given much to this city (Warren Hellman is a great example). He lived here; he cared about the place. He invested his personal fortune in better public schools, a now-defunct online newspaper, Hardly Strictly Bluegrass etc. You think any of the part-time residents of 8 Washington will do that?

 

 

Posted by tim on May. 20, 2013 @ 1:37 pm

to the city but, in practice, you cannot force people to do that if they don't want to. You cannot legislate that people "contribute" and you cannot ban people from buying a home here just because you perceive that they might not "contribute".

The contribution of someone buying a 5 million dollar penthouse unit is the 600K a year they spend in property tax each year. Enough for you?

And I have a lot of difficulty believing that a high-rise HNWI building like 8Wash with a fairly small footprint has a serious effect on land prices in the south and west parts of the city. Downtown high-end condo's are a very distinct market and 8Wash will have little to no effect on land and home prices generally.

Indeed, insofar as theys top the rich buying in sOMA and the Mission, it will help home prices, as of course all new supply does.

Posted by Guest on May. 20, 2013 @ 1:50 pm

A $5 million dollar piece of property does not lead to $600K in property taxes a year.

As to the other point raised by Redmond -- suggesting that new property owners buying expensive condos won't contribute like Hellman did -- no one knows that to be the case. We might get some huge benefactor living here. Or maybe we won't.

Posted by The Commish on May. 20, 2013 @ 2:37 pm

Plus of course sales and income tax receipts, HOA fees, hiring of locals, revenues to local shops and restaurants etc.

Point being, absent wealthy folks give the best ratio of revenues to cost of any SF resident. Cities that have a lot of wealthy absentees invariably have no significant fiscal problems.

A 100 super-wealthy folks in SF could make a real difference, and prevent city services having to be shut down.

Posted by Guest on May. 20, 2013 @ 2:53 pm

just a few weeks ago you were bitching about the wealthy people who donated money to certain causes, such as museums, as opposed to just basically paying more in taxes (with the net effect of the money being pissed away when it is used inefficiently). Now you're praising people who donate their money to certain causes? You can't seem to keep your whines consistent.

tiresome, really.

Posted by Guest on May. 20, 2013 @ 3:05 pm

Hardly Strictly - good. Mostly poor people attend.

Museums - bad. Mostly middle and upper people attend.

With Tim, it always comes back to class warfare.

Posted by Guest on May. 20, 2013 @ 3:18 pm

Tim, I am not some cheerleader for building a bunch of housing for the "super rich," but do you really think that on some of the most expensive waterfront land in the city someone is going to build affordable housing? No. And if the city had the money to acquire the land, wouldn't it be put to much better use purchasing cheaper land elsewhere in the city to building quality affordable housing for a greater number of individuals?

Also, what is the current use of the land on which the 8 Washington development is proposed to be built? Is it affordable housing, or even housing at all? No, it is mainly occupied by a tennis club for the mostly white yuppies who live nearby. Yes, San Francisco will really lose some of its much celebrated cultural diversity if that goes away......

Moreover, you have no proof that people who live in 8 Washington will only live in San Francisco a few days of the year. New York is New York and SF is SF, and what happens in one city with one particular development is really not related to the other. And frankly, whether a property owner does or doesn't live full-time in her local residence, so long as she takes care of her property and pays her real estate taxes, is really no one else's business.

Finally, I would like to see the damn tennis club torn down, some swank housing go up, and watch the city rake in the $11 million in fees, plus the couple of million more in annual property taxes, and put the money to good use, like building more affordable housing--that money will go a long way toward building a better community.

Posted by Chris on May. 20, 2013 @ 5:12 pm

and it's 11 million for that purpose.

But no, this is not about cheap homes at all, as he knows that failing to build 8Wash leads to less affordable housing. He just doesn't want any more people in SF who might not vote the way he thinks people should vote.

And that is why his argument here is a hypocrisy.

Posted by Guest on May. 20, 2013 @ 5:40 pm

That's why I oppose things like Care Not Cash, as well as those despicable calls to give transients a one-way ticket out of town. We need to accept and value the transients who choose to make San Francisco their home, and help those who need it.

Didn't read much of what you wrote -too long for me and frankly you usually don't make much sense, but I definitely agree with the title of your post, Chris. Continue to make comments that make sense like that, and I may start listening to more of what you have to say.

Posted by Greg on May. 20, 2013 @ 6:01 pm

("Transients? Give me a break) but hate the successful, cops and of course Asians.

Posted by Guest on May. 21, 2013 @ 5:13 am

coming from Bold Lying Guest here.

I've had a bit of trouble quite putting my finger on it, but I guess that falsely imputing racism entails the mention of racism; and while calling out a true racist requires such, falsely using the accusation of racism needlessly cites racism, which in a not so round about manner *is* in and of itself racist, since it tends to promote the idea that such anti-social behavior has some degree of normalcy.

Basically, I have no doubt that Bold Lying Guest *is* a racist, and the constant false accusations against greg substantiates that.

Posted by lillipublicans on May. 21, 2013 @ 5:51 am

Greg isn't the only "progressive" here who appears to love all non-whites except for Asians, but he is quite prominent and blatant about it. There's another anon "Guest" here who endlessly crows about the Chinese and how they are criminals.

Apparently progressives like blacks and hispnaics because they are victims, but Asians out-perform whites at school and work, and that really doesn't fit the progressive image of non-whites as victims. They don't know to handle that, and so hate.

And of course the popular pro-jobs Mayor Lee just compounds the problem.

Meanwhile your logic that anyone who calls someone a racist must be a racist, as well as being inane, also condemns you to being a racist since you just accused me of that. Bingo.

Posted by Guest on May. 21, 2013 @ 6:13 am

Actually I haven't seen any progressive say anything against Asians. The only anti-Asian sentiment I've seen recently was from a conservative troll, who was saying on another thread that it's perfectly fine for Nike to slap around female Chinese workers. That person -probably you -then accused *me* of racism for expressing the opposite opinion. This is the M.O. of conservative trolls. This is what you guys do to shut down debate. You sure you're not Lucretia masquerading as "Guest"?

Posted by Greg on May. 21, 2013 @ 7:32 am

You'd be better off ignoring it than consistently getting proven wrong on that.

Posted by anon on May. 21, 2013 @ 7:46 am

Black is white; right is wrong. Lucretia/you didn't "nail" anything. S/he got nailed when I called her out for saying that blacks should be grateful for their enslavement (direct quote). She got angry for being called out on her racism, so she started this kick of accusing me of being anti-asian. Without the slightest basis, of course, but hell, who needs a basis when you're a troll and your goal is to shut down debate?

Posted by Greg on May. 21, 2013 @ 8:01 am

We all say dumb things occasionally but denying it when you were publicly caught out is just pathetic.

Posted by Guest on May. 21, 2013 @ 8:15 am

In my case I never said anything "dumb." I challenged Lucretia the troll to come up with something I actually said, and to this day she can point to nothing. In her case, she really did say something truly vile and racist. No wonder she's upset whenever I bring it up.

Posted by Greg on May. 21, 2013 @ 6:16 pm

Please - you really need to attend a few sensitivity training sessions in Chinatown. And please, don't use that tired old canard of "I supported Leland Yee." It's really so vulgar every time you pull that one out.

Posted by Lucretia Snapples on May. 21, 2013 @ 10:58 am

how the hell do you know what the residents of 8 washington will do or wont do?

Posted by Maldita fondada on May. 20, 2013 @ 5:41 pm

Just listen to him.

"Hey, I liked Warren Hellman -- I just don't like the unknown rich people who haven't even bought a condo at 8 Washington yet".

Tim has the wisdom of a bigot. Just like other bigots "know" that Blacks go on public assistance or Jews are cheap of Asians can't drive. Tim "knows" about those rich people.

Posted by Troll on May. 20, 2013 @ 6:01 pm

bigot stereotypes and associating them with certain groups. You disgust me and have nobody fooled.

Posted by lillipublicans on May. 20, 2013 @ 7:23 pm

Progressives inherited Wallace racialism and classism, pointing that out is bigoted stereotyping.

Posted by Matlock on May. 20, 2013 @ 8:02 pm

Do you want to remind us again why they kicked you off of SF Gate, Lilli?

Posted by Troll on May. 20, 2013 @ 8:05 pm

None of these units are built, much less sold, so you have no clue who will live in them, much less that they will be part time residents. The key idea here is that you have no clue. On many matters.

Posted by Richmondman on May. 21, 2013 @ 3:05 pm

Is he more the kind of super-wealthy resident that you think would suit our eclectic city?

Posted by Anon on May. 20, 2013 @ 2:10 pm

to be "part of the community?" Are third floor dwellers part of the community but fourth floor dwellers not? Or are you mainly concerned about penthouses?

I'm genuinely curious how you arrive at your conclusions. At the time Jane Jacobs wrote her treatise on city life there were already many high rises in Manhattan and a number of them in the Village.

Posted by Lucretia Snapples on May. 20, 2013 @ 2:20 pm

homes for the wealthy, that miraculously there would be hundreds or thousands of affordable homes for people who cannot really afford San Francisco.

Of course, there isn't a shred of evidence for that, the taxpayers are not willing to fund building BMH housing on any scale that would make a difference, and of course Tim routinely opposes building new homes anyway.

The one reliable source of money for BMR housing is the affordable housing setasides from luxury new build, but of course Tim opposes that on class warfare grounds, leaving him nowhere to turn. He wants cheap homes but is bereft of ideas for getting them, and so just rails against the rich as if they were all the anti-Christ.

Posted by Guest on May. 20, 2013 @ 2:36 pm

The NY Times article is about an 84 floor tower where the penthouse is $95 million and "buyers have snapped up apartments on lower floors for prices that are almost as breathtaking". You can get a studio for your housekeeper for $3.19 million.

8 Washington is, I think, 10 floors, less than half the height of the building next to it, and much less than the Embarcadero Towers down the street. The price range of $2.5 to possibly $10 million is much, much closer to the prices of the surrounding condos than it is to the prices mentioned in the NY Times article.

There is no comparison between the two projects. You would REALLY have to play the slippery slope card big time to even begin a comparison.

Tim just tries to get away with it because...well he probably thinks that it is worth a shot.

But the NY Times article is about competition between London and NY and Hong Kong. To compare it to a small project in San Francisco that will sell for approximately the same price as surrounding housing is just crazy. And, btw, the NY tower is not going to destroy the street life at Park Ave and 56th, despite what Tim absurdly writes.

Posted by Troll on May. 20, 2013 @ 2:49 pm

In practice, we are lucky that any of the world's super-rich want to live here. Heck, most restaurants close by 9pm here.

Posted by Guest on May. 20, 2013 @ 3:14 pm

I think the plan must be to collect real estate taxes, but over the span of 10 or 20 years real estate taxes don't keep up because of prop 13. The offshore money pouring into these projects will in no time be paying property taxes rates that will be lower than the fire fighters and police families buying new. That is going to be interesting....

No such thing as long term planning for the crims in charge of SF these days.

Posted by Guest on May. 20, 2013 @ 3:26 pm

exactly how much tax these wealthy guys will pay. It's a lot any which way, and you can only dream of such amounts.

Posted by Guest on May. 20, 2013 @ 3:46 pm

...have you taken into account the loss of the asphalt parking lot? Once a resource like that is gone you can never get it back.

Posted by Troll on May. 20, 2013 @ 4:02 pm

less than every ten years. They will likely will stay pretty close to their actual value property tax associated.

Prop 13 is such a comical boogie man with some people.

Posted by Matlock on May. 20, 2013 @ 9:15 pm

"And I think people who buy homes here should be part of the community. And let's be serious: There is a lack of space in this city, as in Manhattan, and the more you give to luxury housing the less there is for everything else, including cheaper housing. You don't think these high-end towers have driven up land prices and had an impact on everything else? You're crazy."

Yes they are crazy, as well as ignorant. I know that and you know that so why do you give these right-wing trolls any time by responding to their craziness? They are parasites on this site. Everyone of them. They want wealthy condos on every inch of cement in this city. When that's completed, fill in the Bay (screw the views) and build wealthy condos out there too. They are all Leebots. That corporatist conservative piece of work can do no wrong and they're still campaigning for him. Stupid assed people. They want this city for the smug elitist wealthy only, which these useless bigoted trolls pretend to be part of themselves.

These backwater cesspool smug elitist right-wing parasites deserve no time from anyone. All it does it feed their hate, bigotry and ignorance, which they are proud of.

Posted by Guest on May. 20, 2013 @ 4:49 pm

are better off. There isn't a shred of evidence for that, and common sense says that the truth is the exact opposite.

The rest of your rant is just intolerant hate speech as usual, of course.

Posted by Guest on May. 20, 2013 @ 5:35 pm

...called your trickle-down theory "voodoo economics."

Posted by Hortencia on May. 21, 2013 @ 7:04 am
Posted by Guest on May. 21, 2013 @ 7:20 am

So everyone who is middle-class or below is a "loser." Got it.

Posted by Hortencia on May. 21, 2013 @ 2:57 pm

you take more than you give. Which are you?

Posted by Guest on May. 21, 2013 @ 3:06 pm

... "giving" and "taking"? Monetarily only? I think a never-very-rich person active in his or her community is much more of an asset to that community than someone who lives here two weeks out of the year, paying sales tax during that time and property tax once a year.

Posted by Hortencia on May. 21, 2013 @ 3:41 pm

These backwater cesspool smug elitist LEFT-wing parasites deserve no time from anyone. All it does it feed their hate, bigotry and ignorance, which they are proud of.

Posted by Maldita fondada on May. 20, 2013 @ 5:45 pm

And yet you're giving them time by being here. Scram.

Posted by Greg on May. 20, 2013 @ 8:54 pm

I wish I knew who leaked this to you:

"They want wealthy condos on every inch of cement in this city. When that's completed, fill in the Bay (screw the views) and build wealthy condos out there too. They are all Leebots."

But since you know you might as well know the rest. We also plan to build a roof over Hunter's Point and build more condos on it. There will be occasional glass panels designed to allow some sunlight for the people living beneath us, but none on the golf course.

Posted by Troll on May. 20, 2013 @ 6:16 pm

"You're crazy."----Tim Redmond

Absolutely. They have to be crazy. What well-adjusted, rational, reasonable person in their right mind would go to seed, decay, rot, stagnate and go to pot on a site that they can't stand? Who would do THAT? Someone who is crazy. Not all there. That would be like me going on some rightwing site and baiting the fools there. I have no interest or the time in doing that, and it would be dysfunctional. I have better things to do with my time than to go on a rightwing site and argue incessantly with people. It accomplishes nothing. But the righwing trolls here come here to bait people and then like the fools they are slap each other's back in troll agreement trying to "score points." Very childish. Maybe they do what they do here because they don't have the maturity to do anything else. The septic people.

Posted by Guest on May. 20, 2013 @ 7:43 pm

is a mental illness.

Posted by Matlock on May. 20, 2013 @ 7:58 pm

Financial bubbles creating conditions for new crash
21 May 2013

It is a sure sign of the systemic breakdown of the global capitalist system that the very measures put in place to try to prevent a crisis are creating the conditions for a financial meltdown beyond even the scale of 2008.

For almost five years the world’s major central banks have pumped an estimated $7 trillion into financial markets with the stated aim of trying to spark an economic recovery. Economic data from around the world indicate that it has been a manifest failure.

The statistics on price levels are among the most significant. These show that rather than prices increasing—a sign of recovery in so-called “normal” conditions—deflationary pressures are intensifying.

In the US, consumer prices fell by 0.4 percent in May, the biggest decline since late 2008, following a 0.2 percent decline in April. In Europe, excluding food and energy costs, consumer prices in the 17-member euro zone rose by just 1 percent in April from a year earlier.

The downtrend has far-reaching implications. Confronted with falling prices for their products, major firms and corporations seek to make profits not by investing and expanding production, as they would seek to do if a recovery were underway, but by savage cost-cutting coupled with financial speculation. The consequent cuts in pay and jobs lead to a reduction in consumer demand, further fueling the deflationary trend.

Other economic data highlight this process. Last month, US industrial production fell by 0.5 percent, compared to a projected decline of 0.2 percent, prompting predictions that results for the second quarter would be even worse than the last quarter of 2012, when the US economy showed virtually no expansion.

Article continues here:

http://www.wsws.org/en/articles/2013/05/21/pers-m21.html

Posted by Guest on May. 21, 2013 @ 4:11 am

But that's a good thing.

And shrewd investors can make money out of down markets too, so we should not fear market cycles.

Posted by Guest on May. 21, 2013 @ 5:16 am