February 29, 2008
Put a Condo On: Glut, Freeze, Drop and Affordable Housing
So my partner recently signed up with a rock-climbing gym in downtown Oakland. The gym is pretty convient for us since we live fairly close to downtown and they have locations in San Francisco and Berkeley (which I supposedly could get to after work since I work in the City; NOT! I am too lazy). Anyway, every time I go over to the Oakland location on 20th and Telegraph, I notice this large swath of unfinished condos. In fact, there seem to be large swaths of condos everywhere in Oakland; especially in and around downtown. So it turns out that some developers have halted construction on several Oakland condo projects due to a difficult market. Additionally, proposed projects on the Town’s “Major Development Projects” list have been removed (all downtown).
So, getting back to the condos on 20th and Telegraph: what’s with those? All I can find so far is that they are a project of Doug Cain and Michael Panico’s, and were in the works as early as 2006. Let me know if you have any info.
Oh, and by the way: Oakland Mayor Ron Dellums has proposed that new construction condos include affordable housing units. The City Council is now considering his proposal amid much heated debate: affordable housing advocates say yay while developers say nay. What’s your take? As always, thanks in advance for your feedback!
In the meantime, here are some Oakland condos for sale with recent price reductions.
425 28th St. #204A 1bd/1.5ba Reduced $6,000 to $419,000. $399/sq.ft. Downtown Oakland/Pill Hill
2323 Magnolia St. #8 1bd/1ba Reduced $24,000 to $375,000. $324/sq.ft. West Oakland Described as “semi-raw”.
2933 McClure St. #13 2bd/3ba Reduced $27,000 to $498,000. $353/sq.ft. Described as “Lower Temescal” but in my book this is more “Pill Hill”.
466 Crescent St. #326 3bd/2ba Reduced $20,000 to $365,000. $311/sq.ft. Grand Lake/Adams Point
199 Montecito Ave. #402 2bd/2ba Reduced $20,000 to $579,000. $585/sq.ft. Adams Point area
1 Lakeside Dr. #1705 1bd/1ba Reduced $40,000 to $399,000. $479/sq.ft. Overlooks Lake Merritt/Dowtown side of Lake Merritt
V Smoothe said:
The buildings in question are the Uptown Project, a large development of new apartments. The project is being built in phases, and the first phase opened for rental in December, I think. I believe a second building is supposed to be opening this summer.
February 29, 2008 2:33 AM
Alison said:
Thanks V Smoothe. I checked out the webiste for the Uptown; with 3 projects, including one called “The Telegraph” that looks about right. And I think their offices are on 19th and Telegraph.
February 29, 2008 8:29 AM
David said:
Developer needs to redo the loans and switch the buildings to rentals.
Problem is that requires changing the loan terms.
“affordable housing” Dellums should encourage the developers to finish the buildings and make no requirements as to “affordable units.” Increase supply=lower price, and there’s your affordable housing.
February 29, 2008 9:13 AM
Alison said:
Thanks David. I didn’t know about that option: switching from condos to rentals; As far as increased supply=lower price, that would make sense, but not sure if it would ever get to the point of being affordable for the lowest income brackets. I’m thinking mixed income housing… more on this to come. Thanks!
February 29, 2008 4:27 PM
David said:
I’m not sure if Dellums is talking about selling these at below-market or renting them.
If it’s selling, “affordable housing” is anything but. I remember reading about an Emeryville program–basically the person buys the place, enjoys paying a mortgage AND property taxes, HOAs etc, but has his appreciation capped when he sells it. Sounds like a more expensive form of renting to me.
If it’s renting, that’s what Section 8 etc is for.
Dictating price and decreeing builders sell some units below market only guarantees that the remaining units are priced too high for middle-class people, thus continuing to squeeze out the middle-class, leaving the area comprised of rich and poor. This is yet another reason why young middle to upper middle class families are leaving the area and California in droves.
As to converting condos to apartments, it’s a big headache for the developer (renegotiating the loan terms), but might keep such projects from being total losses.
March 1, 2008 2:29 PM
Susan Kuchinskas said:
I don’t agree with David about affordable units requirements. First, most so-called affordables are really priced so only middle-class folk can afford them, because they’re pegged to a percentage of the highest rental rates.
Also, declining demand never sends prices down enough to really make a difference, because tax laws encourage developers and large landlords to leave units vacant and take a tax write-off rather than lower prices.
March 2, 2008 5:37 AM
Alison said:
Thanks for your input Susan. I enjoyed checking out your various blogs/websites. I think it depends what city/county you live in. I know that for SF County, a colleague of mine wanted to go through the below-market-rate option, but because they took her savings into account as part of her income, she did not qualify (even though her household income was “lower” middle class). Also, similar to Emeryville, any money one makes from eventually selling a below-market-rate property in SF goes back to the City. As far as Oakland, if you are first-time homebuyer (which I realize not everyone looking for BMR will be…)there are numerous programs that one can go through; some are for low-income, others, like Acorn Housing (which is not specific to Oakland, but is nationwide) give a pretty wide berth as far as income limits.
March 3, 2008 7:58 PM