The Home Ownership Thread

[Jr Mouse]

Or teach their children, patrol their streets, fight their fires... I am a pretty gregarious person (I know, you're shocked), so I tend to talk to the folks who work in restaurants, cafes, stores. I can't think of one worker who lives in San Francisco. Even the owner of one of the cafes commutes in from the East Bay.

Does San Francisco have programs in place to help reduce gentrification? I know in Austin there are several programs in place that help ensure there are less expensive living options available. Usually in the form of tax breaks being given to new apartment developments if they agree to rent a small percentage of their units out at a reduced rate for people who meet certain income requirements.

 

[djblisk]

So permitted work to upgrade my electrical panel in Los Angeles is ranging from $2,200 to $3,500 including permits. Thats a really wide range, don't you guys think?

 

[djblisk]

Does San Francisco have programs in place to help reduce gentrification? I know in Austin there are several programs in place that help ensure there are less expensive living options available. Usually in the form of tax breaks being given to new apartment developments if they agree to rent a small percentage of their units out at a reduced rate for people who meet certain income requirements.

Maybe I am not smart enough to understand but whats the point of allowing certain demographics a cheaper option while people that have money don't have the same option in a city like San Francisco?

Let the real estate market eat itself until it can't support itself anymore buy pushing out lower income people. The prices would assuredly go down if there were less businesses, don't you think?

For everyone who keeps asking how people can spend money on real estate in LA and SF. It isn't easy but salaries are higher than the average city and you have to be diligent about budgeting.

 

[Jr Mouse]

The real estate market will eventually eat itself up anyways. The tiny percentage of people who take advantage of these programs will do little to slow that down.

 

[jcman311]

So permitted work to upgrade my electrical panel in Los Angeles is ranging from $2,200 to $3,500 including permits. Thats a really wide range, don't you guys think?

Depends on what is being done. Honestly I thought I was having some easy electrical work done and got a couple different quotes. I ended up using a time & materials company and it ended up being cheaper and done better than some of the other work I had done previously. I heard about the company I used from my brother-in-law. I know it can be impossible sometimes, but you need references if you are hesitant about pricing/work.

Edit: to explain further, I had a company come out and quote some various fixes, moving some boxes, adding a ceiling fan box. They came back at around $1500. Time and materials to do it from the other company was 8hrs at $99/hr. Materials were under $100. About 2/3 the price of the original quote.

 

[brokencycle]

Low interest rates mostly
https://www.trulia.com/blog/trends/not-father-market/

That's why the bubble could easily burst as rates continue to climb. A $1M mortgage goes from $4352/mo at 3.25% (which was the rate on election day) vs $4919/mo at 4.25% (what bankrate says is today's rate). If rates go up to 5.25%, the payment goes to $5522/mo. That's before insurance, taxes, etc. A 1% tax rate on a $1M home is another $833/mo.

Those numbers start adding up quickly even for someone making $200k/yr.

 

[brokencycle]

Depends on what is being done. Honestly I thought I was having some easy electrical work done and got a couple different quotes. I ended up using a time & materials company and it ended up being cheaper and done better than some of the other work I had done previously. I heard about the company I used from my brother-in-law. I know it can be impossible sometimes, but you need references if you are hesitant about pricing/work.

Edit: to explain further, I had a company come out and quote some various fixes, moving some boxes, adding a ceiling fan box. They came back at around $1500. Time and materials to do it from the other company was 8hrs at $99/hr. Materials were under $100. About 2/3 the price of the original quote.

I like doing this with electricians for smaller jobs. We did some lighting in our last house, and they did 3 hours with two people at $67/hr/person to redo the lighting in the kitchen, plus they fixed some electrical at the breaker that was done wrong. Much cheaper than the fixed bids.

I don't know if on my current project it would have been cheaper because the guys have been back numerous days (though if I was paying them by the hour, I'd want them to have just come and done all the work in a couple days). Put another way: their fixed price was in line with what I would have thought based on my $/hr back of envelope math, but it took them much longer than expected.

 

[sugarbutch]

It’s easy to say the market should sort itself out/don’t give lower income people any help, but that fails to account for all the market distortions working for current homeowners and against those trying to enter the market.

The big ones...

Artificially constrained supply because of: NIMBYs, restrictive planning codes, inconsistent enforcement of planning codes, lengthy planning process which makes it difficult to find and retain financing for all but the most high-margin projects

Disproportionate tax burden on new entrants because incumbents have locked in artificially low assessments of property values

Mortgage-interest tax deduction for homeowners, but no housing tax credit for renters

 

[sugarbutch]

@Jr Mouse, San Francisco has an affordable housing mandate for multi-unit developments (threshold is, I think, five units) requiring 20% of the units be offered at below market rate (based on a percentage of area median income, with different thresholds that try to make some available to the poor and the lower middle class). We also recently established a program which gives developers the right to build up to two additional floors if they increase the percentage of affordable units and include multi-bedroom units which can accommodate families. (The typical SF condo is a one-bedroom.)

 

[brokencycle]

Mortgage-interest tax deduction for homeowners, but no housing tax credit for renters

Interestingly, MN actually allows renters to deduct 17% of rent because it is assumed to be for property tax. Of course that only applies to MN taxes.

http://www.revenue.state.mn.us/individuals/prop_tax_refund/pages/renters_property_tax_refund.aspx

The other piece on mortgage rates and mortgages is how student loans have impacted people's ability to afford housing, especially in a place like SF. It is easy to tell some 21 year old that they're going to make $250k so they should be able to afford something, but they may have a few thousand dollar per month student loan bill.

 

[sugarbutch]

Giving yet another advantage to those whose parents can pick up the bill for their education. “Fair” is hard to pin down...

 

[PhilKenSebben]

Where Michigan is a dick...is that they make it legal for areas to charge higher property tax rates for non-residents, but those non-residents aren't allowed to vote on the measures (I believe some other areas in the US have rules in place where all property owners can vote in certain elections, even non-residents or non-citizens).

It's just a total racket. A lot of the lakefront communities that attract Chicago residents have significant extra taxes for things like schools. Makes no real sense as summer-home owners are obviously not using the local schools (not saying they shouldn't have to pay for them anyways...just saying they shouldn't have to pay *more* than the people who actually have kids in schools).

Technically, I think that it is that residents who homestead (main house to live in primarily) a home get a discount on taxes, not that non-resident get charged a higher rate .there is a difference, albeit a small one.

I think the theory here is that I am making up the difference by selling and consuming in the area where I am living, also, the state tries to make it appealing to live here .just like attracting corporations .no difference .I definitely don't have a problem with this one

Also, you are only allowed this discount on ONE property .So if I own 5 Michigan homes, I don't get the discount on my taxes for all of them, just the one

 

[otc]

Technically, I think that it is that residents who homestead (main house to live in primarily) a home get a discount on taxes, not that non-resident get charged a higher rate .there is a difference, albeit a small one.

I think the theory here is that I am making up the difference by selling and consuming in the area where I am living, also, the state tries to make it appealing to live here .just like attracting corporations .no difference .I definitely don't have a problem with this one

Also, you are only allowed this discount on ONE property .So if I own 5 Michigan homes, I don't get the discount on my taxes for all of them, just the one

I think that's the case--you are expempted from the school tax levies if you homestead. Although to your last point, I'd say that even as a michigan resident, it is kinda BS. If you live in Detroit but have a cottage on Lake Michigan, you still get stiffed with a school tax bill for schools you don't use.

Again, I am not opposed to non-residents having to pay for schools (even if you just own a vacation home somewhere, you still benefit from the local town doing well), but where it seems absurd is that you have these levies for the schools...but all of the people who actually use the schools are exempted from having to pay the school levy. That just feels super wrong to me (on a boston tea-party level). Unlike something akin to a hotel/lodging tax, people who own property have made a long-term commitment to the community but are getting fucked by not having any representation.

I mean...half of these communities wouldn't exist without tourism. Not every town can be home to the Whirlpool headquarters, and those that don't would have failed a long time ago but for non-resident owners bringing in tourism dollars (either through summer home visits or through making it available as a vacation rental).

 

[djblisk]

It’s easy to say the market should sort itself out/don’t give lower income people any help, but that fails to account for all the market distortions working for current homeowners and against those trying to enter the market.

The big ones...

Artificially constrained supply because of: NIMBYs, restrictive planning codes, inconsistent enforcement of planning codes, lengthy planning process which makes it difficult to find and retain financing for all but the most high-margin projects

Disproportionate tax burden on new entrants because incumbents have locked in artificially low assessments of property values

Mortgage-interest tax deduction for homeowners, but no housing tax credit for renters

I still don't understand the concern. Yes, I could be dense. Tax burdens? That happens to everyone with increasing salaries, mortgage tax deduction for homeowners is great if you can save enough to get a home. Renters seem to have less risks that home owners, especially with renter friend laws in California.

I know I'm nitpicking your concerns, which I see as very valid, but where do we stop here? It feels like a losing battle to get lower income families back into SF. Let the city real estate eat itself until it stabilizes.

 

[djblisk]

I guess the overall point is why are successful people being penalized for being successful?