Photo Credit: Ariel Dovas via the Curbed SF Flickr Pool
Rents on the rise in San Francisco? Most likely, according to the Chronicle. It seems only yesterday that landlords are offering incentives around town. While this may be still happening in other parts of the country, that get-one-month-free strategy dried up here long ago. For one thing, people have jobs. When people have good jobs, they tend to buy, but it's become so hard to get a mortgage that many would-be buyers are stuck on the sidelines staring at owners who will do anything to not sell their home at a loss. So house prices stay artificially high here- a $600,000 house here may be a bargain, but have you seen what the same money will buy in Sacramento? Granted, you'd have to live in Sacramento.The lack of any rent controls on buildings built after 1979 means that landlords will charge whatever the traffic will bear. So how much will things go up? Maybe another ten percent. And really, we can carry on all we want about the rent vs buy debate, but if you cant get a mortgage, it's all hot air. And there are some other civic tweaks that will keep rents high: payroll tax exemptions and unfettered private transport companies.
While the six-year forgiveness of the 1.5% payroll tax in the Mid-Market area seems like a modest amount of money to give up to revitalize a very sorry part of town, it's not about the salaries. The real money San Francisco will be foregoing is when companies like Twitter go public- and we lose the 1.5% on stock options which are considered payroll under the current tax code. So what's 1.5% of a billion dollars over a few years? No wonder they threaten us with? Brisbane. If the Mid-Market rehabilitation is successful, it will mean more people putting pressures on adjacent neighborhoods like the Mission and the Tenderloin.
As for propping up house prices, we can't underestimate the success of private transport companies that carry their workers- usually free, with WiFi- to their jobs down the Peninsula. It started in Noe Valley and Bernal Heights; buses have been spotted in recently in Hayes Valley and the Haight. And there must be some well-compensated renters on those buses, no? So there are these immense vehicles running around town siphoning revenue from CalTrans and MUNI but keeping property values and tax revenue both high and relatively stable. It's your call. Pay more rent or get adopted by someone with a rent-controlled apartment. The linked article is worth reading if only for the rabid comments.
· If no one's buying, does that mean rents are about to rise? [On The Block/SFGate]