The Burlingame Voice

Density Tsunami Approaches

We have known the tsunami of development has been approaching for several years.  The townhouses on Anson Lane have arrived for sale:

Brand new construction in Burlingame. This 3 bedroom, 3.5 bathroom, 2 story townhome style condo is located in the brand new community The Residences @ Anson is built by D.R. Horton, America's builder. Included features, Avalon shaker style cabinets w/satin nickel door pulls, Stainless steel Jenn Air appliances, minus washer, dryer and refrigerator.   $1,903,540.

The massive block of 268 apartments that are part of the same development on Carolan Ave. will be hitting the market soon I imagine.  I have verified with a member of the School Board that the kids in this development are zoned to Roosevelt School.

Further north, the Planning Commission has cleared the first of three big developments.  Per the Daily Journal

The Burlingame Planning Commission unanimously approved the plan to construct at 1766 El Camino Real a development featuring 60 residential units atop 148,000 of office space during a meeting Monday, Aug. 24. The plans will advance onto the Burlingame City Council, which will ultimately determine the fate of the development.  Officials admired the seven-story tower which will also feature a ground-floor lobby and retail center plus underground parking — differing from those who feared the development was incompatible with its surroundings.  

“Will it change the neighborhood here? Yes. That’s the point,” said Loftis, who noted the stretch of north Burlingame has been identified by officials as an area to build additional housing and allow greater density.  He added officials recently approved a general plan update making way for the new uses, making clear the character of the area would change.

And the next two shoes to drop are

To advance the synergy of the emerging area, plans have been filed to build a seven-story tower nearby with 169 units at the corner of El Camino Real and Murchison Drive, and about 1 mile away a proposal was made to build 120 units in a six-story development which includes cultural art space.

That's 349 new units in "North Burlingame".  I'm researching which school(s) these kids will be assigned to when they are all open.  In the meantime, I think we need a better name for this big new neighborhood. Any suggestions, readers?  There is also plans afoot at the Mercy property for a sizable residential development.  That one will be easy to name:  Have Mercy on Us.  That's 630 new units plus the Hower Auto development on Bayswater and whatever gets added at Mercy.  And still, "housing advocates" say it is not enough.........

Keep this view of ECR in mind as it won't look like that much longer.

 

Bay Area Exodus? How Big? How Long?

A lot of the fire, heat and policy-making on the Peninsula lately has  been driven by the belief that we will be adding more of...well, everything.  Except perhaps affordable, local entertainment.  Rent control.  Affordable housing.  Mass transit.  High density.  Subsidized X, Y, Z and back to A.  ADU's.  UBI.  Free lunch.  What if it's all just BeeEss?

You can find polls and surveys to support or contradict any position you choose.  But you can't deny the fact of open market pricing.  Not the engineered, subsidized, hidden-cost stuff like renewable energy.  I'm talking the "walk into a place of business and get a price quote" response.

Here's the "walk-in" price that caught my eye this week.  A friend of a friend is moving to Portland.  I know, I know--really? Now?  He's got remote work status until..... who knows when.  She can transplant her practice anywhere.  All that aside, the cost to rent a truck to move your stuff yourself to Portland today is $2,500.  The price to rent the same truck in Portland to drive to the Bay Area is.......wait for it, $300.  If I gave you my special 20 minute How-to-Negotiate class, I'll bet you could get them to pay you $300 to bring the truck back for them.  It would cover gas, lunch and the Golden Gate bridge toll.

Will the exodus continue?  Yes.  Will it last more than a couple years?  Maybe.  Will it reverse within the next five?  Doubtful.  I'm glad I'm not all-in on a high-density, all-electric$$, bird cage with a minuscule courtyard, 6' x 6' elevators and no balcony that I will need to sell for $650,000 to break even.  The old saying "don't fight the Fed" only applies if you have to get in the ring.

Single-Family Homes Need Single-Family Zoning

The Wall Street Journal and the NY Times are both reporting that people all of sudden want out of dense city living and are on the hunt for single-family homes in the suburbs.  We talked about that and the associated turn away from mass transit here a month ago.  But it's not just the national media reporting generally.  Our very own high-performing realtor, Raziel Ungar, is seeing much the same thing right here in B'game as he wrote this week

It's been an adventurous week in real estate - from what I've seen, things are heating up. Two homes in Burlingame that were well priced, move in ready, and in excellent locations, had five offers each on them and sold multiple hundreds of thousands over asking. I've had more inquiries in the last few weeks from buyers living or renting in San Francisco than I can remember in a concentrated period of time; naturally, many people who may or may not have considered the peninsula, Marin, or the East Bay have placed moving to the suburbs to a home and a yard towards the top of the list. An article in yesterday's New York Times called Coronavirus Escape: To the Suburbs detailed in more detail what I have been experiencing as well.

The Journal's take on the trend is that it's not just buyers.  Renters are feeling the same need

Wall Street’s wager on high-earning suburban renters is paying off, and it is raising its stakes.  Investors are flocking to America’s mega landlords, drawn by signs the companies that emerged from last decade’s foreclosure crisis owning huge pools of rental houses are weathering the economic shutdown far better than feared. Many also expect that the coronavirus pandemic will make suburban single-family homes both more desirable and more difficult to buy for even the relatively well-heeled.

Share prices of the largest home-rental companies, such as Invitation Homes Inc. and American Homes 4 Rent, have outpaced the broader stock market since they and the S&P 500 bottomed in late March. Invitation is up 57% since then and American Homes has gained 36%, compared with the S&P 500’s 31% climb.

Perhaps you also saw the SF Comicle piece about people setting home offices in tents in their backyards to get some more private workspace.  You can only do that if you HAVE a backyard.  So the question is will the city continue to fight to protect single-family zoning, will the state bureaucrats get drawn into more pressing matters than ruining neighborhoods and will the development industry respond?  One of the rare silver-linings of the Covid-19 upheaval is according to Zumper "It seems rents for studios through 2 beds in Burlingame have seen large month-over-month drops between 5-7%".  Anyone care to guess whether or not rents would be coming down now if we had rent control in place?

Green Policies Backfire Against the Coronavirus

I had my next post outlined in my head when I read this piece in today's Wall Street Journal by a couple of podcasters that says the same thing only better:

We really knew there was a crisis when San Francisco, which 13 years ago banned single-use plastic bags in grocery stores, would now prohibit reusable bags as part of its effort to prevent spread of the novel coronavirus.

Plastic-bag bans aren’t the only “green” policy that has been found wanting in the real world of a pandemic. For decades environmentalists have hectored us to get out of our cars and crowd into subways and buses. “From Amsterdam to Tempe, Arizona, more and more cities are finding that eliminating cars from their streets makes people happier and healthier,” Fast Company reported in January, noting with satisfaction that in one Helsinki neighborhood, “none of the new apartments come with parking.”

You can’t have a car-free community without high-density housing, so environmentalists have promoted apartment living and a war on suburban “sprawl.” But now those living in dense apartment buildings risk their lives by walking out the door into common spaces and shared surfaces, even before they reach the crowded, densely populated streets below. Suburban families, by contrast, are often able to maintain community connections even while socially distancing and are more likely to have additional room for their children to roam while out of school.

Environmentalists talk a lot about “externalities,” the unintended consequences of economic decisions. The pandemic is a reminder that policy decisions have externalities too.

Mr. McAleer and Ms. McElhinney host the podcast “The Ann & Phelim Scoop.”

The question is will we learn anything from the COVID-19 onslaught?  Let’s face it, this will not be the last pandemic.  We’ve had H1N1, SARS, MERS, Ebola, Russian Flu, Spanish Flu and the regular flu that mutates every year, so the vaccine manufacturers are half-guessing each year.   More than one person has said to me “Face it, we will look like Manhattan in 20 years.”  Well maybe, but maybe not.  Now is the time to tell Sen. Scott Weiner—the enemy of single-family zoning—and the YIMBYS to take a hike.

NIMBYs and YIMBYs

The Daily Post is digging into the state senate candidates views with some panache -- or is it just cheeky reporting?  I like that they have sent out questionnaires to all five candidates and are writing articles based on the answers.  Jerry Hill's seat is an important one and we need a strong rep for the Peninsula to sit in it.  Here are two recent front page headlines

Stopping Scott Weiner's progressive fascist fantasy called SB50 is a top priority.  Per the Post article, Lieber and Masur "were more accepting of SB50 than the other three, but would have some amendments".  Masur has two "amendments" regarding some grace period for cities and getting rid of the sub-600,000 county population exemption.  The latter should be obvious to anyone.  Why exempt the counties with the cheapest land costs and hence the cheapest cost to build?  Duh.

The other three, Annie Oliva of Millbrae, Michael Brownrigg of dear ole Burlingame and Josh Becker of Menlo Park apparently were less supportive of SB50 in their answers to the Post.  They were also pretty clear in their answers to the last question in the survey, "Simply -- do you identify as a YIMBY or a NIMBY?"  Again, Leiber and Masur owned up to being YIMBY's while the other three walked down the middle line.  So in my view this is a three horse race--the YIMBY's should run in SF since things are working so well up there.

A letter writer from Palo Alto took the Post to task for asking "such a reductive question that encourages lazy, black and white thinking about complex issues".  I can sympathize a little with his concern, but we did get a clear "yes" on the YIMBY question, so we learned which candidates to give a clear "no" on.  Thus the question had some value.  Kudos to the Post for digging in.  We have a couple of months to go before election day, so keep it up! Correction: Just VIsiting caught me confusing the timing of the Council race with the State Senate race.  Primary in March, election next November (see his comments for good insight).

Three Thoughts From Altitude

I had a lovely long stay in Tahoe this past week.  It's as good or better than in the winter even for an avid skier like me.  My wife and I hiked, golfed, friends have a boat that they shared and so one.  It's a great part of California.  As I rolled "down the hill" yesterday, three thoughts came to mind:

1.  Somehow a series of little towns and ski areas manage to put on more live music in a week than we see in B'game in a month or more.  It's sort of embarrassing.  I hear talk of "community" all the time in the Bay Area and yet Tahoe manages to quadruple the quality community time with seemingly little effort and great results.

2.  The livability problems in San Francisco are doing serious, probably permanent harm to its reputation as a world-class city.  The Wall Street Journal is one name-brand news source talking about the problems.  For example, this weekend it noted

The website RealtyHop.com dubs San Francisco “the doo-doo capital of the U.S.” They noted that the city’s poop reports almost tripled between 2011 and 2017.  The problem draws attention because the poop increasingly comes not from dogs but from humans.  There are myriad causes at work, no doubt. But there was no “defecation crisis”—a term usually associated with rural India—in the 1930s, even with unemployment at 25%, vagabonds roaming the country, and shantytowns and “Hoovervilles” springing up everywhere. Today’s homeless and the hobos of the Great Depression are different in many ways. 

In California at least, one is struck by the contrast between the fastidious attention paid to the social duty of scooping up and disposing of dog feces, and the rather more paralyzed and guilty reaction to the plague of human feces. The former is treated as a moral imperative among the enlightened—and the thin plastic bags used as the means to this moral end have so far escaped the fate of plastic straws, well on their way to being outlawed as an environmental outrage. Even social-justice warriors don’t consider it their personal duty, however, to tidy up after their fellow human beings on the streets.

For us locals that is hardly news, but what is news is that elsewhere in California (like Tahoe) long time nearby visitors to EssEff have stopped visiting.  We were paired up with a lovely older woman on the golf course who only waited until the second hole to note that she and her husband used to come to SF every month for 40 years for "dinner and a show" or museums and such.  No more.  One wonders how bad it has to get before the laissez-faire mindset gets whacked on the side of the head?

3.  Who's in charge of infrastructure?  It took three hours to drive from Tahoe City (on the North shore) to Berkeley-- about 190 miles.  That's pretty much the usual time without winter weather.  Then it takes more than an hour to go the last 37 miles to Burlingame on a sunny weekend afternoon with the Giants out of town.  Where are the environmentalists decrying the air pollution of thousands of cars idling in traffic?  Where are the transit officials with new ideas?  Where are the housing advocates smart enough to see the cart might be in front of the horse?  Did all of the urban planner decamp for Boise or Spokane?  Just wondering.  

  

Scott Weiner Comes to Burlingame

Two weeks after state senator Scott Weiner’s visit to Burlingame I am still marveling at how smoothly he can speak out of both sides of his mouth in a single meeting.  Weiner was invited to the Lane Room by Thrive which is a consortium of non-profit organizations.  He was invited to discuss the problems non-profits are having retaining staff as the cost of housing rises.  Weiner’s Senate Bill 50, discussed here and here, appeared to be popular with some in the audience of about 60 people.

In an interview by Samaritan House CEO, Bart Charlow, Weiner comes off as a tall, skinny, somewhat geeky attorney with a heart of gold.  He’s a man on a valiant mission.  Yet I saw in him a streak of progressive fascism interested only in consolidating power in Sacramento by any means necessary.  After describing the “carnage” that is happening in California and is “hollowing out even the middle class”, he excoriated the “No Growth” people for “adopting progressive talking points” such as “we need to build only affordable housing”.  He believes that will never happen without market-rate housing to subsidize it, but others think differently.  To him, it is better to demolish the concept of R1 zoning in the six most populous counties in the state via SB50 thus hurting the middle class homeowners who rely on their single-family homes as their largest investment.  Weiner’s claim that “this is not about getting rid of single-family homes” rang hollow after he said “single-family homes are a ban on affordable housing”.

When asked about SB50 excluding less populous counties, particularly Marin County, Weiner spoke “bluntly” about needing to do that to get the bill through a Senate committee headed by a Marin senator.  So much for principles of “fairness” that one hears so much about from progressives.

When asked about the housing quotas cities have been given (known as the RHNA formula), Weiner complained about how the formula has been gamed by some cities and two-thirds of cities don’t meet their low-income targets.  It didn’t seem to occur to him that perhaps that state-imposed process should be fixed by the state Legislature.  Better to scrap the whole idea of city zoning and let anyone build anything anywhere.  Nice leadership.

Someone other than me asked Weiner where all the water will come from?  He responded that “we have a structural deficiency” on water infrastructure and then made the ridiculous claim that “building housing doesn’t drive population growth” or water consumption.  He really said that.  After the obligatory comments on low-flow toilets and water reuse (“we are way behind Australia and Israel”), one was left to wonder how he would keep the middle-class in California without consuming more water.  It must be nice to live in the fairyland of the state senate and not have to worry about fixing “structural deficiencies” before plunging ahead with massive growth laws.

When asked about the impact that AirBnB and VRBO have on permanent rental housing and whether something should be done to limit those businesses, Weiner magically turned into a private property rights advocate.  He didn’t even seem embarrassed by the switch.  He then proceeded to say that “cities have ample tools to ban or restrict” AirBnB, yet he’s quite comfortable completely overriding these same cities’ zoning ordinances.  I almost had to admire such blatant hypocrisy spilling out in a single meeting.

The most revealing comment of the 90-minute session was buried in one of Weiner’s asides about Area Median Income (AMI) ranges and which income range was most “deserving” of subsidies.  He noted that this was a problem until we tackle “the long-term project to realign our capitalist society and socialize housing”.  There you have it.

Changes to Lyon-Hoag

We've been following the oncoming future of the Lyon-Hoag neighborhood for quite some time including here and here.  This might be the section of town undergoing the most change--at least until the up-zoning in the North end happens.  Regardless of how long the changes have been in the making, it's still a shock to many.  I needed a tow recently and the tow truck driver who has been doing that job for almost 30 years couldn't believe that Hower Auto had closed and that the Datsunville building had been sold and was likely closing.  At least Washington School is getting some new permanent classrooms as the population of kids is likely to jump once again with all of the development coming.

And don't expect the pressure to subside.  Beyond Facebook and the crazy CASA Compact is another wave of price pressure from the next wave of Bay Area IPOs.  The Wall Street Journal notes

Friday’s strong public-market debut of ride-hailing company Lyft Inc., now valued at roughly $30 billion, is expected to kick off a rush of massive IPOs that include competitor Uber and digital-imaging company Pinterest, supplying the Bay Area with possibly thousands of new millionaires.  What sets this IPO season apart from previous offerings is the sheer volume of workers expected to benefit from the bonanza and its impact on the Bay Area, already strained by a growing class divide fueled by the years-long tech boom.

One early Uber employee, who is currently living in a rental apartment with their spouse and sold about half of their shares during an internal sale, said they had been eyeing single-family homes in the city. But that even with a budget of $4 million to $5 million, they didn’t feel they could manage carrying costs and private school for their future children. They are now looking at homes in San Francisco’s suburbs farther south.

The eternal question is whether B'game and our neighboring towns will end up as an expanse of offices, housing and restaurants and nail salons with little in the way of small services like independent auto repair, mom and pop retail, entertainment venues or anything unique from any other suburbia?  Plenty of B'gamers fear the worst about that homogenization and the traffic with the most common question today being "If you decide to go, where would you go?" not generating a satisfactory answer very often.  Here's the Washington addition and the last view of Hower.

Developer Fees Coming

Ronald Reagan is famous for saying “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”  This has been proven over and over again.  I was reminded of the quote when I read that B'game Planning Commission is recommending a "Developer Fee" for new residential development.  The DJ notes the amounts as

Under the proposal, rental developers seeking to build up to 50 units per acre would be required to pay $17 per square foot; those proposing up to 70 units per acre would be required to pay $20 per square foot; and those proposing more than 70 units per acre would be required to pay $30 per square foot. Condominium developers proposing 7 units or more would be required to pay $35 per square foot.

That last bit seems like a typo, but the point is adding some costs that could total $15 mil over the next five years for the 400-600 units that are in the "pipeline" may have the unintended consequence of slowing down development.  If it does, I'm all for it, but that ain't what the initial goal is.  What to do with $15 mil and where to do it is another political football.  While we ponder that eventuality, here is another Reagan quote: "The nine most terrifying words in the English language are “I’m from the government, and I’m here to help.”

Jobs > Housing

The Daily Post blessed us with an article about the trees that couldn't find the forest if they had a compass, Google maps and a dozen Boy Scouts.  The headline was "Area adds far less housing than jobs:  14,900 new homes for 52,700 workers".  The thoughtful response to such a headline is a) Apples are not oranges and b) Where the heck is the water going to come from for that many people?   If you wanted to add a c) and d) go for schools and police/fire, but let's just focus on a) and b).

Unfortunately I cannot make fun of the journalist because the article has no byline.  But let's just enjoy the confusion shown by the second paragraph:

The number of new housing units, mostly apartments and condominiums, was much less than the 52,700 new jobs estimated by the California Employment Development Department to have been added in the nine-county Bay Area last year.

The next sentence begins with "the imbalance....".  Umm.  What imbalance?  Who says that is an imbalance?  Who knows how many of the new jobs went to existing Bay Area residents?  Or how many of the new arrivals found space in existing dwellings?  Is that 3.5:1 ratio a problem?  Who even knows if either of the figures are correct?  I'm not sure I have any confidence in any local agency to get within +/- 20% of the actual numbers.

Better to ask, "If we essentially created a brand new city of 15,000 homes, where is the water going to come from to service those homes?"  But that is not politically correct in today's supposedly environmentally and socially conscious mindset.  Kind of sad what passes for reporting these days.