SAN FRANCISCO – While the country mourns Loss of Willie Mays This Juneteenth, his legacy includes breaking down racial barriers. When he moved to San Francisco, he faced discrimination in his search for housing.

In 1957, Mays gave a television interview about his housing problem in San Francisco.

“Have the difficulties you have gotten yourself into over the last few days been a disappointment to you and your wife?” the reporter asked Mays.

“Yes, it was a disappointment for me because I didn't expect it to be so much trouble to find an apartment. When I go apartment hunting, I don't worry about who lives next door to me. I go in and try to find the best apartment that I like and feel comfortable in,” Mays said.

When the Giants moved to San Francisco in 1957, Mays tried to buy a house in the exclusive Sherwood Forest neighborhood. The seller rejected his offer after neighbors complained about a black family moving in.

Housing discrimination made headlines across the country: “Willie Mays struggles to find a home” and “Willie Mays’ attempt to buy a house in San Francisco is rejected.”

Chris Lango is a researcher who has archived the history of housing discrimination in California.

On his wall at home hangs a collage that shows his understanding of the struggle for equality, from policymaking to neighborhood ordinances and racial covenants.

According to Lango, May's struggle for housing shows how widespread the problem was.

“This just highlights the history of housing discrimination in California because one of the most famous athletes in the history of the United States had difficulty finding housing,” Lango said.

In response to national headlines about Mays's house hunt, then-San Francisco Mayor George Christopher stepped in and put political pressure on the home seller to go through with the sale. The Mays family eventually moved in.

While the nation now celebrates Mays' greatness, it is an ugly reminder of what he first experienced when he arrived in California.

The Fair Housing Act of 1968 put an end to this type of housing discrimination across the country, at least the letter of the law.

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Brookfield has reached an agreement with the city government on a major project that will involve the construction of 3,500 residential units in the 40-acre Stonestown Galleria in San Francisco.

As part of the deal, the mall's owner will make 20 percent of the housing units – about 700 apartments – affordable. The new housing units will also include a senior village and a senior center, according to a report in the San Francisco Chronicle.

The deal still needs to be approved by the City of San Francisco Board of Supervisors, which recently reduced the amount of affordable housing that developers must include in their projects from 23.5 percent to 12 to 16 percent, depending on the size of the project.

Supervisor Myrna Melgar, who represents the area that includes Stonestown, said the 20 percent commitment for affordable housing in the project is the best thing the city can do in the current economic environment.

“I would have liked to ask for more, but given the circumstances — and given that it's more than they have to do — it's good,” Melgar told the Chronicle. “It's also great considering that nothing has been built on the west side in a very long time.”

The New York arm of the Toronto-based real estate giant first proposed a $2 billion redevelopment of the massive parking lot surrounding the 750,000-square-foot mall more than two years ago. The original plans, which called for preserving the 70-year-old mall, also included a hotel, but that was scrapped when housing was increased in the project.

The development will include a town square with outdoor dining, recreational areas and a plaza with a farmers market. Brookfield plans to create a new “Main Street” with shops, restaurants and a 14,000-square-foot corridor of entertainment along 20th Avenue.

The project will include six hectares of parking and a daycare center, the report said. Parking spaces would be built underground and next to shops.

Brookfield will contribute $1 million to improve playgrounds in the area and donate $2.7 million to Fire Station No. 19, which will serve the new neighborhood. The developer will also pay more than $50 million in development fees to the San Francisco Municipal Transit Agency, the report said.

The Stonestown Galleria is thriving in stark contrast to downtown San Francisco's largest shopping center, formerly known as the Westfield Center.

Last year, Brookfield Properties and Paris-based Unibail-Rodamco-Westfield stopped payments on a $558 million loan linked to the Westfield Centre and handed the keys to the half-empty mall to their lenders.

The name of the downtown mall, currently in receivership, has been changed to Emporium Centre San Francisco, a reference to the Emporium, a department store that opened there in 1896.

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By Jack Rogers

April 26, 2024 at 5:54 am

Brookfield enters into contract with city for 3,500 units at Stonestown Galleria.

Brookfield has reached an agreement with the city government on a megaproject to build 3,500 residential units at the 40-acre Stonestown Galleria in San Francisco.

Under the agreement, the mall owner will make 20% of the units — about 700 apartments — affordable. According to a report in the San Francisco Chronicle, the new housing will include a retirement village and a senior center.

The deal still needs to be approved by the San Francisco Board of Supervisors, which recently reduced the amount of affordable housing that developers must include in their projects from 23.5% to 12% to 16%, depending on the size of the project.

Supervisor Myrna Melgar, who represents the area including Stonestown, said the project's 20 percent affordable housing commitment is the best the city can do in the current economic environment.

“I would have liked to have done more, but given the circumstances — and the fact that it's more than what's asked of them — it's good,” Melgar told the Chronicle. “Plus, it’s great considering there hasn’t been any construction on the west side in a long time.”

The New York arm of the Toronto-based real estate giant first proposed a $2 billion redevelopment of the vast parking area surrounding the 775K SF shopping center more than two years ago. The original plans, which called for preserving the 70-year-old shopping center, also included a hotel, but this was abandoned as the number of apartments in the project increased.

The facility will include a town square with outdoor dining areas, recreational areas and a plaza that will host a farmers market. Brookfield plans to create a new “Main Street” with 150,000 square feet of retailers, restaurants and an entertainment corridor along 20th Avenue.

The project will include six acres of parks and a daycare center, the report said. Parking spaces will be built underground and next to the retailers.

Brookfield will contribute $1 million toward playground improvements in the area and make a $2.7 million donation toward Fire Station No. 19, which will serve the new neighborhood. The developer will also pay more than $50 million in development impact fees to the San Francisco Municipal Transit Agency, the report said.

The Stonestown Galleria is thriving in stark contrast to downtown San Francisco's largest mall, formerly known as the Westfield Center.

Last year, Brookfield Properties and Paris-based Unibail-Rodamco-Westfield stopped payments on a $558 million loan tied to Westfield Center and turned over the keys to the half-empty mall to their lenders.

The name of the downtown mall, now in receivership, was changed to “Emporium Center San Francisco,” a reference to the Emporium department store that opened there in 1896.

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Many advocates say the Bay Area needs to build a lot more housing to solve its affordability crisis. Of course, that’s easier said than done, and the high cost of labor is often cited as one of the obstacles. But construction trades workers also need to live in this expensive area and they say wages, though higher than elsewhere, still barely cut it.

What’s the point of building middle class housing, some ask, if you’ve lost your middle class workforce?

This tension surfaced with the opening of Factory OS in Vallejo. It makes what’s often called modular housing. Factory-built housing is cheaper and faster to build and doesn’t require specialized, highly-trained workers. But that’s why some traditional construction trades workers perceive it as a threat to their livelihood — think of the dynamic between Uber and Lyft and the taxi cab industry. Does new housing technology have to come at the expense of decent jobs for San Franciscans?

Building housing in factories, like Factory OS, saves money a couple ways. The main one is by saving time; you can do all the foundation work on the lot while simultaneously starting the building in the factory. They’re also able to streamline everything a bit more, for maximum efficiency and minimal waste.

Each module is about the size of a shipping container, and they fit together like Legos to form bigger rooms and whole buildings. Each module is entirely finished when it’s trucked to location and stacked together.

Right now, Factory OS is building The Phoenix, a supportive housing project for formerly homeless people in Oakland. Factory-built housing has been used in the Bay Area mostly for low-income housing so far. That’s because other kinds of projects run into more resistance — factory-built housing is controversial. Subsidized housing is an inroad, but Factory OS plans to expand into all kinds of buildings.

When it first opened up, Factory OS contracted with the Carpenters Union of Northern California. The union recruited, trained and organized the workers. There are nearly 150 employed today.

“We’re elevating folks that don’t have opportunities and we’re going to help solve the housing crisis in Northern California,” says Jay Bradshaw, Director of Organizing for the union.

Bradshaw sees this new technology as a way to address the housing shortage by making it less costly to build. He says that when developers are able to build more, that means more construction work.

Though the workers here don’t earn as much as traditional tradesmen, they also don’t have to go through five or more years of training. Because they’re from around the Vallejo area, the cost of living also isn’t the same as in San Francisco.

In other words, Bradshaw argues that instead of continuing to fight for higher wages for San Franciscan workers at the expense of making housing more expensive to build, the Carpenters hope to expand the pool of workers and curb the underlying cause of affordability by ramping up the rate of housing construction.

“Even with the great wages and conditions of your outside construction worker, the cost of [Bay Area] housing is beyond reach for most workers. It’s insanity,” says Bradshaw. “And what’s the problem? We’ve got a full circle. The problem is there’s a lack of housing being built.”

The thing is, the Carpenters are alone in this. All the other local trade unions have been resisting housing factories, if not actively fighting them.

Bradshaw says the difference is in viewpoint. “We have a culture and a philosophy at the Carpenters of NorCal that when technology advances happen, we don’t try to fight it,” he says.  “We want to be part of it, embrace it, support it — to stay viable in the industry. Not every organization takes that tack.”

Here’s why this is all so controversial: The way the other unions see it, the Carpenters aren’t creating new jobs, they’re taking other people’s.

“The history of the building trades in this country has been one of occasional conflict ever since its beginnings, and those conflicts have generally been over control of one portion or another of the work,” says Mike Theriault, who recently retired from his seat as the Secretary Treasurer of the San Francisco Building and Construction Trades Council. “Eventually they get sorted out, and I assume that will be the case with the Carpenters as well.”

The Carpenters made what’s called a wall-to-wall contract with Factory OS. The workers will be trained to do all aspects of the work, not just carpentry: electrical, plumbing, and everything else. That means the owner doesn’t need to hire those workers from each local trade union.

“That is a substantial loss of hours for them,” says Theriault. “It’s a substantial hit to their pension funds, it’s a substantial loss to the workers they represent.”

“It’s cutthroat,” says Cynthia Wheeler, a union plumber and San Francisco native. “The Carpenters are out of pocket for that.”

Wheeler has so much pride and passion for her trade that she inducted all four of her children into the same line of work. Her pride extends to other tradesmen.

“It’s a brotherhood … carpenters do carpentry, plumbers do plumbing, electricians do electrical,” says Wheeler. “We are skilled labor, we go to school, we learned this trade. Then you’ve got somebody else doing it and it’s taking away work from us, so it can be cheaper for y’all. That’s crazy to me — because I’m union.”

But factories don’t need  highly skilled tradesmen. And factory-built housing companies want to become the dominant mode of production.

“There goes our wage, our living wage,” says Wheeler. “It’s just B.S. to me.”

To the workers at Factory OS, it’s a steady job. But, Theriault says their wages and benefits package is much weaker than for non-factory work.

“There are pluses and minuses for those workers,” says Theriault. “Their employment is potentially steadier than it is in the in-field construction where there are ups and downs If they live close to those factories, they are spared the sometimes brutal commutes that folks have to undertake,” he adds.

But  Theriault has reservations about its quality.

“I am not entirely sold on the value of modular construction,” he says. “But, I think if it’s going to be used, then we want it to be done in San Francisco with San Francisco workers, so that nobody is left out.”

As Theriault sees it, the mandate of the Trades Council is to build and preserve the middle class in San Francisco. Those are the stakes. That’s what he’s been doing since the early 80’s when he began organizing for living wage jobs with the Chinese community.

“I had the pleasure as an organizer of having individuals come up to me with their families at union picnics and say, ‘This is the man who changed our lives,’” he remembers. He doesn’t want factories to erode the labor standards he’s fought for.

So, the Trades Council is now pushing for what could be seen as a compromise:  to build a housing factory in San Francisco, and employ workers from within the local unions. Theriault’s hope is to find a way to embrace factory-built, without making tradesmen obsolete.

Plumber Cynthia Wheeler’s son and daughters are a few years into their  apprenticeships. Their whole careers are ahead of them. She hopes the jobs waiting for them will be as meaningful as hers was for her.
 

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Christmas came early for some children at an elementary school in San Francisco’s Chinatown Sunday, at an event which hosted a toy giveaway and celebrated families successfully moving into affordable housing. 

The event was back in full force this year after some challenges due to the pandemic, according to the Executive Director of the Chinatown Community Development Center, Malcolm Yeung. 

“Today is our special super Sunday for our families living in single room occupancy hotels. We have about 100 families coming and will be distributing about 250 gifts to children of these families,” he said. 

It’s been a couple of challenging years for the community, according to Yeung. 

“I think we’re finally starting to feel like things are beginning to turn around and events like this are just symbolic of that,” he said.

The gifts given out Sunday were all donated. 

NBC Bay Area spoke with one parent there through an interpreter. 

“This is her first Christmas in America,” they said. “And it means a lot to her because everyone is coming together.”

They also thanked Mayor London Breed, who attended the event, and city for their work in helping to move some families from one-room units to affordable housing. 

The Salvation Army San Francisco said it’s seen an increase in need for toys this year. 

“We will be giving toys to about 1,600 children, which is a 30% increase from last year so we definitely need toys,” Divisional Communications Director of the Salvation Army, Jennifer Byrd said.

Distribution is set for Dec. 19. Ways to help can be found on their website. 

“This coming week, we start packing them and make sure every child gets the toy that they want, but definitely the sooner, the better so we can make sure they get all under the Christmas tree,” Byrd said.

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Christmas came early for some children at an elementary school in San Francisco’s Chinatown Sunday, at an event which hosted a toy giveaway and celebrated families successfully moving into affordable housing. 

The event was back in full force this year after some challenges due to the pandemic, according to the Executive Director of the Chinatown Community Development Center, Malcolm Yeung. 

“Today is our special super Sunday for our families living in single room occupancy hotels. We have about 100 families coming and will be distributing about 250 gifts to children of these families,” he said. 

It’s been a couple of challenging years for the community, according to Yeung. 

“I think we’re finally starting to feel like things are beginning to turn around and events like this are just symbolic of that,” he said.

The gifts given out Sunday were all donated. 

NBC Bay Area spoke with one parent there through an interpreter. 

“This is her first Christmas in America,” they said. “And it means a lot to her because everyone is coming together.”

They also thanked Mayor London Breed, who attended the event, and city for their work in helping to move some families from one-room units to affordable housing. 

The Salvation Army San Francisco said it’s seen an increase in need for toys this year. 

“We will be giving toys to about 1,600 children, which is a 30% increase from last year so we definitely need toys,” Divisional Communications Director of the Salvation Army, Jennifer Byrd said.

Distribution is set for Dec. 19. Ways to help can be found on their website. 

“This coming week, we start packing them and make sure every child gets the toy that they want, but definitely the sooner, the better so we can make sure they get all under the Christmas tree,” Byrd said.

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By Jack Rogers

November 30, 2023 at 07:24 AM

Firm puts itself on block after funding round fails due to “macroeconomics.”

Proptech player Veev, a modular housing company based in Haywood, CA, may be on the verge of closing its doors in the midst of an expansion that expected the Bay Area company to build 300 single-family houses over the next two years.

The company, which was founded in Tel Aviv in 2008 and has constructed more than 170 residential units in Northern California, has decided to sell its assets after failing to secure its latest round of financing, according to a report in the San Francisco Chronicle.

The company, which according to PitchBook has raised $646M to date and employs 255, including 100 people in an R&D center in Tel Aviv, is actively seeking to sell its US assets in order to mitigate its losses, the report said.

“Veev was in the process of a funding round these last few weeks. Unfortunately, over this past week, due to the macroeconomic environment, the round did not come to fruition at the anticipated closing date,” Veev said, in a statement provided to the Chronicle.

“The company will undergo an assignment for the benefit of creditors process and is hopeful that what was created can live on in some form or fashion. In the meantime, until a buyer is found for the assets, the company’s operations will continue,” the statement said.

Veev manufactured modular walls, roofing and other building segments in its factory and delivered them to construction sites, which they can quickly be attached to each other in a method the company calls “plug and play.” The modular units are produced with pre-attached electrical and plumbing outlets.

According to the newspaper report, Veev acquired properties in California by accumulating debt. Veev said in a message to lenders it is having difficulty making interest payments and is unable to sustain the payments until the properties are divested, the report said.

In an early sign of financial difficulty at Veev, the company laid of an estimated 30% of its workforce at the end of 2022. Investors in the company have included Khosla Ventures, Brookfield Growth and Zeev Ventures.

Until the middle of last year, Veev appeared to be a darling with investors. In March 2021, the company raised $100M through a Tel Aviv Stock Exchange platform. In 2022, Veev raised $400M in a Series D round that valued the company at an estimated $1B.

Veev is not the first modular construction tech startup to go under amid the pullback in venture capital funding. In 2021, Menlo Park, CA-based Katerra, which was backed by Softbank Group’s Vision Fund, filed for bankruptcy protection.

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Sharon Sandelin is a resident at 33 Gough Street in San Francisco.

Gabriela Hasbun for Vox

Before she moved into the first shelter village of “tiny houses” in San Francisco, Sharon Sandelin — a 66-year-old who goes by “Mama T” — had been sleeping on the streets.

Now she lives in a 64-square-foot unit with heat, electricity, a twin bed, desk, and chair. There is a combination lock on the outside. The gated community where some 70 other people now live is clean and cheerful-looking, painted teal and sea-foam green. Residents are connected with supportive services like health care and served three meals daily.

Sandelin detests traditional homeless shelters, and appreciates the privacy of her locked room on Gough Street, knowing she can rest undisturbed. But she still considers herself homeless. Though she likes her tiny cabin more than she liked being unsheltered, residents must use porta-potties, they are not allowed to have outside visitors, they can’t shower after 2 pm, and they can’t cook anything that requires more than a microwave or toaster.

“I want to eat my own cooking,” she told me. “My daughter can’t visit me, and there shouldn’t be no set time for a person to take a shower.”

Sharon Sandelin is a resident at 33 Gough Street in San Francisco.

Gabriela Hasbun for Vox

Gabriela Hasbun for Vox

Sandelin has a place to sleep in large part because of Elizabeth Funk, who spent three decades working at investment firms and tech giants like Yahoo and Microsoft, while serving on boards of various homeless nonprofits. Since 2020, Funk, now the CEO of Dignity Moves, which fundraised and developed the San Francisco village, has brought her experience and Rolodex to bear on a singular goal: to, as Silicon Valley puts it, disrupt the problem of homelessness in America.

Since 2016, unsheltered homelessness — meaning those sleeping somewhere not designed for human residence, like a car, a park, or a train station — has been going up. Particularly on the West Coast where housing costs are often prohibitive, local governments have struggled to curb sprawling and politically unpopular tent encampments, and many unhoused people prefer sleeping outside to crowded shelters with bunk beds. The challenge has been exacerbated by Martin v. Boise, a 2018 court ruling that said people can’t be punished for sleeping outside on public property if there are no adequate alternatives available.

Elizabeth Funk, founder and CEO of Dignity Moves.

Gabriela Hasbun for Vox

To Funk and other tiny house proponents, villages like the one where Sandelin now lives offer creative solutions to all these issues. The small, relocatable cabins provide leaders new ways to bypass restrictive zoning rules, by leveraging emergency building codes and “borrowing” rather than purchasing land. They also offer, at least for some, a more dignified shelter option, providing an affordable answer to the difficult reality that many people prefer to sleep outside rather than endure the rules and conditions of typical shelters.

Advocates of “tiny homes” as a solution to the homeless crisis say the units should be understood as a key tool to preventing chronic homelessness amid a brutal housing shortage. If people lose their homes but can get quickly off the streets into a temporary private dwelling, then they’re in a much better position to get back on their feet, and avoid the tumble into longer-term homelessness that can transpire from even just a few weeks without shelter.

For elected officials, the villages also mean that fewer people have to see — or think about — homeless people on a daily basis. Tiny homes provide leaders with a faster and cheaper alternative to building permanent housing or congregate shelters, and may provide cities with the legal authority to then clear out any remaining tent encampments: Funk told me she can determine “exactly how many units you need in order to make it illegal to sleep on the streets within the city limits in San Francisco.” All this has thrilled leaders eager to reclaim their cities from what they see as spiraling chaos and disorder.

Advocates for the homeless, meanwhile, worry that the tiny shelter boom will divert funds that could otherwise go to new permanent housing, preventing people from moving into a real home for even longer. The rush of private industry into the space also gives advocates pause, and they worry that cities will buy bare-bones, cheaper models, place them in remote parts of town, and criminalize those who refuse to go.

At the heart of the tiny houses debate is a question about the meaning of housing and shelter itself. As more companies rush to manufacture models with varying features — some out of plastic, some out of repurposed shipping containers, some built on factory assembly lines, others on-site or on wheels, some with in-suite bathrooms, kitchenettes, and storage space, others lacking plumbing and electricity and with virtually no amenities at all — there is little consensus on what a “tiny home” is, or what standards it must meet.

Tiny house shelter units are typically between 60 and 150 square feet, but the sharp variety of products within the industry creates confusion. How spartan is acceptable? Is anything better than sleeping outside?

Lots of arrangements can be tolerated if they’re understood as emergency solutions — but some communities have also started to explore the idea of treating the units less as temporary shelters and more as something approaching new housing options.

“Harnessing NIMBY” to expand tiny houses

America has a housing shortage in part because it’s become so expensive and difficult to build new housing. The cost to purchase new land has skyrocketed, byzantine zoning rules make residential construction hard, and people living in communities often protest new development — wary of decreased property values, new neighbors, noise, traffic, or general change. This barrier is so common it goes by NIMBY, short for “not in my backyard.”

Yet over the last few years, “tiny home” shelters have been built in communities through what you could call creative hacks of the zoning code. In some places, structures smaller than 120 square feet are not classified as permanent dwellings, and therefore not subject to the same regulations applicable to residential buildings. Other groups have capitalized on cities that declared local states of emergency, which give governments more flexibility to build units with faster permitting.

Dignity Moves is a transitional housing program in San Francisco. These 70 modular units are set at 33 Gough Street, right in the middle of San Francisco. They offer the unhoused a non-congregate shelter option.

Gabriela Hasbun for Vox

Dignity Moves formed in 2020 as a task force within the Young Presidents Organization, a global networking group of chief executives. The group wanted to “apply private sector approaches and Silicon Valley-style ‘disruptive thinking’” to America’s homelessness crisis, as they describe it.

Funk could hardly hold back her grin as she outlined Dignity Moves’ theory of change. Instead of buying expensive land for tiny houses, she told me, they “borrow” it from developers who aren’t yet ready to use it.

Leveraging emergency building codes and word-of-mouth networking, “we take advantage of under-utilized assets,” she said. Maybe the shelters will go on a plot of land for two or three years, and then get transferred via forklift to another location when the developer needs their property back. (There are certain tax breaks available for landowners interested in making this deal.) The San Francisco village I visited on Gough Street rests on such borrowed land.

Sometimes Dignity Moves encourages faith-based groups or local governments to pony up their vacant property — like parking lots or land reserved for future infrastructure projects. In Santa Barbara, leaders countywide have jointly committed to finding locations for tiny houses in their neighborhoods and giving shelter priority to those sleeping outside in the surrounding areas. Funk’s group is spearheading this, and envisions the future playing out similarly in cities all over the country. By erecting many villages at the same time, Funk thinks it’ll be possible to get people off the street at once, a strong incentive for housed residents who are tired of seeing individuals living on sidewalks. “Then we can harness NIMBYism, which is a very powerful force,” she said.

There are at least some encouraging signs that local opposition to tiny house shelters wanes. When researchers at Portland State University surveyed housed neighbors who lived around various Portland “tiny homes” villages, they found the neighbors’ concerns about crime and decreased property values significantly diminished over time. “Some of the biggest initial opponents became some of the biggest champions,” Todd Ferry, a lead researcher of the study, told me. “I genuinely think it became beloved to many people in the neighborhood.”

Perhaps no politician has been more enthusiastic about the potential of tiny house shelters than San Jose Mayor Matt Mahan, who proposed this past summer to divert more than a third of his city’s housing funds to increase village production. Up for reelection in March, Mahan has made moving unhoused people quickly off the street a major part of his pitch.

San Jose started opening “tiny home” shelters about four years ago, originally to reduce the risk of contagion during the pandemic. About 500 units currently exist now in the city across six locations, and hundreds more are in the pipeline. Mahan credits their growth with reducing San Jose’s unsheltered homeless population by 11 percent in the last year, though he laments that new units seem to be taking longer to build than they did during Covid-19 and coming with new requirements.

“We were standing these up in six months at a cost of $80,000 or less all-in, including the utility hookup and common space, and now it’s taking progressively longer and costing more,” he told me, pointing to a new village project that cost the city $250,000 a door. Another San Jose village that took a year and a half to build saw costs go from originally $100,000 per unit to more than $175,000.

In September, Mahan urged his colleagues to quit making excuses for why they couldn’t build more units faster, and led a successful push to adopt a shelter crisis emergency declaration so San Jose could bypass certain building rules. Mahan says he’s motivated not only by a desire to help the homeless but to improve local neighborhoods generally. Calls for crime, fire, and blight in the immediate areas of the villages went down a year after they were built, according to a city analysis.

Each tiny house village in San Jose costs about $15 million to launch, and $3-4 million annually thereafter to operate. In June, the city’s budget director said funding roughly 1,400 of these shelter units will cost upward of $60 million by 2030, a “difficult” figure for San Jose to manage. The mayor, for his part, remains optimistic that external funding sources will come through.

Out of sight, out of mind?

Another reason some have grown excited about “tiny home” shelters is often left unsaid: to no longer have to witness homeless people outside on a daily basis.

Tiny houses provide elected officials with faster and cheaper alternatives to building permanent housing or congregate shelters, and may provide cities with the legal authority to then clear out any remaining tent encampments. This has roused city elites anxious about their increasingly visible homeless crisis.

A federal lawsuit led by Los Angeles business leaders frustrated with their city’s lack of action around tent encampments resulted in LA pledging to construct up to 16,000 new shelter beds by 2027, to house 60 percent of the homeless population in each of the fifteen council districts. These can include “tiny home” shelters, and in exchange, LA officials can sweep remaining tents and resume enforcing anti-camping bans.

“We are now getting much more excited about this 60 percent thing,” Funk, of Dignity Moves, told me. “I’m going to be working privately, quietly, but [to] give you a little preview, [we’re] thinking about doing this for San Francisco specifically as well in San Jose.” If San Francisco has about 4,500 people sleeping outside, according to the last Point In Time count, then Funk believes leaders can confidently estimate how many shelter beds will be necessary to build to start enforcing anti-camping laws again. “Let’s be clear,” she said, “one of the big motives here is Martin v. Boise, and people being concerned about getting sued.”

Funk’s legislative partner in the California state Senate, Josh Becker, plans to reintroduce a bill that would make it easier for cities to build tiny house shelters, and potentially even allow cities to count them toward their state-mandated housing production goals. Given that the tiny structures are much cheaper to build than both traditional housing and permanent supportive housing, a state green-light to include them in production targets could prove to be a major incentive. But that’s worrying news for those concerned the units may be less of a temporary, emergency solution after all.

Bryant Akers works on repairs at 33 Gough Street.

Gabriela Hasbun for Vox

“We’re definitely seeing some cities focusing on this model as more than what I would call an interim solution and a gap solution,” said Amy King, the CEO of Pallet Shelter, a Washington-based company that produces tiny houses between $7,500 to $12,000 apiece.

When Becker’s bill was first introduced earlier this year and included the possibility that shelter units, including those produced by Pallet Shelter, could one day be considered permanent housing and even accept rent or housing vouchers, King’s company came out against it. “There’s just so much opportunity for people to take advantage,” King said of the idea.

Homeless advocates worry about a scenario where cities start to invest in lower-quality shelters that aren’t suitable for everyone, reduce investments in permanent housing, and grow more aggressive about fining or arresting those resistant to shelter offers. “We see sweeps and tiny homes going hand-in-hand,” said Alex Visotzky, with the National Alliance to End Homelessness.

A senior official with the US Department of Housing and Urban Development, who was not authorized to speak publicly, told me the agency has no hard-and-fast policy yet on tiny houses, but is currently “evaluating whether there’s a place for them” in their efforts to end homelessness. As part of that the federal housing agency is investigating whether communities have been abiding by fair housing and civil rights laws as they expand the units.

“Not just segregation, but are people put there by choice?” the official asked. “Are there potential consequences if you don’t go there — like subject to arrest or other penalties? We’re considering all of that.”

The line between housing and shelter

In 2020 a fire broke out within a Pallet Shelter community in Banning, California — destroying 19 prefabricated homes, and displacing 38 people. Two years later another fire broke out within a Pallet Shelter community in Oakland, California, burning down three of the structures. One resident told Curbed she barely made it out as “the walls were melting” around her.

Pallet has denied responsibility for these fires, though the company did make changes to the building materials it uses. The two incidents loom large as leaders debate how cheaply they can build these structures and how tightly together they can pack them together on high-priced land.

A row of Pallet shelters at the Chandler Street Tiny Home Village in February 2021 in the North Hollywood neighborhood of Los Angeles.

Patrick T. Fallon/AFP via Getty Images

Some housing advocates say the challenges cities are running into with building tiny shelters now mirror the same issues that often derail producing more housing at all. Proponents fear that as more pandemic-era emergency codes expire, and if more accidents like those in Banning and Oakland occur, such “quick-build bridge housing” will be built far less quickly.

“Our biggest challenge is the regulations, the code compliance to make sure everything meets all the parameters of the building code,” said Viken Ohanesian, CEO of Boss Cubez, which manufactured the prefabricated units used at the San Francisco shelter village. “It’s kind of like you can never have too much insurance, you can never be too safe in this world that we live in because it’s a litigious world.”

One option is to try and convince state lawmakers to pre-empt cities from tacking on new regulatory requirements. California lawmakers already took this step last year in banning mandates for fire sprinklers in “temporary sleeping cabins.” Funk says she’s “really, quite frankly, tempted to take the 10 other things that cities are starting to ask for, take them up to Daddy and say, ‘Can you break this rule?’” The costly rules and regulations, she believes, are a big part of how we got the housing crisis in the first place.

“I think our definition of housing with a capital ‘H’ is causing homelessness,” she said. “So we can either solve it or we can be stuck to our like, you know, our principles.”

Beyond worrying about building requirements and the practical longevity of tiny shelters, a broader, more existential set of criticisms have emerged around the policy idea.

A worker cleans in front of a row of tiny homes for the homeless, in February 2021, in the North Hollywood section of Los Angeles.

AP/Marcio Jose Sanchez

One major concern is that investments in “tiny home” structures actually sustain homelessness, by diverting needed investments from permanent housing. Many people living in temporary shelters of all kinds end up returning to the streets after their allotted time to stay ends, not having anywhere else to go.

“Until there is more affordable housing, this ‘solution’ leads nowhere,” argued Josh Kruger, a formerly homeless journalist in Philadelphia. “Instead, these are just feel-good boondoggles so middle and upper class people can feel like they’re doing something … They’re storage sheds for human beings who otherwise remind us all of our society’s failure to care.”

In 2021 the Washington state’s Lived Experience Coalition — a group of current and formerly homeless individuals — issued a statement lambasting the “dehumanizing conditions and lack of services” some experience in tiny house villages, and warned of lawmakers who avert focus from more permanent solutions. In Seattle, for example, some residents lived in tiny wood huts that lacked heat and electricity, where school children had to do their homework with flashlights.

Barbara Poppe, the former executive director of the US Interagency Council on Homelessness during the Obama administration, said while some models are better than existing congregate homeless shelters, some are “far worse.” What really alarms her, she told me, is the “corporate investor model, for-profit industry” that’s cropped up, naming companies like Tuff Shed and Pallet Shelter as examples.

“Some of these are quite inhumane, and some of those cost studies — Pallet will say it costs $12,000 [per door], but that’s a sleight of hand, it’s very deceiving, because there’s all the site preparation cost on top,” she said. “It seems like what the public wants and by extension what the elected officials say they want is an easy answer and a cheaper answer to the fact that we have an extreme affordable housing crisis that sits on top of growing inequality.”

For advocates like Visotzky with the National Alliance to End Homelessness, conceptualizing housing and shelter as distinct categories remains important. “If we start calling [tiny homes] housing then folks are going to potentially lose eligibility for a lot of key services and resources,” he said. “We need to make commitments and not shortcuts.”

Supporters of building more tiny houses say their critics are stuck in the status quo, implicitly accepting that thousands of people will remain outside. They say it’s a false choice that cities can’t invest in both permanent and interim solutions at once, and that the crisis demands vision and urgency.

“One of the biggest hurdles that’s blocking us from ending unsheltered homelessness is lost optimism,” said Funk. “Dignity Moves’ value-add can be to come in and say, ‘Oh, no, it’s very possible, here’s exactly the paint-by-color map of how.”

What does a real dignified investment look like?

The Connect Homes factory in San Bernardino, California, located about an hour outside Los Angeles, had homeless shelters on the assembly line the day I visited in mid-October. The company was working to fulfill a contract for Long Beach, California, which plans to open its first village of tiny house shelters in early 2025.

A view of the Connect Homes manufacturing plant in San Bernardino, California, on October 23, 2023.

John Francis Peters for Vox

Originally founded in 2012 to produce factory-built houses, Connect Homes leaders realized during the pandemic they could use virtually their same industrial tools to develop shelters, too. The company now wants to build shelters nationwide.

John Francis Peters for Vox

Gordon Stott, co-founder of Connect Homes, explains new homes in various stages of production. These will be used as interim housing in Long Beach, California.

“Is it housing, or is it shelter? Well I think what we’re seeing is it can be both,” said co-founder Gordon Stott. While at a higher price point than some of his competitors — units can be sold to cities at $80,000 per door — Stott believes his products are more durable investments, and prove homeless shelters don’t have to be ugly or stigmatized.

The shelter units set for Long Beach will be between 110 and 185 square feet (the larger ones will be ADA-accessible) and the city specifically looked for vendors who could build units with en suite bathrooms. The city used part of a $25 million state grant to finance the construction and expects to spend about $930,000 per year annually in operating costs.

Workers build tiny homes at the Connect Homes manufacturing plant.

John Francis Peters for Vox

John Francis Peters for Vox

“We’re in a moment where cities are having to step up and do things they haven’t done before,” Rex Richardson, Long Beach’s mayor, told me. “We’ve had a big history of dealing with homelessness and providing housing but we weren’t prepared for the crisis — the way it manifested — with a 62 percent increase between 2020 and 2022.”

A Connect Homes employee works on a bathroom floor for a new shelter that will be used as interim housing.

John Francis Peters for Vox

Models with private bathrooms might deter some local governments, tempted to spend as little as possible. But if the structures are likely to stick around for years in a city, and if people are likely to live in them for extended periods of time, then investing in nicer units with higher standards makes more sense. Ferry, with Portland State University, said he tells municipalities considering tiny house villages “to think really carefully about” their request for proposals, or RFPs. If you put out a contract for a non-congregate shelter between 70 and 150 square feet with no other specifications, then you’re generally obligated to go with the cheapest bidder.

John Francis Peters for Vox

Connect Homes shelter products, from construction to finished and on display at the Connect Homes manufacturing plant in San Bernardino, on October 23.

For now though, most leaders have been drawn to companies that offer cheaper upfront products. While most players on the market say their relocatable shelters can last at least a decade if not more, none have been operating long enough to really put their claims to the test, to truly see if “tiny home” units can last, bouncing around from plot of land to plot of land.

Patrick Monahan, a 42-year-old resident of the shelter village in San Francisco, had been sleeping outside off and on for almost 10 years before he moved into his tiny cabin on Gough Street.

Volunteers plant gardens for the residents at 33 Gough Street.

Gabriela Hasbun for Vox

Patrick Monahan is a resident at 33 Gough Street.

Gabriela Hasbun for Vox

Monahan never wanted to stay in traditional homeless shelters, and he’s appreciative of what the village offers him: a “fairly safe” environment that’s “very pretty and clean” and where the “food’s not great, but it’s free.” He doesn’t love using a porta-potty but thinks it’s better than going on the street.

Still, Monahan holds out hope that one day he’ll have something more. “I can’t have visitors here,” he said. “I rather have my own place, that’s mine.”

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]]> https://dailysanfranciscobaynews.com/homelessness-within-the-us-can-tiny-houses-assist-with-the-reasonably-priced-housing-disaster/feed/ 0 https://dailysanfranciscobaynews.com/most-splendid-housing-bubbles-in-america-nov-replace-from-2022-highs-san-francisco-11-seattle-10-las-vegas-6-phoenix-6-portland-5-denver-5-dallas-5-san-diego/ https://dailysanfranciscobaynews.com/most-splendid-housing-bubbles-in-america-nov-replace-from-2022-highs-san-francisco-11-seattle-10-las-vegas-6-phoenix-6-portland-5-denver-5-dallas-5-san-diego/#respond Wed, 29 Nov 2023 08:32:32 +0000 https://dailysanfranciscobaynews.com/?p=40623 20-City index below 2022 high, 9 metros below 2022 highs, 10 metros set new highs. The unsavory “National” index cocktail in the headlines today gets shredded. By Wolf Richter for WOLF STREET. Home prices in the 20 metropolitan areas that today’s S&P CoreLogic Case-Shiller Home Price Index covers eked out the smallest month-to-month gain (+0.2%) since January, and …

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20-City index below 2022 high, 9 metros below 2022 highs, 10 metros set new highs. The unsavory “National” index cocktail in the headlines today gets shredded.

By Wolf Richter for WOLF STREET.

Home prices in the 20 metropolitan areas that today’s S&P CoreLogic Case-Shiller Home Price Index covers eked out the smallest month-to-month gain (+0.2%) since January, and remained a tad below its all-time peak of June last year. Here’s the close-up. We’ll get into the most splendid of the 20 metros in a moment in all their individual glory.

The  S&P CoreLogic Case-Shiller Home Price Index uses the “sales-pairs method,” comparing the sales price of the same house over time, thereby eliminating the issues associated with median price indices (see “Methodology” toward the end of the article). But it lags: Today’s index for “September” is a three-month moving average of home prices whose sales were entered into public records in July, August, and September.

By contrast, the national median-price index by the National Association of Realtors fell for the fourth month in a row in October and was down 5.1% from the all-time high in June 2022, making 2023 the first year since the Housing Bust that the seasonal high of the current year was below the high in the prior year. And this is an actual national index.

By contrast, the “National” Case-Shiller index hit an all-time high, which is what the headlines today screamed about. But the Case-Shiller Index, which I think is the most reliable house price index out there, does not cover the entire US; it only covers the 20 metros discussed here.

So S&P CoreLogic, in its attempts to give the 20-City data the aura of a “National” index, combined the clean 20-City Case-Shiller data with data from the FHFA House Price Index. The FHFA data is based on mortgage data from Fannie Mae and Freddie Mac that systematically excludes all cash deals and all deals with mortgages that hadn’t been bought by Fannie and Freddie. This systematic selection and exclusion of home price data makes the FHFA index very weird and skews it.

Nevertheless, S&P CoreLogic mixed these two data sets into a cocktail it calls “National Home Price Index,” and the doofus reporters or bots at the media outlets to make clickbait out of it.

So today’s 20-City Case-Shiller housing numbers.

Prices are below their 2022 peaks in 9 of the 20 metros in the index (% from their respective peak):

1. San Francisco Bay Area: -11.2%
2. Seattle: -10.4%
3. Las Vegas: -5.6%
4. Phoenix:  -5.6%
5. Portland:  -5.0%
6. Denver:  -4.7%
7. Dallas: -4.1%
8. San Diego: -2.0%
9. Los Angeles: -1.1%

Prices set new highs in 10 of the 20 metros in the index (% year-over-year):

1. New York: +6.3%
2. Detroit: +6.7%
3. Chicago: +6.0%
4. Boston: +5.3%
5. Cleveland: +5.0%
6. Miami: +5.0%
7. Charlotte: +4.7%
8. Washington DC: +4.4%
9. Atlanta: +4.3%
10. Tampa: +1.5%

The most splendid housing bubbles by metro.

San Francisco Bay Area: 

• Month to month: flat
• Year over year: +0.5%
• From the peak in May 2022: -11.2%.

And here is the closeup of San Francisco:

Seattle metro:

• Month to month: -0.5%.
• Year over year: +0.9%.
• From the peak in May 2022: -10.4%.

The closeup of Seattle:

Las Vegas metro:

• Month to month: +0.6%.
• Year over year: -1.9%.
• From the peak in July 2022: -5.6%.

Phoenix metro:

• Month to month: +0.5%.
• Year over year: -1.2%.
• From the peak in June 2022: -5.6%.

Portland metro:

• Month to month: -0.4%.
• Year over year: -0.7%.
• From the peak in May 2022: -5.0%.

The closeup of Portland:

Denver metro:

• Month to month: -0.3%.
• Year over year: +1.0%.
• From the peak in May 2022: -4.7%.

Note: I will post closeups of Denver and a few other markets in the comments below as soon as I have a little extra time.

Dallas metro:

• Month to month: -0.1%.
• Year over year: +0.3%.
• From the peak in June 2022: -4.1%.

San Diego metro:

• Month to month: flat.
• Year over year: +6.5%.
• From the peak in May 2022: -2.0%.

Los Angeles metro:

• Month to month: +0.2%.
• Year over year: +5.2%.
• From the peak in May 2022: -1.1%.

Tampa metro: 

• Month to month: +0.5%.
• Year over year: +1.5%.
• Set new high by a hair, squeaking past the high of July 2022.

Washington D.C. metro:

• Month to month: 0.1%.
• Year over year: +4.4%.
• Set new high.

Boston metro:

• Month to month: +0.5%.
• Year over year: +5.3%.
• Set new high.

Miami metro:

• Month to month: +0.6%
• Year over year: +5.0%.
• Set new high.

New York metro:

• Month to month: +0.6%.
• Year over year: +6.3%.
• Set new high.

Methodology. The Case-Shiller Index uses the “sales pairs” method, comparing sales in the current month to when the same houses sold previously. The price changes are weighted based on how long ago the prior sale occurred, and adjustments are made for home improvements and other factors. This “sales pairs” method makes the Case-Shiller index a more reliable indicator than median price indices, but it lags months behind (37-page methodology).

It’s Home-Price Inflation. By measuring how many dollars it takes to buy the same house over time, the Case-Shiller index is a measure of home price inflation. The indices were set at 100 for the year 2000. So today’s index values of 425 for Miami and 419 for San Diego and Los Angeles are up respectively by 325% and 319% since 2000. Miami is thereby the #1 Most Splendid Housing Bubble in terms of home price inflation since 2000, followed by San Diego and Los Angeles.

To be included in this list of the Most Splendid Housing Bubbles, the metro must have experienced a home price inflation since 2000 of at least 180%.

By comparison, Consumer-Price Inflation, which tracks price changes of goods and services that are consumed by consumers was 82% over the same period since January 2000, according to the Consumer Price index (my latest on CPI: Beneath the Skin of CPI Inflation).

The remaining 6 of the 20 markets in the Case-Shiller index (Chicago, Charlotte, Minneapolis, Atlanta, Detroit, and Cleveland) had far less home price inflation than 180% since 2000, and don’t qualify for this list of the Most Splendid Housing Bubbles. But in 2022 and 2023, these metros were the ones with the biggest home price increases in percentage terms.

Chicago is among the 6 metros that don’t qualify for this list, with an index value of 198, which is up by “only” 98% from 2000. But here it is anyway:

• Month to month: +0.3%
• Year over year: +6.0%.
• Set new high.

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]]> https://dailysanfranciscobaynews.com/most-splendid-housing-bubbles-in-america-nov-replace-from-2022-highs-san-francisco-11-seattle-10-las-vegas-6-phoenix-6-portland-5-denver-5-dallas-5-san-diego/feed/ 0 https://dailysanfranciscobaynews.com/whats-up-president-biden-about-your-plan-to-waste-45-billion-on-housing-conversions-mishtalk/ https://dailysanfranciscobaynews.com/whats-up-president-biden-about-your-plan-to-waste-45-billion-on-housing-conversions-mishtalk/#respond Mon, 06 Nov 2023 23:15:20 +0000 https://dailysanfranciscobaynews.com/?p=39635 Conversion from office space to apartments is getting harder. Let’s discuss why, and also what the effort is really all about. Only 3,575 apartment units were converted from office space last year. The already fraught process now faces even more challenges. The Wall Street Journal explains why in its report Turning Empty Offices Into Apartments …

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Conversion from office space to apartments is getting harder. Let’s discuss why, and also what the effort is really all about.

Only 3,575 apartment units were converted from office space last year. The already fraught process now faces even more challenges.

The Wall Street Journal explains why in its report Turning Empty Offices Into Apartments Is Getting Even Harder

Cities hoping to convert emptying office buildings into apartments are running into financing issues, stagnating rental markets and other challenges that are bottling up their efforts.

Developers last year created just 3,575 apartment units in the U.S. through office conversions, according to an analysis by rental listing site RentCafe. That amounts to less than 1% of all apartments built that year through new construction. 

Federal and local governments are also trying to give conversions a boost. The White House said last month that it was updating guidance for existing grants and spending programs to make billions in federal dollars available for these projects. It also said it would seek the conversion of more government-owned properties into housing.

Some cities, such as Washington, D.C., New York and San Francisco, are also taking steps to encourage more conversions. Tax incentives and faster approvals are “rocket fuel” for these projects, said Sheila Botting, a principal at commercial property brokerage Avison Young.

Even so, the process has always been fraught with difficulty and few office buildings are natural candidates. Conversions are easiest in older, lower-quality and mostly empty buildings with small floors. But less than 1% of office space in the biggest U.S. cities ticks those boxes, according to Avison Young.

In significant ways, the conversion process is getting even harder now. Slowing rent growth might make apartment conversions less attractive to investors, if the trend persists into next year. Asking rents for apartments have fallen 1.2% nationally over the past 12 months, according to rentals website Apartment List.

Projects Not Economical

Without massive subsidies these projects are not economically feasible. Many aren’t even with massive subsidies.

In downtown Dallas, developer Wolfe Investments seeks to convert an 18-story, 1950s office tower into residential apartments, but has recently been fighting off foreclosure from its lender, Thistle Creek Partners, court records show. 

Developers of One Camelback, a 200,000-square-foot office building in central Phoenix, are trying to convert it into what would be one of the city’s most expensive rental-apartment properties. A website advertises $8,000-a-month apartments, with floor-to-ceiling windows and crystal-clear views of nearby mountains.

But the developers, Sagamore Capital and partners defaulted on a loan of about $70 million. The project’s lender, Delphi Financial Group, has moved to foreclose. An auction of One Camelback is set for later this month, according to documents filed in Maricopa County, Ariz.

Biden Throws $45 Billion in Federal Funds to Convert Offices into Homes

On October 29, I commented Biden Throws $45 Billion in Federal Funds to Convert Offices into Homes

Questions abound. Assume you can convert offices into homes, who wants to live in them? Is a tear down cheaper?

The government has 1,500 office buildings nationally and leases on almost 200 million square feet of additional space that it does not need. Instead of canceling leases and selling the real estate, it’s going to convert them into clean energy spaces.

With enough subsidies, developers will try nearly anything. Then when the projects fail, the developers ask for more money.

How is this Being Paid For?

Taxpayers of course. But Biden is funneling $45 billion from clean energy incentives in the ridiculously named Inflation Reduction Act (IRA) into housing conversions.

You might also be wondering what this has to do with clean energy, and the answer is nothing. The questions keep piling up and I have answers.

What’s Really Going On Here?

Biden is hoping to spread the IRA dollars around to buy more votes.

But to do so, he is taking money away from his other pet projects to fund the idea of the moment. His idea of the moment is to do something about the price of rent.

Biden Trails Trump in Five of Six Battleground States

Polls say Biden is in serious trouble and those polls are very believable for reasons I explain.

For discussion, please see Five Alarm Bell – Biden Trails Trump in Five of Six Battleground States

One of the more amusing stats in the poll is voters under 30 favor Mr. Biden by only a single percentage point. And a majority of voters saying Mr. Biden’s policies have personally hurt them.

Housing helps explain that.

CPI Rises More Than Expected as Rent Jumps Another 0.6 Percent

CPI data from the BLS via the St. Louis Fed, chart by Mish

I repeat the core key theme for something like two years now. People keep telling me rents are falling, I keep doubting.

The doubters have it correct again.

On October 12, I noted CPI Rises More Than Expected as Rent Jumps Another 0.6 Percent

Rent of primary residence, the cost that best equates to the rent people pay, jumped 0.6 percent. Rent of primary residence has gone up at least 0.4 percent for 26 consecutive months!

Supposedly, the price of new leases is declining. But new leases are a small slice of the market. Most people do not move. And the irony is falling prices on new leases makes these conversions increasingly unfeasible without bigger and bigger subsidies.

It is not the wealthy who make up the majority of renters. So rent alone is fueling the pain that shows up in the polls. Factor in food.

A rising stock market and home prices does not help those with no assets. And the poor have no assets.

So Biden is desperate to do something about rent. His funneling of $45 billion from here to there is part of his solution.

He may very well be caught in a Red Queen Race where the more he tries the worse he looks.

Wake Up Mr. President, Consumers Do Not Want Not EVs

On October 16, I commented Wake Up Mr. President, Consumers Want Hybrids, Not EVs

A better title would have been Wake Up Mr. President, Consumers Don’t Want EVs

While the President harps about how great things are, consumers don’t see it that away and I have been covering all the reasons why.

This office to apartment idea is nothing more than throwing money at failed big cities hoping to buy more votes. Since consumers don’t want EV’s Biden’s plan is to quietly shift the spotlight to rent.

Unfortunately for Biden, $45 billion does not buy as many votes as it used to.

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