Buyer Beware When the Seller is Screwed.
According to Joe Eskenazi in his recent article in Mission Local, “This Screws the Sellers” Below Market Rate (BMR) owners claim the city is forcing them to sell at a big loss, and the forced down-pricing is making re-selling BMR units very difficult under the new program that City Hall is imposing on them.
Not only does this negatively impact the sellers, but the knowledge of the potential losses are driving away potential buyers. Most people buy property with the idea that they will see some returns on their investment or least stay ahead of inflation, not to lose money. Low and no returns and the threat of taxes on empty units between sales suggested by SF city policies such as Prop M, make the deal less attractive than ever. Even if M fails this time, the threat of such a policy is enough to drive most potential buyers out of town. It makes no sense to invest in property that has zero growth potential and forces sellers to take a loss in order to give buyers a lower price.
Taxes add to the inflation rate. If you really want to help vulnerable people living on the edge, stop raising the cost of living by imposing higher taxes and costs on everything. Investing in property is a much riskier venture for people living on the edge. They cannot afford any losses that may be imposed by future government policies. Nobody trusts a system that fooled you into accepting a lower return and then threatens to bankrupt you. Do banks offer reverse mortgages on BMR units? If not that leaves the elderly owners out in the cold. Be careful what you get yourself into when making deals with government entities.
Property owners are not all to blame for the flight from the city that lead to the high vacancy rate. Some large entities and out of town investors may be held accountable for commodifying housing, but the huge jump in empty units cannot be blamed on property owners. Maybe that was the problem at one time, but it cannot account for the loss of population today.
Hostile growth policies have been pushing people out for decades to make room for wealth, but, as some have noted, the greed factor consumed the goose that was laying the golden eggs and the money left town. When the glam and glitter wore off, and quality of life issues hit them in the face every time they stepped out, people left for safer, friendlier communities.
San Francisco was so full of itself it took a heavy international pounding by the media to awaken our politicians to the fact that our city is no longer a desirable place to live. They need to serve the public if they want the public to stay. It is up to the people who created the nasty hostile gentrified city to fix the mess they made.
We need to end the density housing battles and war on cars if we want a civil society. We need to deter criminals to stop crime. So far we only see more hostility and blame than positive solutions. Improvement is a far distant hope.
