High Demand for New Castro Housing
San Francisco native Brian Spiers stands on the unfinished seventh floor of his new mixed-use development Linea and scans the views that residents of the condos on the upper Market Street corridor will enjoy.
Most of the 115 units will have unobstructed sightlines of the Bay Bridge and the bay itself. The five penthouses on the ninth floor will enjoy 360-degree city views, including the golden dome of City Hall and the historic spire of Mission Dolores Church.
Atop the construction site on the corner of Buchanan and Market streets, Spiers can see cranes towering over other residential buildings at various stages of completion in both directions on Market Street.
"I actually think it is great. This is the biggest thoroughfare in the city. It is the best opportunity for high-density housing to meet the needs of our residents," said Spiers, 56, who owns the Lucky13 bar at 2140 Market Street. "It is exciting to finally see it."
Realtors and developers expect to see high demand for the units being built in a dozen new construction projects along the upper Market Street corridor. Not only are the mixed-use buildings the first to come on line in over a decade, they are entering into a super-heated housing market where supply is extremely low and prices are skyrocketing.
"We are not doing any ads; we just don’t need them for that project," said Suzanne Gregg, with Paragon Real Estate Group, who is overseeing sales of the 18 units in the development dubbed ICON at 2299 Market Street on the corner of Noe and 16th streets. "It is doing incredibly well. More than half the building is already under contract."
The building’s promotional website attracted 1,200 people expressing interest. Since last month, when the building came out from behind scaffolding, tours of the units have been given privately to those potential buyers who have already been pre-qualified by lenders.
Residents are expected to be able to start moving in as soon as the end of the month.
"I really see a benefit from the fact you can walk to everything you need, or if you are using public transportation it is right there," said Gregg, who grew up in the city. "It is a really good quality building made of steel and concrete. It is surprisingly very quiet in there."
Allaying fears that the new residents would turn out to be straight twentysomethings working in Silicon Valley, real estate agents are seeing strong demand from LGBT people looking to live near the heart of the city’s gay Castro district.
"It has mostly been young professionals with a good-sized gay contingency," said Gregg.
Spiers’s building Linea, named after the geometry and lines in its design, is not slated to open until January 2014. Yet already 1,000 people have signed up for the list of those interested in purchasing one of the condos, 40 percent of which will be two-bedroom units and the rest one-bedroom units.
"I think, definitely, we will have a large presence of gay couples or singles wanting to buy because of the location," said Spiers. "We will also get young urban professional types who want to live in the heart of the city."
Among the 350 people who have already expressed interest in the Century San Francisco, a mix of two- and one-bedroom condos at the corner of Market and 14th streets, many are older LGBT people who already live nearby, said Jean-Paul Samaha, with Vanguard Properties, who is overseeing sales of the units.
"It is interesting, we are hearing from a lot of older gay and lesbian people currently living in the neighborhood in single-family homes or in buildings that do not have elevators and are looking to get into a brand new construction elevator building," said Samaha. "They love the neighborhood and want to stay in the neighborhood and are looking for other opportunities to stay in the neighborhood in their early retirement years."
Costs Raise Concerns
The roughly 1,000 units of new market-rate housing, however, is receiving mixed reactions from LGBT community leaders.
Some welcome seeing the in-fill developments rejuvenate the streetscape and add new residents and merchants to the gayborhood even if the changes are visually shocking.
"People are kind of amazed by all of the buildings. It is as if people woke up one day and all of a sudden the cranes now turned into buildings," said Duboce Triangle Neighborhood Association President Pat Tura. "I think everybody didn’t quite realize the impact it would have on the neighborhood. At the same time, I believe many people welcome the changes."
Others complain the new housing will not meet the needs of low-income LGBT seniors, youth, or those living with HIV and AIDS with limited means who are being priced out of or evicted from the Castro. As the Bay Area Reporter noted in a March article, the new buildings along the upper Market corridor will produce just 228 new below-market-rate units.
"We don’t see cranes the same way as a lot of people in this city do. We see cranes and think of high-rises that come with rising rents in the neighborhoods surrounding them," said Harvey Milk LGBT Democratic Club President Tom Temprano.
The progressive queer political group last week hosted a meeting about the new housing being built in the Central Market corridor and what impacts the development may have on the nearby Tenderloin neighborhood, where many LGBT people have sought out cheaper housing options.
"I think it sort of feeds into the desperation a lot of people are feeling about the changes in our city," said Temprano of all of the new, high-end housing projects. "With all these new market-rate, high-rise developments, I don’t think I have heard a single positive word from Milk club members in discussions around them."
The new housing along upper Market Street isn’t cheap.
According to a price list for first phase sales at the ICON that was released this spring, a one-bedroom with a parking space was priced at $739,000, while a two-bedroom, two-bath unit without parking was going for $849,000.
A two-level townhome unit with two bedrooms and two-and-a-half bath cost nearly $1.6 million. Monthly homeowners dues ranged from $384 to $520 a month, depending on the unit size.
Nonetheless, the costs are not deterring buyers.
"It will soon be sold out," predicted Gregg. "It is an incredible market and the building is at a stellar location."
At the one mixed-use development that will be monthly rentals, named Venn on Market located next door to the LGBT Community Center, online listings for the one- and two-bedroom units range in price from the low $3,000s to low $4,000s depending on the square footage. It has already started leasing the 113 units in the building, 14 of which are BMR, where amenities include a fifth floor sky deck and social lounge as well as a dog washing station.
Samaha has yet to price the units at the Century San Francisco but expects to start being able to accept deposits from interested buyers as soon as August. The units are scheduled to be ready for move-in sometime this fall, either in mid-September or early October.
"We are waiting until we are further ahead in construction" to determine the pricing, said Samaha. "Just like other similar developments in the area, we will have showings prior to completion to the building as a whole."
In late June Spiers told the B.A.R. that pricing for the units at Linea, whose residential address is 8 Buchanan Street, would range from $600,000 for a one-bedroom unit to more than $1 million for a penthouse. Monthly homeowner dues covering such things as gas, water, garbage, and lobby security would be $450 to $550 a month depending on unit size.
This week Spiers planned to open a preview and sales center for people on Linea’s interest list located inside several modular trailers set up in the vacant lot on the corner of Sanchez, Market and 15th Street next door to the Swedish American Hall at 2174 Market Street. Inside will be a mock-up of what a unit will look like, including the bathroom, said Spiers, as well as touch-screen computers showing the building’s design renderings and various unit configurations.
"This way here you will have an opportunity to walk into the sales office and buy a unit and not have to worry about being outbid the next day," he said. "By mid-July we expect to put people in contracts for the units. We are pretty much on schedule at this point."
For more information on ICON, visit www.icon-sf.com/index.html.