Point alternatives
As you have probably read on Stop, Drop and Roll, WRT Soloman, the consultant tasked to study transit-oriented development options for Alameda, has produced their report on their current findings. Of course the report loudly proclaims that it is a “DRAFT” just in case you didn’t catch the little stamp in red on practically every single page in that font that looks like it belongs on a cargo container.
Basically the report boils down to three distinct plans, which you can read SDR’s summary here, but I will also repost because summarizing it for you helps me crystallize it in my own head. For those of you who don’t care to read the report itself, feel free to skip all the narrative in the report and head straight to the pictures and graphs that start on page 32 of the reader.
Alternative 1: the Preliminary Development Concept (PDC) plan. This is the Measure A compliant plan aims for 1,800 units of housing (estimated population of 4,800) and 9,000 new jobs from 3.5 million square feet of commercial/industrial.
Alternative 2: the Transit Enhanced PDC plan. This plan is not Measure A compliant and aims for 1,800 units of housing (estimated population of 4,140) and 9,000 new jobs from 3.5 million square feet of commercial/industrial. Now you may be asking why there is the same number of housing units but a much smaller generation of the estimated population. Because of the option to build a diversity of housing, including townhomes and stacked flats above retail, the assumption is that the average household will be smaller than the average household size that would result from a Measure A compliant only development.
Alternative 3: Transit-Plus Scenario. This plan is not Measure A compliant and aims for 4,050 units of housing for an estimated population of 9,315 and 9,000 new jobs from 3.5 million square feet of commercial/industrial. To keep this number in perspective, the current number of households on Bay Farm Island more than 5,300 and the current number of residences is around 14,070.
Interestingly enough, the only two plans that involve building a school out at Alameda Point are Alternatives 2 & 3, probably because of the additional space that would be available from being able to build more compactly.
Those that like the idea of preserving as much of the historic character out at Alameda Point should find pages 51 - 55 worthwhile to take a look at. The concerns of some of the preservation community regarding the elimination of many of the historic buildings like the Big Whites, Shop Buildings, and Bachelor Officer’s Quarters have been addressed on these pages and the rationale for not being able to preserve these buildings under the PDC and Measure A are:
Due to its restrictions on multi-family housing, Measure A effectively prohibits the adaptive reuse of historic structures at Alameda Point for residential uses. This, in turn, significantly reduces the financial feasibility of preserving key contributing structures such as the BEQ and BOQ.
In addition, Measure A’s prohibition on multi-family housing requires that larger amounts of land are needed to accommodate a residential land use program that consists primarily of single family detached homes. This demand for residential land results in market pressures to remove buildings like the BEQ, BOQ and Big Whites.
This situation is further exacerbated by the relatively limited market demand for non-residential uses that are able to afford the cost of rehabilitation. Low intensity employment uses such as warehousing and light manufacturing are generally unable to invest the necessary capital to reuse many of the base’s structures.
Allowing multi-family mixed use development at Alameda Point would increase the potential viability of reusing more of the buildings within the district. It would also allow for a larger portion of the new housing and new construction to be located outside the boundaries of the NAS Historic District, where it would have less impact on the historic character of the district.
It’s also worthwhile to mention that while the two alternative plans to the PDC assumes that folks will be using transit to help reduce the number of cars, before anyone starts shouting up and down that you can’t force people to take public transportation, it is the intention that any future residents of this area will pay for future transportation related funding. (p. 17 of the reader) As has already been approved for Alameda Landing, this Transportation Demand Management (TDM) plan will levy an annual fee on businesses and residences to fund transportation improvements and operational costs. I would imagine that much like the annual Community Facilities District fee that Bayport residents were informed that they would pay in addition to all other taxes, this would provide for a certain level of self-selection for future residents.
This report is chock full of information and I’ve only scratched the surface. But one thing that is notable is that for those that insist on commercial/industrial only and musing publically about why housing/residential is the only thing that our city leaders are concentrating on. In all three plans there is the exact same number of proposed square footage for commercial/industrial development (3.5 million and 9,000 jobs). The only thing different about the three alternatives are the housing/residential portion, which is probably why that is the reason why people concentrate on that apsect of the proposed future development.
The only thing I’m convinced of is that the land is worth little or nothing. The land is either polluted, in a flood plain or unstable. There may be a small area just to the west of Bayport that is buildable, but other than that, I wouldn’t be willing to risk an investment.
Comment by AlamedaNayTiff — April 28, 2008 @ 12:09 pm
Re: Instability & floodplain
Is there a qualitative difference between landfill at the Point vs the landfill at Harbor Bay and other parts of town?
Comment by dave — April 28, 2008 @ 12:16 pm
Roughly equivalent to the rest of the island. For their own good, I’d advise everybody to vacate expeditiously
Comment by Jack Richard — April 28, 2008 @ 12:18 pm
Click on Interactive Map link and then select area by zip code.
http://www.abag.ca.gov/bayarea/eqmaps/liquefac/liquefac.html
Comment by Mike McMahon — April 28, 2008 @ 1:20 pm
looks to me like the bisquit is on page 31:
The additional units also generate
signifi cantly more funding for
transportation improvements such as
bus rapid transit improvements from
Alameda Point to the 12th Street
BART station and the Fruitvale BART
station. If these improvements attract
a 1 % of current Alameda commuters
to switch from their cars to transit,
this reduction in commute trips would
offset the additional cars generated by
the Transit Plus alternative.
Comment by Jack B — April 28, 2008 @ 2:05 pm
So, let me get this straight: Future public transit systems in Alameda will be paid for by new residents? How does that make any sense? new residents already have to pay more as a result of M-A, Prop 13, and the limitation of available land. Ironically, almost all of these newcomers must commute to jobs that actually pay enough to buy here since there aren’t any jobs in Alameda to do so.
Let’s not fool ourselves: Unless you’re a stay at home mom pushing baby buggies to town, Alameda is a bedroom community straight and simple. I fail to see that it would really ever become a city that will have legitimate businesses beyond foodservice, retail, and the occasional quaint law firm.
As far as the land on the base being worthless: If it is, can I please have some? Me and lots of other people would love to have it to build houses on.
Comment by edvard — April 28, 2008 @ 3:36 pm
Edvard, why don’t you put in a bid. If Suncal defaults maybe you can be runner up.
I still think Alameda Power & Telecom should become Alameda Power & Telecom & Water… and build a nuclear powered desalinization plant at the point. Like Jack Richard pointed out, there have been nukes there before. Clean energy and clean water for the masses!
Comment by Jack B — April 28, 2008 @ 4:08 pm
It’s not just the young bay mud that’s unstable; Suncal just defaulted on a $235 million loan for their project out in Bakersfield.
http://www.kget.com/news/local/story.aspx?content_id=8a4d39c9-152d-48d9-b3f8-285fcdc78800
Comment by Susan — April 28, 2008 @ 4:14 pm
Here’s an in-depth article re: the $235 mil default.
http://www.bakersfield.com/102/story/426289.html
Comment by Susan — April 28, 2008 @ 4:54 pm
#7 Jack, thing is, the previous point nukes had ships wrapped around them so quakes were no hazzard to them.
Comment by Jack Richard — April 28, 2008 @ 4:57 pm
Susan, looks like they made their payment.
http://www.mercurynews.com/alamedacounty/ci_9084439
Still a very, very bad sign.
Comment by Jack B — April 28, 2008 @ 5:22 pm
#3
“Roughly equivalent to the rest of the island. For their own good, I’d advise everybody to vacate expeditiously”
No part of Alameda is great when it comes to earthquakes, but some parts (like the original peninsula footprint) are better than others. I do own a home in Alameda, but I wouldn’t buy one constructed at the Point — though the likelihood of homes being built there seems more remote each day.
Again, I say drop the idea of a master-plan; zone the land, issue bonds for basic infrastructure improvement in those few areas that can sustain life and then sell off the parcels.
Plan C: Let the Navy keep it.
Plan D: Fence it off and forget that it exist. Note on Alameda maps for areas west of Main that, “Dragons dwell here.”
Comment by AlamedaNayTiff — April 28, 2008 @ 5:24 pm
Don’t mean to make you uncomfortable, Tiff, but I totally agree with you. Assuming my water factory idea is a no-go.
Comment by Jack B — April 28, 2008 @ 5:27 pm
Re #12, “Dragons dwell here”
It could be the “Alameda National Dragon Refuge”!
Comment by Susan — April 28, 2008 @ 5:48 pm
Just have to add that thinking about Suncal and development at the point in general just made a Sinatra tune start running through my mind.
“Call me irresponsible - call me unreliable
Throw in undependable too…”
Comment by Susan — April 28, 2008 @ 5:54 pm
If the distortion of the Big Whites is an indicator, the fill at the Point, which is older than South Shore or Bay Farm, may be more poorly engineered and more hazardous. I have not heard of homes on the fill at south shore lagoon being warped by major settling, though supply line ruptures at South Shore were about 25 times those on the historic island during Loma Prieta.
The sand of the native soil on the historic island is supposed to act like mini ball bearings which rattle and bounce off each other in a quake, eventually leading to liquefaction as the water table is drawn up into the vibrating soil particles. Still, some folks have theories it has behaved well in quakes and has a shock absorbing quality. I don’t think we know enough about various magnitudes and epicenters to tell what will happen.
Comment by Mark I — April 28, 2008 @ 6:33 pm
Judging by the last 60 years and whatever earthquakes we’ve had in the interim, the base is as safe as most other places on this precarious island. That said, I’ve thought from the closing, Alameda would be better off lining bulldozers track to track and shove the point back to where it came from. Island will be worse off trying to do anything with it.
However. given reality, I agree with ANT’s Plan A and B, C & D, if A and B don’t cut it.
Comment by Jack Richard — April 28, 2008 @ 7:51 pm
Jack - you obviously were not around to compare damage of the various areas of these islands after the Loma Prieta earthquake or you would know the base fared much much worse in terms of terra movement. Years ago I heard from a Councilmember that parts of the old runways dropped as much as 4′. That would be catastrophic for a home. For a dwelling of several stories it would likely be deadly.
If you trust ABAG’s compilation of researchers you can see from the site Mike M linked that the entire base is “very highly” susceptible to liquefaction. This is the worst rating on their charts. Most of the Main island is considered a “moderate risk” Only the base, and landfill areas of the main island and Bay Farm Island are listed as the most susceptible to liquefaction. Then again this is from ABAG, who seem vested in securing tax expenditures to fix problems real or imagined.
Comment by David Kirwin — April 28, 2008 @ 8:49 pm
“Due to its restrictions on multi-family housing, Measure A effectively prohibits the adaptive reuse of historic structures at Alameda Point for residential uses. This, in turn, significantly reduces the financial feasibility of preserving key contributing structures such as the BEQ and BOQ.”
I know that I have asked about this before, and JKW responded that it is because they did not have kitchens that the BOQ and BEQ are not really “residences”, but I still do not understand reading Measure A/Article xxvi, why the BOQ and BEQ are not considered existing multiple dwellings which are eligible to be remodeled as multiple dwellings. They were not warehouses or businesses, they were dwellings, so why could they not be reused as dwellings without a change to Measure A?
Comment by Kevis Brownson — April 28, 2008 @ 9:28 pm
As far as the 70 page report on the Alameda Point website, when I looked at that last week I could only shake my head in shame for the consultant. By page 5 the overwhelming bias was so strong as to make further reading almost pointless. I used to feel the same way about the weekly newspaper published by the State Federation of Labor – if they would tone down their bias a few notches, maybe their credibility would rise. JKW must love this report as much as his own mantra – ‘the more dwellings we build, the fewer cars and drivers will be added to our streets, tunnels, and bridges.’
It truly is time to think about the benefits of providing space for the dragons, perhaps coupled with a green energy farm of solar, wind, and tide based generation. Seems safer and greener than bio-mass burning, or using shaky, semi- liquid ground to build even more residences the city can’t support, and which would also cause traffic residents don’t want. MA may be “more of a hammer than a refined tool”, but at least we-the-people have something to use to knock some sense into the developers. Thank God for Measure ‘A’.
If you think we need to appease ABAG with a housing plan, let’s plan to think about starting to consider the possibility of someday bringing a mothballed Navy frigate to berth here and loading it with “container condos” for the very low, low, and moderate income households. They can actually be made relatively nice. I have seen some done nicely by a contractor near dog town, Oakland. They would be safe from earthquakes, floods, and liquefaction. They would meet JKW’s ‘transit hub’ standards. They could provide the affordability everybody from HOMES to Howard (and Edvard) says is needed. And some would have a very exclusive view…. Not to mention the school district which would further increase the perceived value.
Fortunately for our safety I doubt there is any way the NRC would allow nuke ships to be permanently stationed as electrical generators for on-shore USA. Back in the 90’s we used a lot of the empty neglected piers for film set construction. Over in the City, I think near pier 50, somebody had brought over some mothballed ships that were to be used as generators for some 3rd world areas. I wonder how the rest of that story ended.
Comment by David Kirwin — April 28, 2008 @ 9:39 pm
Kevis, I am sure it would take several levels of legal decisions to confirm or deny JKW’s opinion.
It maybe true, as he believes; that since the City ’set the standard’ of dwelling as needing a kitchen in individual units, as well as defining what “kitchen” means; (room with a table, counter with a sink, (disposal?), refrigerator, microwave and toaster oven, and trash facilities - does not qualify as a kitchen for our PB, and C.C.) Therefore BOC,
& BEQ were not residences by that definition. Of course by DOD standards (and likely by those who lived there) they certainly were residences. Either way, couldn’t they be “modernized”, like cardinal point, perhaps a full kitchen for every 4 units in addition to the ‘galley’ in every unit?
Comment by David Kirwin — April 28, 2008 @ 10:00 pm
Ovbiously the above suggestions are not in the vein of how modern developers are used to maximizing profit. Perhaps in this recession they should start thinking of “starter homes” as upscale luxery versions of “Hoovervilles”; if they want to sell what they can build.
Comment by David Kirwin — April 28, 2008 @ 10:08 pm
DK, I say Amen to that idea. Why in the hell almost ALL builders during the boom built hardly anything except ginormous houses is beyond me unless you compare them to SUVs; Large, inexpensive to build, and easier to make a bigger profit with, and especially if there’s a clever little Ponzi scheme to shovel fake monopoly money into buyer’s pockets.
I hope all these builders have learned a hard lesson: You must diversify your product range. If you ask any of us thirty-something what we want, we want homes that are actually within range of our incomes, which indeed means smaller. Given the fact that we’re already in a non-stop energy tailspin that’s only going to get worse and buying smaller homes makes more sense anyway.
In regards to an earthquake, We haven’t seen anything yet. The 1906 Quake wasn’t even at the level quakes have the easy potential to reach. If a large earthquake were to hit Alameda, I’m fairly certain there would be widespread damage.
Comment by edvard — April 29, 2008 @ 7:27 am
Edvard:
As a thirty-something myself, I would appreciate it if you didn’t try to speak for all of us and what it is that we want. You would be surprised at how many “thirty-somethings” who may have started out as “twenty-somethings” who considered and still consider owning their own home a good long-term investment for their financial well-being.
Comment by Lauren Do — April 29, 2008 @ 7:37 am
DK- runways fell 4 feet or 4 inches? 4 feet is impossible to imagine.
I haven’t read the document, but suspect bias is anything you don’t agree with, as usual.
Comment by Mark I — April 29, 2008 @ 7:44 am
K, even if they only “modernized” the old units, the infrastructure work, modernization cost would grossly outhweight any possible profit margin, and their overall value as a whole. Thats why it is most often better to just tear down and start over.
But even if they did go that route, The ginormous cost of building on the point will prob be passed on to homebuyers, and building these little residences would not be logical. Added to, the fact that the even in this market, the starter home set are finding it the hardest to even secure a decent loan.
Of course these homes aren’t being planned for this housing cycle, but for one about 10 years down the road.
All in all I would be into some completely different use for the base. I think there are already plenty of areas in Alameda where redevelopment should be prioritized. Northern waterfront, Lower Park st. I think taking all these big projects all at the same time and spreading ourselves too thin is whats led to lackluster results i.e Blanding center, and from the looks of it Towne Centre.
Comment by MarkD — April 29, 2008 @ 7:58 am
Regarding the suggestion to fence off Alameda Point, and forget it exists, that would be difficult, and rather harsh on the more than 700 residents already living out here, and the many businesses (bike shop, distillery, plant nursery, auction house, plumber, etc.) who are literally and figuratively putting down roots here.
Comment by Doug Biggs — April 29, 2008 @ 7:58 am
# 18
Well, yes in fact I was around to compare earthquake damage. In fact there was very little damage to any of the base after Loma Prieta. Did you mean 4 inches instead of feet? Some of the aircraft taxi-ways experienced cracking, as did some of the concrete building foundations. The base operations continued with very little impact from the quake. But, of course, it was in no way comparable to the Alaska earthquake in 64.
# 21
BOQ’s are equivalent to motel or hotel rooms. No kitchens. That’s why they have “chow halls” for the enlisted or “dining facilities” for the zeros.
Comment by Jack Richard — April 29, 2008 @ 9:03 am
Lauren,
I’d put money on it right this very minute that Most of us in our thirties do not want to own large houses for a number of mind-numbingly simple reasons:
A:they’re too expensive.
B: they waste energy, which you might notice has been skyrocketing lately. We’re talking hyper-inflation territory.
C: The housing crash.
And no- I’m not surprised that so many people still blindly believe the industry shills that: ” Housing only goes up”, and that “housing is a good long-term investment.”
You want a good long term investment? Invest in the stock market. It goes up 7-10 years, which is by far better than what a house will pay you.
Besides- the idea that a house is an investment is totally silly since you have to live in it right? It ONLY translates to money if you sell. Then what? Are you gonna’ move to Kansas?
Anyhow, I will in the future adjust my statements to say that ‘most’ thirty-somethings’ believe that…
Comment by edvard — April 29, 2008 @ 11:25 am
#29
Instead of “most” or imply “all”, how about just speaking for yourself? By the way, is gambling also a good investment? Right this minute?
All three of my kids also in their thirties bought large houses, they weren’t too expensive, they don’t waste energy and they haven’t crashed.
Comment by Jack Richard — April 29, 2008 @ 12:08 pm
I’m one of those people in their 30’s who owns a “large home”. I bought our current home because my growing family needed a bigger home, not as part of some money making dream (Ed). Fact is, some of us in our 30’s buy, have bought, homes here because we have families, large families, that need somewhere to live. I’m smart enough to know that real money making investments may lie outside the realm of real estate. I was also smart enough to make it so that by the time I had a big family and needed a big home I could afford to do so. And given that I bought this house first and primarily for the use of shelter from homelessness, the fact that prices have dropped now is of no real bother to me.
If in 10 or 13 years I decide to sell, this current housing slump will be nothing more than distant memory. As sure as the market goes down, is always comes back up.
Comment by MarkD — April 29, 2008 @ 12:51 pm
The Case-Shiller San Francisco Home Resale Price Index, while off its ‘06 high, has appreciated at ~8.54% per yer over the last decade.
The S&P 500 over the same period has appreciated ~4.8% including dividend reinvestment.
The home price numbers don’t include property taxes, but also leave out the utility as a residence. Apples/oranges, but still worth posting….
And in any case, on a risk adjusted basis, long munis beat just about everything for taxable investors.
Comment by dave — April 29, 2008 @ 2:01 pm
Fair enough.we have a difference of opinion here. But anyone trying to convince me that real estate is a better investment than investing in the market needs to learn a bit more about basic Econ 101, because I can tell you point blank that you’re incorrect.
Drastic example: My rent costs me around $6,600 annually.Just the property tax on one of those large houses in Bayport is at least $10,000. So the old adage that renting is “throwing money away” becomes a mute point given that a home ” owner” in this market STILL throws more money away than me.
And who’s to say that in 10 years we won’t be fully recovered from the slump? It took a full 7 years last time, and that boom wasn’t NEAR as severe as this one, nor did prices or fundamentals get so severely violated. You might break even, but will property double in 10 years? I seriously doubt it. Perhaps I am wrong and 700k homes will be worth 1.4 million and everyone here will be making 500k salaries to support it.If that’s the case, then Alameda only has approximately 430k left to inflate current wages to do so.
I think people need to get away from the notion that as soon as you have kids, well uh-oh!- better buy some monster-sized house complete with a ginormous TV set because otherwise… those kids ain’t gonna be happy! So… how do you explain the fact that my mom grew up in a small two bedroom house and had to share a small bedroom with her sister wound up just fine, loves her family, and doesn’t ever mention that her childhood was terrible because of the small house she grew up in? I think you’ll find that most kids are very flexible and actually could care less about how large their dwelling is.
But I realize that I’m being cynical here. We as Americans have our choices. It’s a free choice to choose, and choose we do. If we didn’t then we would be like the USSR and all live in concrete bunker condos. So I shouldn’t criticize. So for that I apologize.
Comment by edvard — April 29, 2008 @ 3:13 pm
Lastly, in regards to prices, well I’d be looking at the latest Dataquick nes if I were you: yup- prices are still headin’ down in Alameda. Sales down 59% for March, prices down another 4.4%.
I leave you all with this amusing article fro Ben’s blog. Notice the part about Centex:
The Rocky Mountain News. “Men dressed as pigs frolicked outside the annual meeting of Richmond American Homes in Denver this morning, drawing attention to the role they say corporate home builders played in creating the mortgage and foreclosure crises.”
“The six costumed pigs were supplied by the Laborers International Union of North America, which hasn’t had much luck unionizing house construction workers, but represent a lot of workers who work on commercial buildings.”
“The ‘Pigs at the Trough’ campaign hopscotches across the country, attending annual meetings of corporate home builders, and on Wednesday will be back in Washington, D.C., as Congress debates the Foreclosure Prevention Act, union spokesman Jacob Hay said.”
“Hay said corporate builders overbuilt homes, then to get rid of the excess inventory pushed subprime loans through their mortgage subsidiaries.”
“The consensus by local and federal officials is that home builders did play an important part in the foreclosure profit by offering loans at, say, 4 percent, that would change in a few years to 7 percent — a rate that many of the buyers couldn’t afford.”
“Richmond American Homes is a part of MDC Holdings, founded in 1972 by Larry Mizel. Despite a loss of more than $400 million last year, MDC awarded Mizel and President David Mandarich bonuses of $2 million.”
“The worst housing slump in 70 years erased 67 percent from the market value of homebuilders in the Standard & Poor’s 500 Index, turning the companies into small-cap stocks.”
“‘They went through the laundry and got shrunk,’ said Stephen Lieber, who oversees $11 billion. ‘It’s gone beyond an inoperable business situation and turned into an economic crisis.’”
“Centex reached a market value of $10 billion in July 2005 when new home sales peaked at an annual rate of 1.39 million units. The Dallas-based company has since lost 74 percent of its market capitalization.”
“‘The boom was an aberration,’ said Jonathan Vyorst, a New York-based money manager at Paradigm Capital Management Inc., which oversees about $2 billion. ‘The homebuilders have a long way to go and the value of land on their balance sheets has to be reduced dramatically.’”
Comment by edvard — April 29, 2008 @ 3:15 pm
#33
>>> We as Americans have our choices. It’s a free choice to choose, and choose we do.
Edvard, you have chosen not to be a debt slave. Good for you. Now, save your money and enjoy your life. You ain’t gonna convince the housing bulls of anything.
Comment by Jack B — April 29, 2008 @ 3:54 pm
Not a housing bull, JB, just laughing at eddie’s bull.
A home is illiquid and cash flow negative but also generally provides a real return to its owner over/above its shelter value. And we all have heard the “facts” that the stock market rises over time too, except when it doesn’t — a 4-handle return over a decade with a lot of vol & tax consequneces doesn’t get me excited.
There’s alot of reason to be a seller of the sector, but knowing what one is talking about really helps get the point across, dontcha think?
Comment by dave — April 29, 2008 @ 4:01 pm
Dave, I think he’s just trying to convince himself more than anybody else.
come on, edvard, if you believe in your thesis, then be satisfied w/ your situation. Everyone here has already placed their bets. Lauren Do will still love her Bayport home even if it loses half it’s value. Which it very well might. You’ll be happy you saved and waited (and shorted the Nasdaq/Russel 2k if you dare.) I
Comment by Jack B — April 29, 2008 @ 4:16 pm
Actually Bayport hasn’t lost much value although the prices have gone down after we bought. Our house is what I believe is still worth more than what we paid. And they are starting to build the last home here which I was told after no more supply the value will increase. Whether that happens or not we will see.
My stocks and 401K have lost more money than my house in the past 6 months.
When I first moved to the Bay area you could get a 3 floor flat in the mission for $400,000-500,000…probably now 2.5 million…should have, couldn’t have…but nice to think about…in 13 years that is quite the return.
No one know what the future holds, but my parents stretched to buy a house for 29,000 when I was young and it was the best investment they ever made. It was a struggle for a few years but eventually became easier and less than they would have paid for rent as inflation and pay raises went up.
We also bought a 3750 sq ft house rather than a 2100 sp ft house because the difference in price was only $170,000 at the time, just about 2x the house with more upgrades. We don’t need this much space but we use it all. Not all 30 somethings want a small house. We made a good decision and are happy with it.
Comment by Joel — April 29, 2008 @ 7:58 pm
Although I think that people should be able to buy big houses if they want to, it seems that no one does build a certain kind of house that was quite common pre and post WWII– the 2 bedroom starter home. The only time these seem to be built it is when an affordable housing law forces the developer to build them, and then they have to have a lottery for people to buy them.
Comment by Kevis Brownson — April 29, 2008 @ 10:33 pm
Again- a house is NOT an investment. It is a place to store all of your crap, and perhaps someday sell for ‘retirement’ when you get to be an old fart and have to be wisked away by your children to a retirement home. I mean seriously- NONE of you would ever dream of setting your little toes anywhere in the entire world except the Bay Area, so it’s not like any of you will ever sell and move to another state where selling here and moving elsewhere would have actual financial meaning.
When I think of the word ‘investment’, I tend to think of something that makes me money in which I can later spend on things… like a house, a car, or college. I started investing when I was 16. doing so allowed me to go to college debt-free. It also paid for 70% of my car. In fact, I’ve never actually had debt. By investing in diversified portfolio, I’ve avoided taking out loans period.
Look at it this way. Let’s say that suddenly, there was a new Casino built in Alameda. At the door, the greeter informs you that if you play there, you will win approximately 70% of the time. Of course you’d play because the odds are in your favor. So why don’t people invest as much of their income in stocks which have the same odds? Because people are prone to “group think”.
As little sense as this makes,Consumers are more likely to buy housing during a bubble when the prices are outrageously high despite the obvious indication that those prices aren’t expected to maintain their status.Much of this has to do with fear-mongering tactics and real estate industry shills: ” buy now or be priced out forever!” A wise person would see the bubble, wait for the inevitable crash, wait for the upward trend to just start, THEN jump in. Same with earthquakes and other natural disasters. If you REALLLLLY want to live somewhere and there happens to be a convenient little earthquake, then buy when everyone else is panicking.It makes more sense to buy when prices are lower, which historically, always return after a boom or bubble, as they will with time for this latest round even if some are still in denial. it doesn’t matter if your house was the last built on the block. The housing market is general even in the Bay Area, and if values fall across the board, ALL areas will in fact be affected as they already have been… including Bayport.
Likewise, consumers usually avoid buying stocks when their values go lower as the result of a recession or some other economic fallout.These same consumers, like many homeowners of late bought stocks at the peak, or buy when everyone else did the same. When the value falls, they panic and sell off.
But people like Warren Buffet didn’t become rich from buying overpriced Google or Apple stock. Most of today’s Billionaire investors became rich because they quietly buy cheap stocks as well as buy during down times. That or they observe and watch trends. Mr. Buffet bought the heck out of Railroad transport companies because he wisely saw the growth in more fuel efficient transport as a hedge against the rise in diesel.
So in reality, right now is the time to invest when everyone else runs with their tails between their legs.
The US is full of herd mentality. If your neighbor buys a house- then you buy a house. If the TV set says you have to do this, then you’ll do it. The fact is that we’re a society that’s too easily manipulated by consumerism and as US capital concerns are happily aware of- we’ll go into debt past our eyeballs to comply. We’re in debt 40% more than we were 10 years ago, and more than 100% 20 years ago.
Anyhow, you can sit here and tell me all day long what a great ‘investment’ homes are. I can tell you that they are not because again- they are NOT an investment until you sell, do so for a profit, and move elsewhere where housing inflation is less.Until then, it is a hole you dump money into. If they are, then show me what you are doing with that money. Is it in your hands right this minute? Is it paying for your children’s college? Is it fixing the car? Lastly- is it really worth $700,000-$800,000 bucks when the same cookie-cutter generic Mcmansion in a city in another state that has better public schools, better public infrastructure, and an overall better quality of life can be had for 1/3rd the cost?
Anyhow, I’m tired of talking super-basic economics. These things should be obvious.
Comment by edvard — April 30, 2008 @ 8:06 am
Bob Wilson, is your rent really $6.6k/year (ie: $550/month)? Wow, that must be one crappy place … no wonder you sound so upset and bitter all the time!
Comment by Roberto — April 30, 2008 @ 9:06 am
Man Ed, I don’t think anyone on here is saying otherwise. You seem to be arguing with yourself now.Calm down. I think the point people were getting at is that
a) (some)people , even in their 30’s buy big homes because they see it fit, and because they can.
b) It’s not an investment in the way stocks are an investment, But slump over slump, eventually it will appreciate in value. (My parents are living very nicely off of three properties)
c) But more importantly, to quote Joel, “We made a good decision and are happy with it.”
Comment by MarkD — April 30, 2008 @ 9:13 am
Roberto, actually it’s a 3 bedroom house with a back and front yard, a two car garage and workshop on a nice street. I rent with another person. We’ve lived there for several years. The rent is fairly inexpensive. So yes- if you rent, you can have a nice house- perhaps nicer than if you buy- for a pittance if you’re willing to make some small concessions. We’ve enjoyed it quite a bit. with the exception of paying someone rent every month,which as I pointed out is less than what property taxes would be for a Bayport home, it’s pretty much like having our own house.
Anyhow, Mark, I don’t disagree that RE doesn’t appreciate over time. It does. But there’s no way that anyone buying today in the Bay Area could actually monetize rental property because rent would never cover the mortgage payments. Perhaps your parents can since they obviously bought long ago. But not today.
My parents have two rental properties of their own. Both have been paid for for well over a decade… then again, they only cost 20k and 30k respectively, so they had instant positive monetization from the start even back then. As far as a primary residence making anyone income, you can only do this if you have a reverse mortgage, which you can only get when you’re at retirement age, and afterwards the bank gets your house, not your kids.Other then that, people got it in their heads that refinancing was the quickest way to gain money from their homes… and we see how well that’s working out.
I guess what my point was that prices are so high in this area that just about all the old cliche’s that apply to housing ie- being good investments and so on- don’t stick here.There’s too much of a margin for a big correction along with a possible protracted recovery period to deduce that even in the next 10 years, RE will start ‘paying’ those who bought recently back Nobody knows what will happen. Again- this was the biggest bubble in the history of the US so any means to compare what will happen to past trends is off the table.
We all make our decisions. Mine shouldn’t matter because I deduced that the Bay Area isn’t worth the price it demands, which is why we’re moving away. So I suppose I should really care less what decisions people make here anyway.
Comment by edvard — April 30, 2008 @ 2:26 pm
For somebody who is disinterested about the bay area and thinks we’re doomed, you surely spend a lot of time on this blog with your long meandering posts!
Are you trying to convince us or yourself? To paraphrase St Barack, are you, Bob Wilson, the change you are waiting for?
Comment by Roberto — April 30, 2008 @ 4:23 pm
I hope this report doesn’t turn up as objective “proof” that high-density development is better, given that it’s clearly intended from the outset to promote smart growth, as the authors indicate. I have to wonder why this bias keeps appearing tho — because city staff prefers it, or because the funding is more readily available. I notice the same theme w/ this and with the so-called survey, and with various commentaries — we’re always being asked to visualize the most truly fabulous development at Alameda Point, as if that were the only concern that anyone has, and like this report, it sometimes seems to verge on fantasy. I think we should be asking for an objective assessment of the costs and benefits to the rest of us, as a matter of course. Less utopian fantasy, more traffic studies.
As for the report, I agree with David Kirwin — it’s deja vu all over again, “more homes will mean less traffic” because there’s a whole bunch of very generalized academic theories that say so. The report says in effect, just hope that this more extensive transit system materalizes for the whole island, by some means or other.
It’s full of statements that just don’t make sense — for example, buses will “jump the queue” when entering the Posey Tube?? How will this happen? Maybe one of those container cranes could hoist up the bus and drop it down at the very entrance to the tube — okay, it would be tricky, but it’s a thought.
The report states that the residents in the original PDC would not be within walking distance of the central bus stop — well, they would be if there were several bus stops, which is how buses usually work.
And then there’s the ferry — transit proponents love ferries, they want everybody to get on a rapid transit bus, go zipping down to the ferry and over to SF — whether they actually work there or not.
That’s what I find offputting about this report — the belief in abstract concepts that don’t line up with reality.
Comment by DL Morrison — April 30, 2008 @ 8:53 pm
And further: I agree as well with ANT’s comment, #1. I’d like to see an overlay of the maps showing the contaminated soil, the flood zones, the unstable mud. What’s left, anything? But never admit defeat, just pile on some dirt and get on with it.
Comment by DL Morrison — April 30, 2008 @ 8:57 pm
That’s right, DL, it’s utterly foolish fantasy.
They expect us to believe that addding a population nearly the size of Harbor Bay Island will be net flat traffic because they’ll improve the bus service? I would LOVE to smoke some of what they are smoking,,, hahaha.
Comment by Jack B. — April 30, 2008 @ 9:23 pm
Edward,
I have a couple of friends who bought at Bayport and are renting their house now. They are both spending $100-200 per month in the difference in their mortgage payment over rent. But the house has increase $50,000 in value and their tax write offs make up for the difference. It is about timing and being willing to wait until your investment come to maturity.
Sure you have cheap rent…which you share with others, an old car and a few dollars in the bank which has lost a lot of value on the world market as the value of the $ has fallen. You have no debt, but money isn’t everything. We have enjoyment in creating our home which is ours in a neighborhood which we are a part of and invested in. I know we make more money than you from what you have said, but we are also are only 2 persons and even if we spend 30% of our income on a house, why not?…what else should we spend it on…our food and other expenses are probably the same as yours. We made in investment and don’t see ourselves moving to Tennessee so sooner or later you need to act.
Comment by Joel — April 30, 2008 @ 10:13 pm
Ed/Joel — I think those holding cash and not debt are going to be in better shape, investment-wise, for the intermediate term. Banks are shutting off helocs right and left. Edvard (just because he blathers doesn’t mean he’s wrong)… if he’s building up a cash position.. will have better leverage in a deflationary environment… which is what I’m expecting, but with a hyper-infation hedge. Don’t ride me too hard here, Dave
Comment by Jack B. — April 30, 2008 @ 10:26 pm
…Back to the topic of this thread…
1st I have to say that even if the NAS property is unsuited for large development it is far, very far, from worthless. I wish the land, (excluding the ‘tern sanctuary’) could now be opened up to the public. I would love to ride out to the tip, to the basketball court out there. In fact I think the whole Berkeley unicycle basketball group would love to trek out there. It is a most unusual and beautiful spot. I was fortunate to be able to spend so much time out on the runways and the waterfront during preproduction on the Matrix films. Only a moron or a scammer would think or say it is worthless. Perhaps I misunderstand ANT in post #1 when he-she stated “The only thing I’m convinced of is that the land is worth little or nothing”.
I was told there were 4 ft displacements at the Naval Air Station due to the ‘89 quake. I imagined what a 4’ vertical schism would look like and found it hard to believe. Below is a link to a USGS site explaining results of that earthquake to our area. I believe some of the images point to what the councilperson had referred to, but I can’t be sure – it was a long time ago.
Too bad for today’s developers they did not have a housing consultant put the right “spin” on this survey. Or perhaps you will conclude the USGS is in the deep pockets of the likes of ADR and Action Alameda, as these reports should have us questioning the logic of development out there for environmental reasons if we are swayed to ignore the financial or traffic implications such development would have on our city.
While the link reports “small” crack and joint openings, I encourage Alamedans thinking about development at the point, or out on Bay Farm, to visit the site below. Be sure to enlarge figure #16 – a picture of a taxiway for one of the NAS runways after the earthquake. There are also good pix of Alameda land closer to (and on) the airport property.
From the link:
ALAMEDA NAVAL AIR STATION AND THE ALAMEDA
Soil liquefaction occurred over large areas of Alameda Naval Air Station (ANAS), immediately south of the Port of Oakland, as shown in figure 1. Numerous, commonly large sand boils, settlements, and lateral spreads occurred over a large area at the west end of ANAS. The airfield’s two runways and two taxiways were significantly damaged and inoperable after the earthquake. A large sand boil and vent on the taxiway of the two runways at ANAS is shown in figure 16. Pavement damage consisted of heaving, settlement, and minor lateral spreading, resulting in separation at joints. Maximum crack and joint openings were about 10 cm, and maximum vertical offsets were approximately 5 cm.
http://walrus.wr.usgs.gov/geotech/soil/index.html#ALAMEDA
Comment by David Kirwin — April 30, 2008 @ 10:45 pm
And a further note: see the chart on pg. 29, comparing commuter preferences between the main Island and Bay Farm Island:
Bus, Ferry or BART 17% 16%
Automobile 75% 77%
Walk, Bike, Other 8% 7%
Comment by DL Morrison — April 30, 2008 @ 11:24 pm
Link
http://walrus.wr.usgs.gov/geotech/soil/index.html#ALAMEDA
Comment by David Kirwin — April 30, 2008 @ 11:33 pm
Sorry, reposting:
Island BayFarm
Bus, Ferry or BART 17% 16%
Automobile 75% 77%
Walk, Bike, Other 8% 7%
Old Alameda supposedly embodies all the best features of transit-supporting communities, with dense and varied housing, walkable shopping streets and so on.
Whereas Bay Farm Island with its single family homes supposedly fails miserably with regard to transit.
Yet looking at these numbers, there really isn’t much difference between the two (is there?) Am I missing something here?
Comment by DL Morrison — April 30, 2008 @ 11:34 pm
#47, Jack B: We need a simulation — set up a tent city, give them a choice of commuting via bus, ferry or car, and see what actually happens.
We could carry on a concommitant simulation at some of the other development sites, and maybe get a better sense of the “big picture” — that would be interesting, I’ll bet (!)
Comment by DL Morrison — April 30, 2008 @ 11:50 pm
Careful what you ask for DL - some “consultant” could set up a tent city full of old deadheads still wandering around waiting for Jerry’s second coming. They could kick it for as long as the developer funds it, using just a bong for commuting…Then the TC would have some ‘solid’ local numbers to base their theories upon…
Comment by dk — May 1, 2008 @ 12:06 am
re: 49
This is getting pointlessly off-topic but I’m mighty curious how we will experience deflation and hyper-inflation. Did you perhaps mean recession & inflation?
Comment by dave — May 1, 2008 @ 5:13 am
Dave, deflation as pertaining to money supply. Inflation as pertaining to food prices.
Comment by Jack B. — May 1, 2008 @ 6:53 am
“Old Alameda supposedly embodies all the best features of transit-supporting communities, with dense and varied housing, walkable shopping streets and so on”
It does. However, that doesn’t mean that all the best transportation options are actually on the island. What it means is that if they were in place, main island would be much better suited for them.
I want to still care about this, but i just don’t think it’s a good idea, (financially, perhaps yes). As much as I would love to see life out at the point, high density/low density either way you cut it, we will still end up with lots of traffic and no way out. Buses will just not suffice, they usually never do. I would rather concentrate our efforts on the existing neighborhoods. Some of which are in pretty bad shape.
I am leaning more towards job creation. NO, not a ghost town of a business park, like Marina village, but a painfully researched, aggressively scouted campaign to lure in big companies and/or perhaps a University/research institution. Then, bus/shuttle service to Bart and ferry might be more used. And you would only need it during morning and evening traffic hours. A car share service might work well there. Luring high paying jobs seems like smart way to keep high quality of life in Alameda.
Comment by MarkD — May 1, 2008 @ 7:46 am
I think hyper inflation is a very real threat that most Americans are totally off guard and unprepared to deal with.
I’m talking about raw materials and commodities. Things like Copper, fuel, food, steel, cement, and so on.
For example, the average US citizen uses around 24 barrels of oil annually. Even with all this talk about burgeoning economies like China and the dramatic impact countries like these have already had on fuel prices, the avg person in China only consumes 1.8 barrels annually. In India-even less. So it doesn’t take much imagination to figure what would happen if China, India, Brazil, or Russia- the main BRIC countries were to come close to matching our consumption. This goes for everything else that we take for granted that essentially make modern life possible.
This demand will start bidding wars which will lead to an intense explosion in hyperinflation which in effect could make the US dollar utterly useless, as if it isn’t already thanks to all the trimming of late by the Fed.
I mention that as someone who would’ve thought you were full of crap if you’d told me this a few years ago. But I see this scenario as being very real and becoming true sooner than later.
Anyhow, since this was front page headlines in Yesterday’s Chronicle, I couldn’t resist posting it even though I realize I am fanning flames:
“The cost of a typical Bay Area home plunged 17.2 percent year-over-year in February, compared with 13.2 percent in January and 10.8 in December…
“Prices have a lot of room to fall,” said Patrick Newport, an economist with Waltham, Mass., research firm Global Insight Inc. “We could see some really big drops.”
Stephen Levy, senior economist at the Center for Continuing Study of the California Economy in Palo Alto, said the early, enormous price declines in areas like Stockton and Fresno are filtering into the Bay Area.
“Even though we don’t have the high foreclosure rates, housing is a market and prices here are connected to prices in adjoining areas,” he said.
Michael Carney, director of the Real Estate Research Council of Northern California, said he was “shocked” that the Bay Area number fell as far as it did, but echoed Newport in saying the accelerating decline means the worst is to come.”
shocked huh? Why should we be surprised. Its coming Alameda…
Comment by edvard — May 1, 2008 @ 1:02 pm