5 ms·

I suspect, as in Vancouver, a lot of foreign-originated dirty money is getting parked in SF real estate, where the structures sit vacant. One of Vancouver's in

I suspect, as in Vancouver, a lot of foreign-originated dirty money is getting parked in SF real estate, where the structures sit vacant. One of Vancouver's innovative approaches was a special tax assessment on vacant structures. I honestly wonder what percentage of SF, including its commercial office space, is simply a vehicle for money laundering. Switzerland and the Cayman Islands have nothing on Uncle Sam when it comes to real estate opacity.

ulkram 8y ago
is there data to back this up? or will it require a panama papers type leak before we know?
- almost_usual 8y ago
  As someone who knows a few property owners in San Francisco this is a common thing. People in tech make peanuts compared to who is holding property in the city. Most of these wealthy people don't rent because rent control will bring down the value of their property (you can't evict the tenants). We're talking about international levels of wealth, these same people have multiple pieces of property in Hong Kong which makes San Francisco look dirt cheap.
  - lazyasciiart 8y ago
    I know a few property owners in San Francisco and this is the first I've heard of it. Sounds like an urban legend.
    - jeffreyrogers 8y ago
      It happens in other cities, so it would be odd if it's not happening in SF too.
    - deleted 8y ago
      [deleted]
    - almost_usual 8y ago
      Are the people you know single or two home owners? I’m talking about multi home owners in the Bay Area (4+) with property in the most expensive cities in the world. That’s a very different social class than a Bay Area home owner. The ones who do rent usually hire an agency to take care of the headaches for them.
      - lazyasciiart 8y ago
        I might have been thinking of a different definition of 'common' than you were. I don't doubt that more than one person like this exists, but nobody who has attempted to study this has found that the vacancy rate is significant. e.g http://www.spur.org/sites/default/files/publications_pdfs/SPUR_Non-Primary_Residences.pdf http://www.spur.org/sites/default/files/publications_pdfs/SP... (from 2014), https://www.mercurynews.com/2018/03/12/empty-homes-a-california-rarity-as-vacancies-at-13-year-low/ https://www.mercurynews.com/2018/03/12/empty-homes-a-califor... (actual data from the Census is at https://www.census.gov/housing/hvs/data/rates.html https://www.census.gov/housing/hvs/data/rates.html)
- deleted 8y ago
  [deleted]
pcwalton 8y ago
> I suspect, as in Vancouver, a lot of foreign-originated dirty money is getting parked in SF real estate, where the structures sit vacant. That's not the case. Vacancy rates in San Francisco are very low, at 3.6%: https://www.forbes.com/sites/erincarlyle/2015/04/16/san-francisco-tops-forbes-2015-list-of-worst-cities-for-renters/#4ec2bab362fa https://www.forbes.com/sites/erincarlyle/2015/04/16/san-fran... You can see this in the rent-to-buy ratios. While high in the Bay Area, it's nowhere near the out-of-control bubble levels of Vancouver and, to a lesser extent, Toronto. Housing prices are high in the Bay Area because people actually need to live here.
- mchannon 8y ago
  Those appear to be vacancy rates calculated from submissions by landlords, but what about absentee owners who don't want to be landlords? I don't think we're measuring the real figure of merit here.
  - jimrandomh 8y ago
    There are plenty of companies that will take care of finding tenants, doing maintenance and generally handling landlord responsibilities, in exchange for a cut of the rent. Since the rent is quite a lot of money, it would be crazy to leave a building vacant unless you're planning to spend time in it.
    - jeffreyrogers 8y ago
      But people do it in high rent areas like London, NYC, and Vancouver.
      - eanzenberg 8y ago
        It doesn't make it any less dumb. It's the difference of ~80k / year for free you leave on the table.
        mchannon 8y ago
tialaramex 8y ago
Some London boroughs tried taxing empty properties to discourage this. Owners of empty properties just paid the tax. In most cases British law still lets them hide their identity, which is of course why passively owning London property is so preferable over, say, actually doing anything where their identity (as gangsters, foreign leaders who've looted their country to enrich themselves, etcetera) might be revealed.
- s73v3r_ 8y ago
  Well, if the tax is high enough, you can use that money to build affordable units to offset the parking.

ulkram 8y ago

is there data to back this up? or will it require a panama papers type leak before we know?

almost_usual 8y ago
As someone who knows a few property owners in San Francisco this is a common thing. People in tech make peanuts compared to who is holding property in the city. Most of these wealthy people don't rent because rent control will bring down the value of their property (you can't evict the tenants). We're talking about international levels of wealth, these same people have multiple pieces of property in Hong Kong which makes San Francisco look dirt cheap.
- lazyasciiart 8y ago
  I know a few property owners in San Francisco and this is the first I've heard of it. Sounds like an urban legend.
  - jeffreyrogers 8y ago
    It happens in other cities, so it would be odd if it's not happening in SF too.
  - deleted 8y ago
    [deleted]
  - almost_usual 8y ago
    Are the people you know single or two home owners? I’m talking about multi home owners in the Bay Area (4+) with property in the most expensive cities in the world. That’s a very different social class than a Bay Area home owner. The ones who do rent usually hire an agency to take care of the headaches for them.
    - lazyasciiart 8y ago
      I might have been thinking of a different definition of 'common' than you were. I don't doubt that more than one person like this exists, but nobody who has attempted to study this has found that the vacancy rate is significant. e.g http://www.spur.org/sites/default/files/publications_pdfs/SPUR_Non-Primary_Residences.pdf http://www.spur.org/sites/default/files/publications_pdfs/SP... (from 2014), https://www.mercurynews.com/2018/03/12/empty-homes-a-california-rarity-as-vacancies-at-13-year-low/ https://www.mercurynews.com/2018/03/12/empty-homes-a-califor... (actual data from the Census is at https://www.census.gov/housing/hvs/data/rates.html https://www.census.gov/housing/hvs/data/rates.html)
deleted 8y ago
[deleted]

pcwalton 8y ago

> I suspect, as in Vancouver, a lot of foreign-originated dirty money is getting parked in SF real estate, where the structures sit vacant. That's not the case. Vacancy rates in San Francisco are very low, at 3.6%: https://www.forbes.com/sites/erincarlyle/2015/04/16/san-francisco-tops-forbes-2015-list-of-worst-cities-for-renters/#4ec2bab362fa https://www.forbes.com/sites/erincarlyle/2015/04/16/san-fran... You can see this in the rent-to-buy ratios. While high in the Bay Area, it's nowhere near the out-of-control bubble levels of Vancouver and, to a lesser extent, Toronto. Housing prices are high in the Bay Area because people actually need to live here.

mchannon 8y ago
Those appear to be vacancy rates calculated from submissions by landlords, but what about absentee owners who don't want to be landlords? I don't think we're measuring the real figure of merit here.
- jimrandomh 8y ago
  There are plenty of companies that will take care of finding tenants, doing maintenance and generally handling landlord responsibilities, in exchange for a cut of the rent. Since the rent is quite a lot of money, it would be crazy to leave a building vacant unless you're planning to spend time in it.
  - jeffreyrogers 8y ago
    But people do it in high rent areas like London, NYC, and Vancouver.
    - eanzenberg 8y ago
      It doesn't make it any less dumb. It's the difference of ~80k / year for free you leave on the table.
      - mchannon 8y ago

tialaramex 8y ago

Some London boroughs tried taxing empty properties to discourage this. Owners of empty properties just paid the tax. In most cases British law still lets them hide their identity, which is of course why passively owning London property is so preferable over, say, actually doing anything where their identity (as gangsters, foreign leaders who've looted their country to enrich themselves, etcetera) might be revealed.

s73v3r_ 8y ago
Well, if the tax is high enough, you can use that money to build affordable units to offset the parking.