Berkeley sells the most homes over asking price in the country, report finds

The real estate website looked at sales in nearly 1,500 U.S. cities during the first three months of 2021, comparing the final sales price with the last-known list price to calculate the list. 


One Berkeley home made national news in March when it sold for double its list price and received 29 offers. “People are not surprised when a home goes $1 million over,” Josh Dickinson, the founder of real estate agency Zip Code East Bay, told SFGATE in May. “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.” 

Overbidding was most common in Alameda County when compared with all Bay Area counties in the past year, with the percentage of homes selling for over list price reaching 85%, according to data from Compass. Alameda County home sales have climbed in 2021, up 20% when compared to the same time period last year, with the median price in Berkeley sitting at $1.2 million.

Redfin real estate agent Ena Everett told SFGATE in May that the East Bay market has always been busy, but it’s gotten much more competitive in the past year. “In Oakland and Berkeley … people could expect homes to go 20% over asking on a pretty regular basis,” she said. “Now that the supply is a lot smaller, instead of 20% over, it’s common to see houses go for 10 to 40% over asking or more.”

Montclair, New Jersey, a suburb of Manhattan, had the second-highest over asking price in the country, with an average of 14% over list price. Champaign, Illinois, the home of the University of Illinois at Urbana-Champaign, saw an average increase over asking of 13%. 

Article source: https://www.sfgate.com/realestate/article/Report-Berkeley-sells-most-homes-over-asking-price-16327170.php

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Virtual Real Estate Roundtable – The Exodus Is Ending

As we pull out of the pandemic, our real estate panel takes the pulse of the Bay Area market — and finds thriving signs of life.

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As open space and pools continue to top client wish lists, this Los Altos Hills property, sold by Michael Repka in May, delivers on both.

We all know what the last year and a half has been like, with just about every industry impacted by change and challenge. As the Nob Hill Gazette’s virtual real estate roundtable confirmed last year, even midpandemic the Bay Area’s residential real estate demonstrated unicorn resilience and record sales. For our reprised virtual event, presented in partnership with The San Francisco Examiner on May 18, the Gazette’s Janet Reilly moderated a discussion with seven real estate all-stars to follow up on what’s trending and topical in our current market.

The consensus? The convenience of Zoom is here to stay, but with a promising vaccination rate and schools and offices reopening, it’s clear we are also seeing a return to the office — and notably, to the City itself. “So many people are coming back from Sonoma and Tahoe,” says panelist Michelle Pender of Engel Völkers, who has seen a recent spike in condo sales along with the steady demand for single-family homes from her mostly millennial clients. “A lot of the first-time buyers are your kind of unconventional first-time buyers,” she says. “These are folks that were ‘anti’ residential real esJoel
Goodrichtate, more into the stock market focus. But with some instability there and with cryptocurrency being kind of unknown, a lot of people are investing in residential luxury real estate because they know it’s a surefire way to have a safe investment.”

Millennial purchasing power is also an indicator to Pender that the market is strong. With an eye on investment, Alicia Hergenroeder, who recently launched her architecture firm Placeholder Studio, bought her first home with her husband in Potrero Hill. “Anything could be an opportunity because we were so openminded,” says Hergenroeder, who looked at houses and condos in and outside the City.

While the young couple ultimately opted for a single-family home, another of Pender’s firsttime home buyers, Breanne Eder, a researcher who works in biopharma in South San Francisco, took advantage of greater inventory in the condo market (a brief window that panelist Joel Goodrich of Coldwell Banker Global Luxury notes is already reverting back to normal). “The condo market was perfect for me,” says Eder, who settled on Nob Hill. “It gave me the location. It gave me the space. It gave me quintessential needs, but then also the neighborhoods gave me the social and cultural aspects that I was trying to fill.” A transplant from Ann Arbor, Michigan, Eder is eager to find her tribe in a city that continues to be a draw, according to our panelists.

No matter the goals of today’s buyers looking in the City, down the Peninsula, or up in Marin, it’s clear their values have changed this past year, too, with more focused wish lists and expectations of home.


Our Panelists

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Joshua Deitch

Joshua Deitch

Compass (Marin)

With 13 years of real estate experience and dozens of successful and profitable personal real estate transactions in southern Marin, Deitch has developed a well-rounded sensibility of the southern Marin market, especially when it comes to finding premarket and off-market properties.

 

 

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Michael Dreyfus

Michael Dreyfus

Golden Gate Sotheby’s (Peninsula and Silicon Valley)

Dreyfus’ successful career spans more than 30 years in residential real estate. He is regularly on The Wall Street Journal/RealTrends list of America’s Top 250 Agents, and the Bay Area’s top 10, and his recent successes have included some of the highest sales recorded in Palo Alto, Woodside, Portola Valley and Atherton.

 

 

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Joel Goodrich

Joel Goodrich

Coldwell Banker Global Luxury

Goodrich is one of the Bay Area’s most prominent luxury real estate agents, with more than 25 years of experience and over $1.1 billion in sales. He has listed some of the most expensive homes in America, including a number of high-profile celebrity estates, and many of the properties he represents have been featured in Architectural Digest and other design and lifestyle publications.

 

 

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Michelle Pender

Michelle Pender

Engel Völkers

Pender is a native San Franciscan and knows her way around the hills and microclimates of the City’s neighborhoods, as well as the intricacies of our often-complex real estate marketplace. Hardworking, direct and dedicated, Pender stands out for her commitment to excellence, marketing expertise and negotiating prowess.

 

 

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Michael Repka

Michael Repka

DeLeon Realty (Peninsula and Silicon Valley)

Repka is the CEO, managing broker and general counsel of DeLeon Realty and head of the DeLeon Listing Team. Prior to joining DeLeon Realty, he was a practicing real estate and estate-planning attorney. Repka’s enhanced knowledge and legal experience provide a level of understanding that is consistently beneficial to his clients.

 

 

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Neal Ward

Neal Ward

Compass

For nearly three decades, Ward has been guiding clients on the buying and selling of the Bay Area’s finest homes. Ward was a founding member of Compass in San Francisco, and three years later, Compass is now the largest brokerage in the Bay Area. Ward has a deep knowledge of the marketplace, an unwillingness to compromise on quality and a commitment to the highest level of discretion.

 

 

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Helena Zaludova

Helena Zaludova

Compass

Ranked as one of San Francisco’s top 10 agents and 150 agents nationwide by The Wall Street Journal, Zaludova’s sales are now approaching the billion-dollar milestone. Her focus is on San Francisco’s 7×7 square miles, and she is known for her attention to every minute detail of a transaction.

 

 


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From the high-end luxury market are Michael Dreyfus’ recent $23 million sale in Woodside

Nothing in the last year has been predictable, not the stock market, the broken global supply chain, the work-from-home phenomenon, or the real estate market. Can you give us a snapshot of the strength of the market today and where we are?

Helena Zaludova: What the pandemic has really brought into focus is that having a home has never been more important. So I feel like the focus on your shelter, and having a place in the world to call yours, it’s just fueled the demand.

Joel Goodrich: In 2020, in the depths of the pandemic, we saw more $10 and $20 million sales in San Francisco than there were in 2019. And so far, 2021 is on pace to even break that record. So it’s very interesting to see that while we’ve had a huge exit, as I’ve had clients moving around the country and around the world in the last year, we’ve certainly had an influx in our local buyers who are committed to the area.

Michael Dreyfus: Not on the Peninsula. We’re seeing a lot of local strength. People that are here are buying more, buying bigger houses, buying more land. And we’re seeing the locals that are outside of the prime areas start to move in, which is unusual for us, where you usually have a very strong relocation market. So it’s interesting to see it be very, very local and still be very, very strong.

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From the high-end luxury market, Neal Ward’s $46 million listing in Cow Hollow.

What kind of buyers are you currently seeing entering the market and has that profile changed in the last year?

Michael Repka: We’ve definitely seen a change. The pandemic has made people rethink where they’re living. They’re looking for more space. They’re looking for larger lots. We have had a considerable number of people moving out of the Bay Area, and they’re actually looking for smaller places that are lower in maintenance. So essentially the shuffling of homes has really created a lot of demand in many different ways.

Joshua Deitch: In southern Marin, we’re seeing a lot of people, mainly in their mid-30s, who probably had a longer time horizon of leaving San Francisco. And I think the pandemic really accelerated their thoughts about making the move over the bridge and experiencing more space, bigger houses, as everyone has said, and the bigger life experience. Tech, I would say, is the biggest category of buyers that I’ve seen aggressively come on over the bridge.

Michelle Pender: [I’m] seeing a lot of millennials, especially those who have done really well with cryptocurrency. And with the instability of cryptocurrency, people know that luxury real estate is really a sound investment, right? It’s a smart investment. It’s always going to be a great place to plant your money. So a lot of these millennials who’ve done really well are the ones who are entering the markets and buying homes.

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5,500-square-foot Mill Valley property (sold in May by Joshua Deitch)

Most of our homes were forced to double over the last year as offices and classrooms and gyms, and which may have led to new expectations when looking for a home. Are your clients expecting their homes to meet all of these needs? Or are you seeing streamlined or a traditional wish list now that people are beginning to return, albeit pretty slowly, to their offices?

Neal Ward: I feel that there’s no question that buyers are looking to houses to fulfill many, many more needs than in the past. Gyms were a nice-to-have amenity, whereas now it is much more important. Home offices were almost a thing of the past and not needed. You took your laptop and sat on the sofa or the kitchen table or counter and that’s where you did your work. Now people need a closed environment in order to conduct business throughout the day.

Joel Goodrich: I think that we’re going to see a huge comeback into the office … and also the whole theory behind cities and high rises is you live, work and play within 15 minutes. We have the biggest tech capital in the world south of Market, 15 minutes away [from] the most beautiful parks and beaches in the world. So I do believe there’ll be a big resurgence back into cities and into offices. At the same time, people are enjoying that flexibility of having that space at home.

Helena Zaludova: A big premium is now being put on the accessibility to outdoor space. So it’s not just the demand for interior square footage, but it’s just having a place to just get out and feel the grass and breathe fresh air has really put a premium, especially in San Francisco, on other spaces that in the past were completely underutilized. So besides the gyms and besides the offices that buyers are looking for, it’s the yards and the decks that now are driving buyer demand.

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a Potrero Hill condo (listed by Michelle Pender)

In the past year, people in the Bay Area have retreated to second homes or they’ve rented homes for extended periods of time due to the ability and sometimes the necessity to work remotely. Where are some of the places that people are looking to buy?

Michael Repka: The clear leader for around here is probably the Nevada side of Lake Tahoe: areas like Incline Village, Glenbrook. We’re getting a number of people that are moving to Reno and some of the communities that are around that area, probably because of proximity and also because of not having a state income tax. But we’ve seen a number of people moving to Scottsdale, Arizona; Jackson Hole, Wyoming.

Joshua Deitch: At first, during the pandemic, it seemed like everybody [was] buying second homes in Hawaii. And it’s still happening, but now I definitely see a huge amount of people wanting to acquire homes in Sonoma, Healdsburg, Napa, [to] enjoy the wine country, have their big pool and their big yard and their big farmhouse, and have big gatherings for their family.

Michelle Pender: I’m seeing the same thing: Tahoe, Napa, Sonoma, even outside of California, where families have planted their kids in different places and done homeschooling. Now that schools are opening, now that businesses are opening up again, their second homes in Tahoe or Sonoma will remain their second house[s].

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a 4-bedroom/4-bath in Pacific Heights (listed by Helena Zaludova)

According to the Zillow home value index, every major Bay Area city has seen home values go up in the pandemic except one. And that one is San Francisco. Is the exodus from San Francisco real? And if so, do you think that this may be just temporary, or do you think this phenomenon may be a little bit more lasting?

Joel Goodrich: I think we have a couple of things going on. Last year, we saw record amounts of inventory. To take one submarket, let’s say condos on Russian Hill, $2 to $6 million, usually there’s three or four available. At one point last year, there were 30 — 10 times the normal inventory. That inventory is now back to normal. So that’s a huge indicator. At the same time, let’s take another submarket: home sales over $10 million. The average dollar per square foot in 2019 was about $2,300. Now it’s about $2,000. So if you just take that one parameter, that hasn’t quite gotten back to prepandemic levels — but we have a lot more sales. So I think things are definitely trending toward recovery both in terms of pricing and activity.

Neal Ward: I was very concerned throughout 2020 as to what our market was going to be, if the higher net worth individuals were going to stay in the Bay Area. Many of them left for their second homes with their children and were completely distracted. That has changed dramatically. I feel like I am in one of the most aggressive, strongest real estate markets that I’ve ever seen in my entire career. San Francisco is back, it’s strong and everything that made this incredible city beautiful is still here. Everything that made Silicon Valley is still there. There was a huge amount of money made last year. And it’s being spent on people’s homes here in the Bay Area. No question.

Helena Zaludova: My impression is that we’re in the midst of one of the strongest rebounds all across the San Francisco market. That being District 5: Noe Valley, luxury homes in Pacific Heights. We are setting new records in the Marina. Also there were a few pockets like Joel mentioned in the condo market. New construction in SoMa is still a bit slow. High rises in SoMa are definitely one of the weaker spots. But single-family homes, luxury homes in residential neighborhoods are seeing unprecedented demand. You asked about people moving to different areas. I have had a personal experience with several of my high-net-worth clients moving to Florida, but I also have a handful of clients who have made an absolute unwavering commitment to stay in San Francisco.

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1940 Broadway, in Pacific Heights (recently sold by Joel Goodrich)

How does the 2020 decade look for the Bay Area housing market in your crystal ball?

Michael Dreyfus: A decade. Wow, that’s a big question. I think our housing scarcity continues and the inability to provide listings for qualified buyers is going to get worse and worse. It’s going to end up in a crisis, and I’m not sure how that crisis is going to come out. It could come out in the proposals of zoning laws being completely revamped, but I don’t see any way — given the forwardness of the employment market and the money being made in this area and the lack of the ability to build houses — that it doesn’t somehow end badly, which means real estate continues to go up in value.

Michael Repka: I think there’s no doubt that this is an incredible place to live: the economic environment, the weather, the culture, everything’s a big draw. Now, I’m a little more pessimistic than I think some people on the panel. It has gotten incredibly expensive to live here. Unless you have radical changes to zoning, you’re going to see continued increases in prices, but there’s going to be a point, kind of a breaking point as businesses start to see it being more and more expensive to bring people in, there’ll be a desire to relocate offices.

Helena Zaludova: I think the one topic that we haven’t touched on is the rising building costs. It’s happening in real time and it’s here. It’s here to stay. It’s inflationary, and combined with restrictive zoning and rising building costs, that’s going to constrict some of the supply. I don’t know how that’s going to play out in the future, but I work with several very well-known developers, and the new project starts are lagging. So that means two to three years from now, inventory of new turnkey homes is going to be a lot thinner than it was over the past couple of years.

Michelle Pender: To echo Helena, I have a couple of different clients as well who are tired of San Francisco. Things are taking too long through the City and they’re looking at other markets to build beautiful homes. So there certainly is that element, and looking forward in a few years, there will be a lack of inventory right in the luxury market. However, I feel like the luxury market is here to stay. San Francisco is an exceptional city with beautiful culture, and you could do a thousand different things every week. So I think that being said, despite all of this economic forecasting and what’s going to happen with technology and this and that, I think there’s always going to be a population of people who absolutely want to be in this gorgeous city because it’s San Francisco.

Joshua Deitch: I used to develop some really high-end houses, and you could virtually give me a piece of land to build on and I probably won’t do it because the cost of construction, the time it takes and the hoops you have to jump through are enormous. Therefore, I think we’re going to see a continued high level of demand for high-level houses that have great qualities and what have you. I think the liquidity that’s out there right now seems to me to be real. It’s not just like [what] it was a few years ago, where it’s on paper and that one day their options are going to vest and one day they’re going to be wealthy. It just seems like there’s a lot of very wealthy liquid people out there in all ages and price ranges. And it’s pushing all sorts of different levels of unpredictability in the market.

Neal Ward: I’m bullish. Here in San Francisco, we have a teeny tiny piece of geography on the north side or south side [for] single-family homes. And there’s virtually no more land. We have fixed supply. And just as Josh related to: [There’s a] tremendous amount of liquidity, tremendous amount of wealth out there — which creates demand for a fixed supply that has not left the way it seemed that it had.

Article source: https://nobhillgazette.com/virtual-real-estate-roundtable-the-exodus-is-ending/

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The national real estate market is cooling off (unlike San Francisco)

As are most things related to Bay Area housing, the answer is complicated.

Nationally, the market does appear to be slowing down, said Daryl Fairweather, the chief economist at housing site Redfin. 


“We’re going from 100 mph to 80 mph,” Fairweather said. “What’s happening right now is a lot of buyers seem to be backing off the market because of how high housing prices have gotten. We’re seeing lower sales and a slight uptick in price drops.” 


She noted that nationally, listings have “constricted the market,” but that’s not the case in San Francisco, which has seen a small exodus of individuals leaving the city for other Bay Area or California locales. As the logic goes, the more people who leave, the greater housing inventory available. 

Nonetheless, San Francisco remains the most expensive market in the country.

“That’s why everyone’s leaving, because it’s so expensive,” Fairweather said. “But if you have the money (and many in the Bay Area do), the market isn’t really a problem for you.” 

On a statistical level, the number of listings going into contract in the Bay Area’s largest markets — Santa Clara, Alameda, Contra Costa and San Francisco — is slightly down from peaks hit earlier in spring. The exception is Alameda County, which was slightly up from spring, according to data provided by Compass. 

Nonetheless, it’s not unusual for these markets to begin to slow after springtime peaks, as the summer season is typically slower. 

Likewise, new listing data in the four counties mentioned above did pick up significantly in June over May, according to Realtor.com. Alameda was up 5%, Contra Costa 16% and Santa Clara 5%. Only San Francisco was down, by 3%. Active listings on any given day of the month increased in June over May in all four counties. This number is affected by the number of new listings coming on the market and how fast buyers are purchasing them. 

Alan Thuma, a longtime realtor with Vanguard Properties, says he’s seen steady inventory but also “steady absorption.” In other words, while there may be many active listings, those properties are getting snapped up — and often quickly. Part of the reason for increased inventory may be that lots of people are traveling this summer as COVID restrictions wane. 

“But everything’s still steadily moving this summer,” he said, adding that he’s hosted an open house every weekend this season. 

Thuma believes we’re “steadily marching to a fall market.” He expects lots of inventory in autumn, but also expects buyers may anticipate that and start looking now.

“There’s a natural thing where if you’re a first-time buyer, you’re being coached that the market starts ramping up after the Labor Day,” he said, implying that many buyers will hold off their searches until then. 

Generally, he sees any lulls in the market being attributed to the season in “foggy San Francisco,” when the market typically slows. 

So is the Bay Area housing market cooling off? Probably not, no. And while inventory may increase in the fall, you can expect lots of competition, per usual. 


After 20 years of planning, sales have begun on Yerba Buena Island

Dozens camp overnight for chance to buy $1.2 million Bay Area townhouses

Marin’s largest remaining undeveloped waterfront residential property headed to auction



Article source: https://www.sfgate.com/realestate/article/housing-market-cooling-bay-area-sf-16327613.php

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Bay Area real estate prices climbing back up

SAN FRANCISCO, Calif. (KRON) – Around the Bay Area, rents are down about 15-20 percent compared to last year.

However, since the pandemic has started to ease, prices are starting to climb back up.

So far in 2021, rents are up compared to last year. San Francisco rental prices are up about 5%.

San Jose is up 3%, and Oakland is up about 2.5%.

What’s unclear at this point is how high rents will eventually go.

“We are clearly seeing some growth.”

Jeff Andrews is a data journalist with Zumper.com, which tracks and lists rental properties. He expects that rental prices will continue to climb but may not get as high as they were before the pandemic.

He says that many people have permanently left the Bay Area, especially tech workers, and that they may not return.

We are not sure how broadly tech companies are going to adopt work-from-home policies. If that is very broad and people don’t return to the Bay Area in the same numbers as say New York City.

We might see the pandemic as an event that permanently lowered Bay Area rents.

The real test of what will happen with the rental market could come this Fall when many companies plan to reopen their offices and recall workers.

Prices could continue to climb until then but if people don’t come back in large numbers, rents could flatten out or possibly even drop.

Another reason that rents might not return to what they were before is that even before the pandemic people were leaving the Bay Area and rents were dropping.

Nothing has happened that could reverse that trend.

Article source: https://www.kron4.com/news/real-estate/bay-area-real-estate-prices-climbing-back-up/

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That $28 billion to save local restaurants? In the Bay Area, tens of millions went to chains like Panera

But the money has run out. And this week, after the U.S. Small Business Administration (SBA) released its list of 101,004 businesses that received grants, an unsettling feeling settled in. 177,300 applicants, or 64% of the pool, didn’t get anything. Did the small neighborhood restaurants that the fund purported to help — the unsung greasy spoons, the century-old pubs, the strip-mall pho joints — get left behind yet again?

I combed through the list to examine how Bay Area restaurants fared, and some names are comforting to see. Oakland Chinatown community hub and dim sum destination Peony Seafood, which many speculated would close last year, received $1,986,679. Family-owned Fremont Afghan Kabob Restaurant, a favorite in the Bay Area’s halal food scene, got $285,303. Point Reyes’ Station House Cafe, an essential stop for vacationers, netted $1,138,550.25.

Those seemed to align with the purported values of the fund, which politicians and bodies like the National Restaurant Association promoted as targeted assistance for small, “local,” “mom-and-pop” essential businesses.

But many of the Bay Area recipients of the most generous grants don’t fit that image: Locations of well-known businesses such as Panera Bread, Ladle Leaf and Peet’s received significant amounts, through companies Pangenera, LLC, San Francisco Soup Company and Gotham Enterprise, LLC that are licensed partners or franchises of the chains. Others, like the local chain of Lori’s Diners, appear to be permanently closed, which may mean that their funds would have to be returned, though it is unclear whether that money would then go to other applicants. Nearly all of these places received the full maximum of $10 million apiece.

While Panera Bread is technically a “local” restaurant in that it exists here in the Bay Area and employs locals, the financial status of the billion-dollar corporation (and the well-off franchisees that rely on it for marketing, investment help and bulk bread bowl purchases) is a far cry from the independent restaurants that have largely had to deal with the pandemic on their own. (Fun fact: To open a Panera franchise, you must have a net worth of $7.5 million.)

The reality is that despite the fund’s folksy marketing, it wasn’t written to primarily help small, independent restaurants. Restaurants weren’t the only eligible businesses; any entity involved with food, including a bowling alley chain and sports arena concessions providers, was able to apply. Additionally, just 17% of the fund was specifically allocated for restaurants that pulled in profits of $500,000 or less in 2019, while the rest was set to be distributed in proportion to other businesses’ annual gross receipts. That means the overwhelming bulk of the $28.6 billion pot was earmarked for the biggest earners, not the little guys.

A maximum award of $10 million also meant that a small number of applicants could gobble up a lion’s share of the money. According to postmortem data released by the Small Business Administration, 5.2% of grant recipients received awards in excess of $1 million (totaling 39% of the entire pot), while the average award was around $283,000. And flexible allowances for businesses with multiple locations (in this case, no more than 20), meant that 10% of the $28.6 billion fund went to businesses that were franchises of national brands, such as chains like Hilton Hotels.

Worse, thousands of food businesses owned by historically underserved groups will not get any money from this fund unless it is replenished. One stopgap written into the law prioritized businesses owned by gender and racial minorities, economically disadvantaged people and veterans, in the hope of evening the scales after the Paycheck Protection Program faced backlash for allowing publicly traded companies, like Ruth’s Chris Steak House and Shake Shack, to receive crisis aid. The business administration paid about 72,000 priority applicants before the measure failed spectacularly thanks to intervention from right-wing activists who sued on the basis of discrimination against white and male applicants. According to the New York Times, “tens of thousands” of priority applicants ended up in limbo, and close to 3,000 restaurateurs had their grants rescinded.

Ironically, Bob Freeman, owner of San Francisco’s Buena Vista Cafe and a white man, told Eater that he was among those whose offer was taken back because he and his business partner applied in the priority group as veterans. While the court ruling only prohibited the factoring of race and sex from the applications, it appears that even veterans got caught in the legal dragnet.

Priority applicants who were told that they would receive a much-needed shot in the arm, who were ready to rehire staff and pay back rent and overdue bills, had their offers rescinded and will receive nothing. During an appearance on Restaurant Business podcast “A Deeper Dive,” National Restaurant Association representative Sean Kennedy said, “By all accounts, SBA has put down their pencils.” The business administration has frozen its online application portal, and applicants can’t even check on the status of their applications anymore.

No single fund was ever going to solve everything for restaurants. Our political leaders knew that; on a March call with the Independent Restaurants Coalition, Rep. Blumenauer acknowledged that, compared to the $120 billion initially proposed for the plan, the $28.6 billion wouldn’t be nearly enough to meet the needs of the industry.

Still, Blumenauer’s plan could have done plenty to allay the shortage and implement the vision that was sold to us — the one of “mom-and-pop” essential businesses. The $10 million maximum grant cap could have been reduced significantly, freeing up more money for the wider pool of applicants. Corporate chains could have been excluded to prioritize scaled grants to independent businesses that normally draw in smaller profits than businesses with a dozen or more locations. And the funding could have been more specific to actual restaurants, and not event spaces and hotels.

In the early days of the pandemic, it was clear that without help for independent restaurants, we’d be facing a period of monopoly in the industry, with chains taking up more space in our culinary landscape as places closed. The back rent, late utility bills and other debts accrued during lockdown caused many small restaurants to shutter, as they had few means to pay without taking on even more debt. It’s easy to imagine a world where more restaurant real estate is snapped up by financially steady chains, with fewer individuals and families able to sustain food businesses on their own.

This fund was supposed to help. Yet the “help” has not only been disappointing, it has also tangibly worsened the situation for many restaurants. A caterer in Chicago, who spent the pandemic feeding people in need, told industry publication Restaurant Hospitality that the rescinded funding has forced her to finally dissolve her business. An ice cream shop owner in Seattle told the publication the reversal caused “complete chaos” for her business, which ramped up operations and purchased more inventory in anticipation of getting the much-needed funding. As it stands, 2021 may continue to be a brutal year for restaurants. The results have confirmed one of the darker sentiments about American culture: that our system as it is now is not built to support smaller businesses, let alone the 99%.

There is still room to correct course. A proposed bill with more than 180 congressional co-sponsors seeks to allocate $60 million more to the fund. In the meantime, the bill’s leaders have continued to use romantic small town imagery to boost their effort. In a statement on the new bill, congressional co-sponsor Rep. Brian Fitzpatrick, R-Pa., said, “The mom and pop diners and delis on Main Street all across America still need our help, and we must act urgently to save our local restaurants.” But unless the language of the fund changes significantly, I’m not sure there’s much hope of such salvation.

This story has been updated to clarify the relationship between Gotham Enterprise, LLC and Peet’s.

Soleil Ho is The San Francisco Chronicle’s restaurant critic. Email: soleil@sfchronicle.com Twitter: @hooleil

Article source: https://www.sfchronicle.com/food/restaurants/article/That-28-billion-to-save-local-restaurants-In-16320066.php

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