There’s good news for those who didn’t invest in or work at Airbnb, DoorDash, or others of the dozens of Bay Area startups that went public this year. Your fortunes will still be boosted from 2020’s record-breaking crop of Wall Street debuts.
Those who live in California will see benefits from blockbuster initial public offerings from the likes of Airbnb and DoorDash as the state fills depleted coffers with tax revenue from all the newly minted billionaires, millionaires and hundred-thousandaires. The state and cities will also reap economic benefits as those folks spend their newfound riches.
The main benefit to the state comes through income taxes. California taxes capital gains — the profit made from sales of stock — as ordinary income. Initial public offerings result in extraordinarily high compensation for employees, executives and investors. When they exercise options, sell shares or vest stock awards, they will owe taxes, probably at the top rate of 13.3%.
“With state revenue being down, (the stock windfalls) will certainly help meaningfully,” said Jon Ekoniak, a partner at Bordeaux Wealth Advisors in Menlo Park. “The initial predictions of California budget shortfalls won’t be nearly as big as we’d feared.”
California companies going public
*Through Dec. 10
Nine California companies so far had valuations above $1 billion when they debuted on Wall Street this year.
Source: Dealogic
In many cases, the income bumps don’t occur until six months after an IPO because a lockup period prohibits insiders from cashing out too soon. But San Francisco vacation-rental company Airbnb, which enjoyed the year’s most successful offering on Thursday, ending the day worth a cool $100 billion, was more liberal. Its employees and others were allowed to sell up to 16.8 million shares on Thursday.
There are also the proceeds of offerings to consider. Sales by employees and investors benefit those individuals, but not the company itself. The newly issued shares companies sell to the public yield cash for the corporate treasury. Over time, companies spend that money on real estate, salaries and acquisitions, which can further boost the economy.
California bean counters already track initial public offerings and factor them into budget forecasts, said H.D. Palmer, a spokesman for the state Department of Finance. But its last official projections came out in April when Wall Street appeared on the verge of collapse because of the pandemic.
Instead, the stock market had a phenomenal year, achieving all-time highs. Offerings of new stocks, after pausing in the spring, swung into full gear late this year, with last week notching two local megadeals: Airbnb, which ended its opening day on Thursday worth more than $100 billion, and DoorDash, which closed Wednesday worth $72 billion.
This year, 91 California companies have gone public, raising about $40 billion and starting their opening days as publicly traded companies collectively worth $166.3 billion, according to data from Dealogic. That’s almost double the number of California initial public offerings in 2019 or 2018 — and there are still more on tap for this year.
The state didn’t anticipate the market’s swift recovery or the Wall Street gold rush.
“Our capital gains forecasts was fairly low,” Palmer said. That means the gonzo activity from recent months will boost the next budget projection due out with with the governor’s budget in January. “The market outperformed what we expected, which is good.”
While the impact from each company is different, the state can point to some specifics that it gleans by combing through regulatory filings that detail how much stock executives and insiders have.
When Uber went public last year, it yielded about $200 million for the state. Facebook’s landmark offering in 2012 resulted in about $1.3 billion for California over several years, mainly because CEO Mark Zuckerberg had a phenomenal amount of income from selling shares.
Taxes on stock gains are one reason California’s economy has such a boom-and-bust trajectory. The state now tries to moderate that volatility by socking away excess capital-gains taxes into a rainy-day fund.
Some of the surplus could also go into restocking reserves.
State tax benefits don’t just come when the lockup period expires. If a company continues to do well on Wall Street and its employees, executives and investors continue to sell stock, California will continue to benefit.
“It’s not just a series of one-offs,” Palmer said. “What you hope for is something that is an ongoing phenomenon.” That’s certainly been the case with Facebook, Google and Apple.
Currently, San Francisco benefits directly from stock offerings because of its 0.38% payroll tax. Companies must pay that amount when their employees exercise stock options. In 2019, the city estimated it would reap between $15.1 million and $43.5 million from payroll taxes on stock-based compensation, according to a report.
That approach will change in 2021 because of Proposition F, which eliminates the payroll tax and instead raises the gross receipts tax. “No one will pay payroll tax, including IPO companies, as of Jan. 1,” said Ted Egan, San Francisco chief economist.
However, increased stock-based compensation still could boost what the city realizes from the gross receipts tax, he said. San Francisco uses payroll expenses incurred in the city to apportion that tax.
“If executives are based in San Francisco and they are getting a bigger share of the stock-based compensation than lower-paid employees who work in other cities, that will tend to raise the apportion factor for that year,” Egan said.
For example, a global company that has about 5% of its staff in San Francisco — including executives who reap stock bonanzas — might see its San Francisco payroll rise to 10% of overall payroll due to stock cash-outs.
San Francisco also calculated initial public offerings’ impact on real estate and found it to be modest. In 2019, the flood of stock-based compensation may have raised the price of a single unit of housing between $7,245 and $25,005 — not much when the median price was $1.35 million. Its impact on rents, which were at a median of $4,393, was from $24 to $81 a month.
“IPOs are like earthquakes,” Palmer said. “There’s always an amount of seismic activity in California as part of the background noise. There are always a certain amount of IPOs going on because of the nature of our innovative and dynamic economy. But like an earthquake, the bigger IPOs are the ones that tend to get the attention. And they trigger unusually large amounts of compensation. Then that compensation is taxable in California.”
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid
Lauren and Josh Swickard star in the new Netflix film “A California Christmas.” The holiday romance film was filmed in Petaluma. Photo: Netflix
Petaluma is a teeny, tiny Podunk town in the rural hills of California, far from the skyscrapers and silver Ferraris of highfalutin San Francisco. At least, this is how the city is portrayed in Netflix’s new holiday movie, “A California Christmas,” a romantic tale of a real estate tycoon’s spoiled son — and his abs — who changes his philandering ways after meeting a breathtakingly beautiful farmer in short-shorts.
There are a myriad of minor issues with “A California Christmas,” which I suspect Netflix already knew about, given how the film was barely promoted before its Monday, Dec. 14, premiere. But I’m not here to review what amounts to a perfectly passable romantic comedy in the vein of your classic Hallmark/Lifetime Christmas trope. Humanity is blessed with a fresh abundance of these guilty-pleasure movies every year, and this particular “masterpiece” has sat at No. 1 of Netflix’s top 10 offerings in the U.S. since Tuesday, Dec. 15, so there’s certainly an appreciative audience for them.
Instead, I’m here to offer a San Franciscan’s perspective on a television movie set and filmed in the Bay Area, because if there’s one thing we enjoy around these parts, it’s pointing out inaccuracies in national media depictions of our backyard. And “A California Christmas” has a whole bunch of fun ones.
The new film stars Lauren and Josh Swickard, a real-life married couple who met while filming another movie in Petaluma. Lauren also penned the script for “California Christmas,” which follows Joseph Van Aston (Josh), a trust fund baby and womanizer whom we first meet in a San Francisco hotel following a short dalliance with a nameless woman, and who later addresses a boardroom full of male executives at his mother’s company with, “Good morning, ladies.”
Did we really start things off with the old “emasculating men by referring to them as women” energy? That shouldn’t have flown past the 1980s teen movies from which this supposed dig gained popularity, but in a present-day San Francisco workplace? No way.
Joseph is tasked with making the trip to Petaluma to talk Callie Bernet (Lauren) into selling her Sonoma County farm to Van Aston Enterprises before the big company’s Christmas party.
One of the film’s producers is Ali Afshar, an actor and race car driver who was raised in Petaluma and plays Joseph’s dutiful chauffeur, Leo. Presumably Afshar knows our geographical basics. Petaluma is a city of approximately 62,000 people, and most San Franciscans, just an hour south, are aware of its existence. But Joseph isn’t most San Franciscans. He lives in the Van Aston Hotel, which appears to be in Pacific Heights (but is actually a Petaluma building), and he wears a business suit while riding his motorcycle to work.
“A California Christmas” was one of the first films to begin production in the Bay Area after the coronavirus pandemic shut down most of the planet. This could explain how Van Aston’s downtown San Francisco office exterior shows street parking as far as the eye can see. I didn’t just notice one open parking space (of which none exist in real life); every meter was open and every space was big enough to fit a bus.
Tied to a strict deadline to close the real estate deal, Joseph makes his way across the Golden Gate Bridge (15 minutes away from his office) and immediately finds himself in the uncharted wilds of the southernmost portion of Wine Country — a place rich San Franciscans visit all the time. Your aunt in Houston knows all about California Wine Country. Why doesn’t Joseph Van Aston, who is literally there to buy land?
Callie’s farm is charming — scenes were apparently filmed at a real-life Petaluma ranch owned by Afshar’s family. And there’s no way she’s selling her multigenerational homestead to anyone, much less some rich guy from the city. Seeing the impossibility of his task, Joseph decides to take advantage of a misunderstanding and pretends he’s a ranch hand named Manny, while sending his chauffeur to a car wash where wine and cheese are served to customers.
I couldn’t tell if the car wash wine was supposed to be a joke about the snooty chauffeur’s high-end snacks or Sonoma County’s culinary pretension, but aren’t we pretending we’re in the sticks, anyway? How is there wine at this car wash?
Throughout the movie, announcements written in italicized typography let us know that we’re getting closer to Christmas Day. Therefore, it’s got to be December, right? Still, Callie tends to her cows and 19th century grapevines wearing Daisy Duke-style shorts and tank tops. Petaluma’s winter climate, while mild compared to other regions, certainly doesn’t allow for summer clothing — and even less for romantic sex scenes under the stars.
Does love conquer all in this sweet and cheesy holiday romp through the vineyards of Sonoma County? You can probably guess how the story ends. But geographic realism, at least from a cynical North Bay perspective, is located about a thousand miles away.
Afshar hails from Petaluma and the Swickards met in the region. Couldn’t the “California Christmas” team get these small details right? Maybe they tried and Netflix shut them down. The streaming giant’s lackluster promotion for this holiday romance is fishier than a shirtless ranch hand with a dusty real estate contract in his back pocket.
Lucky for Petaluma and the many, many viewers who’ve enjoyed “A California Christmas” so far, only the Bay Area will care about how wrong this movie got us.
“A California Christmas”: Romance. Streaming on Netflix.
Bay Area home prices maintained their record levels last month, despite sluggish population growth.
The median price paid for an existing, single-family home in the Bay Area was $1.1 million in November, unchanged from October’s record and up 18.9% from last November. Sales were down 7.3% from October but up 34.4% from November 2019, according to a California Association of Realtors report released Thursday.
On Wednesday, the California Department of Finance reported that the state’s population grew only 0.05% between July of this year and last, its slowest pace since 1900. More people moved out of California to other states than vice versa, immigration slowed, the birth rate dropped and the death rate increased.
In the Bay Area, the population declined in Napa, Sonoma, Marin and San Mateo counties. It rose in the five other counties, but at slower rates than the previous year. San Francisco had the “fastest” growth rate, 0.31%.
“We did see an uptick in out-migration (statewide), but the population still increased,” said Jordan Levine, the association’s deputy chief economist. “Even if there was less demand (for homes) this year, we are still up against 30 years of underbuilding. There is still such an imbalance of supply and demand, which is one reason we are seeing out-migration.”
And even though people are moving out of the Bay Area, if more renters decide to buy homes in the area, prices could go up.
Jonny and Amie Davis owned a home in Oakland’s Rockridge neighborhood for seven years. But now that they have a 6-month old daughter and are both working from home, they needed more space and made a quick decision to sell it.
“We decided on a Wednesday, put it on the market the following Monday, because Rockridge was nuts. Another house sold up the road sold for an amount we couldn’t quite fathom,” Jonny said.
They listed the 1,647-square-foot home, as “coming soon,” at roughly $1.2 million on Oct. 16. Seven days later, they accepted a $1.69 million offer and closed seven days after that. But now they’re on the other side, house hunting in Oakland, Lafayette and Orinda in an overheated market.
“If it’s a good property, it will sell in days. You have to make a decision really quickly,” Jonny said. They’re renting a home for six months from a family that wanted to get away while their kids aren’t in physical school. Jonny hopes things will calm down before their lease runs out.
“Maybe we are taking a bet the market can’t continue to go so crazy all the way into next year,” he said. “There are certain places where I can’t see how it can continue.”
The family’s agent, Linette Edwards of Abio Properties, said, “The majority of my listings are selling with multiple offers. The migration continues. People in San Francisco and (downtown) Oakland are buying into the East Bay for the yards and space. In Contra Costa County, a lot of people are selling and buying homes in more remote areas.”
Edwards said about three-fourths of the roughly 30 sellers she has represented since the pandemic began moved out of state. “Covid has spurred people to move faster in their life plans.” One seller decided to retire earlier than planned, sold his home in Walnut Creek and moved to Puerto Vallarta.
But, she said, competition for single-family homes is still strong because inventory is limited and people are still moving into the area from out of state. Condos, on the other hand, represent “a great buying opportunity.”
The median price paid for a Bay Area condo last month was $750,000, up 1.4% from October and up 2.7% from November 2019.
The median is the price at which half of homes sold for more and half for less, and can be influenced by changes in market mix. For example, if buyers purchase more entry-level homes and fewer luxury homes, the median can go down even if prices overall went up.
A home at 3930 Canyon Road in Lafayette listed at $899,000 attracted 33 offers and sold this month for a whopping $1.75 million, even though it was in such disrepair that many prospective buyers didn’t even enter the property.
“I thought it was a teardown. It was not a good candidate for a flip,” said listing agent David Otero of Highland Partners. “I was expecting it to sell in the $1.1 million to $1.2 million range.”
The previous owner was 102 and died in the home.
“It had a ton of settlement, mold” and floor damage from a leaking roof, he added. Light fixtures had been removed and replaced with hanging bulbs, and a failed attempt to create a basement ended up looking like an “underground bunker.”
But the home had an acre of land in the coveted Happy Valley neighborhood. It was left in a trust to Tulane University, which was thrilled to get the sales proceeds for its education fund, Otero said.
Levine noted that the Bay Area led the state in sales growth last month, but that’s partly because at this time last year, it was “a little slow out of the gate when the rest of the state was ramping up. The (Bay Area’s) growth rates are slightly exaggerated” because of that.
Normally, the real estate market slows down in November and December. One reason that it’s still going strong is “pent-up demand that couldn’t express itself in April and May,” when sales slowed to a crawl because of strict limits on showings and economic uncertainty. Open houses are still banned.
“We also might be borrowing some sales from next year. Folks want to get in before (mortgage) rates go up,” Levine said. “There’s also a structural component — folks have more flexibility on where they can live. They also have more needs; our homes are more important to us than ever before.”
With the first doses of the coronavirus vaccine being distributed, and the economy opening up, “we are going to see ongoing pressure on prices,” he predicted.
Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender
When Colette Barss sold her Seaside home this spring, her new east Garrison-area home had been sitting on the market for about 190 days. She ended up buying it for about $60,000 under asking price.
Today, that would be extremely unlikely.
The price of real estate has soared across the country since the pandemic, and California isn’t immune. Across the state, home prices are up by almost 20% and the Central Coast, a tight housing market to begin with, has been squeezed even tighter with prices up an average of 25%.
Wealthier residents of San Francisco, San Jose and even Los Angeles are flooding markets from Redding to the Central Valley, hitting each suburb in between.
Fleeing the stifling shelter-in-place brought on by the pandemic and newly endowed with the ability to work from home, Realtors say their clients are searching for bigger floor plans, lots and access to the outdoors. A larger percentage than normal are buying investment properties that can serve as a vacation home, or even a primary residence, should they decide to make the move.
Realtors say their clients are prepared to bargain fiercely for a home, even coming in above asking price with an all-cash offer — which is often made possible by selling homes in pricey regions on their way out.
While that’s leading to an influx of wealthier landowners, it is pricing local renters — potential homebuyers — out of the market, experts say.
‘It’s counter-intuitive’
Barss sold her home in “deep quarantine.” They put the house on the market shortly before the shelter-in-place orders and then it “sat untouched” for 30 days as real estate agents were prevented from holding open houses. Once the orders lifted, though, Barss said it sold within two months.
A for sale sign is placed at the corner of San Miguel Canyon Road and Echo Valley Road in Prunedale., on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
“It was really stressful, I guess,” Barss said. “Sotheby’s had these procedures in place …about disinfecting. They had this little kit in our house with Lysol and disinfecting wipes, and the Realtor would always disinfect everything. It made me feel better about all of it.”
The hardest part, Barss said, living in her home while it was being shown. Where could she go when potential buyers showed up?
“I just drove around,” she said. “Where are you supposed to go when shelter-in-place was going on?”
Still, the pandemic has spurred buyers and sellers. Across the U.S., home sales and prices on everything from new construction to condos has soared since shutdowns began.
In some markets, new listings last hours, if priced right.
A release by the U.S. Census Bureau and the Department of Housing and Urban Development showed the number of newly-constructed homes sold nationally was 41.5% higher in October than last year, though dropped slightly from September.
Current sales and price statistics compiled by the California Association of Realtors (CAR) shows that home prices across the state in October were up by more than 17% from the same time one year ago, and the average sales price is more than $700,000.
Supply is the lowest it has been in years, CAR’s report said. California homes spend a median of just ten days on the market.
CAR data shows that the Central Coast has experienced the greatest price increase in California, with prices up an average of 25% year-to-year.
Data provided by the Monterey Coast Realty and Carmel Realty Company backed that up. Though prices are highest in already-affluent parts of the Peninsula, the realty companies reported the third quarter of 2020 was one of the busiest quarters in their market’s history.
Sotheby’s International Realtor Juliette (Jette) Ferguson helped Barss with the sale and purchase of both her homes. She said she saw this bubble start in spring, soon after the shutdown restrictions on home showings eased.
A Carmel Realty Co. sign hangs in front of a home in Pacific Grove, on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
Ferguson said in her experience, buyers tend to be signing contracts for an average of $50,000 over asking on houses in the $600-$800,000 range. She tries to help them make the best decisions possible based on her understanding of the housing market, but she’s been a bit stymied by the strength of the market.
“It was counter-intuitive,” said Ferguson. “I didn’t expect COVID to make the market increase. Interest rates are low…and all the signs are there that it should be going down, but it’s still steady and up.
“It’s always their choice, but I’m blunt and I’ll say if I would do it or not at this time…but I’m afraid to say at this point,” she said. “I don’t want to be wrong and then they didn’t buy and then it’s more.”
Crowding and COVID-19
Monterey County was already stretched thin, with high home prices, abundant agricultural land and a lack of new development crowding too many people into too-few homes.
Between 2006 and 2018, the median household income in California grew 6.4%, but the average real income for the lowest 20% of households dropped by 5.3%. During that same time period, the cost of housing increased by more than 8% from 2017.
This led to an increase in houses busting at the trusses with generations of family members.
Based on 2011-2015 data from the Healthy Communities Data and Indicators Project, the California Department of Public Health found that in California, 8.2% of households are considered overcrowded, which health officials say can lead to a higher risk of COVID-19 among occupants.
The county has remained classified as purple tier — California’s classification for a case rate of seven diagnoses per day per 100,000 people, the highest rate — since the shelter-in-place orders were announced in March.
In Monterey County, the rate of overcrowded households stands at 12.7% and Latino households in California are the most likely to be overcrowded, at 20.1%. In contrast, only 1.7% of white households are overcrowded.
A for sale sign is placed in front of a home on Maher Road in Prunedale, on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
In Monterey County, about 75% of those diagnosed with COVID-19 are Latino or Hispanic, per county health data.
According to a 2015 fact sheet by researchers at San Diego State University and the Center for Immigrant Integration at the University of Southern California, an estimated 18%, or just under 9,000, of the 49,000 people who live in East Salinas are undocumented immigrants.
The researchers estimate only about 23% of undocumented immigrants have health insurance, compared with 63% of the U.S.-born population, excluding documented immigrants. As such, they may be less likely to take advantage of available healthcare.
A 2019 analysis of Census Bureau data by the California Budget and Policy Center found statewide economic inequality, resulting in millions being unable to afford basic bills. That economic inequality has grown has grown since much of the U.S. voluntarily shut down to stem the spread of the virus. As such, the state and various counties placed moratoriums on evictions for nonpayment of rent, protections that are set to expire in January.
That, says Monterey Bay Economic Partnership (MBEP) Housing Director Matt Huerta, could be a disaster for folks in already-tenuous situations.
“There’s national data coming out that says millions of people are concerned about their ability to make rent next month,” said Huerta. “We will see anecdotal evidence next year. We don’t know how many people are behind on their rent, but those state protections burn off at the end of January.
“It’s going to be critical that the state plays a role to intervene for the most vulnerable residents in our community so that we don’t exacerbate the health emergency with a flood of evictions,” he said.
A for sale sign hangs in front of a home in Pacific Grove, on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
California State Senator Anna Caballero (D-Salinas) launched the Neighborhood Homes Act (S.B. 1385) in the spring that she hoped would help create more housing in the area while not intruding on essential agricultural land.
“This pandemic is ravaging the Latino farmworker community because of lack of affordable housing, and people are required to double and triple up because it takes multiple wage earners to be able to afford the rents right now,” Caballero said.
“It’s frightening,” Caballero said. “The bottom line is that what we desperately need are housing units that people can afford that actually work in the community.”
Caballero’s bill would have turned underperforming or vacant big box stores –– like K-Mart or Toys ‘R Us –– into condos or apartments. She hoped this approach would create walkable new housing while keeping greenhouse gases low, and turning vacant eyesores into a boon to the community.
A similar development already took place in Salinas’s Creekbridge area, where a Safeway grocery store was built alongside more than 15 condos.
“If you live there,” said Caballero, “you can walk downstairs, get your insurance, do your banking, get your groceries. If you don’t live there, you’d never know (they were there).?”
Caballero’s bill did not pass, which she attributed to the expedited sessions the Legislature was subjected to on the heels of the shelter-in-place rules. There simply wasn’t time to address the points other legislators raised, she said. Caballero is retooling the bill based on feedback she received and hopes it will pass in 2021.
“People have been losing housing ever since the recession,” Caballero said. “When so many people lost homes that were overinflated in value, you have investors who buy up homes. Here, locally, there’s a real need for small units so people can. get their foot in the door.”
‘Somewhat trapped’
An apartment complex has room available for rent in south Salinas, on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
Realtors Anita Madison and Kim DiBenedetto respectively work at sister companies Monterey Coast Realty and Carmel Realty Co. Carmel Realty focuses on the luxury brand and only lists houses over $1 million, while Monterey Coast focuses on properties that are less than $1 million.
Comparing sales and prices quarter-to-quarter and year-over-year, DiBenedetto said the numbers they’ve seen are “crazy,” once they were able to start showing houses again. Many of their clients come from San Jose and San Francisco, she said, there’s simply more of them. They’re also getting more buyers up from L.A. than they typically see, she said.
While typically these buyers would be looking for a second home, many of them are turning it into their primary residences, DiBenedetto said.
“What you’re really seeing, too, even in the more affordable price points, like East Garrison and the Dunes, a huge percentage of those are people who work in Silicon Valley,” DiBenedetto said. “Normally they buy a little further north, like in Marina, but now they don’t even have to commute. They say, ‘I can buy anywhere.’”
The comparatively low infection rate in Monterey County, and particularly on the Peninsula, along with the ease of access to the outdoors was a huge draw for many of Madison’s clients, when looking at the congested cities of the Bay Area. In San Francisco and San Jose, too, the cost of high-rise condos and apartments has dropped, while the prices for single-family homes has climbed.
A sign for The Ruiz Group stands in front of a home in a Salinas neighborhood on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
“If you’re going to pay what it costs to live in the city, you can be here instead, probably for less, work from home, and be somewhere that’s a lot more low-key,” Madison said.
“They just wanted out of the bigger cities,” DiBenedetto added. “If you live in a high-rise condo building, they felt somewhat trapped.”
DiBenedetto recalled one family she sold to, who purchased a second home in Monterey County so their son, who had preexisting health issues, had a lower chance of exposure to COVID-19 than he would in San Francisco.
While luxury housing is an important part of the market, MBEP’s Huerta said, the county has fallen far behind on its goals of building affordable housing, which would help spread out the farmworker population and lower rents, as well as the spread of COVID-19.
For that to happen, he said, elected officials at the city and county level needed to find the political will to make big changes: streamlining permitting and zoning and raising or reallocating funds for more affordable housing.
So far, Huerta noted, Monterey County has been more amenable to greenlighting luxury housing developments than it has moderate or affordable housing.
Without some sort of government intervention, a large group of people would find themselves worse off after the pandemic, Huerta said.
“We are one of these areas of the country that are seeing and going to see more of a ‘K’-shaped recovery, where you have kind of diverging paths,” said Huerta. “One path for folks that are going to do well: buyers and homeowners that have enough money to buy the higher homes. And then you have the other end of the ‘K,’ where people are suffering and going to suffer more. These people will have higher rents and (will be) unable to buy.
“The recovery is going to get worse for them.”
A new homes for sale sign is placed near the East Garrison neighborhood homes in Marina, on Friday, Nov. 27, 2020. Photo by David Rodriguez, The Salinas Californian
Kate Cimini is a reporter with The Salinas Californian covering ag, housing and health. She reported this story with support from the California Fellowship through the USC Annenberg Center for Health Journalism. Annenberg’s engagement editor Danielle Fox contributed engagement support to this story.
This article is part of The California Divide, a collaboration among newsrooms examining income inequity and economic survival in California.
The San Francisco Examiner is being sold to Clint Reilly Communications, publisher of the Nob Hill Gazette and Gentry magazine, for an undisclosed sum in a deal that also includes the SF Weekly.
“I feel newspapers are incredibly important to the life and well-being of a community,” said Clint Reilly, chairman and president of the eponymous company. “If we can help the Examiner have a greater impact, we will be helping the city, the Peninsula and the Bay Area come back from the deleterious impact of this awful pandemic.”
Established in 1863, the Examiner was the flagship paper of newspaper magnate William Randolph Hearst, founder of Hearst Corp., which publishes The Chronicle. Hearst sold the Examiner in 2000, and the newspaper has undergone several changes of ownership since then.
The Examiner currently is owned by Canada’s Black Press and is distributed free in San Francisco and the Peninsula via street boxes and door to door in some neighborhoods.
Reilly, a political consultant and real estate investor, has a large property portfolio that includes the Merchants Exchange Building and Merchants Exchange Club, three office buildings on Pine Street, the Little Fox Building in Jackson Square, the Julia Morgan Ballroom and Credo Restaurant.
Reilly said he’s well aware of the huge challenges that newspapers face as advertising and readers have migrated online.
He hopes to create advertising synergies between the Examiner and his two luxury magazines. The Nob Hill Gazette, focused on San Francisco, has a circulation of 70,000. Gentry magazine, which he bought four months ago, has a circulation of 30,000 on the Peninsula.
The SF Weekly was included in the sale “like a stocking stuffer,” Reilly said. He recently turned down a chance to buy the East Bay Express because “the alt-weekly space is not where I wanted to focus my energy,” but he said the SF Weekly has potential and a talented, albeit small, staff.
Reilly, a onetime candidate for San Francisco mayor, has had a long and sometimes contentious history with the Examiner.
In 1993, Reilly alleged that the Examiner’s executive editor, Phil Bronstein, shoved him and broke his ankle while he was objecting to its coverage of him. He sued in a case that was settled out of court.
In 2000, Hearst said it would pay $660 million for the larger San Francisco Chronicle, and merge the Examiner with it. Reilly sued to block the deal on the grounds that it threatened competition, while also trying to buy the Examiner. Ultimately, Hearst sold the Examiner to the Fang family, publisher of some local newspapers, for a nominal sum while giving it $66 million over three years to run it.
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid
