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After living in the Bay Area for nearly seven years, Hari Raghavan and his wife decided to leave for the East Coast late last year.

They were both working remotely and wanted to leave California because of the high cost of living and urban crime. So they made a list of potential relocation cities before choosing Miami for its sunny weather and what they perceived was a better sense of safety.

Raghavan said that their Oakland house had been broken into four times and that prior to the pandemic, his wife called him every day during her seven-minute walk home from the BART station because she felt safer with someone on the phone. After moving to Miami, Raghavan said they accidentally left their garage door open one day and were floored when they returned home and found nothing had been stolen.

“We moved to the Bay Area because we had to be there if you want to work in tech and start-ups, and now that that’s no longer a tether, we took a long hard look and said, ‘Wait, why are we here again?’ ” Raghavan said.

He said there wasn’t much draw in California’s quality of life, local or social policies, or cost of living. “That forced us to question where we actually wanted to live,” he said.

Riverside and San Bernardino counties saw population gains as California overall lost nearly 262,000 residents between July 2020 and July 2021.

An acceleration of people leaving coastal California began during the first year of the pandemic. But new data show it continued even after lockdowns and other COVID restrictions eased.

California ranks second in the country for outbound moves — a phenomenon that has snowballed during the pandemic, according to a report from the Federal Reserve Bank of Chicago, which tracked data from moving company United Van Lines. Between 2018 and 2019, California had an outbound move rate of 56%. That rate rose to nearly 60% in 2020-21.

Citing changes in work-life balance, opportunities for remote work and more people deciding to quit their jobs, the report found that droves of Californians are leaving for states like Texas, Virginia, Washington and Florida. California lost more than 352,000 residents between April 2020 and January 2022, according to California Department of Finance statistics.

San Francisco and Los Angeles rank first and second in the country, respectively, for outbound moves as the cost of living and housing prices continue to balloon and homeowners flee to less expensive cities, according to a report from Redfin released this month.

Angelenos, in particular, are flocking to places like Phoenix, Las Vegas, San Diego, San Antonio and Dallas. The number of Los Angeles residents leaving the city jumped from around 33,000 in the second quarter of 2021 to nearly 41,000 in the same span of 2022, according to the report.

California has grappled with extremely high housing prices compared with other states, according to USC economics professor Matthew Kahn. Combined with the pandemic and the rise in remote work, privileged households relocated when they had the opportunity.

“People want to live here, but an unintended consequence of the state’s environmentalism is we’re not building enough housing in desirable downtown areas,” Kahn said. “That prices out middle-class people to the suburbs [and creates] long commutes. We don’t have road pricing to help the traffic congestion, and these headaches add up. So when you create the possibility of work from home, many of these people … they say ‘enough’ and they move to a cheaper metropolitan area.”

The surge of migration eastward fits a pattern of families escaping densely populated cities, a trend that dates back to the mid-20th century.

Kahn also pointed out that urban crime, a growing unhoused population, public school quality and overall quality of life are driving out residents.

“In New York City, but also in San Francisco, there are all these fights about which kids get into which elite public schools,” he said. “The rich are always able to hide in their bubble, but if the middle class looks at this quality of life declining, that’s a push factor to leave.”

Redfin chief economist Daryl Fairweather cited a June report that tracked the change in spending power of a homebuyer on a $2,500 monthly budget. While 11.2% of homes in Los Angeles were affordable on that budget, using a 3% interest rate, that amount swelled to about 72% in Houston and about 50% in Phoenix.

“It’s really an affordability problem,” Fairweather said. “California for the longest time has prioritized single-family zoning, which makes it so people stay in their homes longer because their property taxes don’t reflect the true value. California is the epicenter of where the housing shortage is so people have no choice but to move elsewhere.”

While California experienced a major population boom in the late 20th century — reaching 37 million people by 2000 — it’s been losing residents since, with new growth lagging behind the rest of the country, according to the Public Policy Institute of California. The state’s population increased by 5.8% from 2010 to 2020, below the national growth rate of 6.8%, and resulting in the loss of a congressional seat in 2021 for the first time in the state’s history.

Although California has relied on immigration to offset its population decline for the past two decades, that flow has also shrunk, according to UCLA economics professor Lee Ohanian.

Delays in processing migration requests to the U.S. were compounded during the pandemic, resulting in the lowest levels of immigration in decades, according to U.S. Census Bureau data.

Estimates showed a net increase of 244,000 new immigrants between 2020 and 2021 — roughly half the 477,000 new immigrant residents recorded between 2019 and 2020 and a drastic reduction from more than 1 million reported from 2015 to 2016.

The state is also seeing a dwindling middle class, said Ohanian, who cited a report from the National Assn. of Realtors, outlining that the national median home sales price has reached $416,000, a record high. Meanwhile, California’s median home price has topped $800,000.

“[California is] at a risk for becoming a state for very, very wealthy people and very, very low earners who receive state and local and federal aid that allows them to be able to live here,” Ohanian said. “We should worry about those in the middle who are earning that $78,000 household median income and is, at the end of the day, really struggling, especially if they have interest in buying a home.”

Los Angeles County, in particular, has suffered from slowed population growth, as have rural parts of the state, while Orange County, Sacramento and some parts of the Bay Area have managed to see some gains, the Public Policy Institute of California found.

Fairweather said that since she last lived in Los Angeles in 2016, she’s noticed fewer affordable places to rent.

“It used to be that Santa Monica and Beverly Hills were expensive, but you could find affordable housing on the Eastside,” she said. “But that got expensive and you had to find housing near South Central. Now, there’s nowhere within a two-hour commute of downtown Los Angeles that’s still affordable.”

The state’s population declined by 173,000 between July 2020 and July 2021, bringing the estimated total population to 39.37 million.

Bay Area native Kenny Phung, who made the exodus from California last fall when his partner got into nursing school in Portland, Ore., said high rent prices helped cement the decision to move out of state. Phung was living with three roommates in Los Angeles for $3,600 total per month but found a two-bedroom apartment for less than half that price in Portland. He’s currently working as a project manager at a San Jose-based company that allows him to work remotely.

“It just didn’t make sense,” Phung said. “Why would I want to live in California when I’m working from home and paying something outrageous for such a small space when I can try things out and be able to save money on rent?”

Housing was also a major factor in Raghavan’s decision to leave the Golden State, he said, adding that downtown Miami has multiple skyscrapers, more affordable housing, well-paved roads and better infrastructure and services.

“The Bay Area has become a land of minor inconveniences, and some are not-so-minor anymore,” he said. “Housing and real estate have ripples across everything. It makes rent more expensive for restaurants, which raises food prices, and it causes people to commute over longer distances. Everything becomes a burden.”

Article source: https://www.latimes.com/california/story/2022-07-29/california-exodus-continues-l-a-san-francisco-lead-the-way

A 200-unit garden-style complex with swimming pool, hot tub and sweeping views of Richardson Bay, the Summit at Sausalito appeared to be just another upscale apartment community positioned to capture the hefty rents that come with the Marin County lifestyle.

But along with the usual marketing hyperbole — “an urban adventurer’s dream,” “amazing outdoor entertainment area”— Pozner discovered something intriguing on the complex’s website: a section called “essential housing” that lays out “maximum incomes” that prospective tenants can earn to qualify for the apartments.

One-third of the complex’s units would rent for $2,325 a month to a single person making 80% of area median income, about $104,000. One-third would go for $2,425 to someone making $130,000, 100% of area median income. And the last third would be available to someone making 120% of area median income, $156,000. While not bargain-basement prices, these rents appeared to be about $800 a month below other options Pozner saw.

“To my surprise I qualified for a rent that was affordable to me,” she said. “I was so grateful because it allowed me to be able to afford to stay not just in California but the Bay Area. It allowed me to continue to do the work I love and stay connected to my personal and professional communities. It’s kind of a dream that something like this was available just when I needed it.”

What Pozner had discovered was a new — and somewhat controversial — model for workforce housing invented by Marin native Jordan Moss, a former UC Davis basketball player who worked in commercial real estate before becoming laser focused on a housing affordability crisis he believed was destroying the state he grew up in.

Rather than try to get into the nonprofit affordable housing business that relies on tax credits and public subsidies to fund, Moss worked with state officials to create the California Community Housing Agency, or CalCHA, a joint powers authority that can issue bonds in order to buy existing properties and, over time, convert them into income-restricted workforce housing. It’s California’s first governmental entity focused exclusively on middle-income housing production.

The new asset class, which Moss’ Catalyst Housing Group calls “Essential Housing,” is an attempt to create affordable rental housing to the “missing middle” — the nurses, police officers, teachers and civil servants who earn too much to qualify for traditional affordable housing, yet can’t afford market rents in upscale communities like Larkspur or Sausalito.

Here is how it works: Catalyst — or a similar group — finds an existing apartment community to acquire. It then approaches the city or county the property is located in to see if that jurisdiction is interested. If the answer is yes, the city or county joins CalCHA, which issues the bonds to buy the property. Catalyst takes a fee of about 1% of the deal’s cost and gets paid $200,000 a year to manage the asset for the term of the bond, which can last 15 to 30 years. Once the bond is paid off, the city owns the property. So while the properties are tax-exempt, the city ends up owning a valuable asset that, once the bond is paid off, can be sold or borrowed against or made permanently affordable.

Part of the deal stipulates that no current residents of a purchased complex are evicted, so the essential housing is phased in gradually as vacancies arise.

So far Catalyst has partnered with the California Community Housing Agency to purchase 14 apartment complexes, a 4,200-unit portfolio worth more than $2.5 billion, the most recent of which was the $122 million purchase of the Sausalito property. Previous deals between Catalyst and CalCHA include deals in Livermore, Antioch, Larkspur, Santa Rosa, Berkeley, Hercules, Huntington Beach and Dublin.

The model has its critics, however. Matt Schwartz, president of the California Housing Partnership, argues that the model lacks accountability and that the discount that tenants get on their rents is so modest that it doesn’t justify the property taxes that are not being collected.

He faulted Catalyst — and other groups that have jumped on the bandwagon — for overpaying for luxury apartment communities and in the process collecting millions in fees. While the rents are discounted compared with similar upscale complexes, they are often higher than older, less fancy offerings in the same area.

“They drop the rent a few bucks and now rent these apartments with granite counter tops and a swimming pool for $3,000 instead of $3,500,” he said.

Schwartz said the model “could give affordable housing a bad name.”

“The main thing that concerned us is the claim that these luxury apartments were suddenly made affordable to moderate households, but when you look at the covenants and binding agreements there is no requirement that rents stay (affordable) and no third-party entity to monitor it,” said Schwartz. “It’s all, ‘Trust me, this is what we intend to do — it’s all going to be to the benefit of the community.’”

Larry Florin, who heads up the nonprofit Burbank Housing in Santa Rosa, also criticized the lack of oversight in the model.

“When I build affordable housing using a public subsidy I have to sign a regulatory agreement which is recorded against the property, and have to produce compliance reports audited by public agencies,” he said. “There is no such mechanism in these.”

Florin said that Catalyst “over-paid and over leveraged” the property it bought in Santa Rosa and had to dip into reserves to service the debt. Moss said that the property — the first one Catalyst purchased — ran into the same issues during the pandemic as other landlords — a significant number of tenants stopped paying rent due to the pandemic — but that since then the community has stabilized and has plenty of reserves.

While San Jose is the one prominent city that took a pass on the model —city staff concluded “the risks and costs of joining outweigh the potential benefits” — other municipalities have jumped onboard.

Bay Area Council Senior Vice President of Public Policy Matt Regan, who is on the Catalyst board, said that Moss “has created a new asset class of housing.” He compared its impact to the effort over the last decade to pass legislation to make accessory dwelling units faster and easier to build.

“The housing conundrum we find ourselves in is so intractable that we need to come up with new ideas to get out of it,” Regan said. “That is what Catalyst has done.”

In just two years, Regan said, Catalyst has created a portfolio that will allow thousands of middle-class California families to stay in the state.

“At the end of the day it’s voluntary — nobody is forcing cities to do it,” Regan said. “The cities have their own very grown-up analysts who can look at this and see if it’s right for them.”

Moss grew up in Sausalito and Mill Valley, but his social life was centered in Marin City, which for many years was the only place in Marin County where Black families could rent or buy property. Marin City, where Moss went to school through eighth grade, is a rare pocket of diversity in the Bay Area’s most segregated county.

Marin County Supervisor Stephanie Moulton-Peters credited Catalyst with volunteering to house public housing residents when Golden Gate Village, a public housing community near Summit at Sausalito will be renovated.

“I honestly think Jordan is one of the those people who genuinely wants to be of help to the community in Marin City and Marin County generally,” she said.

Eden Housing President Linda Mandolini, who sits on the board of Catalyst, said preserving existing housing and building from the ground up are both important. She said the concept of using joint powers authorities to create middle-income housing is a way to “acquire housing that’s being pushed to even higher rents and lessen the impact on the tenants by limiting the amount rent can be increased.”

“The JPA structure, used effectively, can leverage property tax exemptions with public sector ownership, and at the same time lower rents in markets that have faced never-ending onslaughts of rent increases,” Mandolini said, adding that the model takes nothing away from the “very scarce and oversubscribed resources used for very low-income and low-income housing.”

She said Eden Housing is looking at a deal that would take advantage of the CalCHA model.

Another Catalyst board member, investor and nonprofit director Cedric Bobo, said eventually government regulation will catch up with the model and put some guardrails in place that will assuage some of the concerns of critics. One Assembly bill that would have imposed restrictions on the model was introduced but died in committee.

“The reality is Jordan is not just building a business, he is building a sector,” said Bobo.

But Bobo said the fact that companies can make money from the model through fees is not a bad thing, considering workforce housing is in such high demand.

“I don’t know how to scale pity,” said Bobo. “There has to be some element of self-interest.”

SANTA CRUZ — Coming in behind only the greater San Francisco area, a newly released housing report ranks the Santa Cruz-Watsonville metropolitan area as the second most expensive region in the nation for renters to reside.

The National Low Income Housing Coalition’s annual report, “Out of Reach,” documents the gap between wages and the price of housing across the United States. A copy of the latest report was posted Thursday to nlihc.org/oor.

Results of the latest study come as no surprise to Housing Santa Cruz County, according to a release Thursday from the countywide coalition advocacy group that launched in February 2021.

“This report just confirms the sobering reality in our community that many of us are actively trying to change,” Don Lane, Housing Santa Cruz County board chairperson, is quoted. “Santa Cruz County is experiencing a critical shortage of affordable housing. The work HSCC and other advocates are doing to support affordable housing projects and policies has never been more vital.”

In recent years, the Santa Cruz County area has popped up at the top of numerous national and local reports ranking poor housing affordability. Earlier this year, real estate investment analyst Stessa calculated that the greater Santa Cruz metro had experienced the 15th largest rent increase out of all small U.S. metros from 2019 to 2022. In 2019, the metro area was ranked in a USA Today analysis as the least affordable location for teachers to live in the nation and in 2017, researchers in New Zealand described the Santa Cruz County area as the fourth least affordable place for homeowners in the world, based on the gap between median household incomes and the median home price.

From 2016 to 2020, renters made up an average of 40% of Santa Cruz County residents — representing more than 38,000 households. The “2022 Out of Reach: The High Cost of Housing” report estimates renters’ mean hourly wage at $19.78 and calculates those workers would need to work the equivalent of more than four full-time jobs to afford a two-bedroom apartment at fair market rent.

This report’s methodology assesses jurisdictions through what it calls a “housing wage.” The metric is an estimate of the hourly wage full-time workers must earn to afford a rental home and utilities in that location, using the U.S. Department of Housing and Urban Development’s fair market rent rates and with a spending cap set at 30% of renter incomes.

Santa Cruz County’s housing wage is estimated at $60.35 for a two-bedroom rental, behind San Francisco’s $61.50 and ahead of San Jose-Sunnyvale-Santa Clara’s $55.15 wages. To afford an average $3,138-a-month two-bedroom rent in Santa Cruz County, renters would need to earn $125,520 a year, according to the report.

In the 2021 Out of Reach report, the county ranked third with a $58.10 housing wage, and first in 2019.

Meanwhile, the report puts the average national housing wage at $25.82 per hour needed for a two-bedroom rental home, or $21.25 per hour for a one-bedroom rental home.

To track affordable housing project progress across Santa Cruz County using Housing Santa Cruz County’s affordable housing project map and tracker, visit housingsantacruzcounty.com/affordable-housing.

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Article source: https://www.eastbaytimes.com/2022/07/29/santa-cruz-area-trails-only-sf-for-high-rental-costs/

What can I do to prevent this in the future?

If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.

Article source: https://therealdeal.com/sanfrancisco/2022/07/21/keller-williams-group-rebrands-bay-area-offices-as-kw-advisors/

The off-market sale of Zuckerberg’s 21st Street home, situated on Liberty Hill near Dolores Park, was first reported by real estate news site The Real Deal. The $31 million price tag, calculated based on tax assessments cited in the deed, appears to be the most expensive home sale in San Francisco this year, edging out the $29 million sale last week of two penthouse condos once owned by the late former Secretary of State George Shultz and his late wife, former San Francisco and state of California Chief of Protocol Charlotte Mailliard Shultz.

It’s also the latest example of how tech magnates are growing their influence in global real estate, and how high San Francisco celebrity home prices can go. All told, Forbes reported that as of earlier this spring, the Bay Area was home to 116 of California’s highest-in-the-nation 189 billionaire residents.

“Why does California reign supreme?” Forbes wrote in its April billionaire update. “Thank the booming technology industry.”

The Shultz sale broke city records as the highest-priced condo sale in San Francisco history. Past industry reports note that at least one other San Francisco home, a house in tony Pacific Heights, previously traded for closer to $40 million.

Despite the eye-popping sales figures, details about Zuckerberg’s now-former house remain relatively scarce. The Dolores Heights house was purchased and sold by an entity listed as “SFRP LLC,” which The Real Deal notes is also connected to a property owned by Zuckerberg in Palo Alto. The San Francisco house was purchased by an also-opaque Delaware LLC.

It was initially listed as a 7,200-square-foot, four-bedroom home, but famously underwent a renovation that attracted the ire of neighbors not so thrilled with the tech mogul’s presence and construction noise. In 2016, some complained that Zuckerberg’s security detail was hogging “desirable parking spots.”

Fellow Silicon Valley magnates, including entrepreneur and venture capitalist Vinod Khosla, have courted controversy by buying up and attempting to privatize areas around Bay Area compounds. Others are also looking to cash out: Sun Microsystems co-founder Scott McNealy recently dropped the price on his Peninsula mansion to just under $54 million.

In addition to his pricey Bay Area homes, Zuckerberg reportedly owns side-by-side $59 million mansions on the Nevada side of Lake Tahoe, plus some 1,500 acres on the Hawaiian island of Kauai.

San Francisco Chronicle staff writer Roland Li contributed to this report.