Yea definitely a terrific purchase in hindsight .
2020 was pretty gloomy and people lost money during the first 2 quarters . Even Zillow stopped buying when th had all the data in the world
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So why did the original owner failed to push through the subdivision but Aron did? Whatâs Aronâs secret sauce? Aron has been very active up and down the Peninsula.
With the passage of SB9, lot divisions should get easier over time.
I donât see any record in the planning department that previous owner attempted to do that. Only see Aronâs application.
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OK. But with the passage of SB9, if someone bought a house in PA on a 10k lot and subdivide it later, itâs essentially a free house right? Or just land bank it and keep that option in the back pocket.
Thatâs what my wife told me we should do - eventually split the lot into two for 2 kids.
Did newsom already sighed that as a law ?
Every lot is splittable into 2 now ?
Newsom doesnât need to sign. All he needs to do is to NOT veto it. I donât think he will. The law will go into effect even without his signature.
I need to check the details of SB9, but is there any minimal lot they can split? Or is it building 2 units without sub-dividing?
Divide into 2 lots, and each lot can build a duplex. Of course there are some conditions and such. Donât know much detail beyond that.
You can find the bill text and some high level explainers here:
What would be interesting to know would be how much maximum square footage per house ?
Sod for in Los Altos for a 10k lot you can get up to upto 3500 Sq feet .
Now would this 3500
Sq feet of maximum FAR gets divided ( letâs say 1750 per house ) once you subdivide the lot
This link sheds a lot of light .
The most logical scenario is that existing allowed max square footage would be spit aross two lot
These kinds of laws will at best increase housing stock incrementally, as long as cost of construction remains high. It costs 200k + to even build a small ADU. Tearing down an existing house and building 2 duplexes will cost $1M or thereabouts. How many homeowners have $1M lying around, or the ability/willingness to borrow another $1M above their existing mortgages? Very few.
Developers may be able to purchase some lots with small houses, and use the law to create 4 apartments, but those will also be limited occurrences.
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disagree. bidding will go even highter for houses, since a developer can afford more due to business lines of credit, families will have a harder time buying SFH since now developers will be competing as well. you as a homeowner should be excited - your home value will go up!
What I am saying is that the housing stock will not go up by too much due to this new law. Prices may well be driven higher, especially in denser areas like RBA, Oakland/Berkeley etc. But that would be an undesirable side effect for the people who championed this bill. They want to reduce home prices, not increase them.
As a homeowner, I am not too excited. As @hanera has mentioned, long term appreciation is 6-8% in the Bay Area. Not sure I want greater appreciation than this. I already have a super low fixed rate mortgage, not sure how higher appreciation helps me. And if I have to sell many years into the future, I will lose 35% to capital gains taxes and RE commission. I would rather have normal appreciation and have families move into my neighborhood as owner/occupants of SFHs than have houses sold to developers with deeper pockets, who will turn SFH into fourplexes
If a developer buys a SFH and turns it into two duplexes ie four units, thatâd be one unit of housing turning into four. Each one would then sell for way less than the original SFH.
That seems to me housing cost would go down, not up.
But as the Berkeley study shows, the chance of any one particular SFH lot being subdivided is actually not that high. SB9 is an incremental change, albeit change in the right direction. Price of SFH wonât see a step change higher. It will keep going on its existing merry trend of higher and higher due to housing shortage, which is decades in the making.
It is logically inconsistent to claim, on the one hand, this bill will result in very few new housing; but on the other hand, developers with deep pockets and the intention of subdividing will outbid everyone resulting in significantly higher SFH prices.
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Unless they allow more square footage this law is pretty ineffective. Why would a builder build a duplex instead of a high end sfh if the builder has to pay the same per sf. A sfh has a much higher value per sf.
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I will prefer the builder to build a high end SFH than to build quadruplex consisting of affordable units and destroy the neighborhood.
Lets hope the new laws do not create urban decay, reverse-gentrification, or urban blight by building low quality affordable( or cheap) homes in the middle class neighborhoods. This will result in lower price of home if the demand from high paying buyers are substituted for low paying buyers. In other word, would you like to see your neighborhood to go in a inventory reduction (or going out of business ) sale.
True. My argument is that it will result in few new housing, and so it stands to reason in a normal market that prices will not increase much beyond the normal 6-8% appreciation rate. This would be a good thing.
But the market in many parts of Bay Area is distorted by extremely low supply. For example, in some RBA zip codes there are usually only about 15-20 active SFHs on the market at any given time. So, even a couple of developers thrown into the mix bidding higher on houses they want to convert into fourplexes might impact prices.
Couple of New Construction Flips - bought 2 yrs ago and tear down and new build:
https://www.redfin.com/CA/Palo-Alto/978-Amarillo-Ave-94303/home/1238895
https://www.redfin.com/CA/Palo-Alto/2692-Ross-Rd-94303/home/596961
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