June 11, 2008

Investment Opportunity with Toxic Pollution, High Crime, and a Stellar View: Will Hunter’s Point/Bayview be the Next Marina?

With the passage of Measure G,  the Lennar Construction Group has the green light to clean up toxins from the Naval Shipyard and then “partner with other companies to construct high raises, build ‘green tech’ buildings and restore and expand open space areas. Also contained in the measure is a ‘pad’ for a 49ers’ stadium surrounded by ample parking and a promise from Lennar that they would provide infrastructure and $100 million to the team in their effort to build the stadium” (sfgate.com). It will also:

• Allow 33% of the residences to go to affordable housing for families of differing income groups.
• Include some accommodations for those in the lowest-income bracket (Ballotpedia).

Opponents of G mainly focused on the packaging of the 49er stadium with the overhaul of the area, because it would seem to divert the main focus from rehabbing the for human interest to the profit reaped from professional football. The SF Bay View points out that G will “authorize a swap of state park lands for new “parks” that will be flexed between “green” stadium parking surfaces for stadium events.” The article also details the complex political machinations between the Mayor, Lennar, and the 49ers, that gave birth to this bill.

Also included in the article is worry that

Despite claims to the contrary, there is nothing whatsoever in the legal text of Proposition G that guarantees any precise percentage of housing that will be designated as “affordable.” Lennar, under the non-binding Proposition G, may end up building only market-rate housing in the Bayview Hunters Point.

And that

San Francisco is about to hand a gift to Lennar Homes and Lennar Urban worth billions of dollars, in both the value of the land being gifted to Lennar and the eventual sales Lennar will reap from market-rate housing. Financially-troubled Lennar will do so without being required to complete cleanup of the toxic Superfund site.

One wonders how market rate homes will ever sell, however, if no clean up is accomplished. The pollution of Bayview/Hunter’s Point is well established, and frankly shames the city as that toxic enviroment has been linked to multiple health problems for the people living in the area now.

But if G does prove to give new life to an area that clearly struggles now, with high crime, poverty, and pollution, then the property there may soon be worth a lot more. In fact, currently the majority of SF foreclosures are concentrated in District 10, which includes Bayview/Hunter’s Point. Even normal sales show the area to have the most dramatic decline in property value when compared to other parts of the city responding to the current mortgage crisis.

The upshot then? The area offers those in position invest here the chance to possibly see real appreciation for their properties. Of course, the transformation won’t be overnight, so investors would have to be willing (and able) to wait indefinitely for the turn around. And don’t under-estimate anti-gentrification groups fighting the measure, or supervisors throwing in obstacles.

If you’re one who believes Bayview/Hunter’s Point is the next Marina District, here are a few options on the market (note the affordability in contrast to other city ‘hoods):

1180 Palou: 3/1 SFH with 2/1 possible rental down. Reduced to $475,888.

11 Yound Ct.: 3/2.5 SFH with 2-car garage, deck, lots of light and (fittingly) a bay view. $425K

191 Cleo Rand Ln.: 2/1.5 condo/townhome with 1 car parking. $470K.

133 Marlin Ct., #55: 3/2 condo/townhouse with patio and in-unit laundry for $205K. (!!!)

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Photo credit: Bay Nature.com

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