A startup is filling SF's empty luxury rentals | Hacker News Reader

A startup is filling SF's empty luxury rentals

sfgate.com

77 pointsderwiki90 comments

Maybe I am reading into this but I feel like the author makes this sound nefarious and really uncommon.

When I was moving to the South Bay and had only two weeks to figure out my plan, can't tell you how many somewhat affordable room rentals in non-luxury apartments had crazier setups.

Some of my favorites: 1. Spacious open room with bed (it was someone's garage with a sheet down and a mattress on top of the concrete)

2. Pretty common: nice place but you were not allowed to use the kitchen

3. Converted Living Room (no joke, the photo was a twin bed in a living room with Office Depot boxes to create a divider)

So yeah, I get why someone would share a room in exchange for having some amenities.

My favorite setup is renting out a balcony. Yup. It was roofed so you didn't get rained on, but still...

The Craigslist way to brand that would be: "Courtesy ambient rain noise for improved sleep environment."

Should've asked for money back for false advertising; no ambient rain noise during drought.

Yeah, this is incredibly common, even in Mountain View. Not just true in luxury rentals with low occupancy, but also in house shares.

However, I still don't quite understand restricted kitchen access and shared living rooms.

Real estate is completely out of control in the Bay Area and property owners are pulling every dirty trick to make extra profits.

You know no one is forcing people to actually take these offers, apart from government regulations, right? When there's demand, there is going to be supply, and there's nothing bad about that.

Number 2 always stuck out to me on rental listings... Why would I want to live somewhere where I couldn't use a vital function of a home/shelter?

Many many companies these days offer breakfast, lunch and dinner, and you can eat out if not.

It's very perverse that such awesome perks result in viable rentals like this.

The words "light cooking" make me angry.

I think that means, "No actual stove." A hotplate, a small fridge, and a microwave.

I know what it means. If I'm paying for part of a house with a proper kitchen I will be cooking like a human at least two nights a week; no takeout and soylent here.

It makes me angry that I have to pay for a kitchen by law (if I rent or buy a whole 'dwelling'), despite never cooking.

Different strokes.

I honestly can't tell if you're joking or not :/

Would you be happy if you had to pay for a toolshed by law?

Yes, you have to keep your grass short, but why do you need to pay for a toolshed to store your lawn mower when you might just want to hire someone instead and not waste time?

You don't need a kitchen any more than you need a toolshed, and it sucks to be forced to pay for something you don't use, especially when every inch costs you.

What a silly comparison. A toolshed and a kitchen are not equivalent. Replace kitchen with bathroom and you'll see the silliness.

Replace kitchen with what?

A bathroom.

Imagine having a kitchen and a pay toilet.

Some people have unique situations and do not need the use of a kitchen at all. My diet consists entirely of bottled Soylent and protein bars. I never need to cook or utilize any other functions provided by a kitchen.

I reckon the number of folks who claim never to have any need of a kitchen is probably a statistical rounding error, well maybe only slightly more if SF.

But good luck trying to flog your flat or house to the next potential owner when you decided to rip out the worktops, hob etc to re-purpose the kitchen for some other non-food activity.

I thought I'd heard it all regarding peculiar habitation behaviours until this sub-thread.

If it's going to be so hard to flog anyways then why does government feel the need to mandate kitchens? Sounds like the free market should take care of it.

I like to cook, and so does my SO. Even if that weren't the case, we have friends over regularly.

I don't think I'd be ok with inviting over guests and shoving bottles of soylent in front of them as a "meal".

Is this how libertarians actually think?

It's generally a violation of housing / rental code.

That never occurred to me until just now. It seemed like at least half the listings I reviewed when looking for a room in SF specified no kitchen access. (this was early 2015)

I didn't particularly care as it was a temporary situation for me and I was used to road life in hotels without a kitchen, but it quickly became a red flag as it always seemed to accompany some other sketchy situation.

It incentivizes development of luxury condos because they don't remain vacant, but most renters' needs would be better addressed by building affordable housing

> market glut of dense, expensive housing. Since the beginning of 2015, nearly 22,000 units have been built or approved in San Francisco (excluding the massive Candlestick Point development). Of these, 19,500—89 percent—are “above moderate,” meaning they can likely only be afforded by individuals making more than $90,000 a year. “We are in the midst of the biggest apartment-building boom since World War II,” says Patrick Carlisle, chief market analyst at the Paragon Real Estate Group.

The author insinuating that enough housing has already been built, or that building doesn't bring rents down, is pretty rage-inducing.

How many new people have started seeking housing in San Francisco since 2015? I'm going to guess it's more like 200,000.

200k in the Bay, maybe. SF city population is 800k-odd, no way there's 25% churn in two years…

The message I got was that the new housing is aimed at top of market when mid & low end is where it's really needed.

That said, if someone moves from an older (and therefore cheaper) apartment into one of the new and expensive apartments it frees up some mid&low end housing.

Most rent-control laws allow re-pricing to market prices when someone moves out, so someone moving out doesn't typically open up that same price point. You end up with situations where your next-door neighbor is paying half as much for the same apartment. Property owners and real estate developers aren't going to price units lower out of the goodness of their hearts, or due to "supply and demand"...they're happy to let $3k/month 1bedrooms sit empty until some sucker comes along to pay their ransom. By colluding to create a situation where one can't get a studio below $2600/month in SF proper, they can ensure slow but steady growth.

It'd be a great experiment if someone had the cash to do it: open an apartment tower with units priced much closer to their actual cost in SF. It'd probably be around 30% of what they currently go for.

No they are not happy. This is why there are deals on apartments in many buildings with vacancies. A great example of this is the big "L7" complex that just started renting the first finished units at 8th and Harrison. Those studios are advertised as $3000/mo but with two free months now given to those who lease for a year which means they are actually $2500/mo units. This kind of gaming is going on all over the market and there will probably be some property owners slash bag holders selling off assets and being restructured in order to get through this. Much of the recent construction was based on the idea that the market could support any amount of luxury units that were built. The current slump is testing that.

Hi downvoters, I don't understand what's negative about this post. Please leave a comment so I can improve my posting style. Ok thx --falsedan

So they are building too much luxury housing which normally would cause prices to go down but fortunately a startup is making it easier to pack people in like college students or illegal migrants? Wonderbar.

If I rented a "luxury" apartment by myself and found I was living next door to 5-10 people crammed into one place I'd be pretty angry.

Isn't this just the "hacker house" thing all over again, except using a corporation instead of listing on Airbnb?

People straight out of college who have friends already live three, four, five people to a one to three bedroom apartment in SF because of the insane housing prices, even when they're making 105k/year. Heck, when I went to take a tour of one luxury apartment building and told them that I'd maybe come back if I could find roommates so I could afford it, the leasing agent called me that afternoon with a lead on a prospective roommate that worked at the same company. (To them, it's just closing another sale...)

I don't think so. The reason being that it sounds like they are still adhering to standard fire codes and occupancy limits to be in full compliance with the law so it's building owner friendly. For a 2 bedroom, it's probably packed with 4 roommates, the company just helps make the living space more amenable to that setup vs. the awkward college dorm / no privacy situation. It's possible in a 2-bedroom you could have up to 6 people (by converting living room to a 3rd bedroom) which this facilitates as well. The cool part is that you get all the community benefits as part of your package which at these high end condos/apartments usually include gyms, swimming pools, etc.

It is not 5-10 people.

It is 3-5 in a 2 bed apartment.

This is extremely common in SF and is perfectly legal.

3-5 to start ;)

Why the heck would that make you angry? What's it to ya?

If each floor has 20 units and there's 10 people per unit, that's 200 people on one floor -- that's a lot of wait time for the elevator (which was sized for typical occupancy, not 5 people per bedroom), extra foot traffic, overflowing trash cans, parking/traffic issues, running out of hot water (if it's shared), overuse of shared/common areas, much higher resident turnover, etc.

Though in this case, the company isn't cramming people in that tightly, so it's not an issue.

plus all the guests that will be coming through (who have even less incentive to respect standards of quiet and order).

So they overuse the shared resources - the other poster mentioned elevators, but also gym, parking, etc etc.

But also the more people, the higher the odds that there's one of them that just has to do whatever obnoxious thing - like smoke, make noise at all hours, etc etc. Nobody agrees on whose responsibility taking out the trash it is so it piles up and smells.

Vetting can reduce but not eliminate that.

Nobody wants to be next to the "Frat apartment" that is always partying at 2AM on a weeknight.

exactly. I've been in that situation. It sucks

Thanks for explaining, I didn't even think of shared resources since I've never lived in such a place (and find the idea odd -- wouldn't it be safer, providing more choice, NOT to get all your services from one provider?)

Shouldn't a luxury place have good walls in place to avoid noise though? Seems like a luxury place that doesn't do this is kind of a scam.

Things like elevators and hallways are really pretty basic, and not subject to choice. But then, many people choose to live in detached houses so they don't have to rely on cooperating with neighbors for anything (I guess there are always shared civic resources, like water/sewer/streets, but you get the idea).

I honestly don't know when it comes to walls. I've asked at a bunch of places and the answer seems to be a variant of "they're normal, I guess?"

Your neighbors having a small house party with ~10 people over, a few drinks, some music is one thing. It's when it becomes very big and/or intoxicated event that it becomes a huge pain.

People barfing in the stairwells, physically running into the walls, ringing the neighbor's doorbell at 2am because they can't figure out where they're going (or need to lean on it to keep from collapsing). My last apartment was next to a perpetual AirBnB where these kind of things were sometimes a problem (probably < 5 % of the tenants, but 1 out of 20 nights of noise at all hours still sucks)

My current apartment does not have these issues. I still have the sirens and motorcycles of a very busy street to deal with, but earplugs deal with that well enough to leave the windows open at night.

These luxury towers are shitholes. They're run like hotels, the property managers are complete pricks, and things are broken constantly. I don't know why anyone would think quick-build apartments from cheap developers would be luxury anything but I guess people are easily fooled these days.

40 years later and the kids just never learn...

http://www.theverge.com/2013/11/4/5063258/ponte-tower-africa...

Oh but that would never happen here, Bay Area landlords and developers are all on the up and up, yada yada...

Full disclosure: I lived in a great little 3-bedroom in the mission from 1999-2001 where we each paid $650. And it was fuckinh awesome. The place "mysteriously" burned down a few years later, coincidentally releasing the owner from rent control. Who'd a thunk it?

Interesting. It looks like they are not subletting/subleasing, but working with property management companies to sign up tenants. They are basically offering a service to match tenants and collect payment without any risk of dealing with roomate issues. The tenants sign a lease directly with the property management company.

The are probably "quiet" about it because they don't want property managers to do it themselves.

I looked at one apartment complext LSeven. The floorplan 2bd/2ba goes for $4,683, but HomeShare is probably collecting $6,300 per month on that unit.

I had roomates in college. I would never, ever do that ever again.

I had one roomate who would masterbate at night on the couch in the living room, and seemed to think it was acceptable behavior. Had another one who would come in after 2 am strip down and fall asleep on the couch in his whitey-tighty underwear while watching ESPN. I've had to kick out roomates that stopped paying rent. I had a roomate break our lease so he could move in with his ex-girlfriend so he could try to save their relationship -- and that didn't work out so well for him.

Seems to me like you didn't vet your roommates carefully. I have had one roommate in my whole life (maybe lived together for 6 months). I was a bit of a pain in his ass as I was obsessing a lot over cleanliness of the place but we managed quite well. We had guests come over, parties, bring GF/Date and allocate time for the other guy to have sex (it was a studio). So I think it can be managed, you just need to vet carefully and be strict.

   Skyscrapers bloom in America
   Cadillacs zoom in America
   Industry boom in America
   12 to a room in America

`America`, West Side Story, 1961

https://www.youtube.com/watch?v=Qy6wo2wpT2k&feature=youtu.be...

The only thing luxurious about some of these apartments is that they cost a lot and sometimes have air conditioning and heating.

You don't need air-conditioning in SF

> sometimes have air conditioning and heating

For SF, having both is a luxury!

Yes but in the rest of the US it isn't

That's grand pal

What? Don't like being told your city is screwed up?

A lot of these new buildings are in less desirable neighborhoods. SOMA is desirable from a convenience to freeways and work standpoint, but it does not have the charm of the more established neighborhoods. I wonder if some of the glut is simply that the new housing is in areas where high end renters don't want to live.

Everything (restaurants) closes at 4 PM too in SOMA because people go to SOMA to work but don't live there.

I think the startup industry in SF is, in its own odd sort of way, sending a clear message to young people: "Get married." You can share an apartment, and you don't need separate bedrooms.

Unless you are on H-1B visa and your spouse can't work. Now you don't have an option to share a bedroom and have to pay for the whole thing.

And the tax incentives!

I was looking into homeshare a while ago, and it is a reasonable deal.

They take spacious 2 bedroom apartments and put 3-5 people in them, by converting the living room.

(currently I am living in a 2 bedroom with 3 people in it, via Craigslist . )

It is a moderately better situation than living in a college dorm.

So the article is way overblown with its talk of "giving up privacy".

> It is a moderately better situation than living in a college dorm.

That is not a good situation by any standard.

Maybe that's okay when you're a broke 20 yo student with no income.

Basically everyone I know in the bay area lives with a roommate, and these are well paid software engineers.

Renting out the living room of your apartment is usually a pretty good deal, and is perfectly normal.

Sure, if you start to talk about hacker house levels of bad, that sucks. But this is NOT that.

Is it legal though? Both according to your lease and according to occupancy laws? (Referring to over-occupancy by renting out living rooms and/or multiple people per room.)

Yes it is legal. The apartment complex that I am living in allows 5 people to a 2 person bedroom, and I've seen a couple groups do that.

Renting out the living room or even putting 2 people to a room is almost always legal.

Over occupancy laws only come into play in completely ridiculous situations like 3 people to a room and up.

"Unapproved subtenant (approval can be either stated or implied) is the only person still remaining in the unit (subtenant holding over)"

Here is a list of just causes for eviction in San Francisco. https://www.sftu.org/justcauses/

They are not unapproved though.

The way these things work is that the apartment complex puts you on the lease! That is by definition approved.

In San Francisco, the occupancy limits for existing buildings is contained in SF Housing Code §503[1]: bedroom must have 70 sq. ft. of superficial floor area for the first 2 people, plus 50 sq. ft. for each additional person. The subdivided apartments probably easily comply with these limits.

[1]: http://library.amlegal.com/nxt/gateway.dll/California/sfbuil...

Anecdotal and all, but FWIW everyone I know in the Bay Area does not live with a roommate, and these are well-paid software engineers. When people first move here and/or are just getting started with their career, some of them went through periods of having roommates, but they all eventually either found a place they're happy with that is cheap enough where they don't have to have roommates, or after a couple years and a couple raises they don't need them in general.

In fairness, I'm thinking of SV and surrounding areas though- not SF, which is a whole other level of housing pain. People I know who work in SV but were determined to live in SF at all costs were stuck with roommates until later in life, but as soon as they could afford to not have roommates, they got their own place. For people I know who are >= 30 and have gotten past the initial novelty of post-college life, roommates are always something you get because you have to, never because you want to.

It isn't "perfectly normal." It's very much not normal for adult professionals to cram 2 people to a bedroom or a "converted" living room into small (these aren't "spacious") apartments.

That's not even normal for college students who live off campus. Maybe it is for 2 to a bedroom, but definitely not to have a converted living room.

That so-called “luxury” apartments end up getting rented to students and entry-level workers (even if they have to share) should be celebrated, not mocked or viewed with suspicion. Hopefully, it will be a sign that developers will start to target the broader market in earnest in the near future. But the article spins it as some nefarious plot, and anti-displacement groups (of the supply and demand denier type) share it cynically without even realizing that it is positive news[1]

[1] https://www.facebook.com/Vanishingsf/posts/647239248801218

I've noticed the huge wave of new luxury apartments being completed. I wonder why they don't lower the rental prices instead of partnering with HomeShare.

I guess, because they get more money this way.

Negative market signaling.

I thought building tons of apartments and kicking people out of stable living situations was supposed to decrease rents.

Apparently the investors/builders have a price floor they cant go under else the situation becomes financially unviable.

Also - it would appear that several of these new builds are having a tough time filling units at luxury prices.

Who knew?! I thought if we just kept building the market fairy would magically lower prices everywhere.

But... It IS decreasing rent.

The people living in these apartments are getting a good deal. They wouldn't be able to live here without this kind of deal.

And every 4 of these new grads living in a 2 bed apartment, is 4 people NOT gentrifying the mission.

This is that exact process in action. It is happening exactly as proponents of new construction suggested it would. This is all good news.

Also, I'd love to hear more about how building a high rise on what used to be a parking lot involves "kicking people out of stable living situations"

Indeed, none of the new buildings that Homeshare advertises displaced any residences. It’s a common misconception that construction in San Francisco displaces housing. It was true during Redevelopment, but it is not the case with the past couple decades of construction.

• 1222 Harrison St was a bus depot[1]

• 340 Fremont St used to be a few “institutional” buildings including the “Seafarer’s Union” building[2][3]

• 1010 16th St aka Daggett Project was a paint factory[4]

• 1333 Powell St, Emeryville aka Parkside Project was a couple office buildings and large parking lots[5]

[1] http://www.socketsite.com/archives/2012/12/the_massive_plans...

[2] http://www.socketsite.com/archives/2012/09/340_fremont_scoop...

[3] http://sf-planning.org/sites/default/files/FileCenter/Docume...

[4] http://oewd.org/daggett-project

[5] https://www.youtube.com/watch?v=ZZkY04cvzUE

How do they get around violating rental leases ? Are they essentially subletting ?

Homeshare could be owning the condos themselves.

It looks like they quietly make agreements with the corporate housing developers beforehand. They don't want the deal to be publicized since it's not good for their image.

They work directly with property management companies, not individual master tenants. That's why they're only in a handful of buildings.

This was one of the plans I had for housing next year as a college student. My friend had invited me to share the living room with another person in a 2-bedroom apartment that goes for $4400 a month; splitting the costs, we would've paid around $750 a person. The deal with the manager turned south, however, because he wanted to increase the rent. Now I'm aiming for a 1-bedroom apartment or studio to share with my brother that typically goes for $2000+. This is Berkeley we're talking about, so I can't imagine how crazy it is in San Francisco.

Hate to break it to you, but Berkeley is going to be more expensive to rent than SF.

Depends where you are in Berkeley -- you can get some good deals around the Oakland and Emeryville borders.

Absolutely not. I pay $2500 for a 650sqft 1-bedroom in West Berkeley with a parking space. The fixtures are a little cheap, but it's 2001 construction in good shape with solid noise isolation, no pests, etc. The location is urban infill, so industrial, but safe, and similar apartment buildings are popping up around it. It's an obnoxiously long walk (or longer bus ride) to BART, but if you're willing to drive/Uber to a station, the location is fine.

Last I checked, similar units in SF were running at least $3800.

Yes, I could have a crappier apartment, or a shared apartment, or no parking, or several of the above, for a little less in SF. Berkeley is still my best option.

If 2-3 of my peers decide to live in the same amount of space I claim for myself, then the price will rise until the only way I can afford to live here is by sharing with 2-3 people. So while I am excited about the new housing construction in my neighborhood, I am not very excited about HomeShare.

stay hungry. stay foolish.

> quietly

when pretending your article isn't clickbait or can't work a scare quote in your headline

Thanks! We've removed that from the HN headline.

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