REAL ESTATE | PATRICK BARBER
A significant slowdown in the number of multi-unit building sales in San Francisco’s northern neighborhoods suggests that Proposition G may be having an impact on the local real estate market months before city residents cast their votes.
On the ballot for the upcoming November 4 election, Proposition G is designed to discourage property flipping by levying a substantial tax on homes with two or more units that are resold within five years of purchase. Essentially, the proposed legislation could force home sellers to pay up to 24 percent of the sale price in taxes — a substantial sum in a city where the median single-family home price has hovered around the $1 million mark for most of this year.
The uncertainty surrounding Proposition G appears already to have cooled investor interest in multi-unit properties. From mid-August to mid-September 2013, eight multi-unit buildings sold in the Cow Hollow, Lower Pacific Heights, Pacific Heights and Presidio Heights neighborhoods, while four went into contract. In that same time period in 2014, only two multi-unit buildings sold and two went into contract.
And since Proposition G applies to single-family homes with in-law units, its effects could be felt beyond the multi-unit property market if voters choose to approve it.
Patrick Barber is president of Pacific Union.