To G or not to G

REAL ESTATE | PATRICK BARBER

A two-unit home for sale at 2905 Bush Street would be affected if Proposition G passes.

A two-unit home for sale at 2905 Bush Street could be affected if Proposition G passes.

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.

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  • JTownBoy

    Please consider source of this story. The real estate industry is mounting a massive (and expensive) misinformation campaign on G. Phrases like “tax on homes” and the suggestion that this will impact “home” values are deliberately misleading. Real homeowners are not impacted by G because ALL owner occupied housing (with or without in laws) are exempt (single family homes (whether owner occupied or not) are also exempt). G targets absentee landlords of multi-unit buildings, those who are evicting tenants and selling off apartments as TICs. G is a good step towards stabilizing the diversity of our neighborhoods but a bad one for realtors who profit off every sale even if it means evictions and carving up of our community.

  • Dean

    This realtor-authored article is inaccurate. (Remember, realtors like the author make more money if speculators buy and drive up prices, hence the realtors associations dumping $1.4 million so far to distort and defeat Prop. G.)

    The article states “Proposition G applies to single-family homes with in-law units”. This is totally misleading. Review the law, not the realtor talking points. OWNER OCCUPIED PROPERTIES ARE EXEMPT FROM THE SPECULATOR TAX (see section 5 of Prop. G). And owner-occupied or not, all properties owned over 5 years are totally exempt.

    The author, and the realtor associations who are funding the No on G campaign, are deliberately trying to scare homeowners. These homeowners won’t be affected by G. The speculators who are flipping multi-unit buildings will be affected, and they are the ones funding the no on G campaign and spreading lies about the measure.