Edwardian Style

I live in a 6-unit Edwardian so I can testify that the layouts on the smaller flats in this style tend to be more gracious, open and light-filled than Victorians of comparable square footage. 570 Guerrero Street looks like a classic Edwardian one bedroom, with historic details left intact. This would make a sweet bachelor or bachelorette pad. No parking, though.

Grand Sea Cliff Gate Edwardian

KB and I happened to be out on the Avenues a few days ago and we stopped by this open house on 31st Avenue. I wanted to see what a $1.158 million TIC looked like. First, the good news. The top floor unit is wonderfully spacious with 4 bedrooms and three baths. The layout flows nicely. One can easily imagine having the retired in-laws come and stay for extended periods of time without too much crush or fuss. Or visualize hosting a festive sit down dinner for numerous friends and relations. You know - living the way people live who have those things called houses.
Speaking of which, the bad news. I'm afraid living just outside the gates of Seacliff would make me feel somewhat barbaric by comparison. I pictured myself trudging to the California 1 bus stop each morning, crossing paths with members of the leisure class out walking their fluffy pedigrees before retiring back to their manses. And from 31st Avenue that bus ride would be an awfully long grumpy haul downtown and back every day.
More practically speaking, not a one of those many bathrooms has a Jacuzzi or soaker tub, which means after spending over a million bucks we'd need to invest another several thousand in renovations. I don't know about you, but for that much money I want a bathtub that I can fill up and have the water go higher than tops of my knees.
And somewhat oddly, there are still four front doors for the three units. The fourth door opens to a stairwell to nowhere, which is deeded to the top floor and could be, said the realtor "your wine cellar."
I asked the realtor if all gas, electrical and plumbing systems had been upgraded during the renovation. Having lived in a 1910 building for the past seven years I am no stranger to the mishaps that inevitably occur as a result of a hodgepodge of old, new and in-between infrastructure systems. (My favorite involved a gas leak that orginated from a ceiling lighting fixture. The gas line for the old pre-electricity lamp was still up there and live; some contractor had years back simply stuffed it with a wine cork.)
"No," he answered. In other words, if you buy into this building you get new granite counter tops but 1920s wiring and pipes.
That topped it. KB and I happily jaunted back to our little center city flat, where the voltage is low, the fittings are frail, the commuting is easy and our mortgage is circa 2000.

The Challenges of Group Ownership

A New York co-op is not a San Francisco TIC, but there are correlations in any group ownership situation. The New York Times offers this interesting article about new homeowners and the challenge of managing a building for the first time. Registration is required. If you are not registered, here are a few excerpts:

New board members, Ms. Rothman said, have to learn to work together and build consensus. "They’re new to the building, and they’re new to one another. It’s a community to learn about, it’s the responsibilities of the physical plant, and it’s all the people issues."

...Ignoring the big picture was among a new board’s most common mistakes. "There’s one issue that makes a person want to run for the board, and that’s the issue he concentrates on. I hear all the time, ‘Oh, I don’t care about that.' But there are many facets to running a cooperative, and their fiduciary job is to concentrate on all aspects of the co-op."

City-wide TIC Map

After the condo lottery results were announced an SF TIC reader commented, "Have any über nerds plotted out the winners on a map?" I am happy to report that not only the winners but every TIC in the city have been recorded on this map of San Francisco's political districts. (Thanks to David Latterman of Fall Line Analytics for running the data.)
Districts 8 and 5, represented by Bevan Dufty and Ross Mirkarimi, have the highest numbers of TIC owners. The District 5 supe is barred from voting on TIC legislation because he is a TIC owner. It seems to me that due to the City Attorney's recommendation he is not able to fairly represent the interests of a large number of his constituents. Personally, I like Mirkarimi. But I may not be able to vote for him in the coming election if he is still bound by this restriction. In the past Dufty has sponsored pro-TIC legislation. I am hoping he has not purchased a TIC which would also ban him from taking action.

New Plumbing and Electric

I bought into a 1910 Edwardian TIC seven years ago on high hopes and blind faith. Great partners and substantial gains in equity have made me feel that it was a smart move. However, everyone in my building continues to deal with with the odd plumbing disaster that comes with an amalgam of new pipes having been fitted to old. We also have units in our building with electrical wattage that appears to date back to the 1940s, when only movie stars owned both a toaster and a refrigerator. It keeps our carbon footprint low, but also makes for a bit of modern inconvenience. So I am heartened when I see the words "new plumbing and electric" in a TIC advertisement. For the price we paid seven years ago, we are willing to put up with the issues of broken pipes and blackouts. But if I were buying into a TIC at today's prices I would not want those headaches and the expenses that go with them.

1530 Jones Street - Five Remodeled Edwardian TICs.

The TIC Lobby

According to Plan C, there are now nearly 10,000 TIC owners in the City. As the old saying goes, there is strength in numbers. Many polical races in San Francisco come down to a just handful of votes. If TIC owners can organize into a voting block, clearly articulate our demands, and demonstrate that there will be repercussions for ignoring those demands, we can gain leverage over our elected officials. As a first step, Plan C is mounting an email blitz to the mayor and the supes, demanding that they take another look at the onerous condo conversion process. Join in and help put your supervisor on notice.

Click here to tell the mayor and the board that it is time to end the limits on condo conversion.

Here is the email that I sent:

As the recent editorial in The Examiner pointed out, statutory limitation on condo conversion is a flawed policy. It has little impact on tenant evictions, and is, in essence, a taking of private property. I have been a TIC owner since 2000. My group, all hard working middle-class individuals, purchased a decrepit building and slowly restored it. It is now a well-maintained, owner-occupied dwelling, one of those helping to shore up the turnaround in the Hayes Valley neighborhood. San Francisco needs more homeowners. Why continue to penalize those of us who have put so much love and money into our buildings and, in turn, our City neighborhoods?

TIC Owner Supes

My District 5 Supervisor Ross Mirkarimi is A TIC owner. He has been banned by the City Attorney from voting on TIC legislation. Why should TIC owning supes be banned from voting due to some ill-defined claim regarding conflict of interest? When Matt Gonzalez, a renter, was my supervisor no one stopped him from initiating or voting on legislation concerning tenants. I contacted the City Attorney's office to try and get a copy of this recommendation, but I have yet to hear any word.

The One That Got Away

This Broderick Street building is already in contract. It moved quickly. The upper unit is a gigantic duplex with round bay windows. "Unusually great Victorian detail" says it all. And since it is a 2-unit, it will be on the fast track to condo conversion. This is the first TIC property I have seen with a historical wow factor that outweighs the lack of parking.

Mortgage Applications

Since we did not win the lottery, and our ARM is going up, and we are only a couple years away from the end of our first ten year loan term, my TIC is once again looking into refinancing options. Our first preference is of course to refinance with fractional loans. Fractional loans have several advantages over group loans. First, everyone in the group is not on a single note, so you don't need to worry about whether your building partners are paying their mortgages or not. If they don't or can't it is between them and the bank. Second, it makes the monthly administration of the loan less complex. With a group loan, everyone puts their share of the mortgage into the group account every month, and then someone must write one big check to the bank. With a fractional loan you all write your own checks and they get put against your individual loans. Third, it makes condo conversion less of an issue. Legally a TIC building is still viewed as a single property, but fractional loans eliminate the economic entanglements of the partners. So you can run it more or less like a condominium - the only economic obligation each parther has to another is regarding the maintenance and upkeep of the common areas.

In addition, fractional loans allow partners to choose different financing options. One partner can opt for an interest only loan, while another might choose amortization. And big plus, if anyone wants or needs to sell, that same bank will offer a fractional loan to a qualified buyer, allowing you to cash out your equity.

Making the rounds of banks and brokers this month we are finding that rates and terms for fractional loans are improving. For our building, which has six units and a commercial unit, it looks like the best deal is being offered by Sterling Bank. (A senior loan officer there took the trouble to champion our case before a special committee.) A strong point in our favor - we have been a TIC since 2000 and have never missed a loan payment. The benefit of going with a small, local bank that knows the San Francisco market is they will take that kind of history into consideration, instead of simply looking at the size of our building and putting it into a commercial or high risk category. So we are all busy completing our applications this week, in the hopes that we will each be able to secure a reasonable fixed rate for at least the next five years or so.