Office Cap Reached in RWC – Still, Developers Pushing for More

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In downtown Redwood City, a 500,000 square foot cap on office space that was intended to guide development for 20 years was reached in just 6.  Now, a developer is hoping Redwood City Council will raise that cap to allow another new office complex on Main Street.

The Acclaim Companies wants to build a four-story mixed-use building with 78,832 square feet of offices and 6,900 square feet of retail on three contiguous parcels at 847-851 Main, 855-857 Main and 852-860 Walnut St. While buildings will be razed at two parcels, the one at 847-851 Main will only partially be demolished because the city has ruled that some portions of it are a historical resource. The project also includes two levels of underground parking with access along Walnut Street and valet parking for 246 vehicles.

In order for this project to move forward, Redwood City will need to amend the General Plan.  There is a possibility this will happen, as the city is set to release a study on the impact of allowing more than the 500,000 S/F of office space called for in the 2011 Downtown Precise Plan.  Stay tuned…

You can find more information on the project at the city’s website: 851 Main Street

Hotel Tax on Short Term Rentals, and Other Rules, Approved by RWC

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A set of regulations for rentals under 30-days received an initial vote of approval by Redwood City Council last week.  Among them are: a requirement for homeowners to live in the residence they are listing for rent, limiting the number of days a renter can stay in the home without a host present, prohibiting rentals for special events, requiring on-site parking for renters, and collecting transient occupancy tax (hotel tax) on short term rentals.

A 12% transient occupancy tax would be applied on top of what homeowners charge for their rentals.  The tax would be collected on short term rental platforms like Airbnb, who would periodically dole it out to the city.  The city estimates that this tax would generate roughly $400,000 annually, which would be dedicated entirely to an affordable housing fund.

Though the ordinance was approved by a 4-0 vote by city council last week, won’t take effect until 2019.  It will be brought back to council for a second reading in February, as three Councilmembers were absent from last week’s meeting.

For more information, read this San Mateo Daily Journal release

Redwood City Approves Affordable Housing Complex, Pursuing Another

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Late last year, Redwood City approved a 7-story 117-unit residential complex for low-income seniors at 707 Bradford Street, and now they are close to commissioning proposals for additional affordable housing at a vacant lot on 611 Heller Street. Both the Bradford and Heller lots were purchased by the city with redevelopment funds for affordable housing before state Redevelopment Agencies were dissolved in 2012.

Mid-Pen Housing, a non-profit affordable housing developer, is taking on the project at 707 Bradford, which will include an 8,000-square-foot child care facility to accommodate up to 70 children, and a new public trail along Redwood Creek with trees, lighting and bike racks. Redwood City Council is expected to authorize staff to obtain development proposals for the Heller lot sometime late January.

To ensure there are funds for similar projects in the future, City Council is also considering dedicating hotel tax revenue generated from short term rentals (i.e. Airbnb) towards affordable housing.

The council also recently approved new rules making it easier to build small living units on properties that include single-family residences. It also approved revisions to the Downtown Specific Plan that dedicated 375 units out of a a maximum of 2,500 to affordable housing.

Dumbarton Rail Plan Takes Small Step Forward

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For decades, there have been discussions among regional officials about reactivating the long defunct Dumbarton rail, which runs along the Dumbarton bridge connecting Menlo Park and Union City. Such talks have never gained any legs, mostly due to an inability to source sufficient funding for the project. However, last Tuesday San Mateo County Transit District officials approved a plan to make a number of short-term and long-term improvements along the Dumbarton transportation corridor, including a $1.27 billion overhaul of the 100+ year old rail bridge. This plan is the culmination of a study into reviving the corridor led by SamTrans, who have owned the rail bridge since 1994.

The rail would require major improvements before it could become operational again, but if active, it would link Caltrain, BART, the Altamont Corridor Express, and Capitol Corridor. Proponents of the project call it the “missing link” to a regional rail system that would carry passengers from as far as Sacramento and San Joaquin Valley to jobs in Silicon Valley.

While it’s encouraging to see San Mateo County Transit officials taking steps to push the project forward, cooperation would be needed from several other regional bodies before any improvements could be made, since the rail corridor spans multiple counties and transportation agencies.

Funding is another major challenge, as currently no funds have been allocated towards any of the improvements specified in the plan. Regional Measure 3, which could be on the ballot as early as next year, proposes a $3 toll increase on the region’s 7 state-owned bridges. If passed, $130 million of the toll increase’s projected $4.5 billion in revenue would go towards Dumbarton Corridor improvements. With that in mind, it’s worth noting that funds which were set aside for the Dumbarton Corridor from the last bridge toll increase have since been reallocated.

In reality, if we are ever going to see the Dumbarton Rail Corrdior project move forward, it is going to take significant contributions from the private sector, specifically Silicon Valley companies whose employees would be filling the train’s seats every day. Competition for government money is tight, and $1.24 billion is a funding gap far too large for a bridge toll increase to fill.

Stay tuned to our blog for updates on this and other local news

A Look at Benjamin Moore’s Top Paint Colors of 2018

Every year, Benjamin Moore releases a list of their top colors, showcasing what they have found to be their most popular paint colors around the world.  It’s a great list to reference if you’re doing any home renovation, or are just looking to freshen your home up a bit with a new look.  Their 2018 list was recently released, which includes their 2018 color of the year: Caliente.  The video below shows a little about how they chose Caliente as the color of the year, and highlights some of it’s uses.

The RealSmart Fund (the investment arm of RealSmart Group) used several of Bejamin Moore’s top colors of 2018 at our most recent flip in Redwood City.  Below is a slideshow with pictures of the home, where you can see these colors in action – if you like what you see, let us know!  We’ll let you know which colors were used where, and we have samples of all of these colors at the office for you to try out for yourself!

Follow this link for the complete list of 2018’s top paint colors

 

Redwood City Close to Adopting El Camino Corridor Plan

A rendering shows a vision of what El Camino Real in Redwood City could look like in the future. The Planning Commission discussed the draft El Camino Real Corridor Plan and recommended it to the City Council for approval this week. (City of Redwood City)

A rendering shows a vision of what El Camino Real in Redwood City could look like in the future. The Planning Commission discussed the draft El Camino Real Corridor Plan and recommended it to the City Council for approval. (City of Redwood City)

Last week, the Redwood City Planning Commission unanimously endorsed The El Camino Corrdior Plan, which aims to improve travel and business along the city’s main thoroughfare. The plan was launched by City Council in January of 2016, and took form over 6 public meetings led by a 10-member citizens advisory panel. It prioritizes improving all forms of travel along El Camino- car, bike, public, and foot – without removing any existing car lanes, and calls for additional ground floor retail and affordable housing.

The recommendations for improving transportation include: adding a bike lane separated by a barrier from vehicles (which would involve removing some street parking), making sidewalks continuous, and adding more trees and pedestrian lights along the street for better walkability.

While the plan doesn’t currently call for any zoning amendments that would allow taller buildings, the El Camino corridor could be an ideal location for the higher density housing that many people feel Redwood City needs in order to adequately address demand for rental units. The ease of access to public transit along El Camino has the potential to mitigate some of the traffic concerns higher density housing can bring, especially after improvements are made to the corridor to facilitate smoother travel.

The Planning Commission’s recent endorsement of the El Camino Corridor Plan is not an official approval. It will be brought to City Council on December 4th for official consideration and possible adoption.

Follow this link for more information and updates on the progress on the El Camino Corridor Plan.

Non-Profit Developer Planning 67 Affordable Units in RWC

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67 affordable rental housing units for low income families and homeless/at-risk veterans are being planned at 2821 El Camino Real in unincorporated Redwood City, thanks to a $3.5 million dollar loan that just funded from HEART of San Mateo County to non-profit developer, Palo Alto Housing Corp (PAH). The money was given on a one-year loan with a very low interest rate in order to facilitate PAH’s purchase of the 0.59-acre site, which is currently home to an Enterprise Rent-a-Car.

Plans call for the construction of 67 studio and one bedroom apartments. 34 of those units will be made available to families making 30-60% of the area’s median income which, according to the San Mateo County Department of Housing, is between $39,500 and $78,960 annually for a family of four. 27 units will be reserved for homeless or at-risk veterans, and the remaining 6 will be set aside for homeless or at-risk individuals with mental illness. Support services for these tenants will be provided on-site as well. The project is currently in the preliminary stages of the the application process as PAH waits for the property to be rezoned, which they hope will occur sometime in November. If all goes as planned (which is rarely the case in development), construction will begin early 2019, and the property will be fully leased by late 2020.

The Housing Endowment and Regional Trust (HEART) of San Mateo County has been a crucial resource for getting affordable housing projects up and running, especially since the dissolution of California’s 400 plus redevelopment agencies in 2012. HEART is a public/private partnership formed by the county, cities, and labor, business, and education non-profits with the purpose of providing more affordable housing opportunities. Since it’s inception in 2003, the organization has received $14 million in funding gifts and pledges, enabling them to invest around $12.4 million into more than 950 affordable homes across the county. That money goes towards land purchase, architectural drawings, environmental impact reports, and other costly obstacles that cash-strapped non-profit developers face before they can even break ground on a project.

Since this project is on county lands, it doesn’t fall under Redwood City jurisdiction and therefore will be voted on by county officials rather than the Redwood City Planning Commission. Still, if approved, this would be the largest stand alone affordable housing development to be approved in the Redwood City area since the passing of the Downtown Precise Plan in 2011. It will lose that distinction however, if Sobrato is able to gain approval for their massive Broadway Plaza redevelopment, which includes a separate 120 unit affordable housing development.

Stay tuned!

To Stage or Not to Stage

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You’re getting ready to sell your home and your Realtor recommends staging it prior to going on the market. You think to yourself: ‘Why waste the money? We’re in a seller’s market, and I have a beautiful home that should sell no problem, with or without staging.’ Well, you might be right, but the question isn’t whether staging will be the difference between your home selling or not. The question is whether staging will increase the likelihood of your home selling quickly and at the highest price the market will bear. In cases where the home isn’t a complete fixer, the answer to that question is usually yes.

First impressions mean a lot in real estate, even in a highly competitive market like the Bay Area. For a buyer to feel confident writing their highest and best offer for your property, you want them to feel at home as soon as they walk through the front door. Needless to say, it’s hard for most people to feel comfortable in a dark and empty house. If one of our clients has a vacant home, we almost always hire a professional stager to furnish it before going on the market.

If you currently live in the house you’re selling, “staging” becomes more a matter of rearranging furniture, decluttering and hiding/removing personal effects. As much as your home feels like home to you, it might not feel that way to the next family. Whether vacant or owner occupied, it’s important to present a neutral living space that appeals to the broadest demographic of buyers possible.

Foster City Must Upgrade Levee or Become Flood Zone

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Flooding and flood insurance is the top of the news stories with the multiple hurricanes arriving on the Florida coastline. Here in California, we don’t think too much about hurricanes or flooding, but the latter may be more of a reality than we are aware of. We live in the Bay Area – aptly named as our cities surround approximately 1600 square miles of “bay” water – and while hurricanes don’t pose much of a flood threat here, rising bay levels do. One bayside community is currently at the middle of a battle to protect their city from flood hazards, as well as the costly insurance premiums that come along with them.

Foster City officials are currently mulling over their options for updating the levee running between their city and the bayfront. The Federal Emergency Management Agency (FEMA) had previously certified the levee as providing the city with sufficient protection from flood risk, but a new study found that due to rising water levels roughly 85% of the levee no longer meets FEMA standards. As a result, most of the city could be designated as a flood zone unless appropriate updates are made to the levee.

A flood zone designation would have an immediate impact on Foster City’s real estate market. Any property purchased with federally backed loans would require a flood insurance policy, which can cost thousands annually, depending on the property. Homeowners would also have to disclose the flood insurance requirement when selling, which could adversely affect property values. Fortunately for homeowners, the city is taking steps to make sure this doesn’t happen.

We recently hosted Foster City Community Development Director, Curtis Banks, at one of RealSmart’s weekly networking meetings. He explained to us that FEMA granted Foster City a “seclusion mapping” designation in 2015, which has allowed them to temporarily avoid the flood zone designation so long as they show they are taking steps to improve the levee. Since then, he says Foster City has held 37 public, regulatory and general project meetings to decide how much to invest in raising the levee – the higher they raise it, the longer they will be protected from rising sea levels. It’s worth noting that in 2010, Redwood City spent about $2.7 million adding 1-2 feet to about 8 miles of levee in the Redwood Shores community. At the time, the city predicted sea level rise would mandate another round of improvements in 20 years.

Continual levee improvements/maintenance are a burden that fall on many Bayside peninsula communities, not just Foster City. Whether or not these communities do enough to maintain their levees could be the difference of thousands of dollars every year to homeowners. Something to keep in mind if you own a home, or are looking to buy a home in places like Redwood Shores or Foster City, where FEMA accredited levees are the only thing standing between you and a costly flood insurance policy…….or the bay.

Stanford Purchases RWC Property for $39.5 Million

Stanford University has officially purchased the last piece of the 35-acre puzzle that will become “Stanford in Redwood City”.  550 Broadway, a nearly 2.5-acre parcel last home to a data center and administrative office for Genentech, was purchased by Stanford in an off-market sale last month for $35.9 million, according to public record.  It joins 1228 Douglass Ave, and 405, 425, 475, 500-585 Broadway as addresses slated for redevelopment in Stanford’s first major campus expansion.

It is unclear at the moment what Stanford’s long term plans are for their most recently acquired piece of Redwood City real estate, but it does not look like it will factor into phase one of the Stanford in Redwood City project, which broke ground December of last year. According to a report from the Silicon Valley Business Journal, the University is currently exploring leasing out the site’s existing 68,000 square foot building on a short term basis.

Phase 1 of the Stanford in Redwood City project is projected to finish sometime in 2019. Once completed, it will feature four office buildings, a town square and park (open to the public), outdoor dining areas and plazas, a child care center, a parking garage, a glass atrium fitness center, and its own sustainable central utility plant. Some improvements to the surrounding roadways and intersections are included in phase 1 as well. Pictured below is an overview of the phase 1 layout, with the recent acquisition at 550 Broadway highlighted in blue.

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There is no set timeline beyond phase 1, but when it’s all said and done Stanford’s first major campus expansion will feature 13 buildings, totaling roughly 1.5 million square feet of office, medical clinics, and R&D space.  Further, as part of the University’s development agreement with Redwood City, they have pledged $15.1 million in public benefits.

The Redwood City campus will mirror the look and feel of the Palo Alto campus, and much of the ground will be open to the public.  The University’s free shuttle service will be accessible to the public as well.

Stay tuned for updates.

Tesla Looking to Set Up Shop in Redwood City

 

TeslaAn architect working on behalf of Tesla has filed an application with Redwood City to redevelop 515 Veterans into a sales office, warehouse, and service center/garage. The 23,000 square foot site, located at the corner of Whipple and Veterans, is currently home to Crunch fitness and Chef Peking, a Chinese restaurant.

In order for the pioneering electric car manufacturer to use the land as desired, the site’s zoning will have to be amended to add Vehicular Combination Zoning District to its existing Industrial Park zoning.  City staff are currently reviewing the environmental implications of such a zoning change at 515 Veterans, but as the company notes in their proposal:

“Servicing an electric automobile is different from servicing a gas-powered car. Tesla’s vehicles have no internal combustion engine. This vehicle is exclusively electric and is not hybrid. Accordingly, there is no exhaust system, no fuel tanks, no liquid fuel usage, no new or used motor oil, no noise from the vehicle, and no emissions like hydrocarbon and carbon monoxide that are emitted from an automobile powered by an internal combustion engine. Instead of an engine, an electric motor powers Tesla’s vehicles. Electric motors require little to no maintenance.”

With this in mind, it’s probably safe to say that Tesla isn’t terribly worried about how their electric car service station will stand up to environmental scrutiny.

Don’t expect the public review phase to be very rigorous for this proposal either – the project wouldn’t be displacing any housing opportunities (as the land is not zoned for residential), it isn’t likely to introduce any more traffic to the area than the existing gym and restaurant, and the surrounding area is already home to several auto dealerships and service centers.  Unless Tesla backs out, it looks like it’s only a matter of time before Redwood City is welcoming one of Silicon Valley’s most iconic and innovative companies to its workforce.

Why Redwood City?

Tesla’s desire to open a shop in Redwood City is likely part of a larger effort to increase their sales capacity.  They just started delivering their most affordable car yet – the Model 3 – to customers in July, and demand for the car reportedly far exceeds the number of cars available.  On Monday, they announced they would be raising $1.5 billion through their first ever offering of “junk bonds” in order to get the cash necessary to ramp up production of the Model 3 sedan.   As production increases and Tesla becomes a more accessible and mainstream auto manufacturer, they will likely look to set up additional service and sales centers to accommodate demand.

Stay tuned for updates as this proposal progresses through city review.

Zoning Amendment Sought for Massive Inner Harbor Office Project

The Harbor View Place office development that Jay Paul Co. wants to build in Redwood City's inner harbor area is shown in an illustration provided with the City Council's July 24 agenda packet. (City of Redwood City)

The Harbor View Place office development that Jay Paul Co. wants to build in Redwood City’s inner harbor area is shown in an illustration provided with the City Council’s July 24 agenda packet. (City of Redwood City)

Last week, Redwood City officials voted 4-2 to explore amending the city’s General Plan to allow for the construction of nearly 1.2 million square feet of office space along the Redwood Creek.  The amendment is being sought by developer Jay Paul Co, who hopes to build four 7-story office buildings on the 27-acre site, which is currently zoned for light industrial and port use only, with a maximum building height of 3 stories.  The office space would be designed with tech and R&D firms in mind.

In addition to the 4 office buildings, the proposal calls for surface parking at each building, two parking structures, and landscape improvements, including a new park with sports fields.  Most Redwood City residents will remember the site of this proposed project as the former home to Malibu Golf & Grand Prix, but this massive development would also span the land that Lyngso used to occupy, as well as a lumber supply company and gas station.

In a July 10th letter sent by Jay Paul to the city, the developer outlined over $40 million in community benefits, and $32 million towards measures that would mitigate the project’s environmental impact. The project’s benefits would include $10 million toward the Woodside/Highway 101 interchange improvement project; $10.1 million for the Blomquist Bridge and street extension project, plus a commitment to pay the full $24 million needed “while additional funding sources are identified;” $5 million for the development of an inner harbor public park with new sports and recreational facilities; $2.1 million for bicycle paths; and $2.25 million for a new free public shuttle. Mitigation measures include $15.8 million in housing fees, $5.5 million in sewer and water fees, and $2.5 million in traffic impact fees.

Despite the bounty of public benefits packaged with Jay Paul’s proposal, numerous residents spoke out against the development at last week’s meeting, mostly for it’s lack of housing, and for tech and R&D firms being perceived as a poor fit in the Inner Harbor community.  Both Vice Mayor Ian Bain, and Councilwoman Janet Borgens voted against the proposal.

This vote was only to approve looking into the zoning amendment further, and does not itself authorize a zoning amendment.  City staff will prepare a draft environmental impact report, which will be reviewed at a future Planning Commission meeting, before being brought back to city council for review.

Stay tuned.

131 Townhouses Proposed Along RWC Waterfront

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On Tuesday night Redwood City Council discussed a proposal to develop 131 three-story townhouses at 1548 Maple Street, a 7.9 acre stretch of land running along the city’s waterfront.   The project would be adjacent to the Docktown Marina, which currently houses about 65 floating homes that the city is currently in the process of vacating/relocating.

The proposal also includes improvements to the section of the Bay Trail that run through the site.

Tuesday night’s meeting featured the usual concerns that surround new residential development in Redwood City: affordable housing and traffic.  All 131 of the townhomes would be offered for sale at a market rate, so as it stands the project offers no consideration for affordable housing.  Commissioner Connie Guerrero asked that the developer come back with a proposal that included affordable housing, as well as an alternate proposal for a downsized project.

Another member of the Planning Commission, Shawn White, requested information on how school enrollment at Taft Elementary, and traffic along the 2.5 mile route to the school, would be affected by the development.  White suspected that since the project consists of single-family townhouses rather than apartments, it is more likely to attract young families with children.  Taft would be the elementary school that most families living at the complex would be assigned to.

The project’s approval would also require the city to grant a zoning change from tidal plain to mixed-use.  The Planning Commission has already spent quite a bit of time studying zoning changes in that area during their drafting of the Inner Harbor Specific Plan, and while the IHSP was never completed, the hopes are that they can use those reports to guide them in studying a zoning change for this project.

Comments and concerns about the environmental impact of this project can be sent to lcostasanders@redwoodcity.org through Aug. 7, with future opportunities to weigh in once an environmental impact report is prepared and subsequent public hearings are held.

Redwood City Updates/Expands Neighborhood Associations Map

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Redwood City recently announced an update to its neighborhood association map – expanding the number of neighborhoods from 11 to 17. This new map was designed to better align with the city’s natural boundaries and neighborhood characteristics, as well as recognize and blend several pre-existing maps, including the General Plan Neighborhood Map, the previous Neighborhood Association Map, and the Nextdoor Neighborhood Map.

The new map include the addition of the Bair Island and Downtown neighborhoods, where the vast majority of new residential development has been concentrated over the past several years. Also, some of the larger neighborhoods have been broken up into smaller ones. For example, what was previously the High School Acres neighborhood is now recognized as a combination of Mt. Carmel, Eagle Hill, and Edgewood. Similarly, Central Park has been split into Woodside Plaza, and Palm. These new neighborhoods might actually be more familiar than the older ones colloquially, but they are just now being recognized by the city with their own designated neighborhood associations.

Redwood City Residents: The city is currently in the process of appointing leaders to each association, and establishing regular meetings. They encourage all residents to take a look at the new map to determine which neighborhood association you belong to, as these associations are key in driving communication between city officials and the community. For information on how to register with your new neighborhood association, or how to get involved as a leader of your community, head to: http://www.redwoodcity.org/residents/neighborhoods/neighborhood-associations.

Over 55? Downsizing? Avoid Property Tax Increases With Props 60/90

When a home is sold in the state of California, the new home owner faces a reappraisal of the home’s value and a corresponding adjustment to the home’s base tax value.  Due to historically appreciating home values, this typically translates to an increase in the amount of property taxes paid by the new homeowner.  This can be problematic for older or retired people with decreasing or fixed incomes who sell their long time home looking to downsize.

For example, let’s say a couple bought a house in Redwood City in 1992 for $250,000, with a 1.25% tax rate.  This would put their annual property taxes at $3,125.  The county assessor is allowed to raise your property’s assessed value by 2% a year while you own it.  Assuming they did that every year all the way up until 2017, the property’s assessed value would now be $410,151, bringing the annual property tax total up to $5,126.

Now the couple is retired, their kids have moved out, and they’re hoping to downsize to liquidate some of the equity they’ve built up in their home.  So they sell their 3bed, 2 bath home for $1,528,600 (the average sales price in 2017 for a 3BD/2BA RWC home), and buy a 2 bed, 1 bath home down the street for $1,050,046 (the average sales price in 2017 for a 2BD/1BA RWC home).  They’ve done fantastic in terms of taking out equity from their previous home, but now they’ll be paying property taxes based on the value of their new home.  At 1.25%, that puts their new annual property tax total at $13,125 – more 2.5 times greater than what they paid before!  Over the course of 10 years they’ll be paying more than $130,000 just in property taxes.  This could be tough to swing with a fixed income, especially if you have pre-existing debts (i.e. loan for home renovation).

This is why California passed Prop 60, which allows homeowners over the age of 55 to sell their home and transfer its current assessed value to their new home – as long as the two homes are in the same county.  Prop 90 was later passed to allow inter-county transfers, but only at the discretion of each county.  Currently only 11 counties in California have an ordinance enabling the inter county transfer: Alameda, Orange, San Diego, Tuolumne, El Dorado, Riverside, San Mateo, Santa Clara, Ventura, Los Angeles, and San Bernardino.

Are you Eligible to Apply for the benefits of Prop 60/90?  If you meet the requirements below, then yes!

  • You or your spouse must be at least 55 years of age when the original property was sold.
  • The original property and new property must be within the same county.
    You can only use the transfer once in a lifetime.
  • The new replacement property must be of equal or lessor value than the original property sold.
  • The replacement property must be built or bought within 2 years of selling the original property.
  • Your original property must be your primary residence and have been eligible for the homeowners’ exemption or disabled veterans’ exemption.
  • Your replacement property must be your primary residence and must be eligible for the homeowners’ exemption or disabled veterans’ exemption.

One Time Use – You can only apply for the benefits of Props 60/90 once in a lifetime with one exception.  If the benefits have been used once based on age, they can be used again based on disability.

For more information, visit the California State Board of Equalizations

Fed Increase Interest Rates for the 3rd Time in 6 Months

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The Federal Reserve raised their benchmark interest rate by a quarter point this morning, marking the 3rd rate increase since December of last year.  At the press conference announcing the increase, Fed Chair Janet Yellen said the rate hike “reflects the progress the economy has made and is expected to make toward maximum employment and price stability”.

The Fed’s decision to raise rates again signals a growing confidence in the American economy, which saw the unemployment rate hit a 16-year low in May.  The Fed’s Board members predict there will be one more increase before the year’s end.

What does this mean for real estate?  As it becomes more expensive for banks to borrow from the Fed, it typically becomes more expensive for consumers to borrow from the banks.  This is why people heavily monitor the Fed’s interest rates to forecast where mortgage rates might be going.  That being said, average 30-year fixed mortgage rates have actually been on a slight downward trend over the past few months, despite two recent hikes in the Federal Reserve rate.

Mike Fratantoni, Chief Economist for the Mortgage Bankers Association, speculates that interest rates abroad might be holding back our mortgage rates here.  While the Federal Reserve is showing confidence in the US economy by continuing to raise interest rates, central banks in other countries are still trying to stimulate their economies by keeping rates low.  This coupled with a strong foreign demand for safe assets (US real estate), is acting as somewhat of an anchor to US mortgage rates, according to the MBA.  Still, many economists, including Freddie Mac’s Sean Becketti, expect that US mortgage rates will begin to gradually rise as the year progresses.

If you’re thinking about buying and would like to explore financing options/current interest rates, we will gladly connect you with one of our trusted loan advisors.  Feel free to call our office at (650) 363-2808.

 

Paint vs. Stain

When finishing wood upgrades in your home, you have two general style options: paint or stain. Whether you want to enhance the natural beauty of your new Redwood fence, or cover up the flaws of your old plywood cabinets, each style has its pros and cons, and can be used to accomplish distinct goals in your home renovation. If you’re trying to brighten up an older home, but don’t want to spend the money to replace outdated cabinets, vanities, and bedroom doors – paint tends to be the way to go. It covers up imperfections in older wood, and gives you many more color options to match the rest of your home (convenient if you’re not doing a complete home remodel).

On the other hand, if you’ve just spent a bunch of money on brand new Cherry cabinets, or Redwood fencing, you’re not going to want to hide the gorgeous wood grain under a thick coating of paint. Instead, you’ll want to coat it with a stain that will penetrate deep into the wood’s pores, creating a richer wood grain appearance. Different stains will show more of the woods underlying features than others, depending on their opacity and pigmentation.

In some cases, paints and stains can complement each other quite nicely. Lighter paint tones used on trim or siding around darker stained doors and/or decking can yield some dramatic and beautiful results. Take for instance this San Carlos hills home pictured below, which masterfully pairs dark stained Brazilian Ipe decking with sleek white trim, posts and siding.

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Paint can be more difficult and time consuming to apply than stains, as you typically want to prime a surface before painting, and give it a “finishing coat” of paint after the first coat.  Also, since paint is so much thicker than most stains, more care must be taken to roll it out evenly, ensuring no droplets form and harden on the surface of the wood.   Maintaining paint can be a bit more burdensome as well, as you will need to chip away any peeling layers before applying a new one.   Stains don’t normally chip or peel if applied properly.

With stains, surface preparation of the wood is minimal and primers are not always required.  For exterior uses of stains (siding, decks, trim) a finishing coat is not normally required either.  However, for some interior uses (floors, doors, butcher block countertops) you will want to apply a clear protective coating once the stain has dried.

History Shows: Stock Market Paces the Real Estate Market

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Economists tend to disagree on whether there is a true causal relationship between the stock and real estate markets. However, recent data shows that when the stock market goes up or down, home prices follow. When tracking home prices in San Mateo County against the Dow Jones Industrial Average (DJI), between the dotcom crash of 2000-2002 all the way to today, you can see almost identical trend lines. The above chart shows clearly that for nearly every peak and valley in the DJI there is a corresponding fluctuation in home prices.

As a Realtor who has represented numerous buyers throughout my career, I believe there is at least one obvious link between the stock market and real estate markets. It is common for buyers to use stock investments to help fund down payments on home purchases. This is especially true in regions like San Mateo County, where in the month of April a 20% down payment on the average home would have been roughly $375,000. Since most people are not able to save this amount of money in a short period of time, stock based investments and company stocks are the typical source for the down payment. For these people, a surge in stock value means a surge in purchasing power. Therefore, it’s not all that surprising to see home prices ebbing and flowing right alongside the stock market.

While it’s not necessarily a proven science, the theory at the very least passes the eye test. If you’re looking for an indicator of where San Mateo County home prices could go next, keep an eye on the stock market.

The Bay Area’s Most Central Transit Hub Set for a Major Facelift

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The Millbrae Planning Commission was just given its first chance to formally review a massive mixed use development to be built adjacent to the city’s Caltrain/BART staions.  The “Serra Station” proposal calls for the construction of 440 housing units, 290,000 S/F of office space, and 13,200 S/F of retail – contained in two 10-story buildings and one 9-story building.  This project is one of two major developments proposed in a 116 acre site surrounding the Millbrae Station, part of a city-led effort to build a vibrant economic hub around one of the peninsula’s most central and connected transit centers.  The other project, “Gateway at Millbrae Station”, is proposing the construction of over 300 rental housing units, 47,000 S/F of retail, and 160,000 S/F of office space.

In February of last year, city officials approved an update to the Millbrae Station Area Specific Plan, which preemptively completed much of the environmental work necessary for the development of the 116 acres site.  Plans were submitted for both projects shortly after the update was approved by city council, but they had to go through a lengthy public review process before being put in front of the Planning Commission.

Sound familiar?  Redwood City similarly completed environmental work for land downtown when they passed their 2011 Downtown Precise Plan.  This was done in an attempt to jump start developer interest in the city’s downtown area – and it worked…. With fewer regulatory hoops to jump through for project approval, developers flocked to the city in droves.

Millbrae won’t see development on the same scale that Redwood City did.  Their focus, at least for now, is on transit oriented development built around the Millbrae station.  Plus, the environmental work was only done for two projects (albeit two very large projects), as opposed to the dozens of residential and commercial projects that had the way cleared for them by RWC’s Downtown Precise Plan.  Still, the Millbrae station certainly has the potential to become something special.  It is the largest intermodal terminal West of the Mississippi – connecting BART, Caltrain, SamTrans, and if all goes as planned, the California high speed rail.  It also happens to be the peninsula’s most central public transit hub, offering easy access to the East Bay, SFO, the Oakland Airport, San Francisco, and San Jose.  With the area around it developed, this station could become a desirable place for people to to eat, shop, work, and live, rather than just a pitstop that travelers hurriedly pass through on the way to their final destination.

Check out this marketing video for the Gateway at Millbrae Station.  The project’s developer, Republic Urban, put it together, and it offers a remarkably detailed representation of their vision for what the Millbrae station could become in several years time.

Redwood City Approves 350 Unit Apartment Complex Near Jefferson – El Camino

Redwood City’s most prolific residential developer of late, Greystar Development, has been given the green light to move forward on another 350 unit apartment complex.  City council voted 4-2 last week to approve the 8-story project at 1409 El Camino, which will also include 6,000 S/F of ground floor retail, 440 parking spots, and 35 affordable units (10% of the total offering).  As a condition of the project’s approval, Greystar will also be contributing $250,000 towards Habitat for Humanity’s 20-unit affordable condo development at 612 Jefferson.

Greystar Development has been the largest beneficiary of Redwood City’s 2011 Downtown Precise Plan, which pre-emptively completed environmental work for the construction of 2,500 new residential units.  With the approval of their most recent 350 unit complex, Greystar has now accounted for just under 1,000 of the 2,500 new residential units allowed under the Precise Plan.  These 1,000 units are spread across 4 separate developments – all within a block of each other.  See below for a map showing Greystar’s development activity in downtown Redwood City.

Greystar

Despite all of Greystar’s development falling under the residential cap set by the Downtown Precise Plan, many residents feel the city has not adequately taken into account the environmental impact of green lighting so much development in such a short period of time.  The Precise Plan was initially supposed to guide development for a period of 15 – 20 years, but just 6 years since its passing the city has already almost hit the 2,500 unit residential cap (between was has been built or approved).  Further exacerbating environmental concerns is the fact that Greystar’s 1,000 units are all packed into a 4 square block area, adjacent to the already congested intersection at El Camino and Jefferson.   Citing these concerns, an organization called Redwood City Residents for Responsible Development has filed an appeal against the approval of Greystar’s new project at 1409 El Camino.

It’s possible that Greystar – in an attempt to avoid litigation – will compromise with residents by reducing the size of their project.  If not, it could be quite some time before any shovels hit ground at 1409 El Camino.  

Redwood City Residents for Responsible Development have not yet indicated whether they will file an environmental lawsuit against Greystar’s project should their appeal be denied.

Stay tuned.