“Suburban single-family homes will be the holy grail of Bay Area real estate,” according to San Francisco Realtor Nicholas Sprangler. “The most desirable real estate segment is, without a doubt, the single-family home market,” Spangler told the San Francisco Chronicle.
After the sub-prime mortgage meltdown, corporate interests, institutional investors and foreign money flooded the single-family home market, transforming much of it from owner-occupied to rental. Corporate entry into the single-family home market has helped push prices higher and would-be homeowners out.
In a recent article entitled “Why upzoning will make the ‘affordable housing crisis’ worse” Steve Martinot states, “any scheme that will lift zoning regulations will make it easier for the real estate financial corporations to absorb the rest of the supply. That is the gift that upzoning promises to give the real estate corporations.” Because land value increases when single family houses are up-zoned and replaced by fourplexes, it will lead to “price increases across the industry.” If the primary concern is the lack of affordable housing, up-zoning does nothing to solve the problem.
The sudden rush to upzone single-family neighborhoods appears to be just another way investment capital can capture additional appreciation and extract value-added benefit while simultaneously worsening housing affordability and reducing home ownership opportunities. Upzoning single-family neighborhoods just might turn out to be the largest transfer of real wealth from the many to the few that we will ever witness.