The bearded, shabbily dressed man flashed a sign at oncoming traffic. “Please help,” it said, “I’m residentially challenged.”
In San Francisco today, you don’t have to be homeless to be residentially challenged.
Skyrocketing housing prices and rents have produced the nation’s most expensive place to live. Even ordinary, average-size single-family homes can command a $1 million price tag–or more.
The homeless man with the sign was begging in one of San Francisco’s hottest new neighborhoods–South of Market, or SOMA for short.
Located south of Market Street and west of San Francisco Bay, SOMA started out much like downtown Chicago’s popular River North neighborhood.
Both used to be down-and-out warehouse and industrial areas that were discovered by young, artistic types looking for inexpensive loft living.
The emerging creative community of SOMA, also known a “Multimedia Gulch,” is the workplace of film and music producers, architects, graphic artists and a wide spectrum of high-tech and Internet employees.
While Chicago’s River North has been flourishing with new condos, restaurants, shops and art galleries, trendy SOMA still is a work in progress. But forget those once affordable lofts. Like the rest of San Francisco, SOMA is not for the financially challenged.
Just a few blocks from where the homeless man with the sign was standing is a construction site on the south side of Market Street between 3rd and 4th Streets. Scheduled for completion this summer is the $364 million Four Seasons Hotel and Residences.
Stacked atop the 277-room hotel are 142 condominiums that range in size from 800 to 8,650 square feet and in price from $850,000 to $14 million.
Built by Millennium Partners, the location was chosen because South of Market is viewed as a new, vibrant center of the San Francisco lifestyle.
Bill Benton, a broker with CB Richard Ellis in San Francisco, attributes part of SOMA’s popularity to its funky culture and mix of restaurants and clubs.
Novelist Jack London was born in SOMA and one of his books, “The Call of the Wild,” might well describe the neighborhood today.
Adding to the SOMA boom is the invasion of the techies, which started about five years ago.
In recent months, though, the SOMA bubble has slowed, partly because of the failures of several dot-com firms in the area.
Even so, Benton looks at the bright side: “Tech is still a big sector in San Francisco. There are a lot of young people with ideas here. New tech companies will continue to emerge.”
Though housing is currently expensive in SOMA, he predicts that prices “will cool way off, as well as elsewhere in the city.”
He noted that a lot of new housing is slated to open in SOMA.
At first, the most popular housing options were in rehabbed warehouse space. But before conversion to residential use, most older commercial buildings in San Francisco require extensive reconstruction to assure they will meet earthquake safety codes.
That, of course, is hardly a concern in Chicago.
Now the SOMA scene is dominated by the construction of high-rise condos. Among the new projects is the high-end Brannigan, a 336-unit development of condos in three high-rise towers. Prices start at $499,000 for one bedroom on the ground floor, then shoot up to $1 million and higher, according to Jeffrey Slayton Straw, an agent with McGuire Real Estate in San Francisco.
“SOMA is the trendiest part of the city in terms of younger people, alternative lifestyles and restaurants, including such spots at the Red Herring and the Cosmopolitan Cafe,” said Straw.
As for the frequently outrageous prices, he stressed that “residences with views are off the charts.”
One housing option with a broad range is Portside, located beneath the Bay Bridge, where units range from $300,000 to $3 million.
Straw said the South Beach section of SOMA is the most desirable and popular, but another favorable area is from 10th to 12th Streets at the western edge of the area.
Another new condo project is One Embarcadero South. The residences range in size from 940 to 2,050 square feet and in price from $695,000 to over $2 million. Amenities include a fitness center and landscaped skydeck.
A Courtyard by Marriott hotel is under construction at 2nd and Folsom in SOMA. The 17-story, 404-room hostelry is expected to open in August.
“Nobody would go south of Market 10 years ago,” said Joy Berry, regional vice president for lodging development for Marriott International.
Benton said that before the recent boom, SOMA was not regarded as totally safe: “After exiting from the 101 freeway, you would lock your doors until you got to Market and downtown.”
But, as the neighborhood started on the comeback trail, “developers started to view it as one of the most affordable areas in the city,” Berry said.
“Now SOMA is the dynamic center of new development.” SOMA is not just a real estate happening.
It is becoming a real neighborhood with a list of major, new attractions. Here’s a scorecard:
– Pacific Bell Park, the new home of the San Francisco Giants, opened last April. The 40,800-seat facility is so close to China Basin and the bay that balls hit over the right field fence land in the water near a yacht harbor. It is the first privately financed major league ballpark in more than 40 years.
Berry said the new ballpark has sparked new restaurants and entertainment in the area.
– Yerba Buena Gardens, an urban pocket park, also features an arts center, the Zeum technology center for children and a restored 1903 carousel.
– Metreon, a four-story shopping and entertainment facility operated by Sony, includes 15 movie theaters, a 600-seat IMAX theater and a collection of small restaurants labeled Taste of San Francisco.
– The San Francisco Museum of Modern Art, which open five years ago, says it has the West Coast’s largest collection of 20th Century art.
The Moscone Convention Center, already located in SOMA, is being expanded by 300,000 square feet. Construction of the $191 million project is expected to be completed in February 2003. It will increase the area of the Moscone to 900,000 square feet.
Another dimension may dock at SOMA. A new cruise ship terminal has been proposed at Pier 30-32 on San Francisco Bay. The $270 million development also would include a 400-room hotel, theaters and shops, according to Laurie Armstrong , vice president of public relations for the San Francisco Convention and Visitors Bureau.
The SOMA district was born with a silver spoon in its mouth, so to speak. In the 19th Century, the neighborhood used to be a magnet for the rich and famous. In 1855, South Park, part of the South of Market district, was built to resemble a square in London. Grouped around the oval park were 17 elegant mansions.
But later in the century, the upper crust started to move to Knob Hill. Then the South Park area was gutted by the 1906 earthquake, and the area spiraled downward. Eventually it was reduced to a neighborhood with deep problems.
Now the gentrification of the light industrial backwater has evolved from Bohemians to computer geeks.
The Internet invasion has been a mixed blessing for some residents. Some small businessmen in SOMA squeezed out by the dot-com influx are not happy. Similarly, the more affluent dot-comers have had the effect of driving up rents for both office and residential space.
Founded in 1998, SOMA Living, a real estate firm, is unique because of its retail store concept and its emphasis on serving only the buyer.
Looking more like a store than an office, SOMA Living invites shoppers to check out the listings of all homes, including those for sale by owner, at computer kiosks.
At the map table, shoppers can plot locations and print out comparative reports on properties in which they are interested.
“The whole point is to simplify the process for the buyer,” said Bill Jansen, a partner in SOMA Living, which is located near the Embarcadero and the Bay Bridge.
Now the firm wants to broaden the SOMA Living name and expand the concept in California and across the nation.
A second store is slated to open in Palo Alto, south of San Francisco, in March. That will be followed by as many as 400 to 500 locations, possibly including Chicago, in the next seven years.
