A cost-saving residential project in the wrong neighborhood, a retailer’s exit from high-crime cities and an old train caboose marketed as a home. From the wild and wooly world of real estate, here are the hits and misses for the week of Sept. 25-29.
Hit and Miss: Right Idea, Wrong Location. The start-up Brownstone Shared Housing has a great plan for San Francisco residents seeking lower-cost housing: a dormitory-style setting where people have no-frills but comfortable “sleeping pods” stacked in bunkbed-style formations (see the picture above), with communal cooking and living spaces plus WiFi, all for $700 a month. While such arrangements emerged at the right time in that city’s tight housing market, they’re in the wrong place – a former credit union branch in San Francisco’s downtown that’s not zoned for residential housing. Oops! The San Francisco Department of Building Inspection, which only learned of this endeavor through social media, is planning a site visit to determine if the zoning code was violated.
Miss: Target Won’t Be a Target. Target made the news this week, albeit for unpleasant reasons. The big-box retailer is closing nine locations in four states, claiming in a press statement that it “cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance. We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all.” The locations are the East Harlem section of New York City, Seattle, Portland, San Francisco and Oakland. Target’s action is a blistering vote of no confidence against those cities, which have experienced acute quality of life deterioration. Target is leaving those markets on Oct. 21, and don’t expect any other major retailer to rush in and occupy those soon-to-be-vacant buildings.
Hit: Cheap Choo Choo. Perhaps the strangest listing now online is a 1976 train caboose in the Georgia woods that is being offered as a residence for roughly $42,000. And the emphasis for this home is on the word “roughly” – it has no utilities and no running water. The listing agent for this unlikely domicile envisioned a buyer with “a lot of experience transforming nontraditional structures into a residential structure.” Either that or a deranged hermit with $42,000 in his pocket who is in need of a place to hide from the world.
Hit: Dethroning the Cash Flow King. For too long, the internet has been polluted with self-proclaimed experts who are too eager to share their alleged wealth building skills with gullible neophyte investors. Thus, a hat tip goes to the U.S. Securities and Exchange Commission (SEC) for filing a lawsuit against Matthew Motil, a one-time construction worker and host of the podcast “The Cash Flow King.” The SEC charged Motil with fraudulently raising approximately $11 million from more than 50 investors in a Ponzi scheme involving notes purportedly backed by residential properties. Motil was the only one enriched by this scheme – he allegedly used investor money to rent a lakeside mansion, purchase courtside season tickets to NBA games, and make $400,000 in credit card payments for his wife, Amy Motil, who is named as a relief defendant. And while the U.S. justice system insists that Motil is deserving of the presumption of innocence, it should be noted that he has already taken down his website and YouTube page.
Miss: The Crisis That Wasn’t Addressed. This week’s second debate for most of the leading candidates for the Republican presidential nomination was heavy on sarcastic putdowns and glib proclamations, but significantly absent from the proceedings was the acknowledgment that the housing market is veering into a crisis mode. With mortgage rates near a 23-year high, home prices at or near record highs (depending on your data source) and affordable homeownership opportunities at a new nadir, the fact the subject was not raised by either the out-of-control candidates (who obnoxiously overtalked each other) or the never-in-control moderators. The current White House occupant never talked about housing since taking office, and it is distressing that those seeking to move into that historic residence also aren’t raising the subject.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
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