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Condom
iniu
m C
onve
rsio
ns
in
San
Fra
nci
sco:
GIS
Anal
ysis
of
Det
erm
inan
ts
by
J. M
. Po
godzi
nsk
i, E
conom
ics
Dep
artm
ent
and U
rban
and
Reg
ional
Pla
nnin
g D
epar
tmen
t, S
an J
ose
Sta
te U
niv
ersi
ty
Alic
iaT.
Park
er,
Urb
an a
nd R
egio
nal
Pla
nnin
g D
epar
tmen
t,
San
Jose
Sta
te U
niv
ersi
ty
Tito
Van
der
mey
den
, G
IS M
anag
er,
Nex
tbus,
Inc.
Dow
nlo
ad P
rese
nta
tion
Go t
o h
ttp:/
/ww
w.p
ogodzi
nsk
i.net
/an
d
clic
k on “
ESRI
UC 2
007 P
rese
nta
tion”
Ove
rvie
wRel
atio
nsh
ip t
o e
arlie
r pap
erBac
kgro
und
Conce
rnin
g C
ondom
iniu
m
Conve
rsio
ns
in S
an F
ranci
sco
Dat
aab
out
Condom
iniu
m C
onve
rsio
ns
in
San
Fra
nci
sco
Eco
nom
ics
of Condom
iniu
m C
onve
rsio
ns
GIS
Applic
atio
n t
o C
ondom
iniu
m
Conve
rsio
ns
Supply
-sid
eD
eman
d-s
ide
(in e
arlie
r pap
er)
Rel
atio
nsh
ip t
o E
arlie
r Pa
per
This
pap
er e
xten
ds
the
empiric
al/G
IS
anal
ysis
to a
longer
per
iod o
f tim
eThis
pap
er e
xam
ines
“su
pply
-sid
e”in
det
ail
Ear
lier
pap
er h
as d
etai
led “
dem
and-
side”
theo
retica
l dev
elopm
ent
Bac
kgro
und C
once
rnin
g C
ondom
iniu
m
Conve
rsio
ns
in S
an F
ranci
sco
San
Fra
nci
sco is
the
only
City-
County
in
Cal
iforn
ia
177 C
ensu
s Tra
cts
in C
ity-
County
of
San
Fra
nci
sco;
575 C
ensu
s Blo
ck-
Gro
ups
65%
of
housi
ng u
nits
in S
an
Fran
cisc
o a
re r
enta
l units
What
are
condom
iniu
m
conve
rsio
ns?
chan
ge
in t
he
typ
e o
f o
wn
ers
hip
of re
al
pro
per
ty t
o c
ondom
iniu
m,
com
munity
apar
tmen
t pro
ject
or
stock
cooper
ativ
e an
d in
whic
h t
wo
or
mo
re u
nit
sof
such
pro
ject
s ar
e cr
eate
d w
ith
in a
n e
xis
tin
g s
tru
ctu
re
Ow
ners
hip
C
on
do
min
ium
sR
en
tal
Ap
art
men
ts
San
Fra
nci
sco:
What
are
the
public
polic
y is
sues
in
volv
ing c
ondo c
onve
rsio
ns?
Co
nd
o c
on
vers
ion
s ch
an
ge t
he b
ala
nce
b
etw
een
ren
tal an
d o
wn
ers
hip
ho
usi
ng
Posi
tive
Asp
ects
:N
egat
ive
Asp
ects
:
+Pr
ovi
de
affo
rdab
le
ow
ner
ship
housi
ng
+Im
pro
ve t
he
housi
ng
stock
and incr
ease
pro
per
ty v
alues
thro
ugh
upgra
des
-Red
uce
the
apar
tmen
t re
nta
l in
vento
ry,
ther
eby
incr
easi
ng r
ents
-Li
mit h
ousi
ng o
ptions
for
low
-inco
me
peo
ple
San
Fra
nci
sco C
ondo C
onve
rsio
n
Ord
inan
ce
Key f
eatu
res:
Larg
e co
mple
xes
built
for
renta
l housi
ng a
nd o
ccupie
d b
y te
nan
ts
cannot
conve
rt
Condo c
onve
rsio
ns
are
limited
to
ow
ner
-occ
upie
d b
uild
ings
of si
x units
or
less
and t
o o
nly
200 a
pplic
atio
ns
(i.e
. build
ings)
per
yea
r
Lott
ery
syst
em d
esig
ned
to a
lloca
te
appro
vals
San
Fra
nci
sco D
ata
U.S
. Cen
sus
dat
a on S
an F
ranci
sco c
ensu
s tr
acts
and b
lock
gro
ups
–in
cludes
dat
a on
Housi
ng s
tock
(re
nta
l an
d o
wner
-occ
upie
d)
Ow
ner
’sas
sess
men
t of house
val
ue,
Ren
ter’s
report
ed r
ent
pay
men
ts,
med
ian inco
me,
and
dem
ogra
phic
var
iable
s (i
ncl
udin
g e
thnic
/rac
ial
clas
sifica
tion)
San
Fra
nci
sco E
nte
rprise
GIS
web
site
San
Fra
nci
sco D
epar
tmen
t of Public
Work
s (f
or
dat
a ab
out
condom
iniu
m c
onve
rsio
ns)
Eco
nom
ic M
odel
(su
pply
sid
e)
Model
exa
min
es b
oth
supply
-sid
e an
d
dem
and-s
ide
variab
les
Supply
sid
e is
sig
nific
antly
affe
cted
by
regula
tion
Lim
ited
lan
d a
vaila
bili
ty a
nd
limitat
ions
on c
onve
rsio
n m
ean t
hat
su
pply
of
housi
ng
may
not
adju
st
quic
kly
to incr
ease
d d
eman
d (
short
-ru
n m
odel
)
Eco
nom
ic M
odel
(dem
and s
ide)
Eco
nom
ic liter
ature
on t
enure
choic
e
Ten
ure
choic
e m
odel
focu
ses
on c
om
par
ing t
he
satisf
action
a house
hold
der
ives
fro
m o
wnin
g v
s. t
he
satisf
action
it d
eriv
es f
rom
ren
ting (
Hen
der
son a
nd
Ioan
nid
es[1
983])
Ten
ure
choic
e m
odel
can
als
o b
e m
odifie
d t
o a
pply
to
diffe
rent
types
of
ow
ner
ship
(e.
g.,
ten
ants
in c
om
mon
vs.
indiv
iduat
ed o
wner
ship
)
Ten
ure
typ
e w
ithin
the
sam
e st
ruct
ure
may
yie
ld
diffe
rent
leve
ls o
f sa
tisf
action a
nd b
e as
soci
ated
with
diffe
rent
cost
s
Model
Exp
ecta
tions
(supply
sid
e)In
the
short
run,
more
conve
rsio
ns
should
occ
ur
wher
e th
e su
pply
of pote
ntial
conve
rsio
ns
is t
he
gre
ates
t
Sugges
ts looki
ng a
t ab
solu
te o
r re
lative
mea
sure
s of
supply
of re
nta
l housi
ng
Mea
sure
s in
clude
pro
port
ion o
f re
nta
l housi
ng t
o o
wner
-occ
upie
d h
ousi
ng a
nd p
roport
ion o
f re
nta
l housi
ng in o
ne
area
rel
ativ
e to
the
city
-wid
e st
ock
of
renta
l housi
ng
Sugges
ts looki
ng a
t m
ore
ref
ined
mea
sure
of
renta
l housi
ng in a
ppro
priat
e si
zed u
nits
Mea
sure
s in
clude
the
pro
port
ion o
f re
nta
l housi
ng in
build
ings
with a
spec
ifie
d n
um
ber
of
units
in o
ne
area
re
lative
to t
he
city
-wid
e num
ber
of
renta
l units
in b
uild
ings
with t
he
spec
ifie
d n
um
ber
of
units
Model
Exp
ecta
tions
(dem
and s
ide)
Whet
her
ow
nin
g o
r re
nting is
bet
ter
for
a par
ticu
lar
house
hold
dep
ends
on s
ever
al fac
tors
Pric
e vs
. re
nt
for
com
par
able
pro
per
ties
(m
ort
gag
e in
tere
st r
ate
affe
cts
the
cost
of
ow
ner
-occ
upie
d
housi
ng)
Exp
ect
price
-to-r
ent
ratio t
o b
e posi
tive
ly r
elat
ed w
ith
tenden
cy t
o o
wn;
spec
ula
tion o
n incr
ease
in h
ouse
va
lue
also
a p
oss
ible
exp
lanat
ion
Inco
me:
ow
ner
-occ
upie
d h
ousi
ng is
assu
med
to b
e a
“norm
al”
good,
like
HD
TVs,
unlik
e sh
oe
repai
rs.
Exp
ect
inco
me
to b
e posi
tive
ly r
elat
ed t
o t
enden
cy t
o
ow
n
Em
piric
al M
ethods
Cre
ate
GIS
lay
ers
of
variab
les
1)
Ren
tal an
d O
wn
er-
occ
up
ied
ho
usi
ng
u
nit
s2
)p
rice
-to
-ren
tra
tio
3
)m
ed
ian
in
com
e
4)
perc
en
t A
sian
an
d
5)
perc
en
t A
fric
an
Am
eri
can
Geo
code
addre
sses
for
various
year
sbet
wee
n 2
000
and 2
006
Cre
ate
map
ove
rlay
s of
condo c
onve
rsio
ns
with
laye
rs r
epre
senting t
he
mai
nva
riab
les
of in
tere
st
Geo
code
addre
sses
of al
l co
nve
rsio
ns
Map
conve
rsio
ns
and v
aria
ble
s
Supply
-sid
eVar
iable
s
Sto
ck o
f Ren
tal
Housi
ng
Pric
e-to
-Ren
t Rat
io
Const
ruct
ion
Cost
s
Inte
rest
ra
tes*
Condo
conve
rsio
n
* I
nte
rest
rat
es a
ffec
t both
the
dem
and s
ide
(mort
gag
e in
tere
st)
and t
he
supply
sid
e (c
onst
ruct
ion loan
s an
d d
isco
unting o
f in
com
e st
ream
s fr
om
ren
tal pro
per
ties
.
Why
thes
e su
pply
-sid
e va
riab
les?
The
liter
ature
and t
he
econom
ic m
odel
support
thes
eva
riab
les
as d
eter
min
ants
of co
ndo c
onve
rsio
ns:
Co
nst
ruct
ion
Co
sts:
condo c
onve
rsio
ns
inva
riab
ly
require
rem
odel
ing t
o c
om
ply
with c
odes
Inte
rest
Rate
s:re
flec
ted in c
ost
of co
nst
ruct
ion loan
s an
d u
sed t
o a
sses
s th
e dis
counte
d v
alue
of
a st
ream
of
renta
l pay
men
ts
Sto
ck o
f R
en
tal H
ou
sin
g (
esp
eci
ally in
ap
pro
pri
ate
si
ze r
an
ge):
conve
rsio
ns
occ
ur
of existing
housi
ng
(short
-run)
Ren
tal vs
. O
wner
-Occ
upie
d H
ousi
ng
by
Cen
sus
Tra
ct
Dark
est
: 1
00
%-8
0%
ren
tal
Lig
hte
st:
20
%-8
% r
en
tal
Dis
trib
ution o
f th
e Ren
tal H
ousi
ng
Sto
ck (
as p
erce
nt
of Tota
l Ren
tal U
nits)
Dark
est
: 2
.01
%-1
.19
%Lig
hte
st:
0.2
4%
-0.0
1%
Dis
trib
ution o
f th
e Ren
tal H
ousi
ng
Sto
ck (
as p
erce
nt
of Tota
l Ren
tal U
nits)
Dark
est
: 2
.01
%-1
.19
%Lig
hte
st:
0.2
4%
-0.0
1%
Sel
ecte
d:
tra
cts
above
Med
ian (
appro
x. 0
.48)
Condo C
onve
rsio
ns
(2002 &
2003)
and C
ensu
s Tra
cts
with M
ore
than
Med
ian S
har
e of
Ren
tal
Sto
ck
Condo C
onve
rsio
ns
and D
istr
ibution o
f th
e Ren
tal
Housi
ng S
tock
in B
uild
ings
with a
Sm
all N
um
ber
of
Units
(as
per
cent
of Tota
l Ren
tal U
nits
in s
uch
build
ings)
Dark
est
: 1
.63
%-1
.07
%Lig
hte
st:
0.2
1%
-0.0
0%
Condo C
onve
rsio
ns
(2002 &
2003)
and C
ensu
s Tra
cts
with M
ore
than
Med
ian S
har
e of
Sm
all U
nit
Ren
tal Sto
ck
Dem
and-s
ide
Var
iable
s
Med
ian
Inco
me
Pric
e-to
-Ren
t Rat
io*
Perc
ent
Asi
an
Perc
ent
Afr
ican
Am
eric
an
Condo
conve
rsio
n
* T
he
valu
e use
d in c
alcu
lations
is m
ore
com
ple
x: {[(
P*r)
/12]R
} w
her
e r
is t
he
annual
mort
gag
e in
tere
st r
ate,
P is
the
med
ian h
ouse
val
ue
and R
is
the
med
ian r
ent.
See
the
pap
er f
or
det
ails
.
Why
thes
e dem
and-s
ide
variab
les?
The
liter
ature
and t
he
econom
ic m
odel
support
thes
eva
riab
les
as d
eter
min
ants
of co
ndo c
onve
rsio
ns:
Pri
ce-t
o-r
en
t:th
e va
lue
of ow
nin
g v
s. r
enting is
bas
ed
on a
com
par
ison o
f th
e as
set
price
to t
he
cost
of re
nta
l
Med
ian
inco
me:
ow
ner
ship
is
a “n
orm
al”
good –
a good
the
dem
and for
whic
h incr
ease
s w
hen
inco
me
incr
ease
s
Perc
en
tA
sian
/P
erc
en
t A
fric
an
Am
eri
can
:oth
er
fact
ors
hel
d c
onst
ant,
Asi
ans
(esp
ecia
lly C
hin
ese)
hav
e a
hig
her
pro
bab
ility
of bei
ng o
wner
-occ
upie
rs,
and A
fric
an
Am
eric
ans
hav
e a
low
er p
robab
ility
of bei
ng o
wner
-occ
upie
rs
Dis
trib
ution o
f Pr
ice-
to-R
ent
Rat
ioC
ensu
s B
lock
Gro
ups
in P
rice-
to-R
ent R
atio
Cat
egor
ies
(Tot
al N
umbe
r of B
lock
Gro
ups
= 57
5)
020406080100
120
140
160
0 .01-1.
00 1.01-1
.501.5
1-2.00
2.01-2
.502.5
1-3.00
3.01-3
.503.5
1-4.00
4.01-4
.504.5
1-5.00
5.01 p
lus
Pric
e-to
-Ren
t Rat
io
Number of Census Block Groups
Cate
go
ry c
on
tain
ing
med
ian
valu
em
ed
ian
valu
e 1
.73
Dis
trib
ution o
f M
edia
n H
ouse
hold
In
com
e
Med
ian
Hous
ehol
d In
com
e
020406080100
120
140 $0
-$15,0
00 $15,0
01-$2
5,000 $2
5,001
-$35,0
00 $35,0
01-$4
5,000 $4
5,001
-$55,0
00 $55,0
01-$6
5,000 $6
5,001
-$75,0
00 $75,0
01-$8
5,000 $8
5,001
-$95,0
00$9
5,001
-$105
,000
$105
,001-$
115,0
00
$115
,001-$
125,0
00
$125
,001-$
135,0
00$1
35,00
1-$14
5,000
$145
,001-$
155,0
00
$155
,001-$
165,0
00
$165
,001-$
175,0
00
$175
,001-$
185,0
00
$185
,001-$
195,0
00
$195
,001-$
205,0
00
Number of Census Block Groups
Cate
go
ry c
on
tain
ing
med
ian
valu
e$
59
,35
1
Pric
e-to
-Ren
t Rat
io &
Condo C
onve
rsio
ns
Hig
her
pri
ce-t
o-r
en
t ra
tio
Mo
re c
on
do
co
nvers
ion
s
San
Fra
nci
sco D
ata
Freq
uen
cy D
istr
ibution:
Condo C
onve
rsio
ns
per
Blo
ck G
roup in 2
000
Cla
sses
Freq
uenc
y0
- 29,
999
130
- 49
,999
1150
- 69
,999
7870
- 89
,999
2990
- 10
9,99
98
110,
000
and
over
9To
tal
136
Cla
sses
Freq
uenc
y0.
002
0.01
- 1.
002
1.01
- 1.
505
1.51
- 2.
0036
2.01
- 2.
5035
2.51
- 3.
0023
3.01
- 3.
5016
3.51
- 4.
0011
4.01
- 4.
506
4.51
- 5.
000
5.01
and
ove
r0
Tota
l13
6
Sourc
e: A
uth
ors
’ca
lcula
tions
bas
ed o
n c
ondo c
onve
rsio
n d
ata
supplie
d b
y San
Fran
cisc
o D
epar
tmen
t of Public
Work
s
575 B
lock
Gro
ups
136 c
onve
rsio
ns
in 2
000
155 c
onve
rsio
ns
in 2
001
91%
34%
93%
67%
San
Fra
nci
sco D
ata
(cont.
)
Freq
uen
cy D
istr
ibution:
Condo C
onve
rsio
ns
per
Blo
ck G
roup in 2
001
Cla
sses
Freq
uenc
y0
- 29,
999
030
- 49
,999
2150
- 69
,999
6770
- 89
,999
4590
- 10
9,99
911
110,
000
and
over
11To
tal
155
Cla
sses
Freq
uenc
y0.
002
0.01
- 1.
003
1.01
- 1.
5013
1.51
- 2.
0027
2.01
- 2.
5045
2.51
- 3.
0030
3.01
- 3.
5020
3.51
- 4.
009
4.01
- 4.
503
4.51
- 5.
002
5.01
and
ove
r1
Tota
l15
5
Sourc
e: A
uth
ors
’ca
lcula
tions
bas
ed o
n c
ondo c
onve
rsio
n d
ata
supplie
d b
y San
Fran
cisc
o D
epar
tmen
t of Public
Work
s
86%
43%
88%
71%
Res
ults
Hig
her
pri
ce-t
o-r
en
t ra
tio
Mo
re c
on
do
co
nvers
ion
s
Hig
her
Inco
me
Mo
re c
on
do
co
nvers
ion
s
Hig
her
Perc
en
tag
e
Asi
an
No
str
on
g c
orr
ela
tio
n
Hig
her
Perc
en
t A
fric
an
Am
eri
can
Few
er
or
no
co
nd
o
con
vers
ion
s
Gre
ate
r re
lati
ve s
up
ply
Mo
re c
on
do
co
nvers
ion
s
Wea
knes
ses
of
the
Anal
ysis
No c
har
acte
rist
ics
dat
a fo
r co
ndo
conve
rsio
ns
Usi
ng c
ensu
s tr
acts
and b
lock
gro
ups
invo
lves
aggre
gat
ion w
hic
h d
estr
oys
in
form
atio
n
The
anal
ysis
is
sugges
tive
but
more
form
al
stat
istica
l an
alys
is s
hould
be
done
Recommended