Part One: What’s going on in the 2-4 residential unit market?

Last month, Paragon released its special report on buildings containing two to four residential units. If you’re looking for our report on larger apartment building sales (that is, five-plus units), you’ll find that here.

In San Francisco, buildings with two to four units number about 80,000 – or 21 percent of the city’s housing units. For the purposes of this report, we’ve only looked at smaller apartment buildings that have not been converted to condos or exclusive-use TIC units. The two to four unit buildings lie at the overlapping intersection of two different market segments: tenant-occupied, income property and owner-occupied real estate. Within this sector we not only see the usual factors of location, condition, parking, views – but also things such as income and expense as well as rental upside potential, tenant profile, protected tenants and eviction history. Other factors include vacant units and owner-occupancy suitability as well as the feasibility to convert to TICs and/or condos.

As you’ll see in the chart that accompanies this post, Victorian and Edwardian buildings dominate San Francisco’s market for smaller apartment buildings. Hard on the heels of these types is the Spanish-Mediterranean/Art Deco/Marina Style era, the classics of which are the three-flat Edwardian and the two-flat Marina Style buildings. After World War II ended, builders began a gradual shift to single-family home construction, with condominiums once again being built in the 190s. Residential buildings that were built before 1979 are almost universally subject to strict rent and eviction ordinances.

We’ll continue this look at these smaller apartment buildings and what’s going on in this market tomorrow. Meanwhile, if you have any questions, get in touch!

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email

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