Source: MLSListings, Inc., as of June 12, 2023
Criteria: Single Family Residential
DRE #01903224
Managing Broker: Michael Repka
WE ARE LOCATED AT: 1717 Embarcadero Road, Palo Alto, CA 94303 650. 543. 8500 | DELEONREALTY.com
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Federal Court Claps Back on the War Against Gas Appliances
By Alexander J. Lewicki, Esq.
Filling the Lending Void Left Behind After the Demise of First Republic Bank and Silicon Valley Bank
By Ken DeLeonThe Importance of 3D Tours and Narrated Real Estate Videos
By Michael RepkaSpotlight On the Community Peninsula Bridge
By Michael RepkaNoticeable Trend of Agents Scaling Back on Property Preparation, Staging, and Marketing
By Michael RepkaTwelve Interesting Facts About Atherton
By Michael RepkaSB 9, SB 10, and the “Builder’s Remedy”
By Michael RepkaUpgrading Electrical Panels to Prepare for Added Load from Electric Appliances and Car Chargers
By Michael RepkaCONTRIBUTORS:
Ken DeLeon, Michael Repka, and Alexander J. Lewicki (DRE #02189814)
Contact Ken DeLeon for exceptional buying opportunities at 650.543.8501 | DRE #01342140
Contact Michael Repka to learn about our Platinum packages and incredible listing services for sellers at 650.488.7325 | DRE #01854880
DISCLAIMER:
As prominent members of the real estate community, we respect all pre-existing listing agreements. If your home is currently under a listing contract, or if you are contractually obligated to work with a particular agent because you signed a Buyer Broker Agreement or similar form, please do not construe this publication as a soliciation. On the other hand, if you have not yet selected an agent, we urge you to consider our team's resources and design acumen, as demonstrated in this proprietary publication, which was created completely in-house by our talented marketing team.
Advertising. All rights reserved. DeLeon Realty is not a law firm and the publication of this information does not create an attorney-client relationship with this brokerage or any of its members. Likewise, the material in this publication does not constitute a solicitation and is not intended to provide legal advice. The content in this publication is informational only and may not reflect current legal developments. This publication should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. DeLeon Realty expressly disclaims all liability with respect to actions taken or not taken based on any or all the contents of this publication. See also deleonrealty.com for additional disclaimers. Legal services are provided by the Integra Law Group, LLP at no additional charge to our clients.
By Alexander J. Lewicki, Esq.
The ongoing war against gas appliances has gained notoriety in California over the last several years as state lawmakers and environmental proponents cite greenhouse gas emissions, global warming, and studies linking gas appliances to childhood asthma and other health concerns. California homeowners, already facing some of the highest electric bills in the country, are voicing concerns over the costs associated with electric conversion and upkeep, as well as the decreased efficiency that has long plagued electric appliances.
Municipalities across the state have joined the effort by enacting their own “reach codes” aimed at eliminating gas appliances in new construction. Many cities have chosen to follow Menlo Park’s model by crafting an amendment to the state’s Building Energy Efficiency Standards requiring all electric construction, while others have chosen to require increased energy efficiency for buildings which install gas hookups, and an even smaller number of cities choosing to ban gas piping altogether.
In the midst of this ongoing crusade, the Ninth Circuit Court of Appeals in California Restaurant Association v. City of Berkeley recently held that a City of Berkeley building code enacted in 2019 prohibiting gas piping in newly constructed units is preempted by the Energy Policy and Conservation Act (“EPCA”), a federal law governing the regulation of certain types of gas appliances. In doing so, the Court reasoned that because the EPCA expressly preempts state and local regulations concerning the energy use of many natural gas appliances, by preventing such appliances from using natural gas altogether, the Berkeley building code infringed on federal law. Therefore, Berkeley’s gas piping prohibition was deemed unenforceable.
The decision has left Californians wondering what’s next for the future of gas appliances, especially in
light of California’s recent plan to ban the sale of gas furnaces and water heaters by 2030. Of the 72 California municipalities that have enacted policies restricting gas use in new construction, only a dozen have enacted policies akin to those recently struck down by the Ninth Circuit. Many legal analysts believe that while the Ninth Circuit ruling will immediately render the Berkeley-style policy void, it’s still unclear whether it will broadly apply to the more widely used Menlo Park electrification model.
One thing is certain: proponents of the continued use of gas appliances, such as the California Restaurant Association, will use this victory to further propel their fight against similar regulations. And only a month removed from the decision, we may already be seeing some trepidation in enforcing these laws from the City of Palo Alto, which has now granted an exemption to renowned chef José Andrés and his new restaurant set to open in the Stanford Shopping Center after Andrés and his team publicly threatened to sue Palo Alto over the city’s all-electric requirement which took effect this year.
The Buyers Team at DeLeon Realty strives to maintain their knowledge of these crucial legal issues that will affect your home ownership so that you don’t have to. To work with Ken or myself, please give us a call at (650) 543-8500.
Even in hindsight, it seems surreal that the most innovative bank in America, Silicon Valley Bank (“SVB”), was brought down in a matter of just two days by an old-fashioned bank run that conjures memories of Jimmy Stewart in It’s a Wonderful Life. Unfortunately, the collateral damage of SVB rapidly imploding and needing to be taken over by the Federal Reserve precipitated self-fulfilling fears that First Republic Bank (“FRB”) would be the next domino to fall.
Within a matter of two months, the two most iconic and foundational local banks with storied histories of over 40 years were now distant memories. The loss of these two banks will reverberate throughout Silicon Valley’s startup scene for some time, and will negatively impact liquidity in the high-end housing market. For the typical buyer, the loss of these banks will not negatively impact them, as several alternative options exist; however, with few lenders comfortable lending over $10M, losing the two banks most frequently willing to find ways to make the deal work creates concern.
As the top buyer’s agent in Silicon Valley for over a decade, and the most well-educated, with graduate degrees from both Berkeley Law School and Stanford’s Graduate School of Business, I have helped dozens of clients purchase high-end homes in Atherton, Woodside, Los Altos Hills, and Palo Alto. A large number of my clients will initially obtain loans on these properties, and historically the lender for homes over $20M was almost uniformly SVB or FRB. Similarly, the majority of my clients who purchased with all cash would then opt for a cash-out refinance, almost always with SVB or FRB.
Over the last few months, my buyers who have purchased their high-end homes with all cash are now evaluating which bank is the best fit to fill this vacuum in high-end lending. The following banks are the top choices I have found thus far:
Citi Private Bank – Currently, this is the bank that is most aggressively trying to take advantage of this unique opportunity to capture market share. A client who recently purchased in Atherton, and was planning
on using SVB, was instead able to find a similar rate by forming an investment management relationship to subsidize a lower mortgage rate. SVB’s use of mortgages as a loss leader to form long-term relationships is being replicated at Citi Private Bank.
JP Morgan Private – While I was hoping that FRB would survive, when they did go under I was optimistic that they would be acquired by JP Morgan Chase. Despite having some of the best minds in the business, JP Morgan has been surprisingly weak in their wealth management division, yet they wisely realized FRB’s affluent client base as an ideal segue to expand their business. While JP Morgan has stated that they will close FRB, they are retaining the focus upon upper-end clientele and the existing branches will be centers for relationship formation. Michael Repka and I attended a seminar by JP Morgan Private Bank where they explicitly stated their goal of doing more loans and wealth management in Silicon Valley.
Private Lenders – I have a network of private lenders who provide liquidity to clients to help facilitate tradeup buyers in need of capital for a purchase and then quickly pay back the loan once they close upon their former residence.
FinTech Startups – While less likely, FinTech startups such as Brex, who have greatly benefited from SVB and FRB’s demise, may shift their focus from providing liquidity to start-up employees to concentrating on serving their C-suite executives when purchasing a home.
While there is still uncertainty regarding what bank or entity will replace the dominant role FRB and SVB provided, I am encouraged that so many banks see the potential and seek to fill the void. With my focus solely upon buyers, I stay on top of every major bank and lending option to provide my clients with the optimal match based on their personal financial goals and constraints.
Despite the effectiveness of mass marketing, many agents shy away from the significant costs associated with promoting their listings through multiple newspaper and magazine ads, television and radio commercials, direct mail, and paid online ads. However, virtually all agents acknowledge that free online marketing, such as placing the listing on the Multiple Listing Service (“MLS”), which automatically syndicates the listing to popular third-party websites such as Zillow, Redfin, Trulia, and Realtor.com, is effective.
All of these marketing approaches share one key element: attracting more people to an online representation of the property. Nowadays, it is fairly easy and inexpensive to set up a website or microsite for each individual listing, but the quality of the information and material on these sites vary widely from agent to agent.
Catching a potential buyer’s attention, and attracting them to your home’s website, is the first important step in the selling process; however, once they are there, it is critical that the agent conveys both the emotional and the practical elements of the home. High-quality videos work wonders at capturing the emotional
essence of the property. Through this narrated tour, the agent is able to speak directly to the potential buyers and highlight the home’s features − both obvious and subtle. The video should leave the buyer with a sense of what it is like to live at the property, understand more about the neighborhood, the schools, and many other conveniences of everyday life. This is particularly true when the video highlights features around the property, such as nearby walking paths, local restaurants, parks, and schools.
Self-guided 3D tours, such as the popular Matterport tours, are also very helpful in explaining the more practical day-to-day elements of the house. Generally, these tours include a “floor plan” view and a “doll house” view and offer the potential buyer a chance to navigate from room to room via their mouse.
If the buyer is trying to recall whether the hall bathroom has a tub or a walk-in shower, all they have to do is hop online and check. Similarly, checking to see the brand and condition of the washer and dryer is only a few clicks away. Thus, the best option is for the listing to have both a narrated video and a 3D tour.
During Covid, home buyers were reluctant, or even restricted, from touring homes in person. When open houses resumed, attendance was down dramatically and, as a result, many buyers became accustomed to filtering all of the homes on the market through comprehensive online searches.
Potential buyers almost always visit the home’s website after learning about the listing from other sources, such as direct mail, TV commercials or newspaper ads. After reviewing the online collateral materials, they decide which homes they want to see in person and often filter out homes that they would actually like because the online presentation of the property fails to convey the home’s true characteristics or attributes. This is why we have invested well over $1.6 million in the high-quality videos, 3D tours and photography we have showcased on our website, in addition to what we pay to run commercials for our listings on television.
Another great benefit of having a strong online presentation of homes is that it gives out-of-area buyers access to properties in places they may not have considered. As an example, buyers struggling to afford a home that meets their size requirements in Palo Alto may love an alternative property in Menlo Park or Los Altos – that is, if they knew about it. The combination of fullpage ads in the Palo Alto Weekly, TV commercials that air throughout the region, and direct mail may induce these buyers to visit the microsite for a listing in Menlo Park or Los Altos. After watching the home’s video, they may decide that Menlo Park or Los Altos better fits their budget and lifestyle preferences.
Simply put, there are a lot of buyers out there that have focused their search too narrowly. Mass marketing attracts more buyers, even if they didn’t know what they really wanted. This additional competition leads to higher prices and happier sellers.
MODERN MASTERPIECE WITH SOUGHT-AFTER LOCATION
• 5 Bedrooms
• 4 Bathrooms
• 3,052 Sq. Ft. Home
• 10,027 Sq. Ft. Lot
• High-end Finishes
• Open, Light-filled Floorplan
• Peaceful Backyard
• Close to Top Schools
1546 COUNTRY CLUB DRIVE, LOS ALTOS Offered at $4,988,000
1546CountryClub.com
BRIGHT, AIRY, AND BUILT IN 2022
• 4 Bedrooms
• 4.5 Bathrooms
• 3,436 Sq. Ft. Home
• 6,720 Sq. Ft. Lot
• Completed in 2022
• High-end Construction
• Heated Outdoor Deck
• Close to Downtown
2105 MONTEREY AVENUE, MENLO PARK Offered at $3,988,000
2105Monterey.com
The same home, refreshed and revitalized by the DeLeon Realty design team, sold for more than $1.5 million over asking.
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• Built in 2018
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STUNNING NEW CONSTRUCTION IN ALLIED ARTS
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• High-end Finishes
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• Expansive Gathering Spaces
• 4,532 Sq. Ft. Home
• 50,285 Sq. Ft. Lot
• Large Living Spaces
• Top-ranked Schools
10888 MAGDALENA ROAD, LOS ALTOS HILLS Offered at $6,988,000
10888MagdalenaRd.com
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• Great Backyard w/ Casita
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• Top Schools
69 YALE ROAD, MENLO PARK Offered at $8,488,000
LUXURY AND STYLE IN CRESCENT PARK
• 5 Bedrooms
• 4.5 Bathrooms
• 6,450 Sq. Ft. Home
• 17,800 Sq. Ft. Lot
• Renovated Interiors
• Large Spaces & High Ceillings
• Theater, Gym, and Pool
• Top Schools
50 CRESCENT DRIVE, PALO ALTO Offered at $11,988,000
STYLISH CRAFTSMAN IN SOUGHT-AFTER NEIGHBORHOOD
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• Top Schools
1321 HARKER AVENUE, PALO ALTO Offered at $7,988,000
• Dedicated interior designer
• Staging (including furniture, delivery, set up, and de-staging)
• Property and pest inspections
• In-house handyman services
• Real estate attorneys provided to review disclosures and answer real estate and tax-related questions**
• Custom website for your home with 3D virtual tour
• Online and social media marketing campaigns
• Professionally produced, narrated videos
• At least 600 TV commercials for selected properties
• Multiple full-page ads in newspapers such as the Los Altos Town Crier, Palo Alto Weekly , The Almanac, and/or the SF Examiner
• 12- or 28-page custom home brochures
• Chinese newspaper ads and radio commercials
• Advertising in India West
• We will waive the 2.5% commission normally paid to the buyer’s agent if any DeLeon agent represents the buyer, or if the buyers do not have an agent
EXTENSIVELY REMODELED AND A GREAT LOCATION
• 4 Bedrooms
• 3 Bathrooms
• 1,932 Sq. Ft. Home
• 6,400 Sq. Ft. Lot
• Gorgeous Landscaping
• Light-filled Open Floorplan
• Attached ADU
• Recently Remodeled
11 HILLTOP DRIVE, SAN CARLOS Offered at $2,088,000
11HilltopDR.com
TOP-FLOOR CONDO CLOSE TO IT ALL
• 2 Bedrooms
• 2 Bathrooms
• 1,629 Sq. Ft. Home
• Great Natural Light
• Community Pool
• Top-ranked Schools 537 THAIN WAY, PALO ALTO Offered at $1,698,000
537Thain.com
GORGEOUS CUSTOM HOME IN WEST MENLO
• 5 Bedrooms
• 3 Bathrooms
• 2,598 Sq. Ft. Home
• 6,250 Sq. Ft. Lot
• Hardwood Floors
• Open Floorplan
• Backyard Patio & Lawn
• Top-ranked Schools
1161 SHERMAN AVENUE, MENLO PARK Offered at $4,498,000
1161Sherman.com
STYLISH CONDO BLOCKS FROM UNIVERSITY AVENUE
• 3 Bedrooms
• 3 Bathrooms
• 2,010 Sq. Ft. Home
• Sweeping Views
• Walk to Downtwon
• Top-ranked Schools
360 EVERETT AVENUE #5A, PALO ALTO Offered at $2,688,000
360Everett.com
Ken DeLeon
DRE #01342140
• Ranked #1 in the nation by WSJ/ RealTrends Sales Rankings three times (including as an individual and team)
• Former Wilson Sonsini Attorney
• Graduate degrees from:
Alex Wilbur DeLeon
DRE #01926475
• Over a decade as a broker
• 2nd generation broker/4th generation Silicon Valley resident
• Degrees from:
RENOVATED COLONIAL MASTERPIECE IN SOUGHT-AFTER ATHERTON
• 7 Bedrooms
• 8.5 Bathrooms
• 11,660 Sq. Ft. Home
• 1.14 Acres
• Luxurious Appointments
• Theater and Fitness Center
• Backyard w/ New Pool
• Top Schools
303 ATHERTON AVENUE, ATHERTON Offered at $15,488,000
303AthertonAve.com
INCREDIBLE OPPORTUNITY IN ATHERTON
• 42,600 Sq. Ft. Lot
• Acclaimed public schools
• Sought-after Private Schools
• Close to Downtown Menlo Park and Downtown Palo Alto
89 ALEJANDRA AVENUE, ATHERTON Offered at $10,988,000 89Alejandra.com
STUNNING ESTATE IN OLD PALO ALTO
• 6 Bedrooms
• 6 Bathrooms
• 5,310 Sq. Ft. Home
• 10,000 Sq. Ft. Lot
• High-end Finishes
• Large Gathering Spaces
• Lavish Bedroom Suites
• Top Schools
1932 EMERSON STREET, PALO ALTO Offered at $11,650,000
1932EmersonStreet.com
STUNNING LOS ALTOS RETREAT
• 5 Bedrooms
• 4.5 Bathrooms
• 3,907 Sq. Ft. Home
• 18,972 Sq. Ft. Lot
• Luxurious Interiors
• Guest Cottage
• 3-car Garage
• Top Schools 848NashRd.com
848 NASH ROAD, LOS ALTOS Offered at $6,988,000
One of the many wonderful things about living in Silicon Valley is its people. There is a strong sense of community wherever you go, and people all across the region are focused on giving back.
Recently, Ken DeLeon and I had the opportunity to learn about and financially support a local organization that is dramatically changing the lives of many underprivileged youths: Peninsula Bridge.
Peninsula Bridge provides motivation, encouragement and guidance to low-income students to help them achieve college and career success. Students join the program as 4th graders and continue until they receive their undergraduate degree. Through the program, these students participate in a variety of academic and enrichment programs offered through an incredibly dedicated and resourceful teaching staff and group of volunteers.
These talented young students receive advice and coaching on how to excel in their academic and professional careers. Additionally, they benefit from the incredible emotional support and guidance offered by the staff and volunteers throughout the program. Whether it is a practical understanding of how to get into a good college, what classes to take, or how to apply for scholarships and financial aid, Peninsula Bridge serves as a shining lighthouse that guides young people through a treacherous and intimidating sea.
This particular organization struck a chord with my wife, Rachel, and me because of her experience growing up. Rachel’s family left Vietnam under cover of darkness shortly after the fall of Saigon. Rachel’s father had endured almost two years of atrocious treatment in a communist “reeducation camp” because of his service alongside the American soldiers during the war. Despite the harsh treatment, this “reeducation” did not work, and he planned his family’s escape as soon as he was released.
After a harrowing escape from Vietnam in a crowded, underpowered fishing boat with practically no supplies, they washed up on an Indonesian island before being transferred to a refugee camp where they stayed for over a year. The entire time, Rachel’s parents wrote to various religious organizations and charities in search of sponsorship. Ultimately, they were sponsored by the Church of the Nativity in Menlo Park. The generosity of the church and its congregants changed Rachel’s family’s life—and mine!
Until I met Rachel, it was hard for me to even imagine how difficult it was to leave your home and move to a new country where you don’t speak the language, know any people, or understand the system. Like many immigrants, Rachel learned English far faster than her parents and began to take on adult responsibilities at a very young age.
Although Rachel’s parents made it clear that they wanted her to go to college, they had no idea how the system worked. Rachel waded through high school and admission tests, navigated the college selection and application process, learned the world of scholarships and financial aid, and communicated with the various universities. Even after graduating from UCLA and Rutgers School of Law, she still wonders how she was able to find her way through.
For many dedicated, hard-working, intelligent people, the difference between a lifetime of learning and success or one filled with struggles is simply a helping hand and a belief that they can achieve their dreams. Peninsula Bridge provides this guidance and a support network that sets many young people on the path to success. Clearly these young people have the ability to succeed, they just need some guidance and a role model.
Anyone that is interested in this amazing organization should reach out to Devon Gold at (650) 520-1656 or devon@peninsulabridge.org or Randi Shafton at randi@peninsulabridge.org Whether it is with your checkbook or your time, you could change someone’s life.
Many agents seem to believe now is a scary time to be a real estate agent because they fear they will invest time and money in a listing only to have it expire without a sale. Indeed, statewide, many agents are leaving the profession. Many who stay in the business have begun cutting back on their marketing and staging expenses, while others are asking for extended listing periods (sometimes as long as 6 months!) so that the seller does not have the option of leaving the agent even if unhappy.
The common arguments agents give these days include “homes do not need to be staged” and “paid marketing doesn’t help sell houses.” Although these self-serving statements are simply not true, it is understandable why some agents are willing to forego a marginal increase to their commission on the potential increase in sales price, in exchange for a significant reduction, or elimination, of the cost and risk associated with an expired listing.
In fact, over the past 15 months many agents have been shying away from investing much money in their listings due to the current environment of high interest rates and significant out-of-state migration. Instead, they are telling clients that they should sign a listing contract whereby the agent will keep the listing a secret from everyone except that agent’s buyers, or clients who are working with other agents in that agent’s particular office (this is often referred to as a “pocket listing” or “office exclusive”). Alternatively, some agents are merely putting the home on the MLS with little preparation, no (or very low quality/cheap) staging, and virtually no paid marketing.
Not surprisingly, this laissez-faire approach often becomes a self-fulfilling prophecy. After months of frustration, many sellers end up letting the listing expire unless they give in and accept a low offer.
To make matters worse, some sellers’ actions also contribute to why their homes are not selling. Fearing they may not get the price they want, sellers are reluctant to take steps necessary to maximize the sales process because the home may not sell. For example, sellers may decide not to pay for any touchup, or to not move their excess belongings into the garage or storage. Similarly, they may not want to inconvenience themselves with a lot of showings, so they restrict access to the property and require advance notice for appointments.
The good news for those agents and sellers who commit to doing everything right is that their properties will stand out amongst the poorly prepared competing homes. And, because there are fewer ads out there, homes that are advertised will be more noticeable.
Bucking the trend, DeLeon Realty has decided to increase the amount of free prep work and advertising that we do for each of our listings. Additionally, we will continue to offer our sellers high-quality staging at absolutely no cost to them during the entire listing period. Similarly, we will continue to cover the cost of the property inspection, pest inspection, and Natural Hazard Disclosure report, as well as no-cost legal services (provided by the Integra Law Group)1 in most cases. In all cases, clients who list with us will receive all of these services at absolutely no additional cost. Even if the home doesn’t sell, we will not be reimbursed for any of the above-mentioned services.
The average days on market has increased from 16 days in the first quarter of 2022 to 33 days in the first quarter of 20232, but well prepared, staged and marketed homes continue to do well.
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1. The original inhabitants of modern-day Atherton were the Muwekma Ohlone tribe, who came across the frozen tundra and the Siberian ice bridge during the last ice age. There is no doubt that they enjoyed their new home’s warmer weather!
2. Similar to the Muwekma Ohlone tribe, in the 19th century, San Franciscans started to migrate to what is now Atherton to escape cold weather (albeit the chilly San Francisco summers rather than the harsh Arctic winters). These wealthy San Franciscans purchased large pieces of land in Atherton to enjoy the near perfect weather − especially in the summer. The pace of this migration down the peninsula intensified with the gold rush of 1849 and has continued ever since.
3. In the late 1800s, what is now Atherton was known as Fair Oaks. In the 1920s, neighboring Menlo Park wanted to annex Fair Oaks but there was significant resistance from some prominent residents that wanted to maintain Fair Oaks as a purely residential area. Representatives from both Menlo Park and Fair Oaks rushed to Sacramento to file the required paperwork, but the Fair Oaks delegation was faster. However, they found out the name Fair Oaks was unavailable because it was already being used by another municipality.
4. Given the unavailability of the name, the town was named in honor of Faxon Atherton, a New Englander who originally started trading cigars, perfumes, shoes, and other refined goods on the west coast of South America. Eventually, he realized that he could make a fortune selling a variety of supplies to the thousands of gold prospectors that migrated to California in search of riches. To this day, three of the town’s most elegant streets are named after Faxon’s daughters: Alejandra, Isabella, and Elena.
5. In 1863, the railroad finally reached Atherton, which made it far easier for people to travel down the Peninsula from San Francisco. Subsequently, the number of wealthy San Franciscans who purchased summer homes in Atherton increased significantly.
6. James C. and Mary Flood soon joined other wealthy families, such as the Faxons and Selbys, in what was becoming one of the finest communities in California, if not the entire country. James Flood first started to amass his fortune thanks to a successful saloon! After years in hospitality, Flood learned much about the wealthy customers he encountered. Shortly thereafter, Flood began trading in silver stocks and profited greatly from finding the Comstock Lode, the largest silver discovery ever in America. He continued in a variety of businesses, including the Nevada Bank, which eventually merged into Wells Fargo Bank.
Flood acquired a large piece of land east of Middlefield Road and south of Marsh Rd. where he built a grand home often referred to as the Wedding Cake mansion on his estate, which was known as Linden Towers. Eventually, this elaborate home was demolished and the land became what is now the highly desirable Lindenwood neighborhood. The most prominent mementos of the original Flood estate are the perimeter brick wall and grand gates along Middlefield Road.
7. Charles Holbrook came to Atherton nearly broke in 1850, yet he started the Holbrook, Merrill & Stetson hardware store. He watched the growth of the town over the 60 years that he ran his store. In 1958, Olive Holbrook-Palmer donated 22 acres to Atherton, a site we all know and love as Holbrook-Palmer Park.
8. The famous photographer Ansel Adams’ grandfather, William James Adams, ran a lumber mill and boat building business until both were destroyed by fires. Perhaps Atherton’s beauty inspired Ansel’s love of nature and photography.
9. Atherton is consistently ranked as the most expensive zip code in the entire United States. Recently, the median cost of a home eclipsed the $10 million mark – a first in the United States. According to a study published by CNBC in 2022, the top ten most expensive zip codes in the United States were:
10. Thus far in 2023, Audrey Sun and I have already sold two buildable lots in Atherton for $25 million each. There is no doubt that these sites will become grand estates in only a matter of a few years.
Recently, there has been a premium placed on oversized lots of two acres or more. We expect to see more homeowners acquire neighboring properties and merge the lots to take advantage of this arbitrage situation. Our attorneys can help merge the lots if the buyer of one of our listings so desires1
11. Over the past 10 years, Atherton has developed an international reputation as one of the finest enclaves in the entire world. We have shown a $50 million home we currently have listed on one of Atherton’s finest streets to many families from Mainland China, Hong Kong, and India, as well as the Middle East and Europe.
Many of these buyers have mentioned that Atherton has been developing a gilded reputation around the world. Audrey’s fluency in both Mandarin and Cantonese has proven advantageous on many occasions.
12. Atherton is also known as one of the most builderfavorable elite towns in Silicon Valley. Generally, the permit process runs smoothly, there are relatively few restrictions on the architects’ vision, and the restrictions on the size of homes are quite generous compared to other towns, such as Woodside and Palo Alto. Interestingly, these homeowner-friendly policies have contributed to Atherton’s remarkable appreciation because builders and investors snatch up all of the “worst houses on the block” and replace them with modern masterpieces. This cycle has fueled Atherton’s price appreciation, which has significantly outpaced most other towns.
There is not enough housing in California—a fact that contributes to this area’s high prices and price stabilityeven in a bad economy. Understandably, many are pushing to increase the amount of housing, especially affordable housing, throughout the state. While this goal is certainly laudable, the implementation of certain measures that seek to increase housing density have met with a great deal of resistance. Although some argue that opponents to these measures are merely resorting to “Not-In-My-Backyard” thinking, others admit that there are legitimate issues related to traffic congestion, parking, and safety that must be considered.
The three most often discussed, and controversial topics related to housing density are Proposition 9, Proposition 10, and the “Builder’s Remedy.”
On September 16, 2021, Governor Gavin Newsom signed SB 9 into law in an effort to increase housing production, streamline the permitting process for new construction, and increase housing density. This law took effect January 1, 2022.
Under this new law, local jurisdictions must ministerially approve two types of projects if certain basic and objective criteria are met. These types of projects are:
1. Splitting a single family residential lot (RD-1 to RD10) into two lots (a.k.a., an Urban Lot Split); and
2. Adding a second dwelling unit in areas zoned for only single family residences.
Taken together, local jurisdictions are generally required to allow owners of land that currently contain a single family house to split the lot and build a duplex on each half. Thus, there would be four housing units where one had previously stood.
To prevent developers and speculators from taking advantage of these new rules, there are specific provisions that include, among others:
1. The property cannot have been rented within the past 3 years;
2. The owner must confirm that they have the intention of living in one of the properties for the next 3 years;
If an application fits within the contemplated criteria, then the local jurisdiction would not have the power to deny the permit even if it would otherwise violate the town or county’s zoning rules.
California Senate Bill (“SB 10”)
SB 10, which was passed and enacted concurrently with SB 9, takes the concept of increased housing density to an entirely new level if the parcel is in a “transit-rich area” or an “urban infill site.”
Under SB 10, local governments are given a streamlined process to rezone certain areas to allow for up to 10 units where there may have been only one before. This is intended to eliminate, or greatly reduce, the amount of delay that the city and developers would face from expensive legal appeals that would take several years or even a decade to resolve.
For example, this rezoning could take effect without the delay and cost often associated with California Environmental Quality Act (“CEQA”) compliance. While SB 10 does exempt towns and other governmental units from CEQA litigation, it does not relieve the project developer of CEQA compliance, so the overall benefit may be limited.
The “Builder’s Remedy”
Perhaps the most controversial and feared legislation is Government Code section 65589.5(d)(5), more commonly referred to as the “Builder’s Remedy.” The Builder’s Remedy is a provision of California’s Housing Accountability Act that prohibits jurisdictions that are not in compliance with California’s Housing Element Law from denying building applications based on a finding that the project is inconsistent with that jurisdiction’s zoning ordinances or general plan.
Put another way, the State of California is usurping a local jurisdiction’s ability to reject projects based on local zoning rules if the jurisdiction is out of compliance with the State Housing Element Law. Thus, a builder may be able to propose the construction of a multifamily building in a neighborhood filled with high-end residential single family homes if:
• The project will consist of residential units only or it will be a mixed-use building with at least twothirds of the square footage being designated for residential use or it will be for transitional or supportive housing; and
• The project meets specific affordability thresholds:
• 20% of the total units are sold or rented to lowerincome households;
• 100% of the units are sold or rented to moderateincome households; or
• The project is an emergency shelter.
Naturally, many may wonder whether the town in which they live is compliant with the State Housing Element Law such that the Builder’s Remedy provisions would not apply. Here is a summary of the various towns and cities that receive this publication (based on information found at https://www.hcd.ca.gov/planningand-community-development/housing-open-datatools/housing-element-review-and-compliance-report).
Taken together, SB 9, SB 10 and the “Builder’s Remedy” could result in substantially more housing units being built on lots that used to contain only one single family home. The end result of this is that the value of buildable lots, and large lots with dilapidated homes, will likely increase whereas the overall property values in those areas may decline. This is particularly true in very affluent areas.
For years, clients have asked my designers, handymen, licensed contractors, and me what improvements they can make that would enhance the value of their home significantly more than the cost of the improvement. Most of the time, these questions were asked just before the homeowner is about to sell their property; on the other hand, some savvy homeowners figure they should make these improvements now so they can enjoy them until they are ready to sell. Occasionally, people would ask me whether they would get their money back from upgrading their electric system or adding solar panels.
In the past, I generally cautioned against significant improvements to the major systems of the house because most buyers fail to appreciate the importance of those types of costly enhancements. However, as towns continue to enact ordinances banning gas appliances and we shift to electric cars, there will be intensifying scrutiny over the electric capacity of the home.
By way of example, many are finding that the 100amp panel that used to be sufficient for a small home in Palo Alto or Menlo Park simply can’t handle the increased demands placed on it. Electric cars, water heaters, ovens, clothes dryers, and heating systems all use a lot of electricity. As a result, more and more buyers are asking if homes have electric vehicle chargers or, at a minimum, whether the home’s electric system could support them.
Last winter’s severe storms have also played a role in people’s thinking. Strong winds and rains resulted in power outages that lasted for several days in some areas. This demonstrated another advantage to solar energy with high-capacity back-up batteries, such as the Tesla Powerwall. These whole-home batteries are continuously charged by solar panels during the
day when the sun is out. Additionally, they can draw power from the electric grid when rates are low, such as overnight. When the power goes out, these batteries prove to be incredibly useful.
Now, when people ask me about improvements that they can make to enhance the value of their home for a sale many years down the road, I go beyond merely suggesting adding square footage, increasing the bedroom and bathroom count, and upgrading the landscaping. I also suggest considering solar power, back-up batteries, and upgrading the overall capacity of the home’s electric system.
On the other hand, I have received feedback from clients that they have been less happy with their decision to put in large-capacity backup generators. Similarly, a cursory review of people’s opinions on Yelp tends to show a general lack of satisfaction with these backup systems. If you have any personal experience with either whole-home back-up batteries or generators, we would love to hear your opinions about their efficacy, especially during the power outages we experienced last year. Please email MichaelR@DeLeonRealty.com.
ATHERTON LIVING ON ~1 ACRE
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• 3 Bedrooms
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1120 MAY BROWN AVENUE, MENLO PARK $3,988,000
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BRIGHT AND SPACIOUS WITH GOLF COURSE VIEWS
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300 SAND HILL CIRCLE, #103, MENLO PARK Offered at $1,998,000
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MODERN LIVING IN BARRON PARK
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• 5,545 Sq. Ft. Lot
• Extensively Remodeled
• Open Floorplan
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3887 LA SELVA DRIVE, PALO ALTO Offered at $3,500,000
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