
SF residents get a shock: Someone bought their street - mudil
http://www.sfchronicle.com/bayarea/matier-ross/article/Rich-SF-residents-get-a-shock-Someone-bought-11738236.php
======
mortenjorck
This is incredible because this is exactly the same pattern of private-
infrastructure rent-seeking whose costs are normally borne principally by the
working poor: A highway becomes privatized and now you have to spend more
money commuting to your minimum-wage job. Your city's parking meters become
privatized and now you net less from your gig-economy housekeeping work.

Only this time, it's a middle-class couple doing the same to one-percenters in
one of the most elite neighborhoods in the country. Clearly, their predatory
scheme must be stopped!

~~~
kbenson
> Only this time, it's a middle-class couple doing the same to one-percenters
> in one of the most elite neighborhoods in the country. Clearly, their
> predatory scheme must be stopped!

Well, it should, right? If you don't support the practice when it targets the
poor, presumably you shouldn't with the rich either. I too find the irony
entertaining, but that doesn't mean I'm not hoping for a sane outcome. I would
also like to see the Cheng's make some money, since they did put work into
this project, just not an extraordinary amount that gouges the homeowners.

Given SF property prices and that it was bought at an auction, selling for
$300k-$400k would net them a nice profit, and is _well_ within the means of 35
wealthy residents pooling their means.

~~~
mikeash
It's predatory when the state seizes property using eminent domain and then
gives a sweetheart deal to a private company to run the tolls on the road they
build there.

It's not predatory when private property gets seized to pay for thirty years
of back taxes and then sold to the highest.

These are two quite different practices.

~~~
kbenson
> It's not predatory when private property gets seized to pay for thirty years
> of back taxes and then sold to the highest.

As I said in a different reply, I think it's highly dependent on situation,
and facts that may not have been presented. Was the money for the taxes paid
in good faith by the residents but not delivered to the city for some reason?
Was fraud involved based on some management company? Was the city informed by
the accountancy at some point that they were no longer a valid recipient of
tax requests and did not follow up (and is it required to act in good faith in
situations like that)? Given the low cost of the taxes and the relative wealth
of the residents, it's not impossible that they paid a large lump sum to some
management company to just deal with it for the next 50 or 100 years and
something went wrong.

Details like those are what would swing my opinion in this case. The residents
seem wealthy enough that there's little reason for them to let it slide this
long, but if they had reason to believe it was being taken care of and that
there tax responsibilities were paid, I think that puts the situation in a
different light. We just don't have that information, one way or the other.

~~~
mikeash
I don't know that those details really change the specific question of
property ownership here. I would think that if it was the fault of a
management company, then the management company would be on the hook to make
things right, for example by paying to buy back the street. But I don't see
how a management company screwing things up makes a real estate purchase by a
third party predatory.

~~~
kbenson
I'm not specifically talking about whether it's predatory or not, but whether
the correct procedures were followed and if they weren't, whether that would
have allowed the residents a chance to rectify the situation if alerted.

I wasn't really taking the predatory part of the original statement all that
seriously so wasn't addressing it specifically, and wasn't paying close enough
attention to your initial reply to note that you were specifically addressing
that aspect, so that's my mistake.

~~~
mikeash
It sounds like the city and the buyers followed the correct procedures. The
failure was with the HOA or with whatever entity the HOA delegated this
responsibility to.

If a management company screwed up, the HOA may be able to get compensation
from them. If it was the HOA itself then the residents probably have little
recourse, since ultimately they _are_ the HOA.

------
raldi
Buried lede: All those very valuable privately-owned parking spaces weren't
even being _assessed_ for anything close to their fair share of property tax.

If you owned just _one parking space_ on this street, how much do you think
you could rent it out for on Craigslist?

This land has 120 parking spaces. And it was being assessed at $14 a year in
property tax -- not just the parking spaces, but _all_ of the common property.

~~~
muzz
Likely due to state law, ie Prop 13

~~~
gman83
Good podcast about Prop 13 from Malcolm Gladwell:

[http://revisionisthistory.com/episodes/11-a-good-walk-
spoile...](http://revisionisthistory.com/episodes/11-a-good-walk-spoiled)

------
resu_nimda
Unsurprisingly neither side in this story seems deserving of much sympathy.
Old-money NIMBYs vs. new-money opportunists. "I just love SF so I wanted to
buy a part of it." The potential extortion of wealthy homeowners via legal
technicality just happened to be a bonus of this great piece of real estate!

~~~
mikeash
You see extortion, I see charging a fair market rent for use of their land.

Note that the new owners are not threatening to cut off access to the houses.
I'm pretty sure that would be illegal. They are merely threatening to _charge
for parking_. Parking space is valuable and something people _should_ pay for.

Edit: I also want to say that having your property auctioned off after you
fail to pay property taxes for _thirty years_ is hardly a "technicality."

~~~
resu_nimda
Whether it's technically legal or not is immaterial, it's still unsavory
opportunism in my book. They have added no value, they're not looking to add
value.

~~~
npsimons
> They have added no value, they're not looking to add value.

Which is basically property ownership/landlordship in a nutshell. Not that I'm
disagreeing with you, just pointing out it's something we accept all the time
already.

~~~
resu_nimda
Yes but not all landlords are the same. Some put time and effort into
maintaining the property and making improvements. I would consider that adding
value.

Like everything else, there's a spectrum, and I find the couple described in
the article to be on the extreme "slumlord" end, except even more obnoxious
because they are masquerading as nice gentle good samaritans.

~~~
icebraining
Why do you assume they won't be putting time and effort into maintaining the
property and making improvements?

In fact, they already did, by paying the debts of the property.

------
owenversteeg
Oh man, every part of this story is great. The Asian couple buying a street
that was only salable to whites for most of SF's history, the fact that the
fancy gated community didn't pay $900 in taxes, and the $90k price.

I read that Feinstein owned a home there. They should set up a website taking
donations: every dollar donated would increase Feinstein's annual parking
costs by a dollar.

In case people don't know who Feinstein is: she co-sponsored PIPA, is a
continuing supporter of the PATRIOT Act and SOPA, FISA, warrantless searches,
and sponsored a bill that would have criminalized all forms of strong
encryption.

[edit] I have a lot of friends with strong political views, from hardcore
Hillary supporters to Communist/Socialists to the far right, and literally all
of them strongly dislike Feinstein for various reasons. Meanwhile, she keeps
getting elected easily and set a record for the largest amount of votes for a
Senator. In the last election, she ran against a woman who doesn't even have a
Wikipedia page, who got 37% of the vote.

~~~
jff
> I read that Feinstein owned a home there. They should set up a website
> taking donations: every dollar donated would increase Feinstein's annual
> parking costs by a dollar.

I'd donate to that, as long as the money went to the ACLU and/or the EFF.
She's also a notorious gun-grabber despite having been one of the few people
in the city of San Francisco to have a concealed carry permit (I don't
remember if she still has it or not)

~~~
yellowapple
"I don't remember if she still has it or not"

I wouldn't be surprised if she still does. I also wouldn't be surprised if she
still employs armed bodyguards.

~~~
batbomb
She does, but most those homes are empty 80% of the time. They have security
guards that go around to the homes just to look for people who break into
those homes to squat, which is an actual problem. I knew a guy living in one
of the homes on that block for free just so that somebody would be around.

~~~
jff
You're thinking of security guards, not bodyguards. yellowapple was pointing
out that she has armed bodyguards near her when she's out and about, yet she
advocates for disarming the regular folk like us--"one law for me, another for
thee"

------
xfour
This is hilarious but there's no way in hell they'll be able to extract rent.
They'll get their 90K back and a note from the mayor or something and the
Presidio Hieghts owners will have to pay up in donations to Ed Lees campaign
or the local district supervisor.

~~~
cylinder
... this is very basic and fundamental property law. They now own title to the
common areas. No mayor is going to be able to overturn property laws which
have developed over hundreds / thousands of years.

~~~
londons_explore
Rich and powerful people have a way...

There'll be an apology for "accidentally" doing the paperwork wrong, which a
judge will say nullifies the sale.

Alternatively, the couple will just be sued for lots of random things, and
will run out of cash defending themselves, forcing them to declare bankruptcy
and sell the property.

~~~
nugget
A handful of "rich and powerful" people lost out here. Orders of magnitude
greater numbers of "rich and powerful" people rely upon unassailable
precedents of property law to "take advantage" of less sophisticated people
every day. Nobody is going to risk overturning or weakening those precedents
so that the first handful can save a couple million dollars. Just like most
ballot initiatives in California, these battles are rarely "rich versus poor"
but rather "rich versus rich".

------
hmahncke
This street is immediately to the west, as you come out of the Presidio
(Masonic Gate). It looks exactly like an ordinary public street - there's no
gate or anything (although there is a sign posted). I once tried to walk in
there, to gawk at the houses. Right at the entrance, where the private street
meets the public street, I was stopped by a guard who told me this was a
private street, and I wasn't permitted to enter.

So I kind of hope the new street owners let people go for a walk in there...

~~~
pm24601
Maybe allow tour buses for a fee.. :-)

------
rwmj
This sounds familiar. In the UK we have a feudal ownership system for some
flats/houses called ‘leasehold’, where someone other than the owner of the
flat owns the ground.

I once owned a flat where the leasehold was sold off (without my knowledge)
for just £500. Unfortunately the new owner of the ground started charging me
for ridiculous fees, each one hundreds of pounds for nonsense things. (This is
entirely legal). I was _very_ lucky that in the crazy go-go London housing
bubble of the 2000s I was able to sell the flat to a less discerning buyer (or
someone prepared to ignore his solicitor). But not owning the land under or
around your home can be terrible.

~~~
thaumasiotes
> In the UK we have a feudal ownership system for some flats/houses called
> ‘leasehold’, where someone other than the owner of the flat owns the ground.

What makes such a system "feudal"? It sounds like the normal organization of a
condo building, for instance.

~~~
wahern
A condominium is completely different from a leasehold. Perhaps most
importantly, a leasehold is for a fixed term of years. That means that whoever
improved the property understood that the resale value on their improvements
would be less; increasingly so as the end of the lease approached. It's
basically not much different than any other kind of lease, such as a lease of
an apartment. In both cases there are rules that control, for example, how a
landlord must compensate you for improvements to the property (i.e. building a
house on the land, or modernizing the wiring of an old apartment) that he
would benefit from after the termination of the lease.

Residential leaseholds are less common in the United States than in Common
Wealth countries because of the different political, legal, and housing
development histories. But they certainly exist in the U.S.

By contrast, each condominium in a building is usually held in fee simple--
perpetual, absolute ownership--except that there are always a common set
easements and servitudes related to the obvious fact that each condominium is
intrinsically and substantially reliant on the other condominiums--access to
supporting structures, plumbing and electrical risers, etc. Shared spaces are
held in common by all the condominiums, and title in those shared spaces can't
(for obvious reasons) be severed from the title in your condominium. In other
words, you can't sell your condominium but keep your title to the swimming
pool, even though both titles are fundamentally distinct. Furthermore, on top
of all of this are contracts that mediate how the interdependent obligations
are to be carried out. Basically, a condominium is a pre-packaged set of
titles and contracts that both legislation and courts recognize as a holistic,
interdependent set of property rights when mediating disputes. Leaseholds, by
contrast, are far simpler.

Sometimes you can have a situation where a condominium is constructed on
leased land. There's a huge residential condominium in San Francisco's
Chinatown like this. These condominiums sell for substantially less than
market prices because, once the lease is up, there's no telling how much the
land rent will increase or if there might be a forced sale of the condominium
to the land owner. I imagine there are lots of condominiums like this across
the country. It seems like a good way for a developer to continue to extract
rent while maximizing an upfront return on investment.

OTOH, buyers are especially wary of purchasing homes utilizing unfamiliar
legal instruments; cities are likewise wary of permitting such developments;
and banks often won't finance the purchase of such units. So these kinds of
properties sell at more of a discount than you would theoretically expect,
especially in the United States.

There's another kind of shared ownership of residential buildings called
tenancy in common (TIC). Usually you only see this happen when a deceased
landlord's estate is passed to multiple heirs. Because San Francisco restricts
the number of condominium conversions that can occur each year while
simultaneously restricting new developments, developers began doing TIC
conversions as an end-run around city planners. As these became more common
and more marketable, some local banks began to finance the purchase of these
units. AFAIK, San Francisco is the only housing market in the country where
you can get a mortgage from a bank to purchase a TIC unit without any other
form of security. They're a good option for home ownership in the city.
There's some additional legal risk, but my guess is that compared to the
typical hassles you see with small condominiums, worth it given the discount.

------
Xoros
So a bunch of really wealthy people are grinding because someone might charge
them for something they add for free for years ?

I'm sure the majority of them earned their money by giving away free stuff
too. Yeah, right...

~~~
randyrand
I think the issue is that someone can by the street you live on with no notice
from the government

~~~
blackguardx
They didn't pay property taxes for 30 years.

People have had land sold out from under them with much less notice. In
Colorado, there is a recent get-rich-quick scheme of buying deeds to trailers
when the owners fail to pay their taxes. The tax bill is often less than
$1000, accrued over 5 years or so. The trailers' owners have the same excuses:
they didn't get the tax bill. Many people come out to defend this system
because "the law is the law."

Before we spend too much energy being outraged about this street serving the
upper crust, I think we should fix this problem for people at the margins of
society.

~~~
randyrand
Why not fix this issue for everyone? And stop being over-the-moon because this
happened to rich people?

If your taxes are not being paid correctly, you should be notified. Your home
street shouldn't just be put up for sale and sold to the highest bidder
without your knowledge.

~~~
blackguardx
I agree. Lets fix it for everybody. I wish more people with your point of view
would comment when it happens to marginalized people, though.

~~~
randyrand
I don't see anyone commenting in zealous joy when it happens to poor people.
So at least there's that.

Either its okay for everyone, or okay for no one. It's hypocritical otherwise,
and gives us little moral footing to stand on.

Sure, maybe its true rich people usually do this to poor people. But it's
_different_ rich people. Being happy because some rich people are getting
screwed over because _other_ rich people are assholes is _incredibly_ stupid.

------
ritchiea
I wonder if any of the people objecting to the sale or the possibility of
paying the new owners for parking spaces describe themselves as
"libertarians."

~~~
rm_-rf_
huh? I would not imagine any libertarians would want to overturn the sale as
it would completely defy the idea of property rights.

It seems like the residents of this neighborhood are old money NIMBYs and
either [ex-]Democrat politicians or donate quite a bit to Democratic
politicians.

~~~
thaumasiotes
> I would not imagine any libertarians would want to overturn the sale as it
> would completely defy the idea of property rights.

There are certainly libertarian arguments to be made for honoring the sale.

But I think it's going a little far to claim that overturning a process in
which the government assesses a tax on the ownership of your property, doesn't
inform you that you owe it, and later sells that property on your behalf
without notifying you, "would completely defy the idea of property rights".
You're talking about a contract transferring ownership of property, to which
the owner of the property is not a party.

You could make a much stronger libertarian argument that the existence of a
property tax in the first place "completely defies the idea of property
rights".

~~~
quuquuquu
I do think most libertarians would agree that the city agents, who have sold
the street's rights to someone else due to an arbitrary breech of contract,
have acted completely in bad faith and have thus nullified their contract with
the new buyer

What the city should have done is physically approached the landowners and
done a large public outreach to raise the very small public tax due... before
seizing it and selling it to anyone. And now the person who has purchased it
wants to seek rent, as if their action is somehow beneficial to anyone but
themselves. And the city's argument is that arbitrarily selling community
property despite poor serving of papers is how business should continue?
Yikes.

------
pm24601
They could allow the homeless trailers to park on the street. That way the
homeowners could understand the true impact of the high cost of bay area
living.

------
maxerickson
Here's the auction record (it lists the parcel number and other information)

[https://secure.bid4assets.com/mvc/auction/647729](https://secure.bid4assets.com/mvc/auction/647729)

It'd be interesting to see if there are any restrictions or covenants attached
to the deed.

------
hprotagonist
If London and Amsterdam can have houseboats, surely San Francisco can have
tiny houses on trailers listed on AirBnB.

~~~
samstave
Actually this is a pipe dream of mine - is to buy a barge and built a tiny
house with years and garden on it. Allow for other barges to link up like a
tiled map with standard interconnects.

Leverage solar and teals pattents... I want to take a single tesla drive
motor, attach a propeller to it and have a tesla battery pack as the primary
source of power for the residence.

~~~
billmalarky
My god man.... you want to create The Raft from Snowcrash?

~~~
hprotagonist
no no. I'm down for driving a zode through it hunting pirates, though!

Patri Friedman is the guy who wants to make the Raft.

------
yellowapple
I recall seeing such a street right in the heart of SF (I don't think it was
that exact street, though) on Zillow when I was scoping out the feasibility of
actually living in the Bay Area. No building rights (because it's a street),
yet it was somehow for sale independent of the other properties on that
street.

I chuckled at the thought of buying that street and charging for access rights
(maybe even setting up a little guard shack and a gate), but then moved on to
more productive ventures. Fun to know that I wasn't the only one thinking
along those lines.

~~~
jobead
Heh, saw this too, my whole office got a kick out of it:

[https://www.zillow.com/homedetails/2094740884_zpid/?fullpage...](https://www.zillow.com/homedetails/2094740884_zpid/?fullpage=true)

~~~
yellowapple
Haha, yep, that's the one.

I love the suggestion of ripping out the concrete and selling bits of it as
souvenirs to fund the pouring of fresh concrete. I'd personally extend it into
a monthly farming operation.

------
pm24601
> “Ninety-nine percent of property owners in San Francisco know what they need
> to do, and they pay their taxes on time — and they keep their mailing
> address up to date,” said spokeswoman Amanda Fried.

See there is the problem ... we are talking about the other 1%

------
randyrand
The amount of glee in this comment thread because this is happening to rich
people is interesting. I had no idea there was so much classism on hacker news

Sure, maybe its true its usually rich people that do this to poor people. But
it's _different_ rich people. Being happy because some random rich people are
getting screwed over because other rich people are assholes is incredibly
stupid.

------
revelation
120 parking spaces, rent for each at $100/month (which is still too cheap for
the space they cover), sounds like a good deal.

~~~
CalRobert
Donald Shoup would be proud. Free parking is generally a menace to cities.

~~~
ImSkeptical
I'm not sure that holds true for all streets, especially a private street in a
residential area. Suppose there were no problems with parking before - what do
you get by introducing a charge suddenly?

------
stretchwithme
Maybe they should put housing on it. Keep the streets as they are (free for
residents) but sell the air rights to a developer.

That should make the other residents happy.

But maybe that would take a zoning change.

~~~
toast0
Housing is very unlikely to fly, the adjacent property owners almost certainly
have access rights through the common areas, and the shape of the common areas
isn't likely to accommodate any new residential structures with proper
setbacks and what not. Zoning changes to allow for new structures would be
adversarial to say the least.

~~~
Veratyr
> Keep the streets as they are (free for residents) but sell the air rights to
> a developer.

I think OP is basically suggesting turning the street into a tunnel by
building units _above_ the street.

~~~
stretchwithme
Exactly.

Although I think this is useful form of property, I also think there needs to
be a way to value, recognize or sell the view or open space that people think
they are getting when they buy a property. A beautiful view is worth something
and somebody shouldn't be able to take it away arbitrarily. But you should
also be able to sell your right to it so someone can build. And the same
should apply to the expectation that a 100 story building will not be
constructed next to your one story house.

It's inevitable that a city will get denser as time goes on. If I had to
choose between developers convincing city officials to let them build or their
having to buy the rights to do so from property owners, I'd go with the
latter.

[http://www.nytimes.com/2013/02/24/realestate/the-great-
race-...](http://www.nytimes.com/2013/02/24/realestate/the-great-race-for-
manhattan-air-rights.html)

------
justboxing
> Until a 1948 U.S. Supreme Court ruling banning the enforcement of racial
> covenants, homes in Presidio Terrace could be purchased only by whites.

Wow.

------
politician
It's a private street that's blocked by a security guard, right? Sell tours.

------
hmahncke
Another buried lead: >> It’s something that the owners of all 181 private
streets in San Francisco are obliged to do. >>

181?

------
tnhaoe7843ntdnt
I love how most comments here are debating the merits of public vs. private
parking. Only in California. In other parts of the world, people with $35M
mansion park in their _fucking garages_!

~~~
ww520
They have garages, for sure. The street parking are extra spaces. Still they
can be rented out to non-residents.

------
iokevins
Google Street View:
[https://www.google.com/maps/@37.7887836,-122.4607777,3a,75y,...](https://www.google.com/maps/@37.7887836,-122.4607777,3a,75y,106.62h,86.25t/data=!3m7!1e1!3m5!1sMLoMuNRqIX7-GMjlzrzpng!2e0!6s%2F%2Fgeo2.ggpht.com%2Fcbk%3Fpanoid%3DMLoMuNRqIX7-GMjlzrzpng%26output%3Dthumbnail%26cb_client%3Dmaps_sv.tactile.gps%26thumb%3D2%26w%3D203%26h%3D100%26yaw%3D108.895676%26pitch%3D0%26thumbfov%3D100!7i3328!8i1664)

Note: it seems just Street View displays just a section of the street.

------
sachamps
News from the United States lead to immediate head-shaking === Probability 30%

------
whipoodle
Residents' reaction as eye-rolling as it is predictable.

------
sitkack
I have such a schadenfreude grin right now! If the gate is on their property,
charge rent for that at least! Or by the car passing through it.

~~~
randyrand
I really don't understand this sentiment.

Sure, maybe its true rich people usually do this to poor people. But it's
_different_ rich people. We know nothing about the people that live on this
street. Being happy because some random rich people are getting screwed over
because other rich people are assholes is incredibly stupid.

~~~
sitkack
> incredibly stupid

I am sick and tired of those in power wanting "fairness" that always balances
in their favor.

They will in slightly inconvenienced at most. They will be pissed because they
are getting screwed in way that reminds them of being on the receiving end of
power. I can guarantee you that everyone of those rich people have
disproportionally screwed someone. Directly or indirectly. If they want their
street back, buy it back! Their power comes from their money, wield it.

