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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 pa

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 9y ago
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."
- lemoncucumber 9y ago
  See also: http://usa.streetsblog.org/2017/07/26/if-americans-paid-for-the-parking-we-consume-wed-drive-500-billion-fewer-miles-each-year/ http://usa.streetsblog.org/2017/07/26/if-americans-paid-for-... The expectation that parking should be cheap or free is bizarre when you take a step back and think about it. I don't expect the government to provide massively subsidized self-storage spaces, yet I do expect massively subsidized places to store my private vehicle.
  - mikeash 9y ago
    Exactly. I'm a surburban car user, but I still think the expectation of free parking is harmful to all of us. Why do we get to park for free on government land?
    - dawnerd 9y ago
      > Why do we get to park for free on government land? Because presumably, your tax money is already paying for it.
      - mikeash 9y ago
        Right, except it's not my tax money specifically, but all of our tax money, even tax money from people who don't use street parking. Free use of government property is a great thing when it's a public good, but parking is not one of those situations.
        inetknght 9y ago
        Just because you don't use it doesn't mean it's not a public good. If tax money built the parking spot and tax money maintains the parking spot, then why should the government get extra income from the parking spot? Is my tax burden alleviated when I pay to use this parking spot?
        mikeash 9y ago
        The whole point of charging for the parking spot would be so that they wouldn't have to use tax money to maintain it. It's not a matter of alleviating your tax burden, it's a matter of alleviating everyone else's tax burden so they're not subsidizing your car. You should pay for what you use unless there's a compelling reason for it to be subsidized, not the other way around. Roads are essential for freedom of movement and in any case are too difficult to toll on a massive scale, so it makes sense to subsidize them. Parking spaces are inessential and easy to charge for, so we should charge for them.
        sgdread 9y ago
        Nobody is subsidizing your car: as a car owner, you already paid 1) sales tax; 2) yearly registration; 3) yearly property tax; 4) taxes included in gas. Why car owners should be double-triple taxed?
        mikeash 9y ago
        Those don't come close to covering it all. Especially since I don't pay any (4). Paying to store your car is not a "tax" so it cannot result in being double-taxed. It's a standard payment in exchange for use of property.
  - owenversteeg 9y ago
    I agree with that, but that article says the _average_ American parking space costs six hundred dollars PER YEAR. How does that make any sense whatsoever? Maybe in downtown areas in a few big cities. But that's the average for the entire country. There's no possible way that can be true.
    - i_cant_speel 9y ago
      Are you saying that is expensive? The parking in my building in a big city is over $200 per month. The extremely expensive places are going to pull up the average quite a bit.
    - randallsquared 9y ago
      In downtown areas in some US cities, a parking space might go for hundreds per month. http://dc.urbanturf.com/articles/blog/the_cost_of_a_parking_spot_in_dc/8348 http://dc.urbanturf.com/articles/blog/the_cost_of_a_parking_...
    - mikeash 9y ago
      Why can't it be true? Land is expensive, road construction is expensive, road maintenance is expensive. $600/year to maintain ~200ft^2 of road seems relatively reasonable to me.
    - deleted 9y ago
      [deleted]
    - wokky 9y ago
      ...estimates that the annualized cost of land, construction, maintenance, and operations per parking space in the U.S. comes out to $600 [PDF]. I've heard it said, although I can't find a cite right now, that the construction of an underground parking complex may cost $40,000 per space. You can see how that sort of thing would push the average up a lot. You can also adjust "annualized costs" a lot by changing assumptions about useful lifetime. In practice, many American suburban parking lots are maintained very poorly and probably come out very cheap per space. The PDF linked from the article does show more detail than the $600/year figure. While some categories cost a little less than $600/year, several categories cost a lot more, so the average gets up there even though the expensive kinds are rarer.
- resu_nimda 9y ago
  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.
  - mikeash 9y ago
    Charging market rent for parking will result in more efficient use of the space.
    - abrodersen 9y ago
      Charging market river toll will result in more efficient use of the Rhine. /s
      - mikeash 9y ago
        I mean, yes, if the Rhine suffers from insufficient capacity, charging money to use it will help ensure that the existing capacity is used as efficiently as possible. For modern examples along those lines, consider the Suez or Panama Canals.
  - mrkurt 9y ago
    If they sell the spaces to people outside the block, they're adding value.
  - escherize 9y ago
    If someone owns something and rents it out, could you explain how that not provide value?
    - resu_nimda 9y ago
      I am using the term value in a more personal/human sense than a purely economic one. Most of the comments replying to mine seem to be defending this behavior based on these more technical economic arguments (understandable on HN). I'm talking about the value that is created by a person creating and doing things, rather than simply finding opportunities to arbitrage for a quick buck. It's subjective so we can agree to disagree if you find the type of behavior described in the article to be valuable.
- zitterbewegung 9y ago
  I have seen dwellings in my local area (Chicago) that you have to pay for parking on the street. I think that the event is just unusual instead of extortion.
- Allower 9y ago
  Considering the city sent the bill to the wrong address for 30 years.. yeah technicality. If this happened to you..
- dawnerd 9y ago
  Depending on the easement they might not be able to charge. I know in California some easements do allow for transitory parking. http://webcache.googleusercontent.com/search?q=cache:hQNIidICQfMJ:www.fearnotlaw.com/articles/article1872.html+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:hQNIidI... While I'd like to assume the new owners researched the deed before purchasing, I get this feeling they didn't since it was an auction and simply saw an opportunity to take advantage of wealthy people. My question is, why didn't the city just convert it into a public road?
  - wahern 9y ago
    There have been private streets and alleys up for sale like this before in San Francisco. https://sf.curbed.com/2015/10/14/9911570/unicorn-alert-san-francisco-driveway-for-sale-asks-50k Monetizing these things can be very difficult because the adjacent property owners often have very strong arguments for an easement. The laws of easements and adverse possession are highly fact based so it's not worth opining on this case without more facts. But the takeaway is that you _always_ want to have an explicit agreement with people who are using your land, and ideally you want them to pay an annual rent that you enforce, even if it's a token sum of $1.[1] Once you allow people to use your property without an explicit agreement, you open the door to either outright losing your property or losing the ability to control your property. This is a good thing because, on balance, if somebody willingly sits on their rights for a long period of time it's better that he lose out rather than permit him to, out of the blue, disrupt the settled expectations of everybody else. But it does mean that as a property owner you have to remain at least minimally vigilant. That's why these streets sell for such little money. If the ability to monetize ownership of these private streets were clear cut, you can bet that they would sell for much more at auction. I doubt this couple were the only speculators who saw this opportunity. [1] Don't think of paying a token sum as a pointless ritual. In the eyes the law, the regular exchange is objective evidence of the existence of the contract and its continuation.
    - cardiffspaceman 9y ago
      Totally arm-chairing this here.... Adverse possession seems to require an element of you know, possession. No one possessed this property except the HOA until the nice couple bought it, and then their ownership has been the opposite of notorious because they didn't want to come into the light until they had their legal ducks in a row. If the couple had been paying the taxes for the last 30 years it might come under adverse possession. If this goes in favor of the couple without limit to whatever they want to do, it would be because the auction is unreservedly upheld. I basically agree that there is some chance that at least an easement will be found to exist in favor of the HOA. The tax collector did sit on their rights to the detriment of all, including a bit of degradation of the already weak reputation of tax collectors.
- comex 9y ago
  The price they end up charging may be a “fair market rent”; it may not be. But it doesn’t have to be, because the couple effectively has a monopoly - on convenient parking for the houses that the residents already live in. You might argue that the street was always privately owned. But if the parking fees had existed when the residents were searching for a home, they could have factored them into the price, and if the result was too high, they could have easily picked another offer. Thus the parking fees would have effectively been part of a competitive market for housing. However, now that they already live there, moving out would have a significant financial and psychic cost. The limit on the price the couple can get away with charging is set by that (along with, of course, the perceived cost of alternate parking arrangements, again both financial and psychic) - not by anything related to the market value of the land they own.
  - mikeash 9y ago
    That stretches the definition of "monopoly" awfully thin. They can always park on the street a couple of blocks away and walk home, like lots of city-dwellers do. Yeah, it sucks that they've lost something they assumed they'd have forever when they purchased their property. But that's why you need to make sure that the HOA is in good shape when you buy a house that has one. Apparently nobody noticed, for thirty years, that the HOA wasn't paying taxes on its property, or that the wrong address was listed for it. Did they never have an internal audit?
spaceflunky 9y ago
While I'm glad you pointed out that that this is a shitty thing to do, I still think its a slimy thing to do regardless of whether it's done to the rich or poor. A couple things to note: (1) if the couple does win, then it only bolsters someone else's case to do something similar elsewhere. When it happens in a poor neighborhood and people are up in arms, guess which case will get cited. (2) there's no way in hell this is going to stand. there are probably mistakes that were made in not notifying all the homeowners of the sale. the homeowners are too rich and too powerful to not find some kind of loop hole. (3) that couple is in for a world of legal hurt. if they choose to fight they're going to rack up a shit load of legal bills. it's them vs 40 rich people. yes, $90k for the street and $5M in future legal bills. even if they win, they'll be buried in legal bills. And then when they do try to collect parking fees, the homeowners are going to hassle them for every dime. if the couple thinks the homeowners are just going to roll over and merrily pay them any amount of money for parking, they are sorely mistaken.
- dmode 9y ago
  My bet is that the couple is hoping that rich homeowners will pay a pretty penny to buy the land back from them
  - spaceflunky 9y ago
    That's 100% their plan, but a stupid idea. Don't pick fights you can't win. There are 40 homeowners who would rather drag that couple through legal hell out of spite than pay a $1 parking fee. And they have the wherewithal in spades to do it. Even if the couple gets passed all that, the homeowners are going to complain about every little thing. Crack in street? Fix it. Curb crooked? Fix it. Someone illegally parked? Deal with it now. Trash on street? Clean it. Leaves on street? Sweep it now. Grass too long? Mow it immediately. Don't answers these calls immediately? Get accused of negligent landlord. If the couple thought they could just kick their feet back and collect checks... I just don't know what to say...
    - softawre 9y ago
      They could drag it out, but they may all agree to give up 10k each (==400k) for a nice profit. Why pay lawyers here? Spite?
diogenescynic 9y ago
>"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! I agree, but it's hard to feel bad for the residents of that neighborhood. They're just getting taste of the type of crap that the lower and middle classes deal with every day.

mikeash 9y ago

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."

lemoncucumber 9y ago
See also: http://usa.streetsblog.org/2017/07/26/if-americans-paid-for-the-parking-we-consume-wed-drive-500-billion-fewer-miles-each-year/ http://usa.streetsblog.org/2017/07/26/if-americans-paid-for-... The expectation that parking should be cheap or free is bizarre when you take a step back and think about it. I don't expect the government to provide massively subsidized self-storage spaces, yet I do expect massively subsidized places to store my private vehicle.
- mikeash 9y ago
  Exactly. I'm a surburban car user, but I still think the expectation of free parking is harmful to all of us. Why do we get to park for free on government land?
  - dawnerd 9y ago
    > Why do we get to park for free on government land? Because presumably, your tax money is already paying for it.
    - mikeash 9y ago
      Right, except it's not my tax money specifically, but all of our tax money, even tax money from people who don't use street parking. Free use of government property is a great thing when it's a public good, but parking is not one of those situations.
      - inetknght 9y ago
        Just because you don't use it doesn't mean it's not a public good. If tax money built the parking spot and tax money maintains the parking spot, then why should the government get extra income from the parking spot? Is my tax burden alleviated when I pay to use this parking spot?
        mikeash 9y ago
        The whole point of charging for the parking spot would be so that they wouldn't have to use tax money to maintain it. It's not a matter of alleviating your tax burden, it's a matter of alleviating everyone else's tax burden so they're not subsidizing your car. You should pay for what you use unless there's a compelling reason for it to be subsidized, not the other way around. Roads are essential for freedom of movement and in any case are too difficult to toll on a massive scale, so it makes sense to subsidize them. Parking spaces are inessential and easy to charge for, so we should charge for them.
        sgdread 9y ago
        Nobody is subsidizing your car: as a car owner, you already paid 1) sales tax; 2) yearly registration; 3) yearly property tax; 4) taxes included in gas. Why car owners should be double-triple taxed?
        mikeash 9y ago
        Those don't come close to covering it all. Especially since I don't pay any (4). Paying to store your car is not a "tax" so it cannot result in being double-taxed. It's a standard payment in exchange for use of property.
- owenversteeg 9y ago
  I agree with that, but that article says the _average_ American parking space costs six hundred dollars PER YEAR. How does that make any sense whatsoever? Maybe in downtown areas in a few big cities. But that's the average for the entire country. There's no possible way that can be true.
  - i_cant_speel 9y ago
    Are you saying that is expensive? The parking in my building in a big city is over $200 per month. The extremely expensive places are going to pull up the average quite a bit.
  - randallsquared 9y ago
    In downtown areas in some US cities, a parking space might go for hundreds per month. http://dc.urbanturf.com/articles/blog/the_cost_of_a_parking_spot_in_dc/8348 http://dc.urbanturf.com/articles/blog/the_cost_of_a_parking_...
  - mikeash 9y ago
    Why can't it be true? Land is expensive, road construction is expensive, road maintenance is expensive. $600/year to maintain ~200ft^2 of road seems relatively reasonable to me.
  - deleted 9y ago
    [deleted]
  - wokky 9y ago
    ...estimates that the annualized cost of land, construction, maintenance, and operations per parking space in the U.S. comes out to $600 [PDF]. I've heard it said, although I can't find a cite right now, that the construction of an underground parking complex may cost $40,000 per space. You can see how that sort of thing would push the average up a lot. You can also adjust "annualized costs" a lot by changing assumptions about useful lifetime. In practice, many American suburban parking lots are maintained very poorly and probably come out very cheap per space. The PDF linked from the article does show more detail than the $600/year figure. While some categories cost a little less than $600/year, several categories cost a lot more, so the average gets up there even though the expensive kinds are rarer.
resu_nimda 9y ago
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.
- mikeash 9y ago
  Charging market rent for parking will result in more efficient use of the space.
  - abrodersen 9y ago
    Charging market river toll will result in more efficient use of the Rhine. /s
    - mikeash 9y ago
      I mean, yes, if the Rhine suffers from insufficient capacity, charging money to use it will help ensure that the existing capacity is used as efficiently as possible. For modern examples along those lines, consider the Suez or Panama Canals.
- mrkurt 9y ago
  If they sell the spaces to people outside the block, they're adding value.
- escherize 9y ago
  If someone owns something and rents it out, could you explain how that not provide value?
  - resu_nimda 9y ago
    I am using the term value in a more personal/human sense than a purely economic one. Most of the comments replying to mine seem to be defending this behavior based on these more technical economic arguments (understandable on HN). I'm talking about the value that is created by a person creating and doing things, rather than simply finding opportunities to arbitrage for a quick buck. It's subjective so we can agree to disagree if you find the type of behavior described in the article to be valuable.
zitterbewegung 9y ago
I have seen dwellings in my local area (Chicago) that you have to pay for parking on the street. I think that the event is just unusual instead of extortion.
Allower 9y ago
Considering the city sent the bill to the wrong address for 30 years.. yeah technicality. If this happened to you..
dawnerd 9y ago
Depending on the easement they might not be able to charge. I know in California some easements do allow for transitory parking. http://webcache.googleusercontent.com/search?q=cache:hQNIidICQfMJ:www.fearnotlaw.com/articles/article1872.html+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:hQNIidI... While I'd like to assume the new owners researched the deed before purchasing, I get this feeling they didn't since it was an auction and simply saw an opportunity to take advantage of wealthy people. My question is, why didn't the city just convert it into a public road?
- wahern 9y ago
  There have been private streets and alleys up for sale like this before in San Francisco. https://sf.curbed.com/2015/10/14/9911570/unicorn-alert-san-francisco-driveway-for-sale-asks-50k Monetizing these things can be very difficult because the adjacent property owners often have very strong arguments for an easement. The laws of easements and adverse possession are highly fact based so it's not worth opining on this case without more facts. But the takeaway is that you _always_ want to have an explicit agreement with people who are using your land, and ideally you want them to pay an annual rent that you enforce, even if it's a token sum of $1.[1] Once you allow people to use your property without an explicit agreement, you open the door to either outright losing your property or losing the ability to control your property. This is a good thing because, on balance, if somebody willingly sits on their rights for a long period of time it's better that he lose out rather than permit him to, out of the blue, disrupt the settled expectations of everybody else. But it does mean that as a property owner you have to remain at least minimally vigilant. That's why these streets sell for such little money. If the ability to monetize ownership of these private streets were clear cut, you can bet that they would sell for much more at auction. I doubt this couple were the only speculators who saw this opportunity. [1] Don't think of paying a token sum as a pointless ritual. In the eyes the law, the regular exchange is objective evidence of the existence of the contract and its continuation.
  - cardiffspaceman 9y ago
    Totally arm-chairing this here.... Adverse possession seems to require an element of you know, possession. No one possessed this property except the HOA until the nice couple bought it, and then their ownership has been the opposite of notorious because they didn't want to come into the light until they had their legal ducks in a row. If the couple had been paying the taxes for the last 30 years it might come under adverse possession. If this goes in favor of the couple without limit to whatever they want to do, it would be because the auction is unreservedly upheld. I basically agree that there is some chance that at least an easement will be found to exist in favor of the HOA. The tax collector did sit on their rights to the detriment of all, including a bit of degradation of the already weak reputation of tax collectors.
comex 9y ago
The price they end up charging may be a “fair market rent”; it may not be. But it doesn’t have to be, because the couple effectively has a monopoly - on convenient parking for the houses that the residents already live in. You might argue that the street was always privately owned. But if the parking fees had existed when the residents were searching for a home, they could have factored them into the price, and if the result was too high, they could have easily picked another offer. Thus the parking fees would have effectively been part of a competitive market for housing. However, now that they already live there, moving out would have a significant financial and psychic cost. The limit on the price the couple can get away with charging is set by that (along with, of course, the perceived cost of alternate parking arrangements, again both financial and psychic) - not by anything related to the market value of the land they own.
- mikeash 9y ago
  That stretches the definition of "monopoly" awfully thin. They can always park on the street a couple of blocks away and walk home, like lots of city-dwellers do. Yeah, it sucks that they've lost something they assumed they'd have forever when they purchased their property. But that's why you need to make sure that the HOA is in good shape when you buy a house that has one. Apparently nobody noticed, for thirty years, that the HOA wasn't paying taxes on its property, or that the wrong address was listed for it. Did they never have an internal audit?

spaceflunky 9y ago

While I'm glad you pointed out that that this is a shitty thing to do, I still think its a slimy thing to do regardless of whether it's done to the rich or poor. A couple things to note: (1) if the couple does win, then it only bolsters someone else's case to do something similar elsewhere. When it happens in a poor neighborhood and people are up in arms, guess which case will get cited. (2) there's no way in hell this is going to stand. there are probably mistakes that were made in not notifying all the homeowners of the sale. the homeowners are too rich and too powerful to not find some kind of loop hole. (3) that couple is in for a world of legal hurt. if they choose to fight they're going to rack up a shit load of legal bills. it's them vs 40 rich people. yes, $90k for the street and $5M in future legal bills. even if they win, they'll be buried in legal bills. And then when they do try to collect parking fees, the homeowners are going to hassle them for every dime. if the couple thinks the homeowners are just going to roll over and merrily pay them any amount of money for parking, they are sorely mistaken.

dmode 9y ago
My bet is that the couple is hoping that rich homeowners will pay a pretty penny to buy the land back from them
- spaceflunky 9y ago
  That's 100% their plan, but a stupid idea. Don't pick fights you can't win. There are 40 homeowners who would rather drag that couple through legal hell out of spite than pay a $1 parking fee. And they have the wherewithal in spades to do it. Even if the couple gets passed all that, the homeowners are going to complain about every little thing. Crack in street? Fix it. Curb crooked? Fix it. Someone illegally parked? Deal with it now. Trash on street? Clean it. Leaves on street? Sweep it now. Grass too long? Mow it immediately. Don't answers these calls immediately? Get accused of negligent landlord. If the couple thought they could just kick their feet back and collect checks... I just don't know what to say...
  - softawre 9y ago
    They could drag it out, but they may all agree to give up 10k each (==400k) for a nice profit. Why pay lawyers here? Spite?

diogenescynic 9y ago

>"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! I agree, but it's hard to feel bad for the residents of that neighborhood. They're just getting taste of the type of crap that the lower and middle classes deal with every day.