The Georgetown alley lots.
Headlines were made this week when a couple paid $90,000 in a city-run auction to purchase one of the San Francisco’s most exclusive streets — a private, gated block that once had covenants restricting home sales to white buyers.
As the San Francisco Chronicle reports, Tina Lam and real estate investor Michael Cheng bought the Presidio Terrace cul-de-sac at an auction, the result of an annual property tax bill of $14 that went unpaid by the homeowners association for 30 years. The homeowners were unaware of the sale until a title search company contacted them in May to gauge their interest in purchasing the land back. Most of the other homeowners are infuriated and have petitioned the Board of Supervisors to have the sale negated.
While the board is scheduled to hear the petition in October, the treasurer’s office asserts that it was the obligation of the homeowners association to ensure that their taxes were paid and billing address current. In the meantime, the couple is exploring how they can capitalize on the purchase — perhaps by charging rent for the 120 parking spaces that are now under their ownership.
If you are thinking how can this happen, well, it sort of happened in DC a few years ago.
During a five-year span starting in 2002, Kebreab Zere purchased five private Georgetown alley lots at tax auctions for approximately $25,000. Not unlike the San Francisco street, the alley lots around Potomac Street and 33rd Street NW all went to auction due to unpaid taxes. After purchasing the lots, Zere moved to fence them off, preventing neighbors from accessing the alley and perhaps leading to the situation that Zere wanted all along in which the property owners had to buy the lots back at a premium.
In October 2015, the DC Council stepped in with a bill that would seize the alley back from Zere via eminent domain. Then earlier this year, the city successfully sued Zere ruling that a prescriptive easement existed on the alley, allowing for members of the public to traverse the alley by foot, bicycle or car. Georgetown Metropolitan has a good post on this topic that goes into a deeper explanation of a prescriptive easement.
“Mr. Zere missed his opportunity,” ANC Commissioner Rick Murphy told UrbanTurf. “The alley lots are now essentially worthless.” Murphy notes that Zere has until August 17 to appeal this order if he has not already done so.
This article originally published at http://dc.urbanturf.com/articles/blog/a_san_francisco_street_sells_for_90000/12884
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