Rich San Francisco homeowners get sold-off street back

SAN FRANCISCO (AP) - Residents of an exclusive San Francisco neighborhood who failed to pay taxes on their private, gated street for two decades got the street back Tuesday after supervisors voted to rescind the sale of the tax-defaulted property.

The Board of Supervisors split 7-4 on the move, with those in favor saying residents of Presidio Terrace had not received enough notice before their sidewalks, street and common areas were sold at auction in 2015.

Supervisor Mark Farrell, who represents the district, said it was not good policy to allow out-of-town land "speculators" to swoop in on law-abiding property owners who simply did not know they owed tax on their street.

He agreed the homeowners' due process rights were violated when the tax collector sent tax bills to an outdated address.

"When I look to the constitution and deprivation of property and taking of property from individuals, I think that is a high standard that hasn't been met here," Supervisor Katy Tang added.

Supervisor Hillary Ronen voted against reversing the sale, saying homeowners had defaulted before and should have been on notice.

She agreed that most people did not expect to pay taxes on sidewalk in front of their house but pointed out that most people don't have a private street in front of their house.

"Did the treasurer act unreasonably? I don't think so, and should we give a second bite of the apple to these homeowners when most people don't get that?" she said. "I don't think so."

The issue is unprecedented in San Francisco, although supervisors in other California counties have reversed sales as allowed under state law.

The oval-shaped street in upscale Presidio Heights is lined with leafy palms, lush landscaping and multimillion-dollar mansions. Previous residents of the gated neighborhood include U.S. Rep. Nancy Pelosi and U.S. Sen. Dianne Feinstein, who wrote a letter that accused the city of bureaucratic bungling.

Current residents lined up Tuesday to plead their case, saying they were regular, hard-working San Franciscans who had faithfully paid taxes on their homes and simply didn't know about the separate tax lot. The British consul general in San Francisco lives in the neighborhood.

The residents cheered when the votes were cast.

Investor Tina Lam had bought the street, its sidewalks and common areas for a mere $90,000 at an auction in 2015 after the Presidio Terrace Association failed to pay property taxes on it for two decades. The association says the annual tax bills of $14 and auction notice were being sent to an outdated address.

Homeowners learned about the sale earlier this year and petitioned the board for a hearing.

City Treasurer Jose Cisneros said the association was responsible for updating its address and should have paid its taxes on time. He said he followed the rules and that there was no indication that the property, listed as a vacant lot, was attached to residences.

Otherwise, he said his office would have reached out to homeowners.

It marks the second time the association has defaulted, but it won back the street in 1985 after paying up.

Shepard Kopp, attorney for the new owner, argued in a scathing court brief that San Francisco should not give politically connected homeowners an out for failing to do what is expected of every other property owner in the city: pay their taxes on time.