In a San Francisco enclave where mansions fetch upward of $10 million, a San Jose couple staked a claim for $90,000.
Michael Cheng and Tina Lam, who live in San Jose’s Berryessa district, snapped up the street and sidewalks of Presidio Terrace—one of 181 private roads in San Francisco—at an auction in 2015. Apparently, the city put it up for bid after the neighborhood association failed to pay its $14-a-year tax for more than three decades.
Cheng and Lam’s purchase made international headlines this week after the San Francisco Chronicle ran a story about their shrewd investment. Lam, a Silicon Valley engineer and Hong Kong native, told the newspaper that she wanted to own something in San Francisco because of her affinity for the city. Chen, a Taiwan-born real estate investor, admitted they got lucky.
“Before we bid on it, they just gave us the parcel number,” he told San Jose Inside in a phone call Tuesday morning. “We didn’t’ see it, but knew the general location—that this is a pretty well known and desirable area and we placed a bid.”
During the auction, there were about 40 “very scrappy pieces” of vacant parcels, he said. One was on a cliff face and another consisted of a two-foot strip by a sidewalk. Others included underwater plots and virtually inaccessible land by hillside homes.
“Apparently a lot of people are interested in these types of properties,” Cheng said, before adding that they’re not advisable purchases.
For now, Cheng said, he wants to just hold on to the property.
“I wasn’t planning on doing anything with it right now,” he said. “It’s a beautiful street as it is, and just owning it gives us enough pride in and of itself.”
Although, eventually, the couple could very well cash in. They could charge residents to park on the street their association owned from 1905 until two years ago. Another possibility raised by the Chronicle: the couple could open up the 120 parking spots to the general public.
“We’ve been bombarded with a lot of interesting ideas over the past couple of days,” Cheng told San Jose Inside.
Residents of the exclusive tract—where a guard monitors a gated entrance and past residents have included Sen. Dianne Feinstein and House Democratic leader Nancy Pelosi—were none too pleased when they heard about their street being sold out from under them. An attorney for the homeowners said they had no clue about the unpaid tax bill or the auction until the end of May this year, when a title company approached residents about buying the street back.
Homeowners petitioned the county’s Board of Supervisors for a hearing to reverse the tax sale, and that meeting will occur in October. Meanwhile, the homeowners association has sued the couple and the city, claiming tax collectors should have done more to notify them about the delinquent payments.
There’s a layer of irony to the whole predicament, Cheng noted. As first-generation Asian immigrants, Lam and Cheng would have been legally barred from owning any part of the ritzy Pac Heights neighborhood in the not-too-distant past.
Presidio Terrace was originally built exclusively for white residents, according to Curbed San Francisco. The Virtual Museum of San Francisco cites an ad from 1906—the year after the homeowners association gained control of the street—lamenting the influx of Japanese and Chinese people in the city.
“There is only one spot in San Francisco where only Caucasians are permitted to buy or lease real estate or where they may reside,” the ad read. “That place is Presidio Terrace.”
Presidio Terrace and many other swanky neighborhoods, continued to exclude nonwhites until 1948, when the Supreme Court ruled racial covenants illegal.
“The history of the property is clearly a disquieting one,” Cheng said. “People like me were barred from owning anything there less than 70 years ago.”