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Comment by mortenjorck | Hacker News Reader

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!

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> 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.

In FiDi/SoMA single parking spots can sell for $150k. I would be expecting $50-100k per resident.

The question isn't about market value, it's about whether the homeowners should have been contacted about the problem and given a chance to remedy it (e.g. First right of sale)

The answer to that may differ from person to person, and may depend heavily on facts not presented here, such as whether the money was paid be the homeowners but didn't make it to the city, whether the city should have or did know the accountant's address was no longer good for decades, etc.

Because I support sane outcomes when this happens to poor communities, I support the same when it happens to rich ones.

Presumably they were contacted but the home owners association failed to keep an up-to-date mailing address with the tax authority. It's not the city's responsibility to determine if mailing addresses are accurate, especially for a three decade tax bill of less than $1000.

> It's not the city's responsibility to determine if mailing addresses are accurate, especially for a three decade tax bill of less than $1000.

I'm not so sure. If a property that is held in common is going to be sold, perhaps a good faith effort to contact the property owners requires a bit more effort, regardless of whether the amount due is small. The sale price was $90k.

Pretty much this. This story is a bit click-baity with the details summarized as a comedy of errors. I love Matier and Ross as much as anyone else, but they really should have dove into this more. It's absurdly silly if SF had no contact with any of the residents of 30 years and just out of the blue decided to auction the rights to the street.

As for the winner, kudos to him. Now he'll either settle for a significant amount of court, or mired in years of civil trial.

120 spots at 150k each is $18m.

> Well, it should, right? If you don't support the practice when it targets the poor, presumably you shouldn't with the rich either.

Wasn't there some quote along the lines that "you can judge a society by how it treats the lowest"? I suppose it depends on your definition of "lowest", but I'm also a fan of Rawls' theory of justice which is roughly: a just policy is one which you would accept without knowing which side of it you'd be on.

Is there a more general ethical stance equivalent to "Progressive taxation"? I.e., the more money you have, the more society expects you to take responsibility for internalizing society's externalities?

I would support a law that specifically tried to take this into account, as presumably it would also make it easier for the poor to deal with this situation. I'm less for the poor and the rich must have the exact same penalty as much as I am against the outcome and penalty being based on market prices, which means it's dependent on your income level. I want all groups to have the same ability to solve the problem, even if the cost to do so may scale in some way.

> If you don't support the practice when it targets the poor, presumably you shouldn't with the rich either.

"In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread." -- Anatole France (https://en.wikiquote.org/wiki/Anatole_France)

I can't say I see a huge issue with treating the rich worse than the poor in this instance.

'Fair' is just an ideal; at any given moment there's tons of unfairness around, big and small. If SF had a bug tracker, issues of the poor being preyed upon would be P1 bugs. This issue should be a P3 (which means nobody will ever get around to it).

In this case, the bag results in issues that are both high priority (the poor being taken advantage of) and P3 (the rich being taken advantage of). That you see oneparticular symptom and assume it's P3 is a failure to see the root problem and correctly extrapolate how it may play out with different factors at play.

It's sort of like being alerted to a bug that shows random account personal information, and the instance reported happened to be all test accounts. You don't assume the problem is not large just because in this instance the accounts affected were test accounts, you need to determine whether it affects real accounts.

There's nothing stopping someone from buying up a poor street and charging more for parking than the residents can bear. That's a much worse scenario, but results from the exact same factors as this scenario.

What's P1, that you charge me more for parking on some street? Man, I'll just park on the next street over when I go to mow somebody's lawn (because most of the time I just use public transport). I commute in from 3 hours away, I promise you I won't even notice this little unfairness amidst all the larger arbitrariness that influences my life.

[Disclaimer: first person just as a rhetorical device. Author is privileged.]

This sort of arbitrage is fundamentally something you can only do to the middle class or rich, people who are sheltered enough to know convenience. In addition, the richer the people you target, the more likely your scheme is to pay off. This is not the sort of thing to hope for volume with.

> What's P1

That property held in common between a group of people be sold to a third party without their knowledge or consent, possibly because of a tax bill they were not aware of.

> This sort of arbitrage is fundamentally something you can only do to the middle class or rich, people who are sheltered enough to know convenience. In addition, the richer the people you target, the more likely your scheme is to pay off. This is not the sort of thing to hope for volume with.

I disagree. Poor people sometimes own land that has high market value, but they value their neighborhood more. See gentrification. My neighborhood has a park that our HOA fees go towards. If I was to learn at some point that our HOA mismanaged funds so badly that the park was sold to a private party and someone decided to develop some portion of it into residential or commercial real estate, I would be pissed, and I think I would have reason. It would be a real loss to me, as my family uses the park regularly. What's more, it's a public park, so even though my neighborhood pays for the upkeep, anyone can use it.

My neighborhood is new, and isn't poor, but I could easily see something similar playing our in an older neighborhood here (which is not SF), where some interesting property ownership was done during development.

Pretty sure you can't buy poor streets because they haven't co-opted public spaces for their own advantage.

If they weren't rich, they wouldn't have been in this predicament in the first place. Make your bed and lie in it.

If you don't support the practice when it targets the poor, presumably you shouldn't with the rich either.

Why? I support other protection systems that only apply to the poor. Right to a free lawyer, or to food stamps or to certain scholarships. What makes this different?

This is a really good question, and I've hesitated to reply because I haven't really solidified my thoughts around an answer. None of my initial ideas about why it's different actually seem all that functionally different in reality, so I think I'm going to reexamine both my assumptions about this issue as well as my assumptions about the examples presented and try to come up with either a consistent way to explain my stance, or a changed stance on either this issue or the examples you presented.

Other people might have a good idea of how to answer this already, and power too them, but I didn't so I think this is a noteworthy comment, and just wanted to call that out.

> 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.

Indeed, a righteous outcome would be for this couple to triple or quadruple their investment and make several hundred thousands of dollars, for the effort of going to an auction and then hiring lawyers. Hard work!

This rings of the classic 'that billion dollar startup's idea is so easy I could have done it' with the classic response of 'fuck you, you didn't'

It may ring of it but it's not the same. The "easy" billon $ startup is adding value. This couple isn't. They just exploited the clerical (mailing-address) and accounting errors of the homeowners.

They didn't exploit anything. The couple was not privy to the circumstances.

The fault arguable lies with the accountant who failed to transfer this to the successor accountant. Either way there have been homeowners who have lost home in the same manner - who couldn't afford to correct the problem.

Each and everyone of the residents of this private street: * could have notice the auction. * could come up with money to buy out the couple

Also notice that the couple is now responsible for the maintenance on the street. Charging for parking seems reasonable way to make the street self supporting.

Why do the homeowners have a private street in the first place? Oh... because they wanted a gated community. Tears that no one paid the property taxes on their little enclave.

Think of the rich! Barbarians!

They tied up $90k for a couple years by owning this property when they could have use it otherwise. They hired a title company to look into the property. They've put at least some time and effort into the property as an investment. They bought at auction, which means the price paid doesn't necessarily reflect market price, just what those present were able to determine from the information at hand and were capably of paying.

All those combine to something. I'm not sure what it is, but I don't think it's nothing.

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.

> 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.

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.

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.

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.

A loan, to pay for the toll road, to be paid back over an expected course of N years.

Ooops toll road use isn't what was expected... that N years is now literally forever.

I don't remember the article mentioning that example. But here's another one with bait-and-switch of the promises of toll roads...

-> http://abc13.com/archive/8671067/

I was pleasantly surprised when the government of BC actually did remove a toll for the Coquihalla Highway after 22 years. Apparently it cost $848 million to build, and it took that long to collect $845 million in tolls.

> Well, it should, right? If you don't support the practice when it targets the poor, presumably you shouldn't with the rich either.

Interesting rhetorical, but no? This presumes that:

1. The manner of seizure is the same; were the poor in the OPs examples given the chance to "own" their situation? I'm sure it happens, but in all the cases and situations I've seen, the poor are simply subject to the choices of those with better means (wealth, status) to sway decisions.

2. Those you are asking believe in equality across the board instead of some variation of progressive social balance. Not saying that I believe this one way or the other, but I can see why someone would make the argument that what's "fair" is relative in situations like this.

I just think that saying this to start the discussion is an unfair way of painting everyone who opposes your point of view negatively.

> 1. The manner of seizure is the same; were the poor in the OPs examples given the chance to "own" their situation? I'm sure it happens, but in all the cases and situations I've seen, the poor are simply subject to the choices of those with better means (wealth, status) to sway decisions.

Poorer people often own property, as it's one of the few ways of amassing any wealth that are more protected in our society. Sometimes it's inherited. I don't find it unreasonable to think there are neighborhoods of poorer residents that have some property held in common, such as a garden, park or green strip.

> 2. Those you are asking believe in equality across the board instead of some variation of progressive social balance. Not saying that I believe this one way or the other, but I can see why someone would make the argument that what's "fair" is relative in situations like this.

I believe the recourse available should be the same regardless of means. I believe the penalty or cost can in some circumstances take into account means. I think that translates into wanting all people to have an equal chance to resolve the situation in their favor in similar circumstances, regardless of wealth, even if the cost to do so may scale somewhat with wealth.

> I just think that saying this to start the discussion is an unfair way of painting everyone who opposes your point of view negatively.

I don't think so. "Presumably" plays a very important role in that statement. It leaves it open for people to explain a separate point of view, which many have done. I try to choose my words with care, and not be overly assertive about opinion.

If you don't support the practice when it targets the poor, presumably you shouldn't with the rich either

With apologies to Anatole France, "the law, in its majestic equality, allows the rich as well as the poor to have their parking spaces used for profit."

> 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.

I can guarantee that a couple having the capacity and sophistication to spend 90k to acquire a private road knowing that their title will certainly be challenged by several far richer families and would require further investment in defending said challenge, are themselves part of the 1%

they paid 90k. this was not a middle class family haha.

Lots of people that never earn more than $50,000 a year have hundreds of thousands of dollars of investable assets.

That's arguably the bottom of the middle class...

They're petite bourgeoisie, sure, but that doesn't translate to lower-middle in America; America's middle-class is defined more by its culture of striving than its success. People in the US who have any investible assets are almost always considered "upper class"—at least by people who don't, which includes most of the people attempting to project the image of being middle-class.

Sure, people that call themselves middle class aren't necessarily using some degree of financial security as a measure.

That doesn't mean that there is no argument to be made about financial security being a defining aspect of middle classiness.

Any middle class family can get raise 90k. Most owe more than that on their house. If they are financially careful and have lived in their house for a few years they probably can do a cash-our refinance and get 90k to spend on this. Also as a business venture it isn't high risk so there is a good chance their banker was happy to give them the loan on their person credit for 20k down - their yearly bonus might be that much. Again, this requires financial responsibility to pull off, many middle class are not responsible enough, but some are and that is enough.

Of course we don't know (or at least I don't - I didn't read the article) the background of the owners. They might well be rich.

>Any middle class family can get raise 90k.

This was not a group of middle class people coming together. This was a single couple, spending their own money.

I agree with you that some middle class people could raise 90k if they needed to. Maybe to pay health care expenses for a loved-one. They would not be spending it buying private roads.

> They would not be spending it buying private roads.

Why not? They are able to raise far more than that on business ventures as long as they have a business plan that's approved by the bank. Additionally, people buy houses to flip them on credit all the time as well. If you have private investors backing you, this would be an easy sell. That's much easier than you might think as a middle class person, there's an entire section of the real estate industry devoted to private money loans for slightly riskier investments than banks will fund, but at different interest rates. Contractors and investors use them all the time for short term investments (such as building our a lot for 2-4 homes, or some property flips that a bank isn't willing to fund, but a private investor that has worked with the person on multiple loans over a decade has no problem with).

I didn't see where in the article it says they raised or borrowed $90K for the purchase. Since it was an auction, I would assume they paid in cash. Middle class people typically don't have $90K in cash sitting around burning a hole in their pocket.

Middle class people who go to those auctions already have a bank approval. They don't have the cash, but the bank has agreed to fund the loan.

Farmers buy land on auction all the time. It is very common for the auctioneer to have a local banker at the auction site so that someone who wants to bid can get approved for a loan right before bidding. The banker knows how much he will give a loan for (based on an appraisal he has done on the land), and the minimum down payment. This amount is different for different farmers (a farmer who does best practices can get much more profit for acre and thus is worth giving a larger loan to - bankers know who these farmers are)

> Any middle class family can get raise 90k

No.

"The median Bay Area income rose 1.8 percent from 2011, tied for fourth-largest annual gains in the nation. The region’s ranking was unchanged from last year’s survey. The Bay Area’s 2012 median income was 22 percent higher than California’s median income of $58,328."

[https://blog.pacificunion.com/bay-area-median-income-second-...]

The idea that raising 2 years of income is easy is a joke.

I didn't say it was easy. I said it is possible. You save your money carefully well in advance of this opportunity. You might take 2 years to raise 10k. Your extended family and some of your friends are doing the same. When this opportunity comes up they borrow the money to you (while wishing they had seen it first).

Most families do not operate this way: few save that much, and not many have extended family saving that much. Even of those who do, many do not get along with their family well enough to risk borrowing large sums of money.

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