> you can do an un-permitted remodel of your downstairs, add drains, pave over the soil filter, create a massive sewage flooding problem, and sf will do... nothing. But if you were to try to tear down a house and replace it with a properly engineered multi unit dwelling... are you kidding me?

This is a really good point. Someone correct me if I'm wrong, but I think this applies to US in general; not just SF. Cities will never inspect your house unless you give them a reason (e.g. apply for a permit).

The main deterrents to un-permitted work are: 1) if you need to sell the house, buyers don't like unpermitted work, and 2) your neighbors can file a complaint.