2901 Broadway

After 2,058 days on the market, the sale of 2901 Broadway closed escrow on Friday with a reported contract price of $28,250,000 to become the third most expensive single-family home to have ever sold in San Francisco.

The transfer tax paid to the City at the time of the sale should have been $712,500 and the annual property tax bill will now be around $330,000 a year, a little more than the $7,900 paid last year thanks to Proposition 13.

The most expensive home sale in the history of San Francisco remains 2840 Broadway at $33,000,000 while the penultimate position belongs to 2950 Broadway at $29,500,000.

And yes, by most accounts 2901 Broadway is a fixer. Take a peek inside.

54 thoughts on “2901 Broadway Sells For $28,250,000 And The City Seriously Benefits”
  1. Oh yeah… great job by the agents selling this at almost 50% under the original asking in only five years!
    Anyway, fantastic sale for the city. This is a wonderful windfall for whatever structural engineer is subbed out to work on this thing for the next 2+ years. Who knows… Maybe they’ll move in to it as is… because no one ever remodels anything on Broadway.

  2. I will be interested to see if/how they decide to tear down the court. That wall probably hugs bedrock. The main floor also opens to that court therefore they have to really ponder that fact too. A garden? A 25m swimming pool? I would bet we’re stuck with that wall even though I think it really kills the dramatic entrance.

  3. The new owners have a lot of money …and a lot of patience. I would guess 3 years of renovation, including planning, structural, and interior work. When it was the Decorator Showhouse, it was clear that it needed a lot of work.

  4. Any new owner should obviously go for a “living wall”, thus winning the oooos and ahhhs of green San Francisco and scoring points for a variance or two on other issues.
    Besides, as others have pointed out, there’s likely bedrock behind that cement. Plus, ivy’s cheap…

  5. ^Definitely not a solid block though who knows what the natural contours are below that shell.
    So $300K additional annual revenue for the city? That’s almost enough to hire another Assistant Maritime Historian or perhaps Director of Nontraditional Spirituality. But not both.

  6. Denis insults the realtors for not being able to convince the seller 5 years ago to take what we all assume were much higher offers. Meanwhile Denis would have sold it for $19.5M per your earlier comments – so lets be honest Denis, you’d be a horrible realtor.

  7. What’s sad is that I paid 50% more in property tax on my small home, than did a $28 million property. The unfairness of the Prop 13 is ridiculous.

  8. Yes, hang, I would be a horrible, horrible realtor… Seriously, I would be awful. This is why I am not a realtor and instead make snarky comments on a real estate blog.
    I just thought the realtor cheering in one of the earlier posts was somewhat laughable considering what happened here.
    Likewise, the comment in the previous thread about forming a local bureaucracy where city employees would schedule biennial appointments to tour the interior of every home in the city in order to determine their “true” taxable value is equally laughable.

  9. just calling you out on your $19.5M statement – seems hypocritical to claim the realtors didn’t do their job when they sold it for 9 MILLION DOLLARS more than you valued it at. 9 friggin million dollars. snark on snark my friend

  10. And you ever notice how Denis routinely has disparaging comments about agents unless it’s Team Malin? Then it’s these creepy, “with Malin’s marketing, they can definitely make this happen!”. The woman’s not even top 20 in the city anymore (a legend though, none the less, no disrespect to her directly). But yeah, this Denis… something off with this guy.

  11. So someone remind me as to why it’s good public policy that a place like this was paying around $7.9k in property taxes until this sale?

  12. @Amen Corner – That’s easy! It saved the owner a ton of money that they then invested in their business which created jobs! And what they didn’t invest they spent at local businesses which also created jobs! They were crapping jobs all over the place thanks to that tax break! It was like the “Every Sperm is Sacred” skit from Monty Python’s Meaning Of Life but instead of kids it was jobs falling from their crotches! It’s the magic of tax breaks for Job Creators! If it weren’t for those breaks, as well as others, all the job creators would move to Texas or Nevada and spend their money there instead of California and our State budget would be screwed from the loss of revenue and jobs. Oh wait… we’re screwed anyway. Well at least they saved some money.

  13. This house has been in the same family for many many years. Just becasue the house sold for over 28 million doesn’t mean they would have been able to afford the higher tax bill each year. They just got lucky that the house is worth so much money. prop 13 benifts all homesowners even ones that are buying homes this year. They rates are locked in and your tax bill only goes up so much each year based on the purchase price of your home. Prop 13 keep people in their homes!

  14. There’s no reason to fault the realtors for closing this deal under list price. I’m not even sure they had the listing for 5 years. Need to fact check that one. Also, the price paid is what the market will bear. So if this place went for 50% less than what it was originally listed for, that’s no fault of the agents. Not to mention the pool of buyers at that price point is a lot less than the “average” SF buyer.
    I’m not one to generally jump on the “go realtors!” bandwagon, but in this case the criticism is unwarranted.

  15. @MarinaBoy – I hadn’t noticed the huge homeless problem in all the states that don’t have something similar to Prop 13. But I had noticed their budgets are a bit more balanced. But if you say everyone will lose their homes then why would we ever eliminate Prop 13? New buyers are just going to have to pick up the slack. Up with Prop 13! It’s saving peoples homes and creating jobs and keeping the rich in our good State! It sounds like everyone wins with this thing.

  16. Boo most states don’t have such high property vaules for the common person like we do in CA and SF.
    For example if you purchased a home in 1980 say for $125k and your home is now worth $1.25 million you prob couldn’t afford the more than $13k in taxes every year if you are an avergae person. So prop 13 actually helps more than just the rich! It is like a hand out but it helps everyone that owns a home.

  17. Prop 13 does NOT benefit all homeowners. What it does is shift the burden of tax from older to younger individuals. If we could eliminate prop 13 and also require max property tax of less than 1% (e.g 0.5% of assessed value) we would likely INCREASE revenues, increase fairness and get a market that does not distort. This would Lower tax burden on those buying homes now or in the past decade and while this may require those who bought homes 15 or more years ago to begin to pay their FAIR share for public services that they use and enjoy, it could also be done in a way to exempt from a change those who really could not afford higher property tax (e.g. those who own only one home, it is their primary residence and they make average or below average income). Why shouldn’t those who can afford to pay their fair share do so? Because they bought 15 or more years ago? This system sounds, tastes and feels like a not in my back yard syndrome or the now that I got mine, you can’t get yours syndrome.
    I just hope the Democrats in the state assembly begin the process of having a real honest dialogue on revamping Prop 13 to make it fair and reasonable now that they have a super majority.

  18. What these last elections have proven is that voters are not completely blinded with self-interest and can vote themselves a tax hike,
    when properly sold.
    Would there be enough support to get rid or at least amend Prop 13? I am not sure.
    In SF, for instance, 60% of the population are renters, which should mean they shouldn’t care too much, right? Except many renters are rent-controlled paying less then the recent market prices, with their landlords protected under prop 13. If prop 13 is repealed then their landlords will be greatly reassessed. After 2-3 years and a dozen or so horror stories about cash-strapped landlords going bankrupts because of evil protected renters using their place as a crash pad, expect rent control to get the same treatment as prop 13. Going from $1000 for a 3BR lease started in the 80s to $4000 today is gonna hurt like hell.
    Statewide, we could say this is a fight between recent buyers vs the entitled. Except many of the bubble buyers still standing have had a reassessment on the way down to close to market price. With prices climbing back up, they’ll fight to get their assessed values pegged at the new low. Expect also some horror stories of people still underwater who would face higher property taxes if Prop 13 were to be repealed.
    And of course you have the bread and butter of the Howard Jarvis taxpayer association: homeowners locked into a very low property tax who are lobbying to keep having their cake and eating it too. They still have a fight into them.

  19. Lol @ Agent… If by “off” you mean crazy, then I can’t really disagree with your assessment.
    As for Prop 13… If it was repealed wouldn’t there just be a ballot initiative to restore it? This is a state amendment. Can you imagine all the commercials with sobbing old people saying they’re going to lose their family homes?
    LOL brings up a really interesting point. Removing prop 13 on apartment buildings would be really interesting. There’s a POS RC apartment building on my block that’s literally falling apart. It’s been for sale for 5 or 6 years at $300 per foot on a block where an SFR would sell for minimum $1200 psft. The landlord can’t afford a reassessment. What would happen to tenants if hundreds of landlords in SF suddenly filed for bankruptcy? Prop 13 is likely more beneficial to SF’s tenants than homeowners.
    My other issue is that I don’t really trust the city bureaucracy to fairly assess properties. A home near me sold for around $2500 per foot, and it was in fairly poor condition. What would stop the city from using that as a comp for my reassessed value? I would imagine thousands of homeowners would issue appeals for new assessments creating a massive backlog at the appeals board.
    The reality is prop 13 will phase itself out in SF because, well, people die. The Gold Coast in particular saw at least three houses turn over this year because their owners passed away. I’m probably alone in thinking this, but as others have pointed out, new buyers bear the brunt of new taxes and are in a way subsidizing prop 13 protected homeowners by paying an inflated tax rate. If prop 13 were removed, unfairly assessed homes would have their taxes raised resulting in a massive increase in inventory for sale thus driving everyone’s property values down. Recent buyers would likely file appeals en masse to reflect the immediate decrease in the value of their properties. Instead of creating additional tax revenue, I can see a situation where it could end up being a wash.
    And honestly, is there really that much of a revenue problem? SF takes in 1.33 billion in property taxes annually. With a $7 billion annual operating budget, SF spends close to $9k per person… As opposed to NYC with a $61 billion budget that spends $7k per person.
    I could be completely wrong about all of this… I’m often wrong.

  20. Denis,
    True, turnover does help catch-up the deficit in tax revenues, but it does so at a very slow pace. And while this is happening, new generations of prop 13 beneficiaries are minted by the 1000s. I have said earlier I am now on the winning side of prop 13 with a purchase made 2 years ago. This is simply ridiculous. More generally, the original winners from prop 13 who purchased before the mid-80s are less numerous, but we have another massive entitled population who purchased between 1985 and 2004 who are doing very well on that from too. Their cost will stick around on the books for 20+ years.
    Also, yes SF is a relatively financially healthy city. But we could be so much more. Transportation could be hugely improved. We could have a subway grid all around the city. We could have a train to SJ running in 30 minutes. We could have citywide wifi. We could have all the utilities buried. And so on… Instead we have chartered buses that pick up the slack of the government. I am seeing a wonderful first world city with a 3rd world infrastructure. Some cities in Mexico have better transportation! No offense to Mexicans.

  21. lol is completely right on this one. I have yet to see a rational defense of prop 13 that isn’t driven by self-centered hypocrisy. It’s always “Prop 13 is good because I don’t want to pay more. Plus the city just wastes the money.”
    How the city collects its money vs. how they spend it are two completely distinct topics that should not be comingled. Hypothetically, if all San Franciscans felt that the city spent it’s budget wisely, would it be fair to introduce a new tax based on someone’s age?
    Regarding turnover, doesn’t a tax-assessed value pass on to one’s heirs when they pass away? And should people that own multiple homes still benefit from prop 13? Don’t want those poor widows losing their Pac Heights mansion, plus their wine country pad, plus their lake house, plus their Malibu surf shack, and let’s not forget the ski cabin. The pity is welling up inside of me already.
    Lastly, regarding this place, I’m sure it will be renovated with no expense spared. But do you guys think anyone will actually ever live in it? Or is this just another furniture & art display gallery that will sit vacant 350 days/year?

  22. I’m loving this lively dialog about Prop 13… now if only Sacramento could do the same. I did notive in all the back and forth, noone has yet brought up the massive loopholes in Prop 13. Namely the “legecay” clause allowing families to pass on properties (both private AND commercial) from generation to generation without ever reassessing the vallue. For a single family home… wether in SF or Chico – big whoop. But for instance, consider all the Hearst or Getty family property hodlings across the entire State… and now we’re talking some lost tax revenue that could certainly be reconsidered.

  23. +1 for LOL & Legacy Dude. Also, several different folks mentioned that they wouldn’t trust bureaucrats to assess property regularly. It’s not rocket science; it’s how almost every other place with a property tax deals with rates. They typically are automatically assessed regularly by adjustment factors, and every so often (say every 10 years on average) are assessed in person to ensure that the assessed value hasn’t gotten too out of line from the market value. While assessed values inevitably get a little out of line with market values, it’s not ANYTHING like the idiocy of Prop 13, which has created entitled hereditary lottery winners.

  24. I believe the “legacy” clause was a voter-approved amendment to the original prop 13. If so, wtf was the electorate thinking??

  25. Denis wrote:

    The reality is prop 13 will phase itself out in SF because, well, people die. The Gold Coast in particular saw at least three houses turn over this year because their owners passed away.

    Those sellers apparently didn’t have very effective or knowledgeable financial advisors/wealth managers or single family offices.
    I obviously haven’t examined their finances, but I’d bet that the Sperlings, who have multiple mansions in this city which are sitting completely empty, won’t have a problem transferring their property and the low, low assessed value on to the next generation when the time comes. Same goes for Larry Ellison.
    DZinerSF wrote:

    I did [notice] in all the back and forth, no one has yet brought up the massive loopholes in Prop 13. Namely the “legacy” clause allowing families to pass on properties (both private AND commercial) from generation to generation without ever reassessing the value.

    Fair point, but technically this wasn’t part of Prop. 13 when it first passed.
    What you’re describing are the effects of Proposition 58, which passed in 1986 and limits reassessment(s) when property passes from parents to children, and to a degree Proposition 193 passed a decade later, which expands these limits to include certain transfers from grandparents to their grandchildren.
    The fact that these two follow-on measures passed into law well after the problems with Prop. 13 were well-known leads me to believe that the answer to lol’s question re: would there “be enough support to get rid or at least amend Prop 13”, at least for non-commercial property, is an emphatic, resounding NO. It’s the third rail of California politics.

  26. While I think there might be enough support to amend Prop 13 to remove commercial property, the reality is that corporations and the wealthy would spend a ton of money to defeat that reform, probably pretending they were doing so to protect “small businesses”.

  27. With Prop 58 and 193 it only includes the primary residence. So you won’t have the very wealthy passing on multiple homes to be protected under Prop 13. it doesn’t matter how the money is spent prop 13 allows older people to stay in their homes and children to keep the family house in the family. What happened to wanting people to pass things on from generation to generation?
    Prop 13 is for homeowners and rent control is for renters, so everyone is helped out one way or another.

  28. What happened to wanting people to pass things on from generation to generation?
    Sure, and there are tax laws that will help you do that. But you shouldn’t be able to also inherit an existing abnormal property assessment especially on second homes or rental property.

  29. Very few homes in D7 are passed on these days. Please give me an example of a prop 13 protected home here that a child or family member inherited say within the last 5 years. Three old people near my block snuffed it all within the last year and their respective families had those houses sold off within a few months. If this is a real problem, then I haven’t seen it.
    Anyway, homes should absolutely be reassessed when they change hands even as an inheritance. That’s just a no brainer.
    And Brahma… the Sperling example is terrible. They don’t pay low, low assessed values because they always paid double for those properties. They paid over a $1 million in property taxes last year. The empty home on Washington has a 200k tax bill. They did pull something fishy with the Hyde st. home, but their tax bills is still $180k. Maybe in 30 years, 180k will be the new $7k.
    Look, the rich are going to find a way to pay for their tax increases and, yes, a few of the Pac Heights widows everyone is whining about will have to sell, but the reality is reassessed homes are going to hurt long-term poor and middle-class homeowners far more than the hand-full of oldies still left in their rotting mansions. Unless of course, there’s a local ballot specifying that only homes north of California St are prop 13 exempt… I could TOTALLY see that happening.

  30. I’ve always been surprised that there isn’t a court challenge possible to Prop 13 (or even more so Props 58 and 193). It’s so inherently unfair to pass the assessed valuation on to a 2nd or 3rd generation. I’m no legal scholar, but what I’ve always heard is that the courts don’t like to wade in to tax issues, because taxation systems inherently choose winners or losers, so it’s hard to draw a bright line, and “unfair” doesn’t mean “illegal”.

  31. An older neighbor in the 94114 passed away 4 years ago. Her daughter inherited the place and the prop 13 assessment. Unfortunately she passed away a few months after her mom and her son now lives in the place, inheriting the prop 13 assessment.
    Should I precise the original owner purchased in the early 50s and that the tax check they make every year is less than $1000 for a probable market value of 1.5M. That’s a net loss for the city of 15K+/year! Prop 13 at work.

  32. And Brahma…the Sperling example is terrible. They don’t pay low, low assessed values because they always paid double for those properties…They did pull something fishy with the Hyde st. home, but their tax bills is still $180k. Maybe in 30 years, 180k will be the new $7k.

    Poorly formed and written on my part.
    I meant to say that in the future, when their “primary” property is passed on to the next generation, they’ll take advantage of a low assessed value, and that’s true regardless of what they paid for them in the recent past.
    MarinaBoy’s point about only the primary residence gets to take advantage of Prop 58 is a good one. I assumed, perhaps wrongly, that there’s all kinds of tricks that wealth management firms put into place so that secondary and tertiary and quaternary and quinary and senary homes still get protected by regular Prop. 13 from being reassessed, such as having them owned by a family trust that never needs to sell over a multi-generational period.

  33. curmudgeon
    Almost immediately after passage, the California Supreme Court sustained Proposition 13’s constitutionality in the Amador case (Amador Valley Joint Union High School District v. State Board of Equalization. September 22, 1978). After a series of legal challenges in the 1980s, the issue of acquisition-value assessments reached the U.S. Supreme Court in Nordlinger v. Hahn. In a stunning 8-1 decision, the court in 1992 upheld California’s acquisition-value system.
    The court ruled that an acquisition-value system does not violate the Equal Protection Clause of the U.S. Constitution because it “rationally” furthers a legitimate state interest. The court said, “The state legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high.”
    The court also opined that a state has a rational interest in neighborhood preservation, continuity and stability, and that Proposition 13’s system of “locking in” lower tax assessments contributed to such preservation.

  34. Rillion: One of our very own State legislators thinks along those same lines with respect to commercial real estate. From George Skelton’s column in The Los Angeles Times today, Now is the time to adjust Prop. 13:

    Let’s be clear: There has never been a serious thought of hiking Prop. 13’s residential property rates. No politician is that dumb.

    …Not even a proposal by Assemblyman Tom Ammiano (D-San Francisco) to change the method of taxing commercial property is receiving a warm reception in the Capitol.

    The liberal lawmaker would impose a so-called “split roll” — long feared by business leaders — that would tax commercial property at market value. That property has benefited from Prop. 13 even more than owner-occupied homes because it changes hands — and therefore is reassessed — much less often.

    Ammiano contends that Prop. 13 is no longer “the untouchable third rail” for politicians…but few of his colleagues want to test that thesis.

    Emphasis is mine.
    Later in the piece, Skelton mentions that implementing a “split roll” would probably draw lots of opposition from business interests, and I agree. I don’t know how you get around that, especially since such a change would have to pass with a necessary two-thirds majority of the vote.

  35. For God’s sake, CA has some of the highest tax rates in the country and people want to make them even higher by repealing Prop 13. Tell Sacramento politicians to live within their means!

  36. Mark F…ever thought that we have high sales and incometax rates BECAUSE of Prop 13? What people are arguing for here is for more equity in the system….

  37. Brahma,
    One big argument for the case that prop 13 will stick around for quite a few years:
    Californians voted themselves a tax hike in November with proposition 30. Thanks to that, and a very decent recovery, the deficit will probably shrink from $15B+ to $2B next year.
    In short, we are taxing income (at least those over 250K) and spending (through a sales tax increase). Fair enough I guess. Everyone has to finance our great state. Except this is not everyone…
    What this amounts to is having income (both actual income and spending coming from income) make up for taxes on real estate wealth.
    We’re perpetuating the current cycle:
    1 – Stagnation or regression of the importance of income
    2 – Compounding of wealth through under-taxation of assets. You pay less taxes, will cling to your RE and therefore create a lack of supply, increasing the value of your assets. Also the return of your assets is higher due to lower taxes and you can cumulate wealth at a faster clip.

  38. 2nd & 3rd homes can qualify for Prop 58/193 exemptions. While the entire value of primary residences are exempted, up to $1 million in value of other real property per parent can be excluded from reassement. So a married couple with a primary residence of any value and two $1 million properties could transfer all of that their children without the property taxes going up.

  39. Mark F. wrote:

    For God’s sake, CA has some of the highest tax rates in the country and people want to make them even higher by repealing Prop 13. Tell Sacramento politicians to live within their means!

    Uh huh.
    From the same author I cited above, but published in January of this year in anticipation of Gov. Jerry Brown’s then-planned ballot initiative to temporarily impose higher income taxes on the rich and sales taxes on everyone that became Prop. 30: California voters need to separate facts from myths on spending:

    Myth No. 2: Taxes have gone through the roof in California.

    Fact: They’ve been held down. Even if Brown’s tax hikes are approved by voters, the state tax burden will be basically what it was back when Ronald Reagan was governor in the 1970s.

    In Reagan’s last year in Sacramento, state taxes amounted to $6.89 per $100 of personal income. Currently, the level is $6.45. With the hikes, it would be $6.67, according to the State Department of Finance, which charts such data. The high tax point was $7.96 in 1999.

    Also, according to the finance department, California ranks 19th nationally in state and local taxes and fees, at $16.42 per $100 of personal income. The highest-taxing states relative to income are Alaska, Wyoming and New York.

    Myth No. 3: California’s spending has been out of control.

    Fact: It’s on a relatively tight rein. The deficit-ridden state General Fund has been cut by 16% in the last four years, the overall state budget by 2%.

    One example: Welfare, the poster child of waste for many on the right, has been slashed to the grant levels of 25 years ago: $638 monthly for a family of three.

    But let’s go back to that conservative icon Reagan. General Fund spending per $100 of income is lower today, $5.14, than it was in his final year, $5.89.

    Like they say in the blogosphere, go read the whole thing.
    If you do want to live in a state where the majority of citizens wants a relatively low level of public services, then you can by all means move to Texas. But you can’t say that the state government doesn’t “live within it’s means”.
    Tax hikes have/had to pass with a supermajority, and that’s why the state budget has been cut substantially, even though most Californians want a relatively high level of public services, over most of the last fifteen years.
    Sheesh. With widespread attitudes like those expressed by Mark F., it’s a wonder Prop. 30 ever passed.

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