As we outlined, with graphics, back in January, at which point a pending sale of the “four-bedroom home” had been removed from the MLS:

Purchased as a little two-unit building at the peak of Potrero Hill for $720,000 in February of 2012, 882-888 Carolina Street was subsequently expanded and remodeled with permits for a two-unit project that were secured in 2014.

While a number of complaints alleging “work beyond the scope” of the approved permits for the project were received by the City during construction, San Francisco’s Department of Building Inspection (DBI) closed/cleared the complaints, with inspectors having reported “all work according to [the approved] plans” on their project reports.

The redevelopment of 882-888 Carolina passed final inspections in 2016 and sold for $3.7 million in early 2017, with an oddly located “closet” in the lower-level unit. And in January of 2018, the property then quietly resold off-market, at the “seller’s request,” for $3.8 million, having presented as a four-bedroom home with two entrances and a central staircase that now ran from the home’s top floor to its “garden level,” through the aforementioned “closet.”

The property returned to the market this past September listed as a four-bedroom home, at which point a new complaint was received by the City, fingering an unpermitted Dwelling Unit Merger (DUM) of 882 and 888 Carolina Street. And this time around, a DBI inspection revealed what the previous off-market sale (and newly listed floor plan) had privately highlighted.

A formal Notice of Violation for the unpermitted merger of the two units was issued by the City in October. And plans to “permanently” infill the unpermitted staircase connection from the home’s second floor to its garden level were drawn and permits requested. But if the plans to correct the unpermitted dwelling unit merger are approved as drafted, the lower-level staircase between the two units would remain hidden behind the rebuilt “closet wall” and below the infill flooring on the second floor, as the property appeared when inspected back in 2016.

The aforementioned plan to “restore [the] separation” between the two units was subsequently approved and completed this past May, at which point the property returned to the market listed as a four-bedroom home for $4.59 million, albeit with “a legal second [garden level] unit that offers a full kitchen, 1 bedroom and 1.5 baths, ideal for guests or extended family with a separate entrance” that was included in the four bedroom count. And the sale of 882 Carolina Street has now closed escrow with a contract price of $4.5 million. No word on whether a sledgehammer and “historic” set of plans were part of the transaction.

9 thoughts on “De-Mergified Home Trades for $4.5 Million”
  1. These two unit buildings provide some pretty awesome value, IMO, because there’s so much optionality. You can essentially have your single family home, but in a time of need, simply lock a door and have family stay for an extended period, or AirBnB it.

    1. If I’m not mistaken, because it’s a separate living unit, you’re limited to 90 days of short term Airbnb stays per year, with you “living there” the remaining 275 (still a good option, but not feasible to be a full time year-round Airbnb rental?). 30+ day rentals would be allowed past that cap, though, is my understanding.

      1. sforthright, you sweet summer child.

        The AirBnB “hosts” in this city don’t care about the rules, they just do what they want to make money and dare the S.F. authorities to try and enforce the rules on them before they’ve collected their ill-gotten gains and decamped to Texas or Florida. Same goes for flippers what want to sell buildings with illegal DUM’s as SFH’s. In “time of need”? More like time of greed. Which is at all times in operation. The income stream represented by the second unit’s potential on AirBnB or VRBO, etc., whether legally let or otherwise, was priced in at the time of listing.

        1. I think Airbnb enforcement may be more strict than you realize, since Airbnb themselves are required to report rental activity to the city, making it difficult to fly completely under the radar

      2. Yeah, seems like creating separated “rooms down” in a single family home is a much better deal since you get unlimited rental days and there’s fewer permits/conditions than a separate unit, especially now that mini-kitchens are allowed in them.

      3. The 90 day limit only applies to units that are a primary residence, either for the owner or a long-term lessee, which needs to be a natural person. And if you own/rent a multi-unit building, “you may only register the specific residential unit in which you reside.” Short-term rentals are not permitted otherwise, at least not legally.

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