When Oliver and Danielle Wang received the 2023 property tax bill for their San Francisco condo, they were aghast. The city had priced their unit in the Lumina — a glass-encased high-rise downtown — at more than $1.6 million.
By their back-of-the-envelope calculations based on recent sales of similar properties, that was 40% higher than the home’s market value. This meant a tax bill thousands more than what they thought they should be paying.
San Francisco and other local governments allow residents to appeal a property assessment using evidence of comparable sales. If successful at a hearing with the assessor’s office and an appeals board, the owner gets a property tax refund, with interest.
Professionals and commercial real estate owners have created a cottage industry navigating the complex and bureaucratic process, but the Wangs weren’t able to find a lawyer who would do it for them at a reasonable price. So, utilizing their technical expertise, they turned to AI.
They built a tool, CompFinder, that uses AI to pull up real estate “comps.” The sales prices of these comps are accepted by the city as a benchmark for fair market value. The tool asks for the size, location, and age of the property, while allowing a user to write in specific features and amenities — such as a specific view, parking availability, or a swimming pool — to get more accurate comparisons.
For now, CompFinder results are limited to condos in San Francisco and San Jose.
While the market for single-family homes in San Francisco has remained relatively competitive, the market for downtown condos is a different story. Factors including remote work, spiking interest rates, and public safety failures have depressed the condo market from its 2021 peak.
“I’m seeing about a 10% drop in the last five years,” said Robyn Kaufman, a San Francisco broker specializing in sales of high-rise condos.
The Wangs aren’t just the developers of CompFinder; they’re users too. When it came time for their assessment hearing, the couple used the tool to triangulate a new value for their unit and find comparable sales.
“It actually was spot on to what the city adjuster gave,” Oliver said. “We were actually slightly better,” Danielle chimed in.
The adjuster offered a new value within 5% of the Wangs’ estimate and was annoyed when they decided against accepting the deal.
“He was like, ‘We’re so close, what the hell?’ But he said it under his breath,” Oliver said. The next step was going to a full hearing, where the Wangs and the assessor would present their comps at the same time.
“When we mentioned that, by the way, we built an AI tool to actually spit out our comps, and our justification, the whole hearing just kind of turned,” Oliver said. “It basically ended up turning into a 10-minute pitch.”
In the end, the couple were able to lower their condo’s assessed value by more than $300,000, saving them $3,000 in taxes.
Peter Fatooh, president of S.F. Property Tax Appeals and a former member of the appeals board, said many inexperienced homeowners fail to choose comps that meet the narrow criteria accepted by city officials.
“It’s a tough road if you go by yourself,” Fatooh said of the appeals process. “The assessor is not going to help you, and if you choose the wrong comps, they’re gonna kick you in the ass.”
The Wangs hope CompFinder, which costs $20 to download, can save users thousands of dollars in property tax bills, or at least allow them to avoid the $60 appeal application fee. In San Francisco, property owners are typically required to appeal their values every year, which can lead to even more confusion.
Kathy Sittnick, who also owns a unit in the Lumina, found out about CompFinder from a neighborhood social media group. Sittnick and her husband purchased their condo in early 2021 and have seen its value dip considerably.
“We weren’t distressed that the value went down,” Sittnick said. “The problem was units all around us were all selling for less, and the taxes we were paying kept increasing.”
She attempted to go it alone, spending many frustrating hours cross-checking applicable Zillow sales, before using CompFinder, which did the work in minutes. Her property tax bill was reduced, saving her around $5,000. Sittnick said the city officials at her hearing referenced the exact same comps she found by using the tool.
In a follow-up call with the assessor, the Wangs learned that a major pain point for officials is that appealing homeowners submit comps that are unreasonable, then they must be educated during the hearing.
“He does this, like, three times a week, and each hearing is four hours, so he spends most of his time giving the same lecture about how property evaluation works,” Oliver said. “At the same time, if you’re the taxpayer, how are you supposed to know? It’s like going up against a professional athlete on the basketball court.”
The Wangs used the conversation with the assessor to improve their tool and learn more about how city officials value properties.
“He said, ‘There’s a potential conflict of interest here because I’m teaching you how to fight me,’” Oliver said.