The controversial SF Dream House raffle is ending forever

The coveted and controversial SF Dream House raffle is coming to an end.

The charity raffle is the flagship fundraising event for San Francisco’s Yerba Buena Center for the Arts. Tickets, which cost $150 for one, enter participants into a raffle for a number of prizes, from a seven-day trip to Paris to a Macy’s gift card. But its grand prize — and most contentious offering — is the much-touted SF Dream House.

This is a common story for the SF Dream House. In 2016, SFGATE reported that the St. Francis Wood dream home had been on and off the market five times in six years. Among the recent dream house offerings were two homes that hadn’t even been built yet. Instead of real staging photos, the spring 2023 Danville home and the fall 2022 home showed renderings “for illustrative purposes only and are intended to convey the concept and vision for the home.” 

Then there’s the complicated matter of actually gaining ownership of the property. In the fine print, YBCA discloses that whoever accepts the prize must pay “all fees, local, state and federal taxes (including but not limited to income taxes based on the value of the house)” and all “financing costs (including, but not limited to, closing costs, title insurance, and transfer tax and fees).” That’s a hefty price tag for a Bay Area home.

Most, if not all, winners appear to get a cash payment instead. According to the raffle’s marketing materials, winners who choose cash instead of the home can get $1 million total spread out over 25 years or a one-time lump sum of $700,000. If less than 50,000 primary tickets are sold, the grand prize winner doesn’t have a choice — they are automatically awarded the cash prize.

Beyond the controversy around the dream house, the raffle itself has been probed at least once by the California Office of the Attorney General. In YBCA’s financial statements filed in 2020, YBCA discloses receiving “a document request to produce books, records and documents for the YBCA Dream House Raffle from the California Attorney General” in 2018. When YBCA applied to the state of California for a raffle permit that year, it was denied on grounds “related to the Attorney General’s pending investigation” of the contractor that YBCA paid to run the raffle, as well as “potential violations of California laws related to raffles and charitable funding.”

YBCA’s tax returns show it paid an independent contractor over $1 million in 2015, 2016 and 2017 to administer the raffle. In 2017, it also spent approximately $970,000 for two additional contractors that provided raffle mailing and printing services.

After the 2018 permit revocation, YBCA told the attorney general’s office it was ending its relationship with the raffle administration contractor, and the state agreed to issue a permit. YBCA’s tax returns the next year show it paid about $166,000 instead to a staff member with the title “chief raffle officer.”

When asked why YBCA was ending the raffle, SFGATE was provided with a statement from CEO Sara Fenske Bahat.

“Since 2009, the raffle has helped provide YBCA with financial support to further our mission. The Bay Area has changed a lot over this time, and we want our revenue streams to better align with the value we create in the community,” the statement read. “As such, we made the decision to hold no further raffles after the current Dream House Raffle, so that we can dedicate the staff time and energy to other efforts.”

There’s no question that the SF Dream House raffle did bring in donations for the nonprofit. In the August 2022 nonprofit raffle report sent to the state’s Registry of Charitable Trusts, YBCA outlined its recent haul. The raffle raised $6.6 million in gross receipts, but $4.5 million was spent in “direct costs incurred by the organization from the operation of [the] raffle.” 

A YBCA spokesperson did not respond to a question regarding if the grand prize winner has ever actually accepted the dream house.