City economist Ted Egan projects the OpenAI and Anthropic IPOs will generate over $10 billion for San Francisco — but the city can't touch stock gains directly. Its actual cut depends on a real estate transfer tax, and sellers are already holding back.

San Francisco's chief economist projects the OpenAI and Anthropic IPOs could deliver more than $10 billion to the city over the coming months. The catch: San Francisco can't tax stock gains or income directly.

"Both of them will be more than 10 times bigger than anything we've seen before," Ted Egan, chief economist for the city and county of San Francisco, told ABC7 News Thursday. The city's actual mechanism for capturing any of that wealth runs almost entirely through real estate. "The city gets a transfer tax when people sell their house. And for expensive houses that are over $10 million, that's 5.5%, so there's a significant amount of money there," Egan said. A rising property base also lifts the city's flat 1% annual property tax yield — a slower, passive gain compared to transaction-driven transfer revenue.

There's measurable evidence the pre-IPO wealth effect is already moving the luxury tier. Sales of San Francisco homes priced above $5 million rose 69 percent comparing Q1 2025 to Q1 2026, according to Jay Cheng of the San Francisco Association of Realtors. Both OpenAI and Anthropic filed confidential S-1 registration statements with the SEC earlier this month; neither has set a public offering date or confirmed a price range.

The fiscal math has a structural friction point. Real estate agents report a simultaneous inventory freeze: sellers are holding back, betting the market peaks higher once IPO liquidity actually flows. Fewer transactions mean fewer transfer taxes collected, regardless of what prices do on paper. "There's so many people who are trying to jump the gun on all the money that they see coming," said Austin Klar of Vanguard Properties, "and at the same time, all these sellers think it's going to be crazy, so they're holding back."

SF's $10 billion windfall depends on tech employees converting equity to real estate — and on enough willing sellers to generate the transactions the transfer tax requires. Neither is guaranteed until the S-1s go public and a lockup timeline is set.