As it currently stands, affordable or ‘Below Market Rate’ housing units in San Francisco are allocated by lottery with preferences given to households that hold a rare Certificate of Preference or tenants who have recently been evicted by way of the Ellis Act.  And being a resident in the neighborhood where the affordable units are being constructed doesn’t count for anything.

In other words, while the City’s eye-popping project at 490 South Van Ness Avenue is being positioned as a project to address the displacement of Mission residents, there’s currently no guarantee – nor even preference – that current Mission residents, or those who have recently been displaced, will land one of the building’s units.  And the same goes for the proposed BMR units associated with the so-called ‘Monster in the Mission.’

But as proposed, a new law would not only expand the eviction preference to include tenants displaced by way of any no-fault eviction, unit merger, or condo conversion since January 1, 2010, it would also create a third preference for ‘residents in the neighborhood’ where the affordable housing is being built.

‘Neighborhoods’ would be broadly defined as San Francisco’s 11 supervisorial districts.  And to qualify for the Neighborhood preference, an applicant would have to have a primary residence in the district at the time they apply for a unit.

In addition, the Neighborhood preference would only apply to 25 percent of the units in any new development and would be tertiary to the other two preferences.

Sponsored by the Mayor with Supervisors Breed, Christensen, Cohen and Wiener on board, the proposed ‘Preferences in Affordable Housing Programs’ ordinance has just been scheduled to be reviewed by San Francisco’s Planning Commission in three weeks time.

Comments from Plugged-In Readers

  1. Posted by GoBlueInOakland

    Its about time. I think the voters would be pretty shocked at how much of the new rental housing units built in SF got to folks far from their neighborhood – or often, even non-SF residents. (I’m not talking about the for-sale BMR program)

    On top of that, there’s a fair amount of these new rental units are being leased to tenants who already live in affordable rental housing in SF and are just applying in order to upgrade to a newer unit. Now, that frees up their old affordable unit – but 99% of the time, that old unit gets filled by someone on a waiting list that has been closed for 5 years.

  2. Posted by Sam

    Jesus Christ, and here it comes. Kickback to the political Calle 24 lobby, I really hope someone tracks who gets the S Van Ness housing, it would be interesting to scrutinize this.

  3. Posted by Karl

    Calle Vente Quattro – por favor!

  4. Posted by eddy

    Has anyone studied the economic impact of BMR. My guess is that a lot of people who own these things have been ripped of the opportunity to benefit from the mass appreciation of real estate in general had they bought a market rate place home somewhere they could afford to live. I generally dislike the BMR concept although I think some provision allowing for certain city based jobs could possibly be appropriate for teachers and other low salary resources that we need here in SF.

    • Posted by busboy

      Bmr is a broken system – there are a lot of people in the program that shouldn’t be. Getting ripped off of the opportunity to benefit from appreciation? How about they should be grateful for having what they have. I think Bmr units should all be rentals controlled by the city… the mayors office is doing a bad job managing the program as it is currently set up.

      • Posted by SFJazzer

        Mayor Lee did not design the rent control ordinance. That ordinance was created in 1984 I believe. Rent controlled units only apply to units built prior to 1979.

    • Posted by Pfffttt

      BMRs are practically free (a jackpot, essentially) to the lucky, completely random (or is it?) few who end up with them at someone else’s expense (the developer’s). They are already receiving a subsidy. Why should they stand to benefit from the market capital gains when they did not pay market rate?!

      I personally know someone who got a BMR unit, has a great, well-paying job, and now she is traveling the world, living off the BMR unit she is renting out for $$$$ in downtown SF. Well played, gf! Yeah, the BMR program has ZERO oversight, like many of the handout — I mean entitlement programs of SF.

      • Posted by SFCitizen

        Pft – I can only hope that your acquaintance is the exception and not the rule for BMR unit owners. It sounds like she is committing fraud and should be held accountable. I seem to remember that BMR unit owners are not allowed to rent out their space. I wonder if the tenant is aware of the situation.

        Determining BMR status of a unit is very easy. Just review the documents for the parcel on the propertymap.sfplanning.org website. A BMR unit will have documents related to the Mayor’s Office of Housing. In a multi-unit building, the appraised values are much lower than similar units in the same building. We shouldn’t allow such fraud to occur when so many people need affordable housing.

        • Posted by kbbl

          That hope is your only option is pretty telling that the system could use some adjustments.

          I really don’t see what point there is in ownership in BMR — the equity appreciation will by design be lower, and yet the owners are stuck with the same HOA dues as their (hopefully) better-heeled market-rate neighbors. I don’t see where this is better for the BMR owner … except in the case of this anecdotal world-traveler.

          Is there actually a regulation that makes renting out a BMR at market rate illegal?

          • Posted by SFCitizen

            kbbl – Here is the applicable section from the MOH BMR Program document:

            F. RESTRICTIONS ON BMR OWNERSHIP UNITS AND OWNERS
            Term of Restriction
            All BMR Ownership Units are restricted in their resale price and other applicable restrictions for the Life of the Project unless otherwise noted in Use Restrictions for the Project.

            Occupancy Requirements
            BMR Ownership Units are to be owner-occupied and used as the owner’s primary residence as defined by living in the BMR Unit at least 10 out of 12 months of the calendar year. The BMR Household must occupy the BMR Unit within 60 days of the completion of the purchase.

            Rental Prohibition
            BMR Units are not to be used as rental property. An owner of a BMR Unit may not rent or sublease any part or the entire BMR Unit without prior written consent of MOH.

            MOH may grant consent to a BMR Owner to rent in circumstances where the Household is forced to temporarily relocate due to employment requirements; where the BMR Owner is unable to sell a BMR Unit at the original purchase price or at the original purchase price plus the Change in AMI repricing methodology per Section II (C) of this Manual; or for other reason deemed acceptable by MOH in its sole discretion, provided that:

            (1) The total period for which the BMR Unit may be leased does not exceed twelve (12) months;
            (2) The tenant satisfies the income requirements placed on the BMR Unit by Use Restrictions and of
            this Manual for the Unit as a BMR Ownership Unit and other qualifying Household requirements placed on the BMR Unit by Use Restrictions and of this Manual for the Unit as a BMR Rental Unit;
            (3) Initial rent does not exceed the Maximum Monthly Rent, calculated according to the Maximum Household Income stated in the Use Restrictions for the Unit as a BMR Ownership Unit, or the BMR Owner’s total housing expenses, as defined in Section I of this Manual, whichever is the lesser amount.

          • Posted by SFJazzer

            So you think someone who qualifies and gets a BMR unit which is already below market rate should also reap the benefits of the appreciation so that when they sell it, their profits would be more than what a person who would have bought that same unit at market rate????. Jesus….some people feel like they are entitled to everything but I wonder what they actually contribute????

        • Posted by spyder

          When I was trying to get BMR units 10 years ago, I was at a sales office of a new development and someone was buying one of the BMR units. Her father was there with her and when the salesperson asked how she was going to pay the down payment, her father pulls out a check for $250,000 (the unit was slightly over $350k). The salesman said, “whoa, I can’t accept that, sir. These have to be your daughters funds.” And with that, he reached in his desk drawer, pulls out a business card, and says, “call this lawyer. He’ll help you sort all of this out and make sure that check can help your daughter buy this place.”

          I stopped trying to get a BMR place after that. 11 years, a wife, 2 kids, and 3 no-fault evictions later, we just bought our first home.

          • Posted by Tossed Around

            spyder – congrats and hope you enjoy your new home!

  5. Posted by soccermom

    We could just allocate a number of BMR certificates to each supervisor’s district. That way people could mail in a BMR application and a campaign contribution check to the incumbent at the same time to, you know, speed the process along with a single stamp.

    Seems like the cleanest way to move in the nativist/patronage direction we’re leaning.

  6. Posted by eddy

    What ever happened to the woman who bought a bmr unit at market rate only to find out its bmr status when she tried to sell it years later and was told it had bmr restrictions?

  7. Posted by JOE Leland

    There is a problem with the lottery system, but there has been no unbiased evaluation of past practices. This solution may be a step in the right direction, but how will the City know when the exact problem is ill defined?

  8. Posted by grrr

    I would like to see an audit of all public housing and BMR housing in the city. Journalists needs to scour that information for the rampant abuse that everyone expects is there. I’ve heard so many stories of favoritism and fraud.

    • Posted by JOE Leland

      Such an investigation does not have to decidedly look for “rampant abuse”. One first step would be to simply compare the demographics of the lottery winners to that of the immediate neighborhood. If there is a stark difference, that’s when you start to question and dig deeper. I think this new law is acknowledging that there is a problem but no one seems willing to articulate that problem with easily obtained facts.

  9. Posted by Tommy Strange

    I would like more, to see some researched articles on a bay area website, that shows the massive subsidization of this new property bubble. $12 Trillion near zero interest loans? $4 trillion of RMBS that will likely turn toxic in this crash bought by the Fed and treasury? How about an accounting against speculators that flip? What are the tax subsidies for that? In the real world, with the majority of americans (60%) not having a real dime to their name, I would expect people within a society would wonder what the future implications are as rents increase 20% across the entire country, and 100% in the bay area, as trillions of foreign money too is buying up real estate. If you believe your profit supersedes human rights, community, and having livable urban societies, you have accepted corporate oligarchy. You should expect the ‘people’ to recognize this lunge, and expect them to react more militantly in the future. Short note, the fuse has been lit by your greed.

    • Posted by BayviewSF

      0% interest policy is the same for the whole country and it is a correct policy due to deflationary economy, it is not a special subsidy to San Francisco. San Francisco’s high housing cost is due to its rent control policy which has taken 70% of the rental stock out of circulation. BMR is similar to rent control. Both BMR and rent controlled apartments will most likely stay out of circulation for a long time. BMR will probably stay out of circulation for even longer time due to its permeant nature. BMR and rent control are the best way to inflate property price, inflate rent because they take many housing units out of the market thus middle class and above will have to pay an extremely high price in rent and purchase price. The best subsidy to flippers is BMR and rent control. Fed’s 0% policy have very little effect. Look at Florida and Texas, housing is ridiculously affordable with the same 0% interest rate.

  10. Posted by folderpete

    I’ve heard that Rose Pak won the “lottery” and has a BRM unit. It’s good to see the system working.

    • Posted by Hitman

      Rose told me that she wished she never bought it – not that good of a deal.

      • Posted by Ivoryhouse

        Because she cant airbnb it? Why was it not a good deal exactly?

  11. Posted by anonymous

    Mayor Lee has been a total sellout as far as affordable housing goes. He’s allowed “I live in a bubble tech” to take over what was once a city of great diversity. So disappointing…and surprising given his roots fighting for affordable housing post law school.

    • Posted by moto mayhem

      i agree he’s been a sellout but for exactly the opposite reason. his given in to an emotional stance by a supervisor who only cares about his own re-election and popularity, agaisnt any decent policy or economic realities. The recent decision of building the “affordable” housing in the mission that will cost $1M/ unit is deplorable and a slap in the face to taxpayers. Lee has been anti-development in my book

      • Posted by SFJazzer

        The money to build affordable housing has to come from somewhere? Where do you suggest the money comes from?

        • Posted by moto mayhem

          im not against taxpayer money if it is used more wisely. You can buy already built units in the city for under $1M. and you could build elsewhere in the city for under $1M/unit. you could build or buy 50% more units for the same price.

  12. Posted by moto mayhem

    i finally found a stat that ive been looking for: how much of SF’s housing stock is actually market rate rentals?

    The number was shockingly low. Only 9% of SF’s housing stock is market rate rentals. That makes it very easy to understand why the rents are so high, and a clear rationale for many more market rate rentals. Source is an SFHAC report

  13. Posted by Mark F.

    Abolish this stupid program. I don’t mind the BMR rentals (as I have one), but there is no need for this “ownership” program at all

  14. Posted by Mark F.

    I meant to say that the argument for the BMR ownership program is poor. I benefit from the BMR rental program, but would prefer a free market.

    • Posted by Dan

      Having a BMR rental and wanting a free market are contradictions in terms.

  15. Posted by Sara Short

    BMR = unfair wind fall for the lucky or well connected few. The units at 490 S. Van Ness will cost over 900 thousand dollar each! Nothing is affordable about that, it is massive wasteful subsidization of a lucky few.

    • Posted by SFJazzer

      Sara…no developer is going to build subsidized housing that is below market rate. What’s the point? Would you take a job that paid less than minimum wage. The city would have to contribute to the cost of those BMR units meaning my taxes are going to be used to help people who cannot help themselves and there’s a limit as to how much the middle class’s income can be bled to help the poor.

  16. Posted by Mark F.

    The market rents would be much lower if we had a more free market. $1281 for the studio (what I pay) is far more than the market rent in most cities.

    • Posted by SFJazzer

      If you want a cheaper studio to rent, then you should move to a city that has lower rents. You are living in San Francisco, one of the most expensive cities in the U.S.. Why live here and then complain about high rents? You expect San Francisco should have the same rents as Oklahoma city?

      • Posted by Mark F.

        You don’t seem to understand that one of the reasons rents are so high is because of government regulation. San Francisco rents and home prices in the 1960s were not so high compared to other cities as they are now. The market rent for a studio apartment should not be 6 times that of one in Oklahoma City, no.

    • Posted by James

      Great! Let’s start with your non-free market rental!

  17. Posted by SFJazzer

    I think only those who actually have a job in San Francisco should be qualified to get BMR housing. Why give housing away to someone working in Hayward or Fremont when they could live in those cities and be closer to work and not clog up public transportation?

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