SAN FRANCISCO (KPIX 5) — Believe it or not, there are a few thousand condos in prime San Francisco neighborhoods that are actually selling for under half a million dollars. You can buy one through a special city program for people who couldn’t otherwise afford to be homeowners in the city. But we found some people are abusing it.
They’re the coveted few, but they don’t want to talk about it: owners of affordable housing in unaffordable San Francisco.READ MORE: Downsized But Not Out, Dreamforce Conference Set to Boost Business in San Francisco
Below Market Rate units, or BMRs, are supposed to be for low to mid-income individuals, who are first-time homebuyers and work in the city. Even if you become a millionaire, you can still keep your BMR as long as you live in it.
But we found dozens of cases of people breaking the rules and renting out the BMR units.
For example, we found a condo on 18th Street in Potrero Hill that belongs to Margarita Popova. No one answered the door. Instead, we found her out in the avenues in a nearly $1.5 million home.
Neighbors say she’s been in the house for years. Still, she insisted otherwise.
“So you still live on 18th Street?” KPIX 5 asked her.
“Yes I do,” was her response.
But we found an ad on Craigslist asking for $3,100 a month to rent Margarita’s condo.
“So you never put an ad on Craigslist?” KPIX 5 asked.
Her response: “No.”
No answer either at a BMR condo near the Embarcadero.
The owner is Caroline Novak. We found her at a home she purchased for $2.25 million in the exclusive Redwood City community of Emerald Hills.
“Basically we wanted to understand how the system works for you guys, because we have heard that you are supposed to live in the unit,” KPIX 5 said to her.
Her response: “I do live there.”
She too has been accused of renting out her BMR.
“So this is not your house?” we asked.
Her response: “I am just staying here, for a couple days.”READ MORE: Flames Reach Ancient Sequoias; Crews in Pitched Battle to Save Giant Forest Grove
Then there’s Amy Gussin, who also owns property in New York, Beijing, and Los Angeles. She was advertising her Below Market Rate unit on New Montgomery Street on Airbnb for $149 a night while living in a multi-million dollar condo she owns in the Millennium Tower.
“The amount of people misusing the system are so small compared to the people using the system for its purpose,” said Maria Benjamin, director of Homeownership and Below Market Programs for the Mayor’s Office of Housing and Community Development.
“We want to make sure that people understand and know that we are watching these units, we are monitoring these units, we will prosecute these units. This can’t happen,” said Benjamin.
The city attorney is prosecuting three cases involving alleged BMR cheats and has served notices of complaint against Gussin, Novak and Popova.
Popova says it often takes a neighbor complaining for red flags to be raised.
“Without the BMR program would you be able to live here?” we asked Janet, a BMR owner who lives in the same building as Caroline Novak’s BMR and asked that her last name not be used.
“I wouldn’t be able to live in California, in San Francisco, that is for sure. Never!” Janet said.
Janet did complain about a cheating BMR owner next door to her years ago and nothing ever happened.
“I was really wondering when is someone going to notice this,” she told KPIX 5.
Janet says at least two of the five BMR units in her building are not owner-occupied, and that’s just her building.
Meanwhile there’s a waiting list of low-income San Franciscans trying to get one.
The city calls it a lottery. Janet says it felt like hitting the jackpot when she got her SOMA BMR nearly 20 years ago.
“Is it hard for you as someone who is benefiting from this program — the way that you are supposed to — to see people abusing it?” KPIX 5 asked her.
Her response: “Absolutely, absolutely.”
“You are saying this office is watching these units. But this is happening. And there are cases in which this happened for multiple years, in some of these cases more than a decade. How do you explain not being caught?” KPIX 5 asked Maria Benjamin at the Mayor’s Office.
Benjamin’s response: “Sometimes it takes a while for it to come to a lawsuit.”
The Mayor’s Office of Housing says it is investigating approximately 40 cases involving misuse of Below Market Rate units.MORE NEWS: PG&E Says Light Rain After Long Drought Led to Lights-Out Across Bay Area
That’s about 1 percent of the BMRs in the city.