Affordable SF Home Ownership Success Story: Where There’s a Will, There’s a Way Part 1

This is a long story with a lot of happy endings. Please stick with me. It’s worth it – I promise.

home-1353389_640Back in February 2015, Patrick called me. He was a renter in a building on 5th Avenue in the Richmond that was about to go on the market. He thought just maybe he, his wife and his downstairs neighbors could buy the building from the landlady and pre-empt their evictions. There was just one problem. All four of them were educators, three of them for San Francisco Unified School District (“SFUSD”) with limited resources.

There are affordable home ownership programs offered by the Mayor’s Office of Housing (“MOH”), but none of them apply to the purchase of a multi-unit building, so they were going to have to piece it together and see if they could buy the building without outside assistance. (Also, the MOH income limits were also so low in 2015 that even two SFUSD educators were over-qualified for the assistance.)

I went to the building and met with both couples. Bridget and Kai were expecting their 2nd child. Patrick and Meghan already had two. Between them they could come up with about 15% down. They talked to a lender and found that if they received some gift funds from a friend (another teacher couple if you can believe it), they could make a decent offer on the building. They did so, but it was rejected by the owner who had decided to move in to Bridget and Kai’s unit and sell Patrick and Meghan’s on the open market.

So, Bridget and Kai moved to another more expensive rental in the Inner Sunset. They thought about buying a home using the Mayor’s Office programs, but found they were outside the income limit and that the amount available – around 250k in assistance – wasn’t enough to get them into a home. More on that in Part 2.

Meanwhile, following Bridget and Kai’s eviction, Patrick and Meghan tried to buy their unit but found that the overall condition of the building was too poor for them to proceed, so they spent the summer of 2015 showing the house to prospective buyers who would presumably evict them. Then, in the Spring of 2016, the owner decided to move her mother in to Patrick and Meghan’s unit using a Relative Move In” or “RMI” eviction and they found themselves looking for housing after all.

The aforementioned friends (Vanessa and Jack) who were able to gift funds to the group so they could attempt to purchase the 5th Avenue building had outgrown their condo. They also have two children. Vanessa & Jack and Patrick & Meghan decided to hunt for the impossible two unit building to live in together. Patrick and Meghan were able to rely on a few extra funds from the RMI relocation payment, which they badly needed. After about four weeks of searching, the perfect building on 19th Avenue came on the market. It was a stiff competition with five offers and multiple counter offers, but they were able to win the bidding war to buy it. The only problem was there was a tenant in one of those units. Fortunately, this tenant was asking to be “bought out” and the group was able to make an agreement with him shortly after closing and will have possession late in 2016.

Great right? It was. But upon learning that Patrick & Meghan were in contract to buy a place, the landlord on 5th Avenue decided to attempt to rescind her Relative Move In, and take back the relocation funds which are required for an RMI eviction. And Patrick & Meghan only were able to buy because they received these funds. You simply cannot make up a story like this. (This month, a court found that the landlord was in the wrong and Patrick & Meghan got to keep the funds.)

Soapbox: Extending the MOH assistance programs to apply to multi-unit buildings where all units will be occupied by program recipients would really help close the affordability gap for a lot of families. Not only is the price per housing unit lower, tne of the economies that Patrick & Meghan and Vanessa & Jack now have in their 2 unit building in the Richmond is a support system between the couples for childcare/pickup that further stretches their tight budgets. In the above example, Vanessa, Jack, Patrick & Meghan are all SFUSD educators and none of them could use the TND program for which they were otherwise qualified because they chose to share a multi-unit building rather than buy condos or single family at a higher price.

Teamwork, ingenuity, community, friends helping friends and being flexible won the day. There is so much more that happened here, but with this happy ending, we have to get back to the Inner Sunset and see what’s happening to Bridget & Kai…

Stay tuned for part two…