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Below market rate housing being rented out illegally in San Francisco

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One homeowner reportedly lives inside a seven-figure Millennium Tower condo while renting out her BMR unit

A photo of the exterior of a San Francisco apartment building. Photo via Wikimedia Commons

A CBS SF report this week revealed cheating below market rate (BMR) homeowners suspected of breaking the rules by turning their units into rentals.

According to the report, “The Mayor’s Office of Housing says it is investigating approximately 40 cases involving misuse of below market rate units. That’s about 10 percent of the BMRs in the city.”

The possibility that one out of ten of the city’s crucial yet limited BMR homes may belong to a cheat is enough to inspire queasiness and rage.

However, Deirdre Hussey, spokesperson for Mayor Ed Lee and the Mayor’s Office of Housing, tells Curbed SF that the one in ten figure isn’t right.

“There are 40 cases under investigation,” says Hussey. “But that’s one percent; there are about 4,000 BMR homes [altogether].”

In this case “under investigation” could mean anything ranging from the city receiving a tip that someone is abusing their BMR agreement up to deferral to the Planning Commission for potential discipline.

While one percent doesn’t sounds nearly as provoking, it still adds up to dozens of scarce homes potentially in the hands of fleecers.

San Francisco Skyline Photo by Justin Sullivan/Getty Images

CBS SF says it found dozens of apparent cheats, including one who owns a BMR home in San Francisco but lives in Redwood City. Another case involves a BMR owner renting a home secured through the city on Airbnb for three figures a night.

And in one egregious case, Millennium Tower resident Amy Gussin, who reportedly owns property in New York, Beijing, and Los Angeles, allegedly rents out her Montgomery Street BMR unit on Airbnb for $149 a night.

“These units are an important public resource,” said Kate Hartley, director of the Mayor’s Office of Housing and Community Development, in an August press release.

“Their intended purpose [is] providing stable, long-term homes for low and middle-income households,” Hartley adds.

City Attorney Dennis Herrera is also suing several city homeowners for allegedly breaching agreements about their city-funded homes.

“These units are designed to provide hardworking city residents with homes they own. They are not investment properties for aspiring landlords,” says Herrera.

Note that all allegations are currently under investigation. Some of those being investigated have not yet even been formally accused.

The Mayor’s Office of Housing presently has 11 BMR homes listed as “available.” Would-be buyers must submit to a screening process to prove that their level of income and then win an opportunity to buy one of the units via a lottery.