Rincon Center BMR Program
Last updated July 26, 2009 | Bookmark this site | Contact us

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There seem to have been a lot of irregularities in the way the Rincon Below Market Rate (BMR) Program has been implemented in the past year. There are many reports of BMR tenants not being given leases. Other BMR tenants are being given backdated leases. The Tenants Association has contacted the city about these and other issues.


BMR PROGRAM RULES

BMR tenants should remember the following rules and make violations known to management and/or the Tenants Association:

- Management must provide leases for BMR tenants. (Make sure management is not delaying your new lease while they wait for permission to increase rents.)
- There is no special (higher) month-to-month rate.
- BMR tenants can choose leases ranging from six- to 12-months. It is their choice, not managementís.
- BMR tenants are not required to accept and sign backdated leases.
- BMR tenants re-certify for the program every two years (see BMR Re-certification Issues below).
- BMR tenants have the option of re-certifying after one year if they wish. This is the tenantís choice to make. (Tenants may do this if they feel their income has dropped and they may qualify for a lower BMR category.)
- There is a 5% buffer on top of each category's maximum income amount for BMR tenants re-certifying so they won't be bumped into a higher category for temporarily making a few dollars too much.
- BMR tenants who change categories (Low, Lower-moderate, Moderate) are not required to change apartments.
- If the target category is full, there may be a provision for a temporary expansion of the category.

Contact the Tenants Association for more information.


BMR RENT AND INCOME LIMITS

BMR tenants should be aware of the official income and rent limits which change every spring. They can get this information by contacting the Tenants Association at this address: rcta@RinconNeighbors.com. Just provide your name and apartment number and confirm that you are in the BMR Program. You will be sent a link providing this information.


[Anton Refregier WPA Mural]

BMR RE-CERTIFICATION ISSUES

Many time-consuming and disruptive problems have cropped up in the Rincon BMR Program since the previous owners and city implemented a new tenant re-certification process several years ago. This new process fixed no known problems and has caused management, city workers and tenants many hours of grief. It does not bring the owners any additional income. Its problems far outweigh its benefits. The old process, which had been implemented for over 10 years, worked fine.

The previous owners made a bad business decision in implementing this new re-certification process. Its re-certification formulas are complex and prone to error. City hall bureaucrats never seem to consider all contingencies or appreciate how complex these programs can become. Resident disruption and displacement has never been much of a concern of theirs.

Dismissing our concerns as being self-serving would be a gross over-simplification. The long history of problems on all parties speaks for itself.


BMR CONDO CONVERSION PLAN

The city and the previous owners of Rincon Center developed a plan for selling the BMR apartments to the current tenants at very affordable prices. If and when Rincon Towers Apartments goes condo, management would implement this plan. The BMR condo owners could not, however, sell their units on the market at market rates. It is a limited equity program.

Detailed information about the proposed sale has been moved to another web page to keep it from real estate speculators. The location can be had by contacting the Tenants Association. Just tell us your name, apartment number, phone and whether you are a BMR or market-rate tenant, and we will send you the address of the new BMR web page.

The biggest drawback is that there is no provision for BMR tenants to avoid getting hit with large increases in homeowner dues. The market-rate homeowners would theoretically get a return on this increase because the market value of their unit would increase with whatever improvement the increase in dues is bringing about. Because the BMR units are limited equity, those tenants would not see the value of their home increase, and they might be priced out of their home. Here are two articles about this problem:

Unlimited Condo Fees Undermine City's "Affordable Homeownership" Program

Affordable housing provided one woman an opportunity, but she was unprepared for the reality


GENERAL BMR OVERVIEW

BMR Programs exist in numerous buildings around San Francisco. These programs keep the buildings from just filling up with wealthy individuals. If implemented correctly, they create a wonderful environment where people of ALL income levels are living side-by-side in a nice building (if not a nice neighborhood).

Below is a list of buildings offering BMR apartments:

The history of the Rincon BMR Program:

1986 Construction of Rincon Center begins. The builder-owners receive millions of dollars from the city to finance construction and, in return, willingly agree to set aside 160 apartments as a permanent Below Market Rate (BMR) affordable housing program.
1989 Rincon Center opens. Consistent with a good neighborhood redevelopment project, all prospective BMR tenants are promised (for 10 years) that their housing will be stable and affordable long-term. Some are able to contribute back to the city by doing community work and even starting small businesses (such as housekeeping services, Web design and selling baked goods to supermarkets).
1995 BMR tenants are told to expect rent increases as high as 25%. The Rincon Center Tenants Association is formed.
1996 Tenants speak up and work together with the S.F. Redevelopment Agency to address the problem.
1997 BMR Tenants gain rent rebates and limits on rent increases. Many receive rebates totaling nearly $1000. One official said Rincon residents were probably the only tenants "west of the Mississippi" to be getting their rents reduced at that time. Rent increases stabilize temporarily.
1999 New corporate out-of-town owners slash the BMR program from 160 to less than 80 apartments. Without evidence of problems or abuse, they also start making widespread changes to the rules for administering the BMR Program. Existing tenants--who have followed the rules and done nothing wrong--are not exempt. Owner profit-motives bring about tenant disruption and uncertainty.

Although Mayor Willie Brown accepts the Tenants Association's invitation to visit Rincon Towers and meet with tenants (during his re-election campaign), the Redevelopment Agency he controls does nothing to solve BMR Program problems. (Turns out the corporate out-of-town owners were contributing to his campaign.) Promised long-term stability for tenants evaporates.

2000 Mayor Brown suggests that the Redevelopment Agency, tenants, and owners "negotiate" changes to the Rincon BMR Program. The Tenants Association gains significant concessions but has no formal input because the new agreement only needs to be signed by the agency and owners.
2001 New BMR rules and requirements are implemented that solve no known problems. The Tenants Association refuses to endorse the new plan due to the broken promises and continuing instability imposed on the tenants. Once the new agreement is signed, the owners deliver their "October Surprise" of negative lease changes creating even more tenant hardship.

As the economy softens and rents decline across San Francisco, the low-income Rincon BMR tenants receive 7% rent increases. The so-called "below-market" rents increase so much that they come within $1 of market rents. Many BMR tenants move out of San Francisco.

2002 The owners and Redevelopment Agency continue making changes to the BMR Program that are favorable to the owners and disruptive to tenants. Low-income tenants receive 7% rent increases for the second year in a row. After a year of prodding, the Redevelopment Agency finally sends a letter to the owners stating that rents only $1 below market are "not in keeping with the spirit" of a "below-market" rent program. The owners spurn the agency's concerns. No effort is made by the agency to adjust the 7% rent increases.
2003 6% rent increases are allowed.
2004 BMR rents have now increased 25% in four years, many times higher than the city average.
2005 BMR tenants finally catch a break (no rent increase for the first time since Rincon Center opened) and the owners announce "the pending sale of the Rincon Towers Apartments, tentatively scheduled for June 1st." Things did not move that fast.
2006 Rincon Center is sold in April to a large, nationwide real estate development company based in Boston. The calculations that set BMR rents show a decrease for once. BMR rents drop four-percent, but only for BMR tenants who are already paying the maximum amount.
2007 Rincon Center's new owners put the apartment building on the market in January. If it sells, Rincon Center will be split between two owners for the first time.

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