PWA fights to become a homeowner
by Matthew S. Bajko
In the overheated Bay Area housing market, finding a luxury condo for under $100,000 is like being in a 1970s time warp. Most people would say to friends and family "pinch me, this can't be true."
Vernel Primus had such a moment. Nearly a year ago, on December 28, 2004, Primus learned he had an opportunity to become a homeowner again after he lost his first home over a decade ago.
Primus, 54 and HIV-positive since 1989, lives in the Beacon on King Street and has been renting his condo since February 2004 at below market rates. The building has been sold to a new owner who is selling the rental units, all 450, as condos.
"I do have first rights to buy the unit," said Primus. "It gives me an opportunity to make a dream come true."
Primus, who worked for a computer software firm, had owned a home in Sacramento but lost it in 1993 when he went on disability due to health problems related to HIV. He moved to San Francisco to live with a cousin while he saved enough money to rent his own place.
"I lost everything. I had to start renting again, which I was not prepared to do at the time. It was stressful," said Primus, openly gay and enrolled at San Francisco State University where he is in a biotech program and hopes to work in a stem cell research laboratory.
If he remains as a renter in his unit – the landlord cannot evict him if he decides not to buy – he said he worries what will happen if his health fails him again.
"What happens if I become sick? The first opportunity they have they will try to kick me out," he said.
Being able to once again own a home would give him peace of mind, he said.
"I would know I don't have to move again or worry about my rent going up every year," said Primus. "Another reason for homeownership is it would give me a foundation to build an economic life again. I could possibly start my own business. There are not enough jobs out there for people on disability."
Before he receives the deed to his home, Primus faces several hurdles on the road to homeownership. Primus's unit has been priced at $99,000; he would need to raise $64,000 to buy it after deducting a $5,000 contribution the developer is required to pay for turning the building into condos and a $30,000 downpayment assistance loan program contribution he has applied for from the city.
Currently, he is using a combination of Social Security disability checks and HOPWA money to pay for the $1,200 in monthly rent. He comes up with $552 and the federal program – the Housing Opportunities for People With AIDS administered by the Department of Housing and Urban Development – covers the rest. His monthly mortgage payment could drop to $1,000 a month, less than what he pays now as a renter.
To help cover the costs of owning his unit, Primus has asked for a waiver so he can put his HOPWA money toward the cost of the mortgage. By using the money to buy his unit instead of paying rent over the life of a 30-year mortgage, he estimates HOPWA would save $700,000.
But there is one catch – he needs the San Francisco Redevelopment Agency, which oversees the HOPWA program locally, to send in the waiver request and there is no guarantee federal officials will grant it. So far, agency officials have expressed concerns about sending in the waiver and have yet to make a definitive decision on Primus's request.
Time is of the essence. Initially given 18 months to decide whether to buy his unit, Primus recently received notice he only had a 60-day period to decide. The letter, dated September 7, said he had two months to exercise his right of first refusal, and if he chose to purchase the unit, the new owner would offer down payment assistance of 5 percent.
With time running out, he turned to the AIDS Housing Alliance for help. At the alliance's suggestion, he met with redevelopment agency staff last week to press his case. According to a letter from Brian Basinger, director and founder of the alliance, to the redevelopment agency about the meeting, two concerns were raised about requesting the waiver. Agency staff expressed concerns about HOPWA's longevity, fearing if Congress cut funding to the program, then the city would be stuck paying for Primus's mortgage. Secondly, according to the letter, agency officials also said they were hesitant to support homeownership for PWAs without public input on the issue.
Basinger criticized both stances, saying HOPWA has bipartisan support in Congress and that the second argument is a Catch-22. Agency officials have not held a needs reassessment of the HOPWA program since 1998, he wrote, because no new money has been added to the program.
"This is circular reasoning. We won't make changes because there hasn't been public input. We won't allow public input because there hasn't been any changes," wrote Basinger.
In an earlier e-mail to agency staff, Basinger wrote that Primus becoming the only renter in a building of homeowners could put him at jeopardy of losing his rental unit.
"My experience in the homelessness prevention field has taught me that this presents the opportunity to create vulnerability for the tenant. The New York owner of the property is not in the business of being a landlord to a handful of residents of a project they have already sold off in San Francisco. It is a tremendous inconvenience, and an inefficient use of resources. It will always be in his best interest if the tenants were to leave, allowing the units to be sold as condominiums," wrote Basinger. "In the past, this has created situations where tenants received substandard services, were made to feel unwelcome, or had minor lease indiscretions aggressively pursued in order to recover the unit. Vernel will always be at risk if the waiver is not granted."
Primus is meeting with the new owners of his building today (Thursday, October 27) to discuss his case. The new owners of the Beacon could not be reached for comment.
In an interview, Basinger contended that the HOPWA regulations recognize the need for homeownership for PWAs, and therefore, the redevelopment agency should support Primus's request for a waiver.
"The HOPWA regulations were born out of a need for flexibility. I believe our request is completely in line with that spirit of flexibility and in keeping with the requirements for economic efficiency and wise use of funds," he said. "I believe our request honors and respects the need for dignity or the need to optimize the dignity that Vernel and every individual needs."
Olson Lee, deputy executive director of housing for the agency, told the Bay Area Reporter Tuesday, October 25 that he could not discuss the details of the case because the matter was still being negotiated. He did say he thought a different solution than requesting a waiver could be reached to allow Primus to buy his unit.
"I am not really at liberty to discuss the issue. It is really a private matter for Mr. Primus and it is being resolved as part of a negotiation," said Lee. "Mr. Primus may be able to resolve his housing situation without the assistance of the redevelopment agency. We feel confident we can resolve Mr. Primus's housing situation without use of the HOPWA waiver."
Lee did not disclose what other options there are for Primus. He did add that he thought the matter "would be finalized relatively soon."
HUD spokesman Brian Sullivan said he was unsure if a waiver could be granted to Primus. While the federal program has experimented with a homeownership program in New Mexico, he said HOPWA is meant to be a rental assistance program and suggested there are other routes Primus could pursue for assistance in buying his unit.
While Sullivan said that the government's "Section 8 voucher program does give certain discretion to local agencies to convert rental assistance to homeownership" under HOPWA those agencies "may not have discretion to do that kind of gymnastics."
Instead, he said Primus might qualify for HUD's American Dream Downpayment Initiative for first-time homebuyers. Primus's having owned a home in the past would not restrict him from the program, said Sullivan.
Primus has been trying to secure a mortgage, but so far lenders have not been eager to have him as a client.
"If the redevelopment agency decided on the request for a HOPWA waiver that would help me qualify for a mortgage. That is a major barrier right now," he said. "I was told they would see what they could do."
In the meantime, Basinger has decided to launch the HIV Homeownership Fund to help PWAs either trying to navigate the home buying process or fight possible eviction from their homes. He is applying for a grant from the Castro Street Fair to kick-start the fund.
"This will help in emergency situations to keep people with HIV in their home," he said.