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Boston sues Rhode Island man it says is renting out an affordable condo that's only supposed to be owned by a Boston resident

Boston is suing a Rhode Island man it says bought a federally and city-funded "affordable" Roxbury condo in 2012 but is now renting it out, in violation of a deed restriction that requires the unit only be owned and occupied by Boston residents.

In its complaint, filed Friday in Suffolk Superior Court, the city asks a judge to order John Brownell to immediately sell the condo to Boston residents who could really use a place to live as well as pay the city all the money he's made renting the place.

At issue is a condo at 102 Homestead St., one of the 16 units in Uva Douglas Estates at Sugar Hill, which were sold in 2012 with deed restrictions limiting their ownership and occupancy to Boston residents making no more than 80% of the Boston area median income. The units are named for an 82-year-old neighbor of the project who died when somebody torched the development while it was still under construction in 2002.

Boston alleges that Brownell, who was one of the winners of a lottery to buy one of the units in 2012, now lives in Pawtucket, RI, and that he is renting out the unit. His deed has riders that ban both investor owners and leasing the unit, which means that what Brownell is doing violates state affordable-housing and consumer-protection laws and is a breach of contract, Boston alleges. Both riders expire in 2032, the city says.

In its complaint, the city alleges Brownell has been ignoring annual city requests for proof he still lives in the condo for years, that, in fact, he has never filed "a principal residence certification" as required. In 2016, the complaint continues, the city did some investigating and found that Brownell lives in Rhode Island, where he actually maintains two residences, the one in Pawtucket and another in Warwick.

The city says all this is not just a deed violation but unfair to Boston residents who cannot afford market-rate housing here:

In the City of Boston, there is a significant shortage of housing that is affordable to low- and moderate-income individuals and families. For this reason, the creation and preservation of affordable housing is of utmost importance to the City and its leadership.

Neighborhoods: 
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Comments

This never happens. Ever. I can't believe it. This is all made up.

Everyone who receives a lottery sponsored lottery unit lives there and that law has never, ever, ever, ever been violated. No building given away by the government with the promise that no money is made from a resale of a lottery unit within certain bounds has ever had someone sell for market rates and pocket the profit.

The people of Boston would never try a real estate scam like this. No realtor would ever, ever, cause a violation of the law by breaking the leasing or sale protocols established for lottery units to make a fast buck. They are moral people.

Adam - Cover the truth not innuendo and rumor please.

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On a related note, everyone who’s receiving a residential exemption on their property taxes is definitely an owner/occupant!

We definitely don’t have ANY landlords in the city of Boston who are getting a residential exemption tax break on their rental property.

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according to the city online records this property was also receiving the residential exemption, so in effect no paying his full share as an 'investor', like other landlords should be. Hope the City will go after him for those funds as well.

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You've got to be kidding, right?

Only because I am shocked, shocked, that this would ever happen.

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To restate what is implied above.
How many other "affordable" condos are treated the same way by the lottery winners? And perhaps: What is the city doing to verify that the lottery winners are in fact abiding by the terms of the deed?

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I wouldn’t doubt if this is happening all over the city, people win lotteries to enter a chance to live in a new affordable housing unit especially in high end neighborhoods such as Beacon hill , South End , Seaport district has the newest luxuries, the city is not doing enough to assist those that hardly know about the program , it’s the educated people who are taking advantage and are mainly the winners of the housing lottery. And they are living large in high end buildings all around Boston.

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Everyone is just "sure" of what "is" or "isn't" happening, but in the absence of hard data the only certain thing is that everyone is "sure" that the rumor they heard is or isn't true.

I'm inclined to think that there is possible fraud, favoritism, and a a hell of a lot of Failure to Follow Up involved. But all that is conjecture absent any actual evidence.

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(Anecdotal evidence)

Is that people get these units, (or other nice housing deals) and then have a wealthier family member or partner who is not on the lease stay there. This essentially has a family making 100, 200, 300k a year living in a unit designed for someone making 50k.

Then there are those who just get lucky. People making 50k a year living in an apt/condo with a market value of $1,000,000 or so. Those are few and far between but I’ve seen them in the suburbs especially for 40b projects.

In the end the scammers are few and far between though , but again, that’s only my guess.

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reminds me of metco.

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The State has lottery units in buildings, and the T, Yes, The T has lottery units in a building in the North End which used to be a power station.

This building was given a 70/30 lottery units / market split but 70% of the voting rights went to the market rate owners. This is how the building got money to be converted. There were a lot of nice old ladies from the North End (for whom most of the units were designated) in most of the lottery units. There were also people in lottery units whose North End lineage was a box of pastry from Mike's.

The T did not care about whether lottery units were transferred at a profit or rented. The person before me who tried to get one person who was leasing their lottery unit out on a version of mid-90's AirBnb got a gun pulled on him by the owner when he said you can't do that. I left that guy alone.

Just be forewarned, all of you who want Rent Control and think that it will all be moral people involved and it will be a nice spring day where all people are good, and all people follow the rules, welcome to real life.

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The point of rent control was never to means test units for individuals.

The point of rent control was to control rent.

We can argue endlessly about whether or not that is a good thing, but it is good to understand the historic point of the practice when doing so.

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A close friend of mine just closed on an affordable condo this winter. Now this was a resale of a unit - the person selling it was the original lottery winner - and not her directly winning the lottery, so I can't speak to that process, but my friend had to come up with a HUGE amount of paperwork and documentation that was all submitted to the city for review and approval, both before even putting an offer on it (essentially getting preapproved) and then after she made her offer. The realtor - only one for the buying and the selling, since there's only a few realtors doing deals with these units - was pretty good, but the city was a nightmare. Asked for everything by X date, said she HAD to close by x date, then didn't look at any of the paperwork for weeks. The realtor had to call the office over and over again and then they 'found' it and put it in for processing. Closing ended up having to be pushed off several days, after she had already signed off her lease to new person and she ended up staying on my couch for almost a week while everything was sorted. So I'm not surprised the office dropped the ball on follow up of this.

That said, there's a LOT of cynicism in this thread about the program, which fundamentally isn't a bad one. Ensuring there are set aside units so people making 50k a year in this city can get a foot in the door is a good thing. The deeds themselves have a huge amount of legalese and no, you can't just take one and sell it for market rate somehow -- the buyer's bank would never issue the mortgage, for one, when the deed is plastered all over with THE CITY HAS TO APPROVE THIS OR ELSE IT'S VOID. Renting it out is harder to crack down on, mostly because the city hasn't been serious about forcing people to actually register their rented units - if they did, they could run a pretty simple comparison between the two databases and find anyone else illegally renting it. Ultimately this comes town to ISD being a goddamn disaster, as it has been for years. But everybody turns their nose at the city hiring more people, claiming "patronage" and "government waste" so there's simply not enough bodies to move things quickly or stay on top of small violations.

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My experience has been that they are very very very very very strict on the buying side. Once the person owns the unit it becomes much harder to track. The units are all over the city and do not stick out. They are under a million different umbrellas. There are also not long term case works like with housing vouchers either. This is why it becomes a problem later on.

I agree that we need units moderate income and low income earners can live in. I do not think people on this thread disagree with the goal. They are expressing a strong disgust for people who are abusing the system.

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Ensuring there are set aside units so people making 50k a year in this city can get a foot in the door is a good thing.

It's not a good thing to get people making $50k through the door, when it leaves behind people making $100k or $120k still unable to get a foot in the door. Instead of maintaining this "Affordable housing" program which the city cannot keep up with enforcing, just convert it all to market rate and let the city pocket the difference. The city can use the money to do public good, and is no longer saddled with the overhead of keeping tabs on whether whether owners actually live in their units.

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I'd go a step further and say it's worse. These programs actively PREVENT others from getting in the door by driving up market-rate housing even further. The subsidy comes from somewhere.... and it's from other people barely able to get their own foot into the door.

We have so many ridiculous housing problems when the solution is simple: build more units.

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The Free Market will solve everything, like it always does! How very unfair of the city to favor people making 50K at the expense of those 1%-ers 10%-ers.

[Edited. Happy now, you pinheaded nit-picker?]

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If you think a $100k salary puts you in the 1%, then you're in for a big surprise.

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just convert it all to market rate

Terrible idea. Not everything that needs to happen in a society can be done at a profit, and when it can't... it still needs to get done. That's what government is for, and until you (or anyone anywhere) can figure out how to get the Glorious Free Market to build enough affordable housing around Boston to satisfy demand, it must remain a government job because it needs to be done and nobody else will do it.

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Simply because we do not permit it to do so. We place so many restrictions on the creation of housing -- zoning, lot size, unit size, parking spaces, affordable housing set-asides, union labor, green building requirements, etc. that it is nearly impossible to actually build new housing that is affordable without heavy government subsidies like tax breaks or free land. Whether or not one thinks any or all of these are worthy goals of public policy, they all add cost to new housing and push new construction out of reach for the middle class.

And many in the middle class make too much to be eligible for the housing lotteries, but can't afford market rate housing.

If we actually had a real free market, developers could build far more densely in desirable locations -- but that would, of course, change the character of the city. I'm not saying we should feel bad for developers. The lack of creation of affordable housing in Boston is largely due to government policy, not a failure of the free market.

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Your wonderful idea would result in the creation of slums, like it has in Mexico City, Rio de Janeiro, and everywhere else that government allows people to build whatever they like.

Yes, I used the G-word. It's what lets us have civilization. If you don't like it, go somewhere that doesn't have one.

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How about this - we'll remove all limits on what developers can do, but institute a 90% vacancy tax on all units that sit empty longer than one calendar month. No more empty investment homes, no more of these new luxury buildings sitting half-empty because the developers don't want to lower the rent to the poors and can write off the losses, no more picking and choosing and hemming and hawing about applicants. If you're an owner and your property doesn't have a person living in it, you pay the equivalent of whatever you SHOULD be lowering the rent to, to the city, until somebody does.

Let's do it for commercial buildings too, might ward off this "sits empty for 6 months and then a BANK happens" disease that's killing our commercial liveliness.

Completely disagree. Government is for paving the roads, running the schools, and collecting taxes to pay for it. There isn't a need for a government program to grant housing to a $75k/year earner in Beacon Hill, leaving a $100k/year earner to commute in from Medford. Maybe there's a political need for it; everyone's favorite question for candidates running for Mayor is how they'll solve the affordable housing problem. But there isn't an inherent government need for it.

The Glorius Free Market has made Boston very expensive, meaning not everyone who wants to live in Boston can settle down in Boston. If you can't afford it, you settle down elsewhere. That's how the country was built.

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My partner bought a deed-restricted house a couple years ago. The owner was living in Las Vegas and renting the place out (illegally). The amount of headaches, time, money, and mental health it cost to resolve was staggering.

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You know that offer of a renter's deduction on the state income tax form? I always assumed that was to rat out landlords trying to hide income. Seems like a database search could turn up all kinds of stuff.

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If the city found out about the violation in 2016, why did the city wait until 2021 to file a court case against the offender?

The complaint says the city sent a letter in 2016, and then took 2 years just to send a follow up letter in 2018.

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You know what the first thing that came to my mind when I read this was? How much of the money made by developers or others who gain income from developments named after dead people is donated to that person's estate or family?

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Hopefully the city wins and leaves him completely broke.

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Both riders expire in 2032

So after ~20 years the unit goes back to market rate?

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No government program that's going to hand out cash (or cash-like benefits) should be passed without including some anti-fraud mechanisms and enforcement. Not only will it reduce fraud a bit, but heck, we'll hire more investigators!).

  1. Disability and Worker's Comp.
  2. Medicaid (how many false PT claims are there?)
  3. This housing program
  4. PPP and other emergency bail-outs
  5. FEMA pay-outs, and special programs like the 9/11 fund
  6. Business bail-out programs
  7. Programs where governments give tax breaks in return for businesses hiring x new employees
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Now look at the reality that it takes TWO YEARS to get SSD, during which time people DIE because they can't afford care, plus the FEMA problems with paying lots of money to owners and ignoring renters (AND systematically bilking people in "black" neighborhoods) and the whole "means testing" morality play becomes nothing but another flaming sack of neoliberal bullshit fucking over of people in need for not having "special paperwork" and friends in high places.

This stuff literally COVERS for and causes a hell of a lot of fraud, because pulling the levers becomes more important than actual NEED.

https://www.scientificamerican.com/article/advisers-rebuke-fema-for-raci...

https://www.theatlantic.com/politics/archive/2009/08/the-case-against-me...

https://www.stopthewaitnow.org/

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You're using rent and lease interchangeably, they are not interchangeable.

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This problem is one reason why lottery-based income-restricted housing is no solution to the housing crisis.

Another major reason is the fact that they have to have a lottery, which proves that the system is failing the majority of people it’s supposed to help: everyone who loses the lottery.

The real solution: allow more housing. Upzoning, removal of off-street parking minimums, and otherwise streamlining the process. In other words, allow the market to build housing, like it did until about 1960 when the restrictions came in.

The problem is existing property owners don’t want competition. Someone in a single-family house doesn’t want a 6-unit apartment building going up next door? Tough. We used to allow it, and we should once again. Our political leaders need to step up and fix this.

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