By David Goldstein

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LOS ANGELES (CBS) — A CBS2 News investigation has uncovered the sons of an L.A. City Housing commissioner living in an apartment complex that hundreds of low-income families are waiting to get into.

Dawn Osler is 6-months pregnant and looking for a home. Her friend Tenetra Hughes was just laid off from her job as a teacher’s aide with LAUSD and now she can’t afford her rent.

“I really need to get in here,” Hughes said.

They have both picked up applications for apartments at Tierra del Sol, a low income affordable housing project in Canoga Park. Rents there are as low as $331 a month for a one-bedroom apartment, depending on your income.

But there were no vacancies.

“They said the waiting list is about 1,700 people on the list. It’s from six months to a year,” Osler said.

While 1,700 of L.A.’s neediest families are waiting to get in, we found one apartment rented by a man, who drives a Mercedes, traveled to Paris and Rome. He is the son of Beatriz Stotzer, the board president of New Economics for Women, the non-profit organization that built Tierra del Sol with millions of dollars of taxpayer-guaranteed loans.

Stotzer has also been appointed by the mayor as a commissioner and serves as a chairperson of the Housing Authority of the City of L.A.

Not only does her 26-year-old son, Antonio, live in one of the units, but her 30-year-old son, Nicholas, lives in another.

“I think it clearly looks bad. It sends the wrong message,” said Councilman Dennis Zine.

He is intimately familiar with Tierra del Sol — a community center in his name is part of the complex. But he said he did not know that two of the apartments were taken up by the developer’s sons.

“This is the first I’ve heard of it. I just don’t think that’s what it was built for,” Zine said.

He said Tierra del Sol was proposed to him as a development for low income families. It even includes a school.

In fact New Economics website claims it creates economic and educational opportunities for single parents and families.

Antonio, who works for a video production company, is single and lives alone. Nicholas, whose Facebook page says he is an associate pastor, is married with no children.

“Should developer’s family members be allowed to move into city-funded buildings like this?” I asked Zine.

“I don’t know what the rules are regarding this, but on the surface, it creates a lot of questions,” he said.

The mayor, who appointed Stotzer to the Housing Authority, echoed the thoughts.

“Questions have to be asked on the circumstances and they are going to have to be answered as well,” Mayor Antonio Villaraigosa said.

Over the past three months, attorneys for Stotzer’s organizations showed me rental applications, waiting lists and other documents.

They refused to provide copies, but the documents showed the sons’ incomes to be low enough to qualify for the apartments and the organization said they followed all procedures in admitting them off the waiting lists.

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But Sarai James has a different story.

“He never showed up on the waiting list,” James said.

She was the former manager at Tierra del Sol. James claims she was told to rent an apartment to Antonio Stotzer in 2006. The rent was just $326 a month.

David Goldstein: “Was Antonio on the waiting list?”

Sarai James: “No, he wasn’t.”

David Goldstein: “He wasn’t and there were other families on the waiting list at the time?”

Sarai James: “Yes.”

David Goldstein: “So he moved ahead of other families?”

Sarai James: “Yes.”

James admitted she was fired, claiming it was for being pregnant. But Stotzer’s attorney said her story is all wrong.

“They didn’t cut in line. No special favors were given. No strings were pulled,” said Stotzer’s attorney Stanley Friedman.

“Do you think it’s appropriate living in that house. In Tierra del Sol. There are all families in there?” I asked Antonio Stotzer.

He didn’t answer questions. Neither did his mother.

“Did they qualify as low-income residents commissioner?” I asked Beatriz Stotzer

“I have no further comment,” she said.

Or his father…

“I appreciate your job David. But we tried to be nice to you. You’re not a nice person. You’re not a nice man,” he said.

In a written statement, Mrs. Stotzer said, “There was no preferential treatment given to my two adult sons who were financially independent of me at the time that they applied for and ultimately qualified for affordable housing.”

But Councilman Zine said that he will investigate to see how someone, who vacationed in Paris and Rome, and drives a Mercedes is living there, instead of Dawn Osler who is hoping for a better life.

“I got to be thankful for whatever comes my way,” Osler said.

Two following are two statements provided to CBS2 News from Beatriz Stotzer’s attorneys:

Over the last several weeks, information has been gathered and provided to KCBS and its reporter, David Goldstein on a voluntary basis in regard to my two adult sons and others. Because this information does not pertain to me and involves confidential private information of others it was necessary to first obtain waivers by these other individuals before such information could be disclosed. By voluntarily undertaking such efforts and disclosing such information, I have done my best to show that there was no preferential treatment given to my two adult sons who were financially independent of me at the time that they applied for and ultimately qualified for affordable housing. Because all rules and regulations were complied with, I did not benefit in any manner from my sons’ application to or acceptance into affordable housing and no preference was given to them, both I, and my attorney believe that there was nothing improper. Also, to the extent that my sons were independent of me and the issues involve private matters such as income level, I ask that their privacy, and the privacy of others, be respected by KCBS in its reporting.

You should be aware that the Tierra de Sol Apartments were built as affordable housing. There are limitations on the size of the household per unit size. The limitations on the appropriate household size will not allow a large family to occupy a one-bedroom unit. A one bedroom would not be occupied by a large family as you claim. The tenancies of both Antonio Stotzer and Nicholas Stotzer comply with the intended purpose of this affordable housing project given the household size of the applicants.

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David Goldstein