First published in the Oct. 1 print issue of the South Pasadena Review.
Caltrans will officially hand over the South Pasadena properties it acquired in its failed bid to build the 710 Freeway extension in accordance with the new Senate Bill 381 signed this week by Gov. Gavin Newsom and drafted by state Sen. Anthony Portantino.
SB 381 provides protections for existing tenants, includes a strategy to protect historic homes and gives flexibility to the city of South Pasadena to create more affordable housing. The bill accelerates the transition of the Caltrans-owned homes and follows the successful negotiation to end the threat of the 710 Freeway, enacting protections for nonprofits operating in the corridor.
Portantino worked closely with the city, community and South Pasadena Historical Society to collaborate on drafting SB 381.
“I want to thank the governor for signing SB 381 and providing South Pasadena an opportunity to protect our historic homes and expand affordable housing options,” Portantino said. “Since the [State Route] 710 Freeway gap can no longer be built, South Pasadena expressed a need for legislative changes to the current sales process and existing tenants needed protections.
“With SB 381, we were able to achieve all these goals while offering the city the opportunity to control the process going forward.”
Early in 2017, Caltrans — the state Department of Transportation — began dispensing properties as required by Senate Bill 416 and the Roberti Act, which govern the sale of surplus property and outline the priority order of who can purchase. In 2019, the governor signed Portantino’s Senate Bill 7, which ended the 710 extension project. To date, Caltrans has sold fewer than 15 properties and will be looking to move forward with the disposition of the remaining 445 properties this year.
The current statute allows cities to purchase only occupied and unoccupied multifamily units, but cities must still compete with other housing-related entities to win the bid. Additionally, the statute sets the sales price for cities at a “reasonable price” determined by various factors. However, a substantial number of these homes need significant repairs and at the same time must be rented or sold at amounts based upon affordable income criteria.
In order to bring more clarity and local flexibility, the South Pasadena City Council asked Portantino to help. After the initial conversation, the city, community and historical society conducted a series of community meetings and council dialogues that resulted in SB 381.
The legislation gives current tenants of single-family and multifamily residences new opportunities to purchase properties. South Pasadena will be able to sell historical homes at fair market value and use the funds generated to reinvest in affordable housing. The measure requires that for every historical home that is sold, the city must create three affordable housing units.
In addition, the bill provides that Caltrans must start to sell unoccupied units by June 30, 2022 and allows the city to buy properties at acquisition price, which must be used for affordable rentals for 55 years and affordable home ownership for 45 years. Construction or acquisition must begin by Dec. 31, 2025, as outlined in SB 381. All tenants who do not buy will get first right of occupancy.
“At long last, the enactment of SB 381 represents the final chapter in the state’s long-standing efforts to build another freeway through the small town of South Pasadena,” said Mayor Diana Mahmud. “Senator Portantino long opposed the proposed freeway, and now has acted strategically to assist the city in addressing the consequences of that failed effort. We are deeply grateful to the senator for his continued support and advocacy for our city and count ourselves very fortunate to be represented by him.”
Among other things, Mahmud noted, SB 381 assures all current tenants of properties purchased in anticipation of the freeway’s construction will have the opportunity to acquire their residences before it is offered to a third party, and permits the city to purchase unoccupied Caltrans homes at acquisition cost for vitally needed affordable housing. In addition, the new law allows South Pasadena to sell at market rate unoccupied historic homes previously acquired by Caltrans, with the proceeds of that sale used for affordable housing.
The imbalance between supply and demand has caused California housing costs to be the highest in the nation, with an average median home price now 2.5 times the U.S. median. These high prices have prohibited people in many occupations —such as teachers, nurses, public safety officers and younger professionals — the ability to afford a home. SB 381 will make it economically viable for South Pasadena to purchase, substantially rehabilitate, maintain and administer an affordable housing program to the benefit of the community.