Council Approves Agreements For Affordable Housing

Council Member Diana Mahmud said the city “desperately” needs affordable housing.

The City Council on Wednesday night unanimously approved entering into agreements with three non-profit organizations to purchase 15 “surplus” Caltrans-owned properties along the defunct 710 Freeway extension route under a plan that would turn some of those properties into affordable housing.

But there was passionate opposition to the move, as a handful of tenants of Caltrans-owned properties and their lawyer spoke out and urged the council to hit the pause button — fearing current residents of the properties would be shut out of the purchase process, and saying the council was acting hastily, afraid of a deadline it actually has the power to move.

The council’s 5-0 vote authorized the city, under the auspices of the South Pasadena Housing Authority, to enter into an agreement with Heritage Housing Partners; New Prospect Housing, LLC; and New Economics for Women.

With the city strapped for cash, the non-profits, under the plan, would provide all the financing and would, in turn, sell the properties — turning some (but not all) into affordable housing and helping the city toward its state-mandated affordable-housing goals.

Caltrans had long ago purchased the properties with the intention of eventually demolishing them for the planned 710 Freeway extension, and now is in the process of disposing of them. The 15 South Pas properties have a total of 28 housing units.

Mayor Marina Khubesrian, in an interview with the Review, said she could not yet specify how many units would be converted into affordable housing, but that it was reasonable to expect that at least 15 would be used toward the city’s state-mandated goal.

City Attorney Theresa Highsmith described the now-approved transactions as a “double escrow process,’’ in which Caltrans would deed the properties to the city, while simultaneously the city would deed the properties to the non-profits, with the city actually owning the properties “for a split second.”

Highsmith also said, “the city has no liability if any of the properties should fall out of escrow.’’

In September, the council heard results of a study by Heritage Housing Partners, which recommended the city partner with qualified non-profit entities to pursue the acquisition of the Caltrans properties as affordable housing.

“We have had considerable interest from the community in the purchase of Caltrans properties for affordable housing purposes,” City Manager DeWolfe said in a release. “And while the city cannot directly purchase these properties, we are able partner with qualified non-profit groups to achieve the same outcomes.”

At Wednesday’s meeting, DeWolfe said, “This is the culmination of a very long process,’’ and that, “We’re now at the point where Caltrans is disposing of the properties.’’

Council members said they felt the matter was urgent.

Council Member Diana Mahmud, replying to comments by speakers who urged the council to hold off on its decision for the time being, said, “We desperately need more affordable housing in the city.’’

“I don’t want to let this chance slip by,’’ Mahmud added. “It’s a huge risk for the city to forego the opportunity. I’m going to go for the brass ring.’’

Khubesrian concurred, saying, “We are under a time deadline.’’

Highsmith said Sept. 26 was that deadline — a Caltrans-imposed deadline by which the city needed to get the agreements with the non-profits in place or risk losing out. The city met that deadline, with Wednesday night’s council vote formalizing the deals.

For her part, DeWolfe said that if the city had not acted now, “it’s entirely possible’’ that another finance partner (or HRE, for Housing Related Entity) “would not come forward.”

In that case, DeWolfe said, the city would lose out on the potential boost to its affordable-housing roster.

However, tenants and their lawyer said the Sept. 26 deadline is more flexible than the council believes — saying that, historically, Caltrans has moved deadlines when it benefited the agency.

Further, the tenants said, they were never consulted during the process of the city connecting with the non-profits — and they fear they might face eviction and/or being shut out of the eventual purchase of the properties at below-market prices.

“It’s been a very exclusionary process,’’ said Libby Curiel, a resident of a Los Angeles Caltrans property and one of the speakers who urged the South Pasadena Council to hold off on its approval.

“Families will be displaced,’’ she said, imploring the council to “put a pause on the decision.”

Lawyer Christopher Sutton, representing a group called United Caltrans Tenants, also pushed for a pause — and at one point threatened to sue the city “tomorrow” if the Council passed the measure. But later in the evening, during an interview with the Review, said he would discuss matters with tenants beginning Thursday. He still held out the possibility of litigation.

“None of the tenants were consulted,’’ Sutton said. “It’s unclear if tenants will be able to stay in the properties or buy the properties. … When will the tenants have their rights respected?’’

For her part, Khubesrian called the matter “a very emotional issue,’’ adding, “Hopefully we can convey to the public that there was due process involved, and that there’s going to be certain guidelines and various rules and regulations’’ protecting tenants.

Among them, she said, were points in a “memorandum of understanding” with the non-profits in which displacement of current residents would be minimized; priority would be given to people who live and work in South Pasdena; and a push would be made to maximinze the number of units deemed “affordable.’’

Also, Khubesrian said, current tenants who do not qualify to purchase units at “affordable” prices would get first shot at buying those units at market prices.

Wednesday’s council vote, she said, “is not perfect, but the best solution.’’