Scores of property owners suspected of abusing a low-income housing program in Dana Point began marshaling their forces Saturday and described the California Coastal Commission as an inept agency that ignored complaints and failed to properly administer its own program for almost two decades.
"Their bureaucratic mentality is absolutely ruthless," said John H. Anderson, a San Clemente attorney, who represents several buyers of affordable condominiums in the Niguel Beach Terrace complex. "They deserve a good fight. We can make life miserable for them in the discovery process."
Anderson and attorneys John A. Delis of Santa Ana and Thomas D. Roth of San Francisco met with more than 100 property owners Saturday in a packed conference room at the Marina Inn in Dana Point.
They discussed possible political and legal strategies to deal with the Coastal Commission, which plans to issue cease-and-desist orders to 139 property owners who participated in a low-cost housing program it created in the late 1970s.
State officials say the owners of 105 condos in Niguel Beach Terrace appear to be renting them to tenants, instead of living in them as required by their deed restrictions.
An additional 34 properties might have been improperly sold at market prices, rather than sold back to a public agency at a modest profit for resale as low- or moderate-income housing. Of that group, 21 appear to be rented improperly as well, Coastal Commission officials say.
Under terms of the sales agreements, qualified buyers agreed to personally occupy the condominiums for 20 years or more, unless given permission to do otherwise by the Coastal Commission or the program's administrator.
Agency officials could not be reached for comment Saturday.
At the meeting, lawyers said the Coastal Commission might be vulnerable on a number of fronts, from giving people improper notice of the accusations to failure to administer the program or heed repeated complaints since the early 1980s about possible violations of sales agreements.
"The Coastal Commission is the most unreasonable state or federal agency that I deal with," said Roth, who accused the agency of trying to "demonize" homeowners in the media. "We believe that a lot of you are in compliance with the goals of the program."
Administering the properties has had a rocky history.
In the early 1980s, the Orange County Housing Authority handled the program, but canceled its participation because county officials said it was socialistic.
The responsibility was then passed to a small nonprofit agency staffed with volunteers. When that did not work out, the Coastal Commission assumed control, but had neither the staff nor money to handle it, officials say. In 1990, the Coastal Commission turned over administrative chores to Civic Center Barrio Housing Corp., a nonprofit Santa Ana organization.
Niguel Beach homeowners said Saturday that they were never notified when the program's administrator was changed.
Some said they tried to get permission to rent their properties, but could not locate the appropriate officials to ask.
Out of frustration, they said, they rented their dwellings at below-market rates to tenants they thought were low- to moderate-income people. They say they were complying with the intent of the program.
The homeowners further disputed reports that people were renting for $1,200 to $2,000 a month. Most, they said, were leasing their units for $750 to $950 a month.
"This is not a bunch of rich people trying to rip off the Coastal Commission," said a schoolteacher who is renting out his two-bedroom condo. "After the county housing office stopped administering the program, no one knew where to go."
Real estate agent Lynne Dvorak said she met with the director of Civic Center Barrio in the early 1990s and requested that the rental restrictions be enforced. She quoted the director as saying the problem was "too out of control" and "too big" to do anything about.
A homeowner who requested anonymity said that in 1983 she began to complain repeatedly to the Coastal Commission about abuses, but never got a response.
Anderson and the other lawyers also say the Coastal Commission might have given homeowners improper notice of the accusations against them, and insufficient time to prepare their responses.
Michael G. Peters, who owns a low-cost unit in Niguel Beach, said he received notice May 30 from Civic Center Barrio of the nonprofit's desire to exercise its right to buy back his condo. On June 7, he said, the Coastal Commission sent him a cease-and-desist order.
"This is upside-down," said Peters, who says he was not informed about the deed restrictions when he bought his condo from a previous owner in 1995. "I am being accused, tried, convicted and sentenced all in one letter."