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ARRESTED REDEVELOPMENT

Cities often give short shrift to affordable housing

At least 120 municipalities spent a combined $700 million in housing funds from 2000 to 2008 without constructing a single new unit, a Times analysis of state data shows. Nor did most of them add to the housing stock by rehabilitating existing units.

October 03, 2010|By Jessica Garrison, Kim Christensen and Doug Smith, Los Angeles Times
  • Fred Reyes and his children Natalie, 4, and Nicholas, 7, stand next to the vacant lot where his mother's home of nearly 40 years had stood before the city of Santa Ana acquired it and knocked it down.
Fred Reyes and his children Natalie, 4, and Nicholas, 7, stand next to the… (Bob Chamberlin / Los Angeles…)

Second of two parts — Cities across California have skirted or ignored laws requiring them to build affordable homes and in the process mismanaged hundreds of millions in taxpayer dollars, a Times investigation has found.

At least 120 municipalities — nearly one in three with active redevelopment agencies — spent a combined $700 million in housing funds from 2000 to 2008 without constructing a single new unit, the newspaper's analysis of state data shows. Nor did most of them add to the housing stock by rehabilitating existing units.

In case after case, The Times found, cities spent substantial sums for little return:

-- The San Gabriel Valley city of Irwindale spent $87 million from 2000 to 2008 but produced only 42 homes and 62 rehabilitated units. Some of the money was spent on industrial land next to an old gravel pit and warehouses, a site that officials now acknowledge was unsuitable for housing. New plans call for building a hot-sauce factory there.

-- In Santa Ana and Avalon, officials spent millions on projects that knocked down homes, displaced low-income people and worsened blight without producing anything in its place. Block after block in a 94-acre area east of Santa Ana's civic center is lined with boarded-up buildings and vacant lots. In the Santa Catalina Island city, where housing is so scarce that workers sometimes sleep in the bushes, a half-block of property where cottages were razed to make way for more homes has sat, sun-baked and undeveloped, for 15 years.

-- Rancho Cucamonga paid $42.5 million to a politically connected developer to keep about 550 units below market rate for 99 years — even though a consultant to the city said the price was "unwarranted" and city officials were told that an appropriate price for slightly fewer units would be about $13 million.

-- Nearly three dozen cities, including Monterey Park and Pismo Beach, reported spending most of their affordable housing money over the decade on "planning and administration" — but never built a single unit. Asked to account for the $361,000 spent by Pismo Beach, Administrative Services Director George Edes said some of it paid the salaries of staffers who were "thinking about concepts of how do we get something going … but we never did get to the point of taking those to the council with a concept that was developed."

State law requires municipal redevelopment agencies to spend 20% of the approximately $5 billion in property taxes they collect each year on building and preserving homes for poor and moderate-income people.

But affordable housing is not politically popular, and The Times found that many projects face inexplicable delays. Others end up worsening blight and hurting the people they were supposed to help. Land ostensibly set aside for affordable housing was in some cases turned over to commercial developers, raising questions about whether cities ever intended to build the housing in the first place.

State officials do little to ensure that cities spend the money properly or report accurately on their activities. The Times found numerous discrepancies between what officials told reporters they had produced and what they told the state.

Citing limited funds, the Department of Housing and Community Development stopped auditing redevelopment agencies three years ago.

"The state has unleashed this incredibly powerful land-use and financial tool that is redevelopment with virtually no effort, no time, no resources spent to hold these agencies to account," said Catherine Rodman, a San Diego lawyer who has sued several agencies over their use of housing funds.


How does your local redevelopment agency perform? Look it up in The Times’ database.
Puzzling explanations

The state's approximately 400 municipal redevelopment agencies control the largest pot of non-federal money available to build and subsidize affordable housing.

These little-understood arms of government are run by city council members and county supervisors — or, in big cities like Los Angeles, by political appointees. The agencies, which often work in concert with private developers, are funded by increases in property tax revenue from blighted areas they improve.

Nearly 35 years ago, amid concerns that agencies were razing the homes of poor people and leaving them nowhere to go, the Legislature passed the law requiring that one-fifth of redevelopment money be spent on affordable housing.

The law gives officials great flexibility in addressing the housing needs of poor and moderate-income families; in Los Angeles, that would be those with incomes of up to $75,600 a year for a family of four. The agencies can do more than build homes: They can buy and fix foreclosed homes, provide grants to homeowners to improve properties and pay to keep existing units affordable.

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