Caltrans needs help in selling 710 Corridor homes
By Kevin Uhrich, October 24, 2013
There are some things that people have come to expect to never happen in their lifetime, such as erasing the line that divides North and South Korea and peace in the Middle East.
Until two weeks ago, another was Caltrans relinquishing control of the 587 homes it owns in Pasadena, South Pasadena and the Los Angeles neighborhood of El Sereno, which sit directly in the path laid out for a nearly five-mile road to connect the Long Beach (710) Freeway with the Foothill (210) Freeway.
But, kind of like the Berlin Wall, a symbol of the Cold War which was somewhat unexpectedly torn down after 28 years in 1989, that’s exactly what has occurred with the freeway connector project.
After five decades, the state transit agency is now being directed by the Legislature to sell the homes in the so-called 710 Corridor, once dubbed the “Corridor of Shame” by this newspaper for the shoddy way Caltrans has historically handled its duties as landlords, or, more accurately, slumlords.
This dramatic change occurred with Gov. Jerry Brown signing Senate Bill 416. Authored by state Sen. Carol Liu (D-La Canada Flintridge), and co-authored by Democratic Assembly members Chris Holden of Pasadena and Mike Gatto of Glendale, SB416 allows Caltrans to sell the homes “as is,” without making any repairs.
This is a significant difference from requirements spelled out in the Roberti Act, so named for former Democratic state Sen. David Roberti, which mandated repairs be made before a sale. However, like Roberti’s legislation, the new law, which passed the Assembly by a vote of 77-0 and the Senate by a 38-0 margin, gives current and former tenants in good standing the first right of refusal to purchase their homes at fair market value. And, under Liu’s legislation, Caltrans still must make repairs required by lenders or government assistance programs or provide the occupants with a replacement.
Yet, questions remain. Liu’s law requires that all single-family residences be offered at an affordable price to present occupants who fall into either low- or moderate-income categories. But, says Joe Cano, a longtime Caltrans tenant and a member of the No 710 Coalition, “This is a quandary.”
“Do these people really have the money to fix the houses? Would these houses qualify for a mortgage, or are they in such ill repair that the banks won’t even touch them?” he recently asked the Pasadena Weekly’s Justin Chapman. Presently, 400 of the homes in the 710 Corridor are occupied. The rest are vacant or too dilapidated to live in.
Liu’s law “still puts the tenants between a rock and a hard place,” Cano said. “Either way, they’re being mistreated. It’s a real complex situation.”
The law goes into effect on Jan. 1, but there is no set time line for Caltrans to begin selling the homes, which the agency seems to be in no hurry to do.
If a past audit of Caltrans’ property management is any indicator, it’s not likely that the agency will be much better in the home sales department when the time finally comes.
The California State Auditor last year found that between July 2007 and December 2011 Caltrans, which did not verify the eligibility of tenants to be charged below-market rate rents, collected $12.8 million in rent but lost $22 million due to underpayment by ineligible tenants. During most of that period, Caltrans reportedly paid out another $22.5 million for questionable repairs.
The audit also found that Caltrans spent an average of $6.4 million per year on property repairs but could not demonstrate that repairs for 18 of the 30 projects reviewed by auditors were reasonable or even necessary. The agency authorized repairs that far exceeded the potential rental income of the property. For 20 of the 30 properties reviewed, Caltrans authorized repairs for which it will take more than three years worth of rental income to recover the costs, according to the report.
In addition to that, the audit found that Caltrans estimated that the market value of all the parcels was $279 million, when the actual sale price for many or potentially all of the residential parcels could be roughly 80 percent less than the estimated market value, in part because of restrictions contained in the Roberti Act.
Making matters even worse for tenants is Caltrans’ assertions that it cannot put the homes up for sale until 2015, when an alternative connector is chosen from five options, one of them construction of a massive tunnel underneath the land where the surface connector was set to go.
With all the planning that’s already been done on the proposed tunnel plan, which is almost universally opposed by people living in Pasadena and South Pasadena, Caltrans should already know which properties would be affected by tunnel construction. It’s hard to imagine why another two years is needed to make that determination.
Perhaps now might be the time to get the transit agency out of the real estate business altogether and turn over responsibility for these properties to people who know what they are doing.
We believe a board of concerned citizens, and perhaps already sitting elected officials from the three affected communities, should be formed to work with Caltrans in order to ensure the state transit agency expeditiously does what it’s been told by the Legislature to do with those homes and does not screw people out of their rights.
Just as it still remains unlikely that we’ll ever see a united Korea or a Middle East without war, the evidence tells us that without supervision and vigilant monitoring, Caltrans will more than likely not do the right thing when it comes to selling those properties.