Fast-track rent hikes

Fast-track rent hikes

Caltrans now raising rents every six months on state-owned homes in 710 Corridor

By André Coleman 07/24/2013

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Residents living in houses seized by Caltrans more than a half-century ago in a failed attempt to extend the Long Beach (710) Freeway through El Sereno, South Pasadena and parts of Pasadena have for years complained about the state transit agency’s shoddy upkeep of the homes.

But now, those residents, many of them low-income families, are in a new battle with Caltrans, which recently announced it will increase rents by 10 percent every six months until people are paying market-value rents on the homes. The first increase went into effect on March 1.

To make matters worse, low-income tenants — who previously were charged 25 percent of their gross annual incomes — are now being charged 30 percent of their pay before taxes.

“We are on a fast-track rent hike that will lead to the eviction of many people,” said South Pasadena resident Roberto Flores. “My rent will increase 30 percent in the next 12 months.”

Flores, who was paying $1,500 a month to live in his home on Berkshire Avenue, is now paying $1,650 due to the initial 10-percent rent hike in March. On Sept. 1, his rent is due to increase again, this time by $160.50, then again by another 10 percent of the new amount on March 1 —totaling a 33 percent increase in 12 months.
 
In California, landlords can increase rents as many times as they like, as long as tenants are given 30 days advance notice on increases of 10 percent or less. A 60-day advance notice is required if the rent is being increased by more than 10 percent. Caltrans tenants were informed of plans to jack up rents back in December.
Despite the hurried pace of the increases, however, Flores says Caltrans appears to be in no rush to fix any of the multiple problems at his house.

“I need floorboards in the living room,” Flores recently told the Pasadena Weekly. “The walls are busted. They repaired some of the walls, but they didn’t paint them. All of the windows need new frames because water leaks in and has caused water damage to the walls. The powder from the concrete gets in the air when the weather gets hot and we breathe that stuff in. We are sick all the time.

“Caltrans is known as the biggest slumlord in the area,” Flores said. “They don’t take care of their houses, and now they want more money.”

Flores’ house is far from being in the worst condition among those homes in the so-called 710 Corridor, the 4.5-mile stretch between the terminus of the 710 at Valley Boulevard in Alhambra and West Pasadena. Earlier this year, No on 710 organizer Joe Cano uploaded a video that he shot of a vermin-infested home in El Sereno, showing bugs and rats crawling on the floor and in kitchen cabinets

“They will do anything to get people out,” Cano said. “They are trying to skirt their way around the Roberti Bill and comparing the rates to good houses in San Marino and Monterey Park.”

Authored in the 1980s by former Senate President Pro Tem David Roberti, the law gives low-income people living for more than two years in homes seized by the state through eminent domain back in the 1950s and ’60s the chance to buy the property below market value, but for no less than what Caltrans paid for it. And if a person has lived in a Caltrans home for five or more years and their household income does not exceed 150 percent of the county’s median income, he or she would be offered the house “at an affordable price.”

Former owners who are still living there would get a chance to buy the house back at fair market value. But if they are living there and happen to also be low-income, they too could qualify for an affordable rate. If the current low- to moderate-income tenants were forced out, Caltrans could sell the homes at fair market value and make about $500 million.
The homes currently sit in the footprint of where state officials were planning to lay concrete to connect the 710 with the Foothill (210) Freeway in Pasadena. The plans stalled after resistance from angry South Pasadena residents who for the past 50 years have vehemently objected to having a freeway disrupt their idyllic bedroom community.

Last year, Pasadena residents, who had once embraced the connector route, fought the idea after Caltrans revealed plans to decimate parts of West Pasadena by either changing Avenue 64 into a six-lane highway or building twin tunnels under the project’s footprint to connect the freeways. Caltrans took that option off the table after more than 700 angry residents showed up at a Pasadena City Council meeting held at the Pasadena Convention Center to vent their displeasure.
Local politicians, including state Sen. Carol Liu and former Assemblyman Anthony Portantino, have called for the sale of the homes. Earlier this year, Liu introduced Senate Bill 416, which would give Caltrans’ authority to offer a replacement dwelling to tenants, revise the definition of “fair market value” to reflect the existing “as is” condition of the aging properties, and delete the requirement for costly repairs to be made prior to sale.

SB416 also gives first right of refusal for purchase of residential properties at fair market value to former tenants in good standing and for purchase at fair market value to tenants of nonresidential properties before they are offered on the open market.

“We need to get Caltrans out of the rental housing business and sell off these properties;” said Liu, a Democrat representing Pasadena, in a prepared statement after the bill was announced.

Liu is also a member of the Senate Transportation and Housing Committee.

“Real estate management is not part of the department’s mission,” she said.

Caltrans Public Affairs Director Will Shuck did not return phone calls seeking comment on this story.
 
Last year, a Caltrans spokesperson called the management of the properties “poor and unacceptable” after an Aug. 16 audit resulted in a scathing indictment of the agency’s management of most of the nearly 500 homes it owns in Pasadena, South Pasadena and the Los Angeles neighborhood of El Sereno. The report 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, according to the audit.

The audit was done after Caltrans paid more than $100,000 for roof repairs in former tenant Don Jones’ house. It was later discovered that the repairs should have only cost about $80,000. Jones’ story, which first appeared in the Pasadena Weekly, led to the audit which revealed the state agency’s mishandling of the properties.

“We have been villainized and criminalized and it is not right,” Flores told the Weekly. “They are the criminals. They should be in jail. ”

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