Caltrans Properties | City’s Plan to Acquire Homes Now Requires Governor Approval

Caltrans currently owns 68 properties in South Pasadena, of which the City plans on taking control

PHOTO: Eric Fabbro | News | South Pasadena City Council 2021

The City of South Pasadena’s grand plan to take control of Caltrans’ properties in town is on the verge of fruition after a flurry of last minute legislative activity. In less than 24 hours, amendments to Senator Anthony Portantino’s SB 381 were passed with overwhelming majorities by the Assembly’s Housing and Community Development Committee (6-1), and then on the floors of the Assembly (56-11) and Senate (35-0), becoming the second-to-last-bill to be approved in the legislative session that ended just before midnight last Friday.

“On to the governor,” Portantino wrote Friday, where supporters are cautiously optimistic it will get a final OK.

Caltrans owns 68 properties in South Pasadena.

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The measure “is an innovative way to protect tenants, and maintains historic properties while giving the city and the local community a stake in developing a viable and sustainable affordable housing program,” Portantino said in a statement. “Since the SR 710 freeway gap can no longer be built, South Pasadena expressed a need for legislative changes to the current sales process. These changes will allow for a more direct intervention by the City in purchasing properties. I look forward to the Governor’s signature on SB 381 so we can ensure that the original intent of the Roberti Act stays intact.”

Current statue allows cities to purchase only occupied and unoccupied multi-family units, but cities must still compete with other Housing Related Entities (HREs) to win the bid,” according to the statement. “Additionally, current statute sets the sales price for cities at a ‘reasonable price’ determined by various factors. However, a substantial number of these homes need significant repairs and at the same time must be rented or sold at amounts based upon affordable income criteria. SB 381 will give current tenants of single-family and multi-family residences a new opportunity to purchase a property and allow multifamily units to be purchased at fair market value without any restrictions to current tenants.”

If the measure is signed into law, the City “will be able to sell historical homes at fair market value and use the funds generated to reinvest in affordable housing,” the statement adds. Under amendments made during the legislative process, the bill requires that for every historical home, the City must create three affordable housing units. In addition to other “accountability measures,” it also must report to the Department of Housing and Community Development that it has the capacity to do a 3 to 1 ratio. If the city fails to comply, the funds must be returned to HCD and used for affordable housing in South Pasadena.

“After decades of Caltrans ownership of homes in South Pasadena, SB 381 establishes a firm deadline for Caltrans’ completion of home sales and provides the City with the opportunity to purchase unoccupied and other homes at Caltrans’ acquisition cost, after the existing tenant has had an opportunity to purchase their residence,” South Pasadena Mayor Diana Mahmud said in a statement.

SB 381 provides that Caltrans must start to sell unoccupied units by June 30, 2022 and allows the City of South Pasadena to buy properties at acquisition price, which must be used for affordable rentals for 55 years and affordable home ownership for 45 years. Construction or acquisition must begin by Dec 31, 2025 as outlined in the bill. All tenants who do not buy will get first right of occupancy.

Passage of SB 381 comes shortly after the Governor signed SB 51, Sen. Maria Durazo’s bill dealing with Caltrans’ properties in El Sereno. Under SB 51, income qualified current tenants will have the first option to purchase their homes at an affordable price, followed by other long-term tenants whose income exceeds 150 percent of average median income. After properties are offered to current Caltrans tenants, they will then be offered to private nonprofit affordable housing managers or public housing authorities to be renovated and used for low- and moderate-income housing. If a current tenant does not purchase the house, SB51 requires the current qualified tenant be offered the property as an affordable rental.



Ben Tansey
Ben Tansey is a journalist and author. He grew up in the South Bay and is a graduate of Evergreen State College. He worked in Washington State as a reporter in a rural timber community and for many years as an editor for a Western electric energy policy publication based in Seattle.