In a major victory for South Pasadena Mayor Diana Mahmud, Governor Newsom on Tuesday signed SB 381, a city-sponsored bill authored by Sen. Anthony Portantino amending the Roberti Act’s provisions on the disposition of the dozens of Caltrans-owned properties in town. The bill, aimed at ending decades of Caltrans’ mismanagement of its South Pasadena properties, is designed to protect existing tenants and features a strategy for the protection of historic houses. It also gives the city a higher priority to acquire the properties and control their transition to well-managed affordable housing.
Newsom signed the bill along with 26 other bills aimed at spurring more housing production.
The new law makes it economically viable for South Pasadena to purchase, substantially rehabilitate, maintain, and administer an affordable housing program, Portantino’s office said.
“Since the SR 710 freeway gap can no longer be built, South Pasadena expressed a need for legislative changes to the current sales process and existing tenants needed protections,” Portantino said in a statement. “With SB 381, we were able to achieve all these goals while offering the city the opportunity to control the process going forward.”
Getting Caltrans to move on selling the property was one of Mahmud’s priorities when she assumed the mayorship last December.
“At long last, the enactment of SB 381 represents the final chapter in the state’s long-standing efforts to build another freeway through the small town of South Pasadena,” Mahmud said in a statement. “SB 381 assures all current tenants of properties purchased in anticipation of the freeway’s construction will have the opportunity to acquire their residences before it is offered to a third party and permits the city to purchase unoccupied Caltrans homes” at the agency’s 1960s-era acquisitor price. In exchange for the pricing, the legislation requires the city ensure the properties are used either for affordable rentals for 55 years or for affordable home ownership for 45 years.
“In addition,” the mayor said, “this new law allows South Pasadena to sell at market rate unoccupied historic homes previously acquired by Caltrans.” The bill requires that for each historical home sold, the city must create three affordable housing units.
“Senator Portantino long opposed the proposed freeway, and now has acted strategically to assist the city in addressing the consequences of that failed effort. We are deeply grateful to the Senator for his continued support and advocacy for our city,” she added.
Caltrans must begin selling unoccupied housing units by June 30, 2022. Construction or acquisition must begin by Dec 31, 2025. All tenants who do not buy will get first right of occupancy.
The senator’s office explained that under current law, cities can purchase only occupied and unoccupied multi-family units. Moreover, they must compete with other private or non-profit “housing related entities” to win the bid. Current law sets the sales price for cities at a “reasonable price” determined by various factors. But many of the houses need major repairs and must be rented or sold at amounts based on affordable income criteria.
The road to the bill creaked open in January when the California Transportation Commission, which must approve all Caltrans’ property sales, told agency officials their efforts to resolve property issues in the former 710 corridor were disappointing. To date only a few of the hundreds of homes in the corridor have been sold, and Caltrans’ various attempts to implement Roberti have twice ended in litigation. Alternative Caltrans efforts to dispatch the properties have also run aground. CTC commissioners suggested the properties may need to be handed over to another agency for disposition.
That’s about the time Mahmud stepped in, determined to break the log jam at Caltrans. She enlisted Portantino to help. After the initial conversations, the city, community, and the South Pasadena Preservation Foundation held several meetings both privately and publicly, resulting in the initial SB 381 draft which was discussed at length during a Council session. The bill was amended seven times during its journey through the state legislature.
Local opposition remains from those who feel the Roberti Act’s tenant protections and sales provisions are sufficient, and that the sales should continue to be handled on a bilateral basis between Caltrans and prospective buyers.
Details remain to be sorted out, among them how the city will finance purchase of the properties, which are expected to cost about $6 million.
The signing of the bill “should not be seen as an ending, but rather a beginning,” said Mark Gallatin, president of the South Pasadena Preservation Foundation, which had a major role in drafting the bill’s provisions. It is the start of “a complex process of implementation” during which “City Council will need to make choices among sometimes competing policy options.” It will be “very important that all interested community members weigh in at these decision points” so the Council is aware of them and “can choose wisely and in the best interest of the affected neighborhoods and the community at large.”
The city has said it intends to conduct public meetings to refine how it will proceed.