A reduction in staffing led to a lack of oversight in several housing projects, resulting in eight vacant affordable housing units last year, according to an audit of the city’s affordable housing program.
“We acknowledge that specific steps in the ordinance were not always followed,” wrote city Director of Housing Bill Huang in response to the internal city audit of the program. “We believe our failure to do so can be attributed in large part to a sharp reduction in staffing within our housing production unit.”
The city’s Affordable Housing Ordinance, adopted in 2001, applies to developments of 10 units or more and calls for developers to set aside 15 percent of the proposed units as affordable for very low- and moderate-income people. Developers not wanting to set aside units can pay an in-lieu fee which goes into the city’s own housing fund. Builders can also donate land worth the value of the fee.
According to Huang, the city’s Inclusionary Housing Ordinance has led to the construction of about 500 housing units for low- and moderate-income renters since 2001.
But amidst a city budget crisis in 2012, local officials reduced the level of staffing for the program from three full-time employees to one. The program has also been using a third-party vendor since 2015 to record housing documents. That work was previously done by the LA County Registrar/Recorder’s Offices in Norwalk and Van Nuys.
All told, 38 units went unoccupied for more than a year, representing about 1.5 percent of the city’s available inclusionary housing units. About half of those vacancies were caused by decisions made by developers.
Four units went unoccupied in two separate buildings, one on Arroyo Parkway and one on North Los Robles Boulevard, because they were very low-income condos, which the city typically does not provide in its affordable housing program because of the high risk of foreclosure.
Four rental units in a different development on Los Robles remained empty when the developer decided to sell the project after it was completed.
Those rental units are now occupied. The condos are being marketed and should be sold very soon, according to Huang.
30 other units were not processed properly. According to Huang, they were all built and occupied.
“If the owners have any type of financial emergency, they don’t have the cushion to absorb it and it could result in them losing their units,” Huang said. “The city is not in the business of putting people in homes, so they can lose them. Setting people up for failure is not what we are doing.”
Housing advocate Jill Shook said she was not surprised mistakes were being made.
“Essentially we have lost over 85 percent of our funding in the Housing Department,” said Shook. “Before we had a Housing Department there was a big conflict between planning and housing.”
Shook also said the city spends less than $2 million on the Housing Department and $70 million for the Police Department. “One of the best practices nationally for crime prevention is affordable housing,” Shook said. “It’s one of the most underfunded and most needed [departments]. When they had a bigger staff they were able to function in a way where they could focus on details.”
Shook said the city should consider strengthening the ordinance much like the city of Santa Monica recently did. Officials there increased the required inclusionary housing units to 30 percent.
In Pasadena, like Santa Monica, demand continues to outpace supply, thousands of people remain on the waiting list at the Westgate apartments on Del Mar Boulevard and South DeLacey Avenue Street, which has 97 low-income units.
Huang announced in June that 22 applications have been received for every low-income unit at the Heritage Square senior housing project on North Fair Oaks Avenue.
In January, the city passed an ordinance easing restrictions on homeowners converting garages and other existing structures into rental units.
Local activists have decried the construction of a 307-unit luxury apartment complex on North Los Robles Avenue and Corson Street which would stretch east along Corson to Oakland Avenue. The project would include four separate structures all at approximately 60 feet high.
The project site currently includes three now-vacant dorm apartment buildings with a total of 172 rooms which Carmel Partners bought from Fuller Theological Seminary in 2014 for $24 million.
“We’re going to be protesting that the city allowed this to happen from the start,” said Michelle White, executive director of the Pasadena-based nonprofit Affordable Housing Services, which seeks to provide housing and social services to low-income and working families.
The list of US Housing and Urban Development Section 8 program recipients contains over 23,000 households as rent and sale prices continue to increase at a rate much greater than incomes, resulting in a widespread housing affordability crisis.
The city’s affordable housing program may be the only way some people can afford to live in Pasadena, White said.
Rents in Pasadena and the surrounding areas continue to rise. Median rent prices in Pasadena are among the highest in the region and well above the national average. Currently, the median price for a two-bedroom apartment in Pasadena is $2,070 per month, well above the national average of $1,160 per month.
The increasing rental rates have led to some in Pasadena and Glendale to call for rent control.
As an alternative compliance option, the city’s ordinance allows developers to pay a fee in lieu of constructing new affordable units. The city publishes an in-lieu fee schedule that it periodically revises in accordance with changes in the Los Angeles County area median income. As of April 2016, the city was in possession of $9.2 million received from developers who did not want to set aside units. Of that amount, officials leveraged another $2 million in state housing funds, according to the report prepared by Jim Wong, senior project manager.
“I think the audit revealed some shortcomings with our program and I will be working with Bill to improve our operations,” said City Manager Steve Mermell.
The audit recommended the department establish a monitoring and oversight mechanism and review key documentation to provide assurances of compliance.
The audit also recommended marketing plans be developed and approved as part of the agreement and provide Mermell’s office with periodic status reports of all inclusionary housing projects.
“We have a situation where we’ve got to fight for the retention of housing that ought to be ours by rights,” White said.