Sunday, July 29, 2007

"San Pedro First", Isn't!

I am going to place an article from today's Daily Breeze about who actually gets the right of first refusal when a condominium unit is sold.

If this law applies to the sale of condominium units at Ponte Vista IF Bob actually gets approval for any condominium units, it is the City of Los Angeles that must FIRST be allowed the right to purchase units and not any private person, anywhere on this planet.

Los Angeles condo sellers don't buy into new fee

Add-on for affordable housing is $150 -- but it's never bought a unit.

By Kerry Cavanaugh
Staff Writer

Since April, homeowners selling a condo in Los Angeles have had to pay a $150 fee to the city under a 33-year-old affordable-housing ordinance that has never produced a single affordable unit.

Few condominium owners know about the new fee or the arcane law, which gives the city the right of first refusal to buy most condos built after 1974.

Without money to purchase units, the city has always waived its right. But, short on cash, the Housing Authority of the City of Los Angeles voted earlier this year to begin charging condo sellers $150 for the waivers.

Annoyed that condo sellers are stuck with a pricey processing fee for a law that has produced no affordable housing, Realtors have begun to lobby for repeal of the ordinance.

"It's ironic that an ordinance that was well-intended to foster affordable housing in the city actually has new fees now that are raising the cost of housing," said David Kissinger, director of governmental affairs for the South Bay Association of Realtors.

Some city staffers had started the work needed to overturn the ordinance under former Mayor James Hahn, but that effort was dropped.

Now, Mayor Antonio Villaraigosa is considering using the ordinance to buy condominiums throughout the city and use them to create affordable housing in more expensive neighborhoods.

"If it enables the housing authority to begin to acquire affordable units in market-rate projects throughout the city, then you could really pursue a mixed-income strategy throughout the city," said Helmi Hisserich, Villaraigosa's deputy mayor for housing and economic development policy.

Although the housing authority and city don't have the money to buy market-rate condos, the agency is developing a strategic plan that would include where and how it could buy units.

The so-called 15 percent ordinance was originally envisioned by former Councilman Ernani Bernardi as a mandate to get developers to set aside 15 percent of new units as affordable.
The ordinance would have been among the first inclusionary zoning laws in the nation, but it was opposed by developers, and the City Council decided to make the affordable housing requirement voluntary when the measure was adopted in 1974.

Under the law, developers are asked to make a "reasonable effort" to rent or sell 15 percent of the units in new buildings as affordable to low- and moderate-income families.

If developers choose not to set aside affordable units - and no developer so far has ever chosen to - they must record a document with the property title granting the city a continuous right-of-
first-refusal to purchase up to 15percent of individual condominium units in a project.

Most condos built after 1974 have this requirement on the title, and during escrow the seller's agent must file a form with the housing authority asking the agency to waive its right to buy the unit.

For the past three decades, the housing authority has processed the waivers and never opted to buy a unit.

"We haven't had the funds to maximize the ordinance the way it should be or could be used to retain and provide affordable housing units," said John King, acting director of planning with the housing authority.

The agency now processes 600 waivers a week.

But Realtors wonder why the city needs to collect $150 per waiver - more than $4 million a year - to rubber-stamp a form saying the city doesn't want to buy a unit.

"It just doesn't seem possible that it could cost that much," said Rick Otterstrom, chairman of the Beverly Hills/Greater Los Angeles Association of Realtors' public policy committee.

"It's been there for 33 years and it's never been used even once, but it still encumbers and inconveniences owners and Realtors and escrow companies. It should be done away with."

Well how about this idea?

Let's say some condominiums do get approved for Ponte Vista. Wouldn't this become a great showcase in not only OUR community but the whole of the City of Los Angeles to actually provide low-income housing at Ponte Vista without any density bonus.

Wouldn't you all think Bob would be able to provide what many, many supporters are calling for in the way of low-income housing?

It probably would put Ponte Vista on the map as being a community willing to allow for low-income residents by the use of the City purchasing units that then would be resold to low-income wage earners.

Wouldn't it be spectacular if Mr. Robert H. Bisno, being the community-minded individual he claims to be, be one of the first developers to actually support this program and even sell some of his units at lower than market rate prices to the City just as a sign that he really means what he says about providing housing for first-time home buyers and others who certainly cannot afford $330,000.00 or more for a 600 square foot unit.

If Bob really wants Ponte Vista at San Pedro to be unique among developments, here is a chance for him to prove it to all of us.

Let me state here and now that if Bob will sell units to the City of Los Angeles so that they can resell those units to low-income families, I would not object to having up to 1,100 units built at Ponte Vista. I think Bob would be able to provide for seniors who do not want to move all the way to Torrance California AND he would be found to be one of the most generous developers in the City for reducing prices for some of his units so low-income individuals actually have a chance to buy a new home in northwest San Pedro.

Naturally, until I see Bob's plans for up to 1,100 units with senior housing AND allowances for the City to buy units at reduces prices for the benefit of needy low-income folks, I will continue to support keeping the current zoning at Ponte Vista at San Pedro.

Learning about the City's plan to attempt to acquire units for low-income buyers is something that I feel would be good for OUR community. I know the City does not have the funds to purchase units at this time, but perhaps if Bob does what I hope he will do, caring, considerate supporters of Bob's plans might contribute money to the City of Los Angeles, for this particular cause. Heck, how about the folks working in the Ponte Vista site office take up a collection. If they did, I'd even drop by and make a contribution.

I am not trying to be too funny about this. Bob has stated that he is community minded and cares about low-income wage earners, first-time home buyers, and working families. Let us see you caring Bob really is, O.K.?


Rebecca said...

I just wrote a blog on this subject. The problem with the 15% rule is that it applys to the entire development and not just the same 15%. Currently a low income person could purchase a low income property and turn it for a profit at market value, and then the development would be short a condo so the next condo to sell (could be yours you purchased at market value) the city has the right to purchase it from you at low income value. If the city will not waive that either can not sell it or must only accept the city's low offer. Still think it's a good idea?

M Richards said...

Thank you Rebecca,
With my support of R1 at Ponte Vista, it is only logical that there really cannot be "low-income" housing on the site.

It is also my opinion that bad ideas is a standard when dealing with Mr. Bisno and his plans.

With Bob's original estimate that a 600 square foot studio or loft unit at Ponte Vista going for approximately $380,000.00, like he told us at the beginning of the year, any concept of "low-income" or even "affordable" for so many of us in the community, is not a concept we can imagine.

Sure he dropped the lowest priced approximation about $50,000.00, but at #330,000.00 for the lowest priced unit, leaves many more than a few members of OUR community unable to buy something the size of a garage.