County to Aid ‘Affordable Home’ Owners : Will Ask Court to Remove Legal Warnings to Prospective Buyers

The Orange County Board of Supervisors decided Wednesday to try to help several dozen moderate-income families who have been unable to sell their homes because of a legal challenge to the county’s defunct affordable housing program.

At the request of Supervisor Bruce Nestande, the board unanimously agreed to file a motion in Orange County Superior Court seeking to remove legal notices that have been attached to 491 homes in six condominium projects in Anaheim and in the south county.

The notices placed on the properties last November by the Orange County Renters Assn. warn prospective home buyers that the association has filed a lawsuit against the county that could nullify any sales. As a result, sales of the homes have come almost to a standstill, according to homeowners and local real estate agents.

The renters association’s lawsuit, filed two years ago, seeks to force the county to reinstate a manadatory affordable housing program that had required builders to provide 25% of new housing for low- to moderate-income households and had controlled the resale prices of so-called “affordable” homes. The county supervisors abandoned the mandatory program in 1983.

Nestande, whose supervisorial district encompasses five of the six affected condominium projects, berated the Center for Law in the Public Interest, a nonprofit Los Angeles law firm, for “harassing innocent homeowners” with the legal notices. He called it “the cruelest thing I have ever witnessed in my public life.”

In the last few months, Nestande said he had received about 100 letters of protest from owners of the homes with the notices--called “lis pendens”--attached to their titles. “They are being held hostage because certain people don’t agree with our public policy change,” he complained. Among those suffering hardship, he said, is a Marine who was transferred to the East Coast but was forced to leave his family behind because he couldn’t sell his house.

Marilyn Tesauro, a lawyer at the Center for Law in the Public Interest, contends that the Orange County Renters Assn. is not trying to block the sale of homes. But she said the plaintiffs are determined to preserve the affordability of homes that the county provided at below-market mortgage rates financed with tax-free revenue bonds. Tesauro said she wants those homes to remain affordable for moderate-income households for the next 20 to 30 years, as the county’s former resale controls had promised.

Tesauro said her clients are concerned that even if they win their lawsuit, a judge may refuse to reimpose resale controls on the homes of buyers who have not been forewarned of the possibility.

‘Talking About Fairness’

Nestande said that if the 25 to 50 homes now on the market with the notices attached are sold before the lawsuit is resolved, they should be permanently exempted from resale controls, even if the courts ultimately decide that the county’s former affordable housing program should be revived. “We are talking about fairness,” Nestande said.

Sherman Smith, a real estate agent who has been trying to organize affected homeowners, said he was “glad to see” the county intervene on their behalf. He said that because of the cost, chances were slim that the homeowners would take legal action on their own. He said many of the homeowners believe that the county is at least partly responsible for their predicament “because they never asked for the resale controls to be released.”

Condominium projects involved are Benchmark Village, Old Trabuco Highlands and Serrano Creek Villas in El Toro; Valencia in Mission Viejo; Vista del Cerro in Laguna Niguel, and Kellogg Terrace in Yorba Linda.