Supervisors Accused of Reneging on Housing Deal

A group suing to get Orange County to provide additional affordable housing said Tuesday that the county has backed out of its own deal to spend $7.7 million for 650 low- and moderate-income housing units in return for settling the lawsuit.

Judy Ficken, executive director of the Orange County Renters Assn., and the group’s attorney, Lisa Foster, of the nonprofit Center for Law in the Public Interest, said the county gave no reason for changing its mind when the deal was called off in May.

But Carlyle Hall, co-director of the Los Angeles-based public-interest law group and an attorney who has worked on the case, said the “hearsay” he received was that the supervisors had backed away from the settlement “in some way to punish the plaintiffs and their attorneys for having sued.”

Benjamin P. De Mayo, a deputy county counsel involved in the 4-year-old lawsuit, confirmed that negotiations had taken place but declined to comment on specific issues. He said no talks are under way now.

But county officials who were told about them confirmed that settlement talks indeed had broken down.

Supervisor Harriett M. Wieder said her impression was that the renters’ group “did not have much of a suit, and they were not going to proceed on it.”

But she said the renters should have been given an explanation of why the settlement was off, if indeed it was canceled, rather than “being left out on the limb about this.”

None of the four other supervisors could be reached for comment Tuesday.

Lawsuits filed against the county generally are discussed in executive session by supervisors, who usually do not comment before cases are settled or brought to trial. Wieder declined to comment on what was said when board members discussed the lawsuit at their private session in May.

The renters’ lawsuit was filed in 1983, soon after the county ended its mandatory program requiring builders to construct affordable housing that could be bought or rented by lower-income county residents. The county program that replaced it merely encourages the building of such housing.

The renters association contended that the supervisors acted wrongly in ending the program.

The lawsuit drew the wrath of former Supervisor Bruce Nestande and current Board Chairman Roger R. Stanton. Both were vociferous in their denunciations of the public-interest law group, especially after it stopped several dozen moderate-income families from selling their homes, which were bought under the affordable-housing program.

The families later sold their homes, after the county helped them in court, and Stanton led the supervisors’ campaign to end the mandatory program.

The county has contended that the voluntary program is providing housing for moderate-income people, But the renters’ group said truly low-income residents still find most housing in Orange County beyond their price range.

Foster, a staff attorney with the Los Angeles-based Center for Law in the Public Interest, said an earlier bid to settle the lawsuit before trial foundered when supervisors said they had not authorized a settlement.

But in March of 1986, Foster said the county’s lawyers, including a private attorney hired to help the county in the court battle, told them that the supervisors had agreed to see whether the suit could be settled.

It was toward the end of last year that the county made its “last, best offer,” Foster said.

After ironing out minor points, it was agreed that the county would target $7.7 million in state and federal money that could be spent on housing programs and direct it toward subsidizing, or otherwise helping, private developers build units available to people earning 80% or less of the median county income, which is more than $40,000 a year, she said.

Foster added that much of the housing was intended to be affordable to people earning 50% or less of the median figure.

But in May, when the county’s lawyers sought approval from the county Board of Supervisors, the board apparently “decided to repudiate their offer and to litigate the case,” Foster said.

She said word was relayed that the supervisors had no specific disagreements with the proposed settlement, but had simply decided not to settle without a trial.

“We were, to be honest, shocked,” Foster said.

She termed the rejected agreement “a good settlement,” one that did not require mandatory affordable housing or limits on how much someone buying an affordable house could eventually sell it for. Both were provisions that supervisors had objected to in the past.

“It is rare as lawyers to get this far along in a settlement and have the other side pull back,” she said.

Foster said she was surprised that the supervisors would spend money on outside lawyers and the salaries of the county’s own lawyers on the lawsuit at a time of budget problems.

But she noted that Newport Beach spent more than $1 million on lawyers’ fees in successfully defending itself against an affordable housing lawsuit.

Hall said he would like to receive an explanation for the county’s rejection of the proposed settlement:

“If they would just tell us, ‘Here’s the problem, we just can’t do this,’ then we could go back to them with some counterproposal or whatever.”