State Due Profits on Affordable Housing Resales, Panel Says

The California Coastal Commission on Wednesday decided that more than 500 south Orange County homeowners who bought property under an affordable housing program must turn over resale profits to the state.

The 12-member commission decided to follow a recommendation by its staff at the end of a public hearing in Marina del Rey.

Until five years ago, the Coastal Commission oversaw a program designed to provide more affordable housing in the county. Then the Legislature repealed the commission’s authority to order developers in prime coastal districts to open up some property for low- and moderate-income people.

After that, the commission used local agencies to monitor the buying and selling of homes it had designated as affordable housing. But that program collapsed in chaos in February after the agencies bailed out.

At Wednesday’s hearing, several homeowners testified that they should not be required to turn over resale profits.

But the state attorney general’s office has issued an opinion saying it would be illegal to allow the homeowners to keep the money.

Many of the homeowners said they did not have money to wage a lengthy legal battle against the Coastal Commission.

“We are by definition low- to moderate-income people. We do not have a lot of money,” said Karl Overbeck, 42, who owns a condominium in Laguna Niguel. “I’m trying to put a daughter through college and I don’t even have money to put down for legal fees.”

Under the decision Wednesday, resale profits will be placed in a fund for state housing programs.

The decision affects 515 homeowners who bought property in Laguna Niguel, Dana Point and San Clemente when the Coastal Commission offered affordable housing there from 1977 to 1982.

Some of the condominiums involved in the dispute were purchased for $88,000 and now could sell for $120,000.