Panel Backs $20-Million Home Buyout : Monterey Hills Development

The Los Angeles Community Redevelopment Agency would have to buy back $20 million worth of damaged property in the troubled Monterey Hills Development Complex under a bill that passed a Senate committee Wednesday.

The bill, authored by Assemblyman Richard Polanco (D-Los Angeles), is expected to move from the Senate Local Government Committee to the Senate floor for a vote next week.

Aides to Polanco say they will ask Sen. Art Torres (D-Los Angeles) to carry the bill in the Senate.

Help Homeowners

Polanco said he wrote the bill to force the city redevelopment agency, which was formed and accorded its powers by state legislation, to assist homeowners whose homes are tilting and cracking on improperly compacted landfill.

The agency helped build the 1,600-unit Monterey Hills project in the late 1970s, when the townhouses or condominiums sold for $80,000 to $100,000. The goal was to provide affordable housing to first-time, middle-income homebuyers who wanted to live near downtown.

“I am frustrated at the lack of real movement in providing assistance to property owners up there,” Polanco said. “There’s just stalling, delay and a lot of finger-pointing and nothing is being done.”

Damage to the townhouses and condominiums resulted from unevenly pressed soil shifting and settling beneath the homes. Residents of the units, which began sinking, cracking and tilting two years ago, filed suit against the Community Redevelopment Agency, insurance companies and contractors.

According to the bill, the agency must establish a plan to purchase the houses from homeowners at their fair market value. In return, the homeowners electing the buyout option would drop the lawsuits.

Agency officials have contended that state laws prevented them from buying back the property, said Keith Malone, Polanco’s assistant.

The bill would require the agency to report to the Legislature a complete breakdown of all projects included in its $171-million special reserve fund. It further requires that the agency transfer money to a buyout fund that would have $20 million available for two years.