Rancho Palos Verdes to Draw Lots for Buyers of $135,000 Townhouses

Want to live in a new townhouse near the Palos Verdes coastline for $135,000?

More than 1,200 people do, and they are vying to buy one of 10 units designated as “affordable” housing when the Rancho Palos Verdes City Council approved a 49-unit development more than two years ago.

The rest of the units in the ocean-view Villa Capri project, on Hawthorne Boulevard near the Golden Cove shopping center, are selling in the $400,000 range.

Prospective buyers--who must be Rancho Palos Verdes residents--will be selected in a drawing Jan. 16 at City Hall. The 100 people whose names are drawn will be eligible to buy the units in the order selected, but completion of the deal depends on their ability to qualify for financing.

Should there still be units available after the list of 100 is exhausted, more names will be drawn. The application deadline is Jan. 11.

The townhouse development, originally proposed as 72 units, provoked four years of controversy over density and traffic. In June, 1986, the council approved a considerably smaller development and required that certain units be “affordable”--at least by Rancho Palos Verdes standards.

The council’s stated motive was to avert potential lawsuits by complying with the city’s General Plan, which sets a goal of providing housing for all income groups. But the council also saw an opportunity to provide homes for the elderly, for children who leave their family homes but still want to live in the city, and for city employees who can’t afford to live in town.

The “affordable” units are for individuals and families in the $60,000-a-year income bracket, but the maximum income allowed varies according to size of family.

Even though the $135,000 units--1-bedroom and loft totaling 1,250 square feet--are the smallest in the 49-unit development and have the most restricted views, officials say the price and location make them highly desirable.

“It’s in a good area, you can walk to the shopping center and to the ocean, and it has great weather,” said City Councilman Robert Ryan.

The remainder of the townhouses in the hillside complex are selling for $435,000 to $485,000 a unit depending on size, location and view, according to Jo Thompson, real estate agent for the project. The project includes 27 3-bedroom townhouses with 2,190 square feet and 12 4-bedroom units with 2,360 square feet. A pool and spa are included.

Thompson said about one-third--mostly higher-priced units--have been sold. Some will be occupied within a month, she said.

Despite the policy that applicants for the 10 units should be Rancho Palos Verdes residents, more than half of the applicants live elsewhere. City Manager Dennis McDuffie said the rules are complicated and many have misunderstood.

To prevent profiteering, purchasers of the 10 lower-priced units are required to live there. Resale prices will be controlled for 30 years under a formula established by the city that limits the amount over $135,000 to the value of improvements plus the cost-of-living increase, officials said.

Since the standard for qualifying for the units is income and not total worth, some council members have been concerned that affluent people could qualify to buy a unit.

However, City Atty. Steve Dorsey said that because of the resale restrictions, people with major assets could find better investments.

“There is no incentive for people with a lot of assets to put money into these,” he said.

When the council debated the issue in 1986, there was a question about the definition of affordable in a city where the median family income was then $63,588. It now is $71,156, according to 1988 estimates. The Los Angeles County median this year is $25,316, according to Donnelly Demographics.