County to Subsidize 650 Housing Units to Resolve Lawsuit

Ending a 6-year-old lawsuit over the county’s housing policy, the Board of Supervisors agreed Tuesday to subsidize construction of 650 homes or apartment units for low- or middle-income residents.

The out-of-court agreement settles Moseley vs. County of Orange, a suit filed in 1983 by Christine Moseley, now a resident of El Toro, and the Orange County Renters Assn., a nonprofit housing advocacy group.

Carlyle Hall, a Los Angeles attorney representing Moseley and the housing group, called the settlement important “because it puts in the form of a contract a commitment from the county” to build those housing units.

Hall acknowledged that several thousand low- and middle-income units are needed to satisfy the demand in the county. “But at least this is a start,” he said.

County officials said they already have subsidized construction of 80 “affordable” apartments in Mission Viejo that will count toward the settlement figure. Where the remainder are to be built has yet to be determined.

The suit was filed after the supervisors scrapped a county policy requiring one of every four new homes be affordable to low- and middle-income people.

The supervisors replaced it with a policy that offered incentives to developers to build affordable housing but did not require them to do so. Advocates of affordable housing criticized the policy as weak and ineffective.

The settlement approved and made public Tuesday by the supervisors calls for the county to spend up to $7.7 million over the next 5 years to build 650 units for low- and middle-income residents. About 500 units would be for people who earn up to 80% of the county’s median income of $49,916. That means families earning up to $39,933 would qualify. The remaining 150 units would be for people earning $24,958 or less, or half the median household income. Any low-income units over the 150 mark will count as two units, according to the settlement.

The settlement is essentially what was offered to supervisors 2 years ago, an offer that was rejected, Hall said. This February, the county approached the group again to seek a settlement of the suit. County officials said they decided to strike an agreement because they already were planning to build the disputed units.

Soon after the Moseley suit was filed, owners of 491 of the condominiums designated as “affordable” were temporarily blocked from selling their homes at market prices. The homes were located in the Saddleback Valley and Yorba Linda.

The homes could not be resold at higher market values because lawyers for the renters’ group attached notices of Moseley’s lawsuit to the property titles. The notices--called lis pendens-- warned buyers that if the lawsuit succeeded, the affordable-housing controls might be reinstated--a threat that local real estate executives said at the time nearly brought sales of the condominiums to a standstill.

The homeowners subsequently organized and filed a suit of their own to try and have the notices removed from their titles, said Sherman Smith and Mike Mattson, Mission Viejo-area Realtors who helped organize the homeowners in 1985.

Several months later, an Orange County Superior Court judge ruled that the renters’ group could not hold up sales of the condominiums and ordered that the lis pendens notices be removed. Smith and Mattson said homeowners encountered no further problems in selling their condominiums.