No Threat of Eviction, Mayor Says : Housing: O’Connor and a federal official hold a news conference to allay tenants’ fears in dispute over sale of two low-income apartment complexes.
Seeking to allay apprehensions over possible evictions at two low-income apartment complexes, San Diego Mayor Maureen O’Connor and a top federal housing official said Tuesday that a dispute over the projects’ proposed sale will not cause residents to lose their homes.
At a City Hall news conference, O’Connor and Robert de Monte, regional administrator of the U.S. Department of Housing and Urban Development, emphasized that federal housing laws probably will enable the more than 800 low-income units in Clairemont and Rancho Penasquitos to be preserved, regardless of the outcome of the projects’ proposed $38.5-million sale.
“There were rumors that . . . the low-income tenants (might) be thrown out into the street within a month,” O’Connor said. “That’s not going to happen.”
Tuesday’s news conference expanded the city’s public relations campaign to quell residents’ fears over the future of the 312-unit Mt. Aguilar and 504-unit Penasquitos Gardens apartments. On Monday, the council voted to guarantee that the two projects remain low-income complexes, even if the city’s current bid to buy them fails.
Last month, the city’s effort to acquire the two apartment projects to preserve them for low-income residents became mired in controversy when it was revealed that Alvin I. Malnik, the Florida businessman who owns them, has a lengthy history of purported underworld connections.
Saying the city should not “do business with the mob,” O’Connor and some other council members have said that, unless Malnik can satisfactorily explain the allegations about his background, the proposed sale should be scrapped.
But some San Diego housing officials have warned that the city could lose 816 scarce low-income apartments housing more than 3,000 people if Malnik decides instead to try to sell the apartments to a private buyer or convert them to market-rate rentals.
De Monte, however, stressed that the 1987 Housing Act established two very stringent conditions for HUD approval of such conversions or sales: The change must not have a negative impact on low-income people or a disproportionate discriminatory effect on any ethnic group.
“That is virtually impossible to reach that conclusion in California given today’s market,” De Monte said. As a result, HUD usually turns down owners’ requests that they be allowed to prepay the low-interest federal loans used to construct their low-income projects--a request that Malnik will be eligible to make next May, De Monte said.
Typically, the agency then begins negotiations over a so-called “plan of action” intended to preserve the projects as low-income units while also offering enhanced financial incentives to owners.
Under those plans, HUD provides rental subsidies to the very lowest-income residents, while those who earn slightly more may be required to pay up to 30% of their salary for rent, De Monte added. In return for the added revenue they provide to the projects’ owners, the subsidies require that the complexes involved be maintained as low-income units.
The “crisis mentality” surrounding the two San Diego projects, the HUD official said, stems from the fact that the sales moratorium included in the 1987 housing legislation was scheduled to expire Sept. 30. That deadline has been extended to Oct. 31 to give Congress more time to approve a measure that would continue the restrictions.
“We know we’re going to get a housing bill; we just don’t know when,” De Monte said.
If Congress has not enacted the housing bill by month’s end, De Monte said, he expects that the moratorium will be extended again pending final action. However, should that not happen, Malnik or other owners of low-income units conceivably could prepay their federal loans, freeing them of any obligation to continue to use their projects for low-income housing.
“I would be extremely surprised if Congress permitted that to happen,” De Monte said.
Meanwhile, the city’s investigation into Malnik’s background is continuing and is expected to be completed within two to four weeks, according to Councilwoman Linda Bernhardt, who chairs the city’s Housing Commission.
Nevada and New Jersey gaming commission reports, newspaper stories and books link Malnik to a variety of reputed organized crime figures, including longtime mob financial leader Meyer Lansky. In a letter to O’Connor and recent interviews, Malnik has denied any involvement or links with organized crime, characterizing the charges as “total falsehoods and innuendo.”
Both O’Connor and Councilman Bruce Henderson, who disclosed the allegations about Malnik, argue that, unless the Floridian can provide a “benign” explanation, the city should pursue other options in regard to the two projects, including the use of HUD regulations to maintain their low-income status.
“There was this theory in the community that you didn’t have a choice,” O’Connor said. “It was Mr. Malnik or nothing. That’s not the case. . . . There are other alternatives out there.”
