City May Get Off the Hook on Housing : Housing: Assembly narrowly approves an exemption allowing the city to avoid its obligation to build 122 homes for people with low and moderate incomes.

The Assembly has sided with the City of Industry in a nasty tug-of-war over the small city’s future.

The fight was sparked by legislation intended to exempt the city from state requirements to build 122 low- and moderate-income housing units. The heavily lobbied bill was approved on Monday with 41 votes, the bare majority needed in the 80-member Assembly, and sent to the Senate.

The narrow vote followed a heated Assembly debate, which turned into a case study in the way seemingly unrelated issues can become linked, especially in the busy final days of the legislative session, which is scheduled to end Monday. It also shows that the outcome of an issue can be dictated by personalities, not the merits of a policy.

At the heart of the issue is whether the state should change the fundamental nature of the City of Industry, set up in 1957 as a purely industrial town with no residential zoning. It is approximately 14 miles long, one to two miles wide, and bounded by two transcontinental railroad tracks. Though 60,000 workers hold jobs in the City of Industry, only 400 to 600 people live there, in housing that predates the city’s incorporation.

The state requires all cities to include a housing element in their general plans and mandates that a portion of city redevelopment funds be set aside for low- and moderate-income housing. Industry officials say they should be exempt.

“As far as we’re concerned, we’ve just never believed that housing blends in the City of Industry,” said City Atty. Graham Ritchie. “The only housing is housing that was here when we were incorporated. It’s been built as an industrial city, and we ought to be left alone as an industrial city.”

But opponents accused city officials of trying to lock out potential new voters in order to hold on to power.

Frank Sims, vice president of J. F. Shea Co. and a member of the Industry Civic Planning Assn., which is against the bill, said he opposed taxes imposed by the City of Industry and “the way you fight taxes is to throw the bums out” of office.

But, “if you are going to throw the bums out, you need voters,” he said. “And the voters are not there because the City of Industry has not adopted” a housing element in its General Plan that would allow for housing construction.

Several Assembly members seemed to agree with the bill’s opponents.

“The bottom line is: Should the monopoly of the existing families that control the City of Industry be broken or should it be perpetuated?” declared Assemblyman Dan Hauser (D-Arcata), chairman of the Assembly Housing Committee.

But Assemblyman Paul Horcher (R-Hacienda Heights), the bill’s Assembly floor jockey, characterized the local opponents in harsh terms, saying they were attempting “a power grab.”

In the end, the Assembly went along with Horcher, but not necessarily because lawmakers thought his arguments had merit on the housing issue.

Instead, some Democrats favored the measure as a goodwill gesture toward Horcher and Sen. Frank Hill (R-Whittier), the bill’s sponsor, because of their views on the state budget.

Assemblywoman Delaine Eastin (D-Fremont) cited Hill’s attempts to cobble a bipartisan compromise to resolve the prolonged budget deadlock and Horcher’s support this week of a measure to allow the state to make good on a month’s worth of claims that otherwise could not be paid until the budget is enacted.

Eastin candidly acknowledged that the City of Industry issue was “a close call,” adding “I think there are scoundrels on both sides, if you will.”

But, she said, “there is a point at which we have to begin to develop some collegiality here that acknowledges that some of these people are taking some risks” in opposing fellow Republican Gov. Pete Wilson on the state budget.

Her vote had as much to do with Horcher’s “willingness to support us on the budget stuff and Hill’s willingness to support us on the budget stuff,” she said, adding that she told Horcher that she would switch sides and cast the needed 41st vote for him.

However, Assemblyman Tom Hayden (D-Santa Monica) condemned the horse-trading. He said that Democrats, including Assembly Speaker Willie Brown, sought to reward Hill and Horcher “for their flexibility on the budget but this was the wrong reward.”

“You don’t reward somebody with the gift of special-interest legislation,” Hayden said.

All the wrangling over the issue prompted Hayden to suggest that next year the Legislature should hold hearings “about why the City of Industry should exist. In some measure, they are a creature of the state and they symbolize the undue influence that special interests have in the whole state of California. It’s a complete mockery of democracy.”

Hayden was joined in opposing the bill by an unlikely ally, Assemblyman Gil Ferguson (R-Newport Beach), who seldom, if ever, agrees with the Santa Monica Democrat.

Ferguson blasted the measure, saying: “There are no good guys in this thing.”

Ferguson attacked another part of the proposal that directs the City of Industry to sell 70 acres it owns in Diamond Bar for $1 for a long-sought high school to be built by the Pomona Unified School District. “And to imagine that you have to pay off a couple of legislators by giving them a school property,” Ferguson said.

Hill, who defeated Ferguson in a Senate race several years ago, scoffed at the special-interest tag, but he acknowledged that his goal was to win something for his constituents.

“I’ve been trying for years to get a high school built in the north end of Diamond Bar,” said Hill, who along with Horcher represents part of Industry and Diamond Bar.

If the Senate agrees to Assembly amendments and sends the bill to the governor, it would earmark about $8 million a year in City of Industry housing funds to Los Angeles County for low- and moderate-income housing within 15 miles of the city.

Hill argued that with $8 million a year, the county could easily build more than the 122 homes required under the law.

Noting that many cities have failed to meet their obligation to build houses for low- and moderate-wage earners, Assemblyman Thomas Hannigan (D-Fairfield) noted that under the Hill measure, “at least we will get some built.”

But the fate of the measure is uncertain if it reaches Wilson’s desk.

Timothy Coyle, director of the state Housing and Community Development Department, said he was unsure what recommendation his agency would make to the governor. But he said the agency has opposed earlier versions of Hill’s measure “because it works against our objectives to expand the supply of affordable housing statewide.”