City Getting Into Business of Building Affordable Housing : Construction: By acting as its own developer, the Redevelopment Agency expects to save money, expedite the process and clean up several blighted lots.
In an effort to provide more affordable housing and clean up several blighted lots, the city is going into the housing business.
The Redevelopment Agency plans to design, build and sell up to 40 single-family houses in the $140,000 price range throughout Hawaiian Gardens.
Many of the houses would replace rundown buildings on lots that the agency has purchased, according to the plan. Some lots already have been cleared, and on others, structures have been boarded up and are awaiting demolition. A total of 24 properties are still occupied, and the agency is in the process of relocating residents, City Administrator Nelson Oliva said.
The blue-collar city, which covers less than a square mile, plans to offer financial assistance to first-time home buyers with low and moderate incomes.
The affordable-housing plan was approved in concept recently by the City Council, acting as the city’s Redevelopment Agency. The agency is scheduled to consider details of the plan Jan. 12.
Oliva said the first group of 10 or more houses could be under construction by May or June. The others would be built in 18 months, he estimated.
Officials hope Hawaiian Gardens residents will purchase the new houses, although Oliva said the law prevents the city from limiting home purchases to those who live in the city. “There are current residents who want to move up to nicer homes,” he said. “There are a lot who are tenants who are paying a substantial rent, pretty close to a mortgage payment.”
Councilman Domenic Ruggeri said the plan would help low- and moderate-income people purchase houses while improving the city. “We can start cleaning up the city that way,” he said.
The Redevelopment Agency is spending $3.8 million on the properties slated for housing, which includes everything from the land purchase to readying the land for construction. The entire city is designated as a redevelopment area.
By acting as its own developer, the city is foregoing the more common practice of selling property to developers who then build and sell houses. “We will have more control over what is built, more of a role in expediting the process,” Oliva said.
The administrator noted that the city will be able to develop a uniform set of floor plans usable for all of the houses. He said the construction process should be less expensive than with conventional development because several houses will be under construction at once.
“This will bring down the cost of building materials,” he said. “Contractors’ bids will be a lot less because they know they have steady work, as opposed to doing two or three homes.”
Oliva also said plans and permit applications for such things as electrical and plumbing work can be processed at the same time. Licensed contractors would work directly for the agency, thereby eliminating time involved in dealing with private developers.
“Our intent is to turn over the permits to the contractor so he could begin work the day after he gets the award,” Oliva said. “It cuts down on time.”
The city will hire a coordinator to handle day-to-day operations, including procuring construction bids and inspecting work by contractors and subcontractors. The monthly salary range for the job is between $3,266 and $3,969.
“We want a local person for the job, someone with knowledge of the construction field and dealing day to day with contractors and change orders,” Oliva said.
Hawaiian Gardens companies and workers in the building trades also will be given preference in constructing the houses if their bids and qualifications are competitive.
Redevelopment officials in other cities said the Hawaiian Gardens approach to building affordable housing is unique but makes sense if it turns out to be economical.
“Maybe they will save money on it, but given government bureaucracy, it’s hard to say,” said Leslie Lambert, housing manager for the Los Angeles Community Redevelopment Agency.
Norwalk’s economic development director, Donald J. Rouly, said the person selected to oversee the program will be one of the most crucial factors. “If someone is inexperienced with any of the elements, it could become a bottleneck,” he said.
Malchon Kow, a South Pasadena developer who is completing a duplex in Hawaiian Gardens on land purchased from the Redevelopment Agency, said he is skeptical about the city plan to become its own developer. Kow said the city will be taking on such headaches as unexpected cost increases, change orders and disputes with contractors, and liability for any problems with finished houses.
As a public agency, he said, the city also will have to pay workers higher wages than private builders--a contention that Oliva disputes.
Said Kow, “Right now, they have the right to review terms, costs, time frames and the design” of projects being built through redevelopment. “They have a right to control it without any overhead.”
