Relocation Funds Help Families Buy Homes in Orange

Sitting in the living room of his family’s new condominium, Candido Reyes exudes the optimism of an immigrant who in less than a decade has gone from grinding poverty in his native Mexico to enjoying a slice of the American pie.

Reyes and his wife, Griselda, found themselves in the middle of the American dream last week, when the couple and their two young children moved into their new condo.

For the Reyeses, who had lived in the Villa Santiago apartments--a cockroach- and rat-infested, crime-ridden complex--home ownership was made possible by living in a bad place at the right time.

They are among 136 families, totaling 1,200 people, displaced from the apartments when the Orange City Council and redevelopment agency voted last year to find a developer to rehabilitate the blighted units. The city is contributing about one-fourth of the project’s $27-million cost.

While the city is helping the new owner clean up what was widely considered one of Orange County’s worst slums, it also has ended up helping families find more stable homes in the community.

This arrangement has drawn criticism because some of the families have received sizable relocation payments under a formula mandated by state law. The relocation costs, which will total $4.5 million when all of the households are moved, have to be paid by the developer.

The complex formula is based on income, family size and the cost of adequate available housing in the market. Officials said that families are receiving an average of $17,000 in relocation expenses, but at least two families have received as much as $37,000. About one-quarter of the tenants have received enough money for down payments on houses or condominiums or to open escrow accounts, officials said.

Many of those displaced chose to remain in Orange, bound by schools, churches and the city’s low crime rate. Despite the large number of households that used their benefits to buy a house, most tenants moved into other apartments.

“The law needs to be changed. This is one example of how the government has gone off the deep end,” said Councilman Dan Slater, who nevertheless voted for the project as the best available way to clean up the apartment complex. Slater said he would have preferred if the tenants had received only a 30-day notice to vacate, as is required in projects fully funded with private money.

“This is all these people should’ve been given, in my opinion,” he said. “But it’s not their fault. I don’t blame them for being here or taking the benefits. It’s our fault. At the same time, I’m glad that many of them decided to stay in our city.”

Others, including Slater and Mayor Joanne Coontz, have suggested that the project provided a windfall for suspected illegal immigrants. “That’s not what we should be doing,” Coontz said.

The law required the relocation payments to be made without regard to citizenship or legal status. Officials involved in the project said they found no evidence that benefits were being extended to illegal immigrants.

Reyes, 27, has worked in the United States for eight years, most recently as a driver for a moving company in Long Beach. The Veracruz native has been studying for his citizenship exam.

His family received $19,000 and applied it to the down payment on their $112,000 home in Orange, which has three bedrooms and 2 1/2 baths.

“Owning our home was our dream. We had a little bit of money saved to use as a down payment, but we could not have bought a house this soon had it not been for our displacement,” he said.

Less than two miles away, Benito Barrios, 34, and his wife Elvira, 30, live in a $160,000, three-bedroom home with two bathrooms. The couple and their four children, ages 2 to 9, lived at Villa Santiago for seven years before moving two months ago.

Like the Reyeses, the Barrios family was dumbfounded when they learned that they were going to be paid handsomely to move. They received almost $24,000 in relocation expenses.

“Even after they told us, we weren’t sure that we were really going to receive this much money, and we’re still not sure why. But we took advantage of the opportunity. I don’t think that anybody who got this money squandered it. Many people did what we did; used it wisely to buy a home,” said Barrios, a permanent resident who has worked at the same construction company for five years.

Coontz said city officials reluctantly accepted the relocation payment plan in order to clean up an area of Orange where drugs, prostitution and drunken fights were common.

Villa Santiago “was the highest crime area in Orange for years,” Coontz said. The crime problems stemmed from overcrowding, officials said. Although there were 260 units in the complex, all of them with two bedrooms, only 136 were habitable.

Officials at Pacific Relocation Consultants, which was hired by the city to supervise the moves, said each unit had an average of nine occupants, but one had 18 people and two units had 17. The apartments rented for between $700 and $1,000.

The city tried several measures, including legal action, to get the previous owners to clean up the complex. Finally, the partnership that owned it sold out to Forest City Development Corp. for $15 million.

The city of Orange contributed a $3.5-million loan and a $3.5-million grant to help Forest City buy the property. Because government money was involved, state law required that tenants be compensated for the forced move.

“This was in everybody’s best interest,” said Steve Oliver, a Pacific Relocation official. “The tenants are getting an opportunity to improve their living conditions, and it’s helping to stabilize the community at the same time. A lot of people [who have criticized the program] are forgetting that the people we’re helping are working folks.”

Each household received up to $5,250 in an initial payment to cover new housing costs plus $850 per apartment to pay for moving costs. Apartment dwellers receive the rest of their benefits in annual installments over a three-year period, but families who use their benefits to buy a home receive them in a lump sum when escrow is ready to close.

Many of the renters work as day laborers or at service jobs that pay slightly better than minimum wage. Some tenants had lived at Villa Santiago for more than 20 years.

For both Reyes and Barrios, the opportunity to become homeowners brought radical changes in their lives.

“Just about everyone who lived at the Villa Santiago was Hispanic,” said Reyes. “I think we are the only Hispanic family in our condominium complex.”

The Barrios family bought a corner house with a large back yard. They similarly are the only Latinos in their east Orange neighborhood.

“I feel like I really belong [in the United States] now. Most of my neighbors are white, and my neighbor behind is Asian. My family and I feel like we’re a part of the community. Now I know what this country is about,” Barrios said.