San Juan Plans to Buy Condos to Repair, Lease
A plan to spend $2 million to buy and rehabilitate up to 50 vacant condominiums in two of the most overcrowded and troubled areas of the city was approved Tuesday night by the City Council.
Despite objections from several residents who said they feared the program would turn Capistrano Villas and Casa de Capistrano into government-run housing projects, council members said they hope the plan will help to solve problems such as noise, traffic and declining property values.
“The primary reason we’re doing this is to try to improve the neighborhoods and reduce overcrowding, not to provide low-income housing,” Councilwoman Carolyn Nash said. “Our goal is not to run a housing project. We don’t intend to stay there.”
Under the plan, the city would spend $2 million over the next three years to buy as many as 50 vacant units in foreclosure at a 30% discount from the Federal Housing Administration.
With help from a nonprofit housing corporation yet to be chosen, the city would rehabilitate the homes, lease them to qualified low-income tenants for up to 18 months and educate the tenants about property maintenance and budgeting.
The city then would sell the condominiums at a discounted price to those tenants who had proved their ability to be good homeowners.
To finance the project, the city would issue bonds, which would be partly paid off with money from the sale of the homes and partly with city money, Nash said. “The intent is try to create pride in the community, a pride of ownership,” Nash said. “It’s a way of maintaining a higher standard of maintenance on these properties.”
Currently, about 60% of the 1,040 condominiums in both neighborhoods are occupied by renters, a trend that city officials say contributes to the problems of overcrowding. Because rents are higher than many low-income families can afford, as many as 15 people live in some of the condominiums, Nash said.
“The problem is when you have a lot of non-owner occupants who are not concerned about the condition of the units,” said Dave Westerfield, director of the FHA in Santa Ana, who has been working with the city on the project. “All they care about is rent, not about maintenance. It has a domino effect on the community. All we’re trying to do is to reverse that trend to get people back in.”
The city would be able to limit the number of tenants who live in each unit, Nash said. The program also would prevent people from immediately reselling the properties for a profit but at less than market value, because the city would hold second mortgages on the properties.
The City Council vote was 3 to 2, with Mayor Wyatt T. Hart and Councilman David M. Swerdlin dissenting. They agreed with residents who complained that while the city staff and a committee had been making plans for nine months, the residents had only two weeks’ notice about the project.
“It’s taken us nine months to get educated about this,” Hart said. “We can spend two more weeks to help educate the homeowners.”
Some residents said they didn’t think the plan would solve the neighborhoods’ problems.
“I am really disturbed that the city thinks they can come in and purchase a drop-in-the-bucket number of houses, control the kind of people who come in, and think that it will have a beneficial effect,” said Janice Palermo, who owns a condominium in Capistrano Villas III. “Buying a couple of houses and placing people in them is not going to make any impact except for the city spending $2 million. They need to go back to the drawing board.”
This is not the first time that the city has tried to deal with the problems in the two neighborhoods, such as public drinking, loitering, domestic disputes and brawling.
“We get more calls for service in those areas than in any other areas in the city,” said sheriff’s Lt. Paul Sullivan, adding that in April, May and June alone, deputies received 473 calls from Capistrano Villas residents asking police for help for nuisance problems. “They’re keeping the police pretty busy.”
Over the past several years, the city, homeowners associations and the police have stepped up law and code enforcement efforts in the neighborhoods, including adding three patrol officers. Although their efforts have made a difference in gang-related activities, it hasn’t stopped the other social ills.
“The police have done a very good job of [handling] the gang situation,” Palermo said. “Now we need help with the other problems. And it’s a bigger problem than just real estate.”
The plan is similar to one now underway in Santa Ana’s Town Square, where that city recently bought about 40 homes in a blighted neighborhood.
