South Pasadena Residents Fight Sale of Caltrans Houses

For years, the residents of an upper-middle-class South Pasadena neighborhood have wrung their hands over the fate of 11 decaying houses owned by an entity they describe as a nightmare neighbor--the government.

On Thursday, the homeowners were in court to try to stop the California Department of Transportation from selling the houses to a private nonprofit agency, a move they believe will bring in even less desirable neighbors--subsidized renters.

“When Caltrans sells these homes to be rented, they are changing the nature of the neighborhood,” said homeowner Beatrice Siev. “This area is all homeowners except for the Caltrans houses.”

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In lawsuits filed in Pasadena Superior Court, two homeowner groups allege that Caltrans violated state law by offering 11 vacant houses, assessed at a total of about $3 million, as one package to a Pasadena-based nonprofit for $636,000. That move, the homeowners charge, ensured that no individual homeowners--their desired neighbors--could buy any of the properties.

“Single families can’t buy 11 homes,” said Michael Montgomery, an attorney for the residents, who said they would welcome low- to moderate-income homeowners.

But Caltrans attorneys replied that they are simply following state law, which requires them to offer state-owned properties first to any existing tenants, then to agencies that would rent the space to low- to moderate-income residents.

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“There is no legal reason why this sale should not go forward,” said Ernie Sanchez, an attorney for Pasadena Neighborhood Housing Services, the nonprofit group seeking to buy the properties.

The organization provides affordable housing for those with low and moderate incomes or with disabilities.

After more than two hours of legal arguments by lawyers from both sides, Pasadena Superior Court Judge Thomas Stoever said he will decide in the next few days whether to extend a restraining order he issued last week blocking the sale.

The brouhaha over the 11 homes near the Pasadena Freeway--one in Pasadena, 10 in South Pasadena--has implications for the fates of dozens of Caltrans houses in the two cities.

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Caltrans decades ago purchased 610 houses in the San Gabriel Valley along the then-planned route of the extended Long Beach Freeway. But a spirited fight by South Pasadena has stalled the extension.

A Times investigation in 1995 showed that many of the houses were vacant and decaying, sometimes being used as havens by squatters or drug dealers. The Times report identified 110 properties no longer in the proposed freeway’s path. Caltrans officials Thursday said that they have identified 56 of those properties that are being sold.

But the battle underway in the northwest corner of South Pasadena may be a harbinger of what happens when a public agency wants to quickly dispose of properties in a city fiercely protective of its neighborhoods.

“This is a tiny, tiny dink of a town. To put up a retaining wall is six months of litigation,” said Kharin Mishan, a neighborhood activist. “To find out all of a sudden that your neighborhood is a throwaway neighborhood [and] a group that you know nothing about is going to come in and do whatever they want . . . is scary.”

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Mishan, a longtime renter who recently purchased her first home, says the objection isn’t to low- to moderate-income renters, or even to renters in general. It’s to a nonprofit running housing that she and others fear could become a “revolving door” through their neighborhood, with tenants so transitory that they do not establish a connection with the community.

Pasadena Neighborhood Housing Services plans to rent the homes to low- or moderate-income families--for example, a family of four earning up to $61,000--and also provide housing for some people with developmental disabilities, said Saundra Knox, the group’s executive director.

Knox stressed that none of the houses would become a group home and said that the agency’s 32 units in Pasadena are clean and neighborly. Neighborhood Housing Services does not run any group homes, Knox added.

“The homes are already there. They’re not going to be moved or changed,” Knox said. “They’re going to be rehabilitated and brought up to the highest code standards possible and blend in with the rest of the neighborhood.”

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Richard Marquis, Caltrans’ senior right of way agent, said the properties were initially offered to the city of South Pasadena, but city officials two years ago declined to purchase them. The houses were then put out to bid.

Mishan and other homeowners alleged that Caltrans offered a package deal to attract “institutional” buyers like Neighborhood Housing Services, which they said would blight the area.

“What a way to get back at South Pasadena for a 30-year freeway fight,” Mishan said. “Really, it’s a master stroke.”

In court, attorney Montgomery suggested that Caltrans is seeking to devalue neighboring properties still in the path of the proposed freeway, enabling it to buy those parcels on the cheap.

But Caltrans officials said there was nothing malicious in their sales strategy.

Under state law, Caltrans is obliged to first offer the properties to any qualified tenants currently renting the houses, their attorneys said. If the current tenants do not opt to buy the houses or if there are no tenants, the next offer goes to organizations that would provide low- to moderate-income housing.

State law “is about getting these houses into the hands of low- to moderate-income tenants,” said Caltrans lawyer William Evans. “We complied with the statute, I have no doubt.”

Caltrans officials said that of the 56 remaining dwellings, about 30 are in escrow for individual buyers and four more are being bundled together for other nonprofits. Another set of 11 is also being sold to Neighborhood Housing Services, but no objections to that sale have been made--yet.

In court Thursday, Judge Stoever predicted that the current legal imbroglio is just the tip of the iceberg.

“I’m anxiously awaiting the next filing,” he said.