An apartment complex will be demolished to make way for 38 new homes under two agreements approved this week by the Tustin Redevelopment Agency.
For years, officials have called the 56-unit apartment complex a "blighting influence," characterized by a backlog of maintenance problems and a high crime rate.
The Redevelopment Agency set aside $1.6 million from a housing fund for the Town Center Redevelopment Project on Sixth Street.
The project will include rehabilitation of a nearby 6,000-square-foot shopping center, which includes Alberto's Mexican Food.
Additionally, the city will pay about $650,000 to relocate residents from the apartment complex. About 33 units are still occupied, officials said.
Construction will begin in January and model homes, by Warmington Homes California, are expected to be completed by summer, said Tustin Senior Redevelopment Project Manager Jim Draughon.
The homes, which will be sold for about $240,000, could be occupied by the end of next year.
The city expects to receive about $88,000 more in property taxes annually from the project.