The federal government on Friday rejected a proposal by the city of Los Angeles to replace a parcel of abandoned Navy housing in San Pedro with market-rate homes, finding that the plan does not set aside enough of the units for homeless families.
The Department of Housing and Urban Development said city officials failed to balance the need for economic redevelopment in the community with the needs of the homeless, as mandated by law.
The decision, however, did not fully satisfy homeless advocates, who wanted a substantial portion of the 545 units of one- and two-story townhouses to be rehabilitated for needy families.
Federal officials suggested that a far smaller number, as few as 152 units, would satisfy requirements.
Los Angeles now has 90 days to revise and resubmit its plan.
"I am disappointed that HUD has rejected the community's plan for Navy reuse land in San Pedro," said Los Angeles City Councilwoman Janice Hahn, who represents the area and was deeply involved in the city's proposal.
"I am grateful, however, that HUD has finally provided us with very specific and helpful information regarding use of the land," Hahn said.
Stephen English, an attorney representing homeless providers and who had challenged the city's plan, also expressed mixed sentiments.
"We had urged that more units be devoted to the homeless, but we have to work with the decision that HUD has made, even though it's not as positive as we would have wanted," he said.
City officials, homeless advocates and homeowners' groups have wrangled over how to redevelop the coveted South Bay property ever since the Long Beach Naval Shipyard closed in 1996.
The city's plan set aside 76 units for low-income housing. Another portion of the townhouses would be designated for students at private Marymount College, and another would go to Rolling Hills Preparatory School for recreation facilities.
A 22-acre plot would become a refuge for the endangered Palos Verdes blue butterfly.
About 245 of the units would have been sold to the highest bidder and demolished to be replaced by more spacious, market-rate homes costing about $300,000.
A coalition of community groups and homeless providers challenged the plan, threatening to sue if the city went ahead with it. A competing group of homeowners then warned it might countersue, arguing that San Pedro already hosts a disproportionate share of homeless services.
Late last year HUD postponed approval of the city's plan and tried unsuccessfully for 45 days to broker a compromise.
In Friday's decision, HUD sought to chart its own middle ground, noting that the needs of the homeless in Los Angeles are "enormous." It cited the city's own 1995 estimate that on any given night about 37,000 people are homeless. (Many homeless advocates put the current number at 87,000.)
But the agency also said it no longer supports "development of such large concentrations of low-income families, but rather prefers mixed-income communities."
The letter stated the city should consider designating at least 76 more units for homeless housing.
It also directed the city to revise its analysis of homeless needs using more recent data.