Owners of Illegal Condos in Surf City Face Big Bills

The owners of dozens of downtown Huntington Beach condominiums improperly converted from apartments are facing fees that could exceed $20,000 per unit, on top of $10,300 to process permits, the City Council said this week.

The fees are unfortunate but necessary to comply with city codes and housing regulations, officials told angry property owners, many of whom have been unable to sell or refinance their homes because of the improper conversions. The final costs will be set by the council in August.

An investigation by Huntington Beach police and the Orange County district attorney’s office has been underway since news of the illegal conversions surfaced late last year.

Among the conversions being probed is the purchase and resale of four units by Councilwoman Pam Julien Houchen, who also acted as the real estate agent on the transaction. She has recused herself from council discussions and actions on the condo conversions and has declined to comment on the sale of her property.

Houchen did not attend Tuesday’s council meeting.

In May, city officials estimated that as many as 40 three- and four-unit buildings might have been converted without proper city permits and fees, then sold as individual units. The issue came to light after complaints were lodged over the sale of some units. Officials then compared Orange County assessor records with city permits.

Property owners could face paying a special fee of up to $20,000 per unit, which would generate $2.4 million to increase the city’s supply of low-cost housing.

Because of the illegal conversions, the city has lost low-cost units that probably would still exist if the previous owners had been forced to go through the costly and cumbersome conversion process, city planners said.