The End of Affordable Housing?

Wednesday, May 7, 2008
Joe Piasecki
Pasadena Weekly

Not far from the 61 new luxury condominiums built recently behind the historic Friend Paper Co. building in Old Pasadena, a tiny homeless woman sleeps inside a tattered, empty suitcase.

All that sticks out is an arm, a shoulder and her head, which she covers with a blue floral cloth - whether out of shame or fear of being identified she wouldn't say, ignoring questions.

Next to her is a dirt mound where Ambassador College's former east campus was demolished to make way for even more high-end housing. The Westgate Pasadena Project will give rise to an impressive mix of 820 condos, townhomes and apartments, but not all of these will be out of reach to people who might otherwise end up like the woman living in a suitcase.

In order to comply with Pasadena's inclusionary zoning ordinance, developer Sares-Regis is setting aside 85 apartments as affordable housing for low-income residents and paying additional city fees toward generating even more subsidized homes. The Friend Paper Co. project chose to pay more than $1.2 million into the city's affordable housing creation trust fund in lieu of selling nine condos below market rate, according to Kermit Mahan, who works in the city's housing division.

But whether any of that housing reaches local people who need it, say affordable housing activists, depends on the results of the June 3 state primary election.

Proposition 98 aims to restrict government's ability to use eminent domain to seize property, but would also make all forms of rent control - including the city's inclusionary zoning ordinance - illegal in California and threaten other renter protections, they warn.

"It's going to have devastating effects on renters," said Greg Spiegel, a housing attorney with the Western Center on Law & Poverty, an advocacy group for low-income California residents that has studied the initiative. "Proposition 98 will end rent control for 1 million California families and jeopardize a myriad of tenant protection laws that are longstanding - things like fair return of a rental security deposit, a notice period before a no-fault eviction, how much a landlord can charge for a credit check."

Opponents of 98, who are asking voters to instead choose the less severe eminent domain initiative Proposition 99, also include AARP, several other senior and renters' rights groups, the League of Women Voters - California, and the League of California Cities.

Environmental groups such as the Sierra Club California, the National Wildlife Federation and Audubon California have also signed on to the cause for fear that the initiative would threaten government's ability to enforce environmental protections.

An anti-98 stance even brought Gov. Arnold Schwarzenegger and House Speaker Nancy Pelosi together, along with the state Democratic Party, Democrats of the Pasadena Foothills, Sen. Dianne Feinstein and former Gov. Pete Wilson, who all oppose the measure for various reasons.

Supporters of Proposition 98 include the state's Republican and Libertarian parties, the Howard Jarvis Taxpayers Association, the California Association of Realtors and numerous rental property owners, who, according to state campaign records, appear to make up the vast majority of pro-98 donors.

According to the Yes on 98 - Californians for Property Protection group, the intent of the initiative is to curb government seizure of private property and stop rent control.

Citing a clause that allows voluntary agreements between private property owners and public agencies to develop affordable housing, spokesman Mark Mlikotin argues that Proposition 98 may not directly affect Pasadena's inclusionary zoning ordinance.

But that's an argument AARP California Executive Council member Marvin Schachter, who helped create Pasadena's affordable housing law, finds incredible because there's nothing voluntary about forcing a developer to settle for lower rents or pay hefty fees.

As 98 reads, "limiting the price a private owner may charge another person to purchase, occupy or use his or her real property" would be summarily banned.

"It's the same justification they're using to eliminate rent control," said Schachter, who described proponents of 98 as making a duplicitous effort to eliminate renter protections in the name of eminent domain reform.

"They're really running two campaigns - one to the public which talks about eminent domain and another to the real estate industry in which they don't talk about eminent domain at all," said Schachter, chair of the Pasadena Senior Advocacy Council. "In article after article in the real estate press, they do not camouflage it by talking about eminent domain. They talk about the issues they're really concerned about: to wipe out protection for tenants, wipe out rent control, wipe out protections for mobile home communities, wipe out inclusionary zoning and turn the clock back."

Opponents of Proposition 98 endorse Proposition 99, a competing eminent domain reform measure. If both pass, the one that gets more votes takes effect.

Proposition 99 would prohibit government agencies from using eminent domain to take a home for use by a private developer, a direct response to the 2005 Supreme Court decision in Kelo v. City of New London which upheld the city's right to seize private property and transfer it to a private developer.

Proposition 98 prohibits any act to "transfer an economic benefit to one or more private persons at the expense of the private owner," and requires increased compensation for private property owners whose land could still be taken under narrowly drawn situations involving public use.

"Proposition 99 doesn't protect business, doesn't protect places of worship - is nothing sacred? - and doesn't close many loopholes [that could be used by government to seize property]," said 98's Mlikotin.

What choosing 99 over 98 does accomplish, said Schachter, is preventing thousands of people from ending up like the woman living in a suitcase in the shadow of affluent condo dwellers.

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