ffordable units had already been sold to unqualified investors months ago. The purchasers were neither seniors nor low to moderate income qualified. It is unclear as to why neither staff nor the developer came forward with this information at the previous meeting. If the item were not flagged by the SGVOG at the November 1 meeting, it is very likely that it would have passed without discussion.
To further complicate the matter, the city attorney rendered the opinion that the city could not impose any restrictions as to whom the units could be rented.
Commissioner Enrique Garcia said, “To me, the spirit was very clear that the 16 units were to be for purchase and occupancy by senior citizens of low and moderate income.” Likewise, Commissioner Gary Frueholz said that “the conditions were clear and he’s not really confused by this.”
But Commissioner Stan Yonemoto cited Mr. Wong’s good intentions and the contradictory information provided by the city to him with regard to the agreement. The resulting vote by the commission approved, by a 4-3 vote, the proposed revision which essentially allows the 16 units to be open for purchase and rent by anyone .
In the end, the 16 units which were originally intended to be owner-occupied by low to moderate-income seniors are now open to anyone. Investors were allowed to purchase at the same below-market rates and allowed to rent out the units unrestricted. This action appears to be illegal. It is no doubt unethical as it hurts both those in need of affordable housing as well as local residents who tolerate the higher density provisions and conversion of owner-occupied units to rentals.
The affordable housing practices of the former Alhambra Redevelopment Agency (ARA)
There are many in the city who do not realize that one of the main goals of the redevelopment agency was to provide affordable housing. State law even mandates that a minimum of 20% of the tax increment revenue must be dedicated to the creation of affordable housing. But Alhambra has consistently focused revenues back into subsidizing developers without creating affordable units. The crux of the problem is that the ARA used the redevelopment vehicle as a subsidy for corporations and businesses. It strayed from the core values of the redevelopment program. It paid for such things as recurring costs in the form of leases and maintenance. Still on the books is over $3,300,000 the ARA gave to New Century BMW to subsidize their construction costs; $320,000 to Kohl’s to come into town; and over $35,000 in rental and maintenance payments on behalf of businesses. At the time of this writing, the city is still fighting to have such payments continue to be paid through the tax increment funds that would have gone to the ARA.
These specific cases are a small subset of the millions of dollars that have already been spent in similar ways. This was made possible, in part, by utilizing the 20% set-aside that the city was required to dedicate to affordable housing. Whenever the city was required to payout portions of its tax revenue back to the state for things such as the Supplemental Educational Revenue Augmentation Fund (SERAF) to help schools, the city opted to use the affordable housing set-aside funds rather take away from its practice of subsidizing retailers. On the books was over $6,400,000 of loans taken out against this account. Efforts by the SGVOG to stop this risky practice since there was a good chance such funds would be lost forever were unheeded . Predictably, when the state shutdown the redevelopment agencies, this money that the ARA was suppose to use for affordable housing projects was completely lost.
It is more likely that the businesses will still get their money, with so many people lobbying on their behalf, including the city’s appointees on the ARA oversight board. But the working poor, without a voice, are left holding the short end of the stick.
Perspective from the wider viewpoint
Although Alhambra is not alone in this practice, no other city in the San Gabriel Valley reserves so much of its affordable housing