Judge Orders South Pasadena Homes Sold For Pennies On The Dollar

SOUTH PASADENA, CA — The fate of the South Pasadena homes in the path of the abandoned 710 Freeway expansion project was decided recently by a judge, who ordered Caltrans to sell the million-dollar homes at their 1968 prices.

According to NBC Los Angeles, Judge Mitchell Beckloffruled in favor of three-long times tenants who sued Caltrans when the state agency attempted to sell the properties to then in 2018 at market value - approximately $850,000 more than the state paid for the homes decades ago. Three longtime tenants sued and the judge rejected the state’s argument that it would lose millions if the homes were sold for less than market value.
The legal victory will allow the residents to buy the homes for pennies on the dollar, but there is a catch, NBC reported. If and when they decide to sell, the equity beyond the bulk of the equity would revert back to the state's Housing Finance Agency.
For example, Angela Flores will be able to buy her family home for the 1968 price of $24,000, but if she decides to sell it at current market value, the state would get $900,000 in equity, NBC reported.
Caltrans has for decades owned hundreds of homes along a six-mile path that was to be a surface extension of the 710 Freeway. Lawsuits and political opposition delayed the extension, and the plan shifted in later years to a tunnel proposal that is also considered dead since the Metro Board of Directors withdrew its support and the project officially died in 2017.
In 2016, Caltrans started selling some of the more than 460 homes it owns, with priority given to renters who live in them and can purchase them at a fair-market rate. Last year, the governor signed a bill preventing Caltrans from raising the rent before a sale for anyone enrolled in the Caltrans Affordable Rent Program, which is available to low-income individuals and totals 123 of the tenants, according to a state Senate report.

City News Service contributed to this report. Image courtesy of Caltrans