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The lead-up to the Coastal Commission hearing on July 14 to determine the continued affordability of 161 Moro Cojo homes has become heated with CHISPA and a variety of Monterey County politicians and leaders claiming that organizations and individuals who oppose lifting the affordability deed restriction are anti-farmworker and uncaring about affordable housing. Monterey Bay Partisan readers will likely be interested that the organizations and individuals painted with this brush include the Sierra Club, League of Women Voters, LandWatch, and by implication, former North County Supervisor Marc Del Piero and many Partisan readers themselves.

You would rightfully be confused at this accusation. It has happened because last fall those organizations and individuals persuaded the Coastal Commission to not accept the January 2016 decision by the Board of Supervisors to allow the homes to be sold at market rate. Coastal commissioners discussed the letters and scheduled a de novo hearing where the affordability requirement could be discussed in depth. That’s happening on the 14th; details can be found at the end of this article.

The accusations are included in letters sent by CHISPA, and in form letters signed by Salinas Valley leaders such as Salinas Mayor Joe Gunter, Gonzales Mayor Maria Orozco, Monterey County Supervisor Simon Salinas, former Supervisor Fernando Armenta, Greenfield political figures  John Huerta and Jesus Olvera-Garcia, Soledad Mayor Fred Ledesma,  and the Most Reverend Richard J. Garcia, bishop of the Diocese of Monterey. As noted, they claim anti-farmworker and anti-affordable housing bias.

The irony is that those organizations and individuals charged with bias were acting to preserve affordable housing, while the organizations and individuals allegedly most interested in affordable housing are acting to convert affordable housing to market rate!

And we’re down the rabbit hole.

At issue is the affordability restriction that  keeps the subsidized homes’ selling prices capped at prices affordable to future qualified low- and moderate-income buyers. That figure currently is $290,000, roughly $100,000 more than Moro Cojo homeowners originally paid. If the selling prices weren’t capped, Moro Cojo homeowners could likely profit by twice that when they sell, netting $200,000 instead of $100,000. CHISPA and 161 of the homeowners want the higher profit and they’ve persuaded Salinas Valley leaders to support them.

The issue began back in 2000-2001 when the Moro Cojo subdivision was developed as an affordable housing project. The approval process was challenged in a Coastal Commission appeal in the 1990s, and later in a lawsuit that was settled by making the 175 single-family homes permanently affordable. The subdivision includes a large park, 90 multi-family units and 175 single-family homes  in the coastal zone near Castroville.

The Coastal Commission’s legal duty at the hearing will be to determine whether granting the application to terminate affordability on the 161 homes is consistent with North County Coastal Plan policies. The relevant policy is remarkably clear and simple:

“LUP Policy 4.3.6.D.1. The County shall protect existing affordable housing opportunities in the North County coastal area from loss due to deterioration, conversion, or any other reason. The County will:

a.) Discourage demolitions, but, require replacement on a one by one basis of all demolished or converted units which were affordable to or occupied by low and moderate income persons.”

And here we have another irony: Using tortured logic, the July 14 staff report claims on pages 13-16 that terminating affordability is consistent with LUP Policy 4.3.6.D.1!

Astoundingly, no replacement units are proposed. This is important. The cost to replace 161 homes at $300,000 each would exceed $48 million. The 161 Moro Cojo affordable homes currently exist. Removing the affordability restriction would help current Moro Cojo homeowners, but deprive future eligible purchasers of the chance for homeownership.

Partisan readers who want the Coastal Commission to keep the subsidized 161 Moro Cojo homes affordable should submit comments to the Coastal Commission by July 7, so commissioners will know Monterey County residents really do care about affordable housing.

If you need convincing about what a great community the affordable Moro Cojo subdivision is, drive on Castroville Boulevard just beyond North County High School. You’ll see play equipment for youngsters and a soccer field in a large public park surrounded by well kept homes. Hopefully, those homes will, as clearly intended, remain permanently affordable to future moderate- and low-income purchasers beyond July 14.

The de novo hearing is scheduled for July 14. It is agenda item 7a on the staff report.

Comments can be emailed to diana.chapman@coastal.ca.gov or snail-mailed to Brian O’Neill at California Coastal Commission Central Coast District Office, 725 Front Street, Suite 300 Santa Cruz CA 95060. Comments should mention Project A-3-MCO-16-16-0017 and arrive by July 7.

Jane Haines is a retired lawyer and long-time advocate for affordable housing. 

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Single family house on pile of money

An effort to terminate affordable housing restrictions on 161 Monterey County homes is currently underway. You can help keep the homes affordable, but first you need to understand the following background:

The homes are located in the Moro Cojo housing project near Castroville. Built during the late 1990s, each home is subject to a deed restriction requiring that it remain permanently affordable to very low, low or moderate income households.

Owners of the homes, represented by Community Housing Improvement System Planning Association Inc (CHISPA), applied to Monterey County to have the “permanent” deed restriction converted to a 15-year restriction whose term commences on the date when the homes were conveyed. Since most of the homes were conveyed between 1999-2001, approval of CHISPA’s application would mean that either this year or next, these 161 homes could be sold at unrestricted market rates, and Monterey County’s affordable housing stock would decrease by 161 homes.

Many government agencies made substantial financial contributions to make the Moro Cojo homes affordable. Monterey County waived $118,868 in processing fees and contributed a $476,150 Community Development Block Grant grant toward the project. The Red Cross donated generously. State and federal governments provided low-interest loans and other financial aid. The Federal Resolution Trust Co. sold the land for the project for an alleged “fraction of the amount [which had been] loaned on the property.”

The public purpose of those contributions was to significantly increase the supply of single-family homes affordable to very low and low income families.

Since the need for affordable homes is as great now as it was in the 1990s, I believe that changing the affordability from permanent to 15 years at this time would be an unlawful gift of public funds because it would be for the private gain of the 161 homeowners, rather than for the intended public purpose.

Please understand that I am not unbiased. I represented clients in two 1990s lawsuits about the Moro Cojo project. The first lawsuit resulted in a stipulated judgment interpreting a condition for project approval to mean that the homes were to remain permanently affordable until substantial evidence showed that the permanent restriction should be changed. The second lawsuit resulted in CHISPA suing my clients for tens of thousands of dollars, alleging that my clients’ lawsuit was frivolous and for the purpose of stopping the project.

The court rejected CHISPA’s allegation, affirmed the validity of that lawsuit (which had to do with water supply), and ordered CHISPA to pay my attorney fees for the time I spent defending against CHISPA’s unwarranted allegation.

So, I’m not unbiased. Nonetheless, I do know a lot about origins of the homes’ affordability.

First, it’s understandable that the homeowners want the greater profit they would reap from selling their homes without limitation on the selling price. Those particular homeowners would become free of any obligation to use any portion of the equity they accrue to help other families wanting homeownership, and they could pocket their profits. However, they would be undermining the very policy that benefitted them.

The homeowners argue that their homes were “self-help,” meaning that each purchasing household spent 40 hours a week for eight to ten months doing non-specialized labor on their homes to provide “sweat equity.” That’s commendable. However their “sweat equity” substituted for a down payment valued at $16,000 plus specified interest. And when they do sell, even with the affordability restriction, they can make a modest profit.

The homeowners argue that redevelopment law puts a 15 year limit on affordability on self-help homes rather than making it permanent. That’s true about now-defunct redevelopment law.

However redevelopment law has never applied to these homes, and the law that does apply commonly results in permanent restrictions on affordability.

The homeowners argue that permanent affordability deed restrictions are unlawful, and that they were not given adequate notice about the deed restrictions, and that the restriction makes it difficult to get home loans or refinancing. However a 2009 appeals court decision about the Moro Cojo permanent deed restrictions, Alfaro v. CHISPA, considered those same claims and rejected them.

It seems likely that, as in the past, issues pertaining to the homeowners’ application will be obscured by charges of racism and classism. Thus, involvement in this public issue should not be undertaken by the delicate. Nonetheless, Partisan readers who care sufficiently about affordable housing and are willing to get involved, should send their comments to the Monterey County Housing Advisory Committee at 168 W. Alisal St., Salinas 93901 before the first hearing, which will be on April 8. Explain whether you think the affordability restriction on the 161 Moro Cojo homes should remain permanent, or whether 15 years of affordability is enough, and why.

Two subsequent public hearings will be held, one before the Planning Commission and one before the Board of Supervisors.

The Alfaro court best summarized the issue when it said: “Plaintiffs are essentially arguing that this housing program should have been designed differently, namely just to benefit them, the first wave of low income buyers. We acknowledge that it would be a more beneficial program to this first wave if they were able to sell their properties for whatever price they could command. However, plaintiffs do not discuss how avoiding the affordable housing deed restriction will benefit the second wave and later waves of low income buyers. There is an inherent conflict between the goals of maximizing the financial benefits to the first wave and preserving affordable housing for future buyers. We consider it reasonable to impose a continuing affordability requirement for the benefit of future low to moderate income homeowners.”

Jane Haines is a retired lawyer who has been heavily involved in issues related to affordable housing.

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