Caltrans is preparing to raise rents on many of the nearly 500 homes it owns in Pasadena, South Pasadena and Los Angeles, in the wake of the state audit that blistered the agency for mismanaging the properties.
In August, the California State Auditor found Caltrans failed to collect $22.5 million in recent years by charging below-market rents, had inadequately overseen repair work and otherwise neglected properties originally acquired in preparation for building an extension of the Long Beach (710) Freeway.
In October, the agency responded with a letter promising to fix the oversights by the end of 2012 while preparing longer-term plans to turn over management of the homes. Caltrans said it would request financial information from some tenants to see if they qualify for below-market rents, and would put in place a program to raise rates incrementally where appropriate.
The effort has drawn an angry response from some longtime tenants, who fear the moves will force them out of their homes and undermine a 1979 law requiring Caltrans to give them first dibs on acquiring the properties
John Kvammen, who has lived in a Caltrans-owned home in Pasadena for 39 years, said one reason he has stayed under poor management for so long is to exercise his right when Caltrans finally sells.
“If Caltrans starts raising the rent and prices me out, they are basically taking away 40 years of my tenancy in anticipation of buying this house,” Kvammen said. “ I think it’s criminal.”
Caltrans spokeswoman Lauren Wonder said the agency must act on the audit's findings, but that it is not trying to throw anybody out.
“It is not our goal to displace tenants nor to deny anyone the opportunity to purchase a dwelling they inhabit when and if it is available for sale,” she said.
Wonder said tenants would receive at least 60-day notice of any rent changes, and that the increases would begin no earlier than March 1.
Local lawmakers question whether it is fair for Caltrans to charge market-rate rents even as residents and auditors say it has been a delinquent landlord.
“It’s only a fair-market rent if Caltrans is behaving as a landlord would in the marketplace, and they are not,” said Suzanne Reed, chief of staff for state Sen. Carol Liu (D-La Cañada Flintridge). “Repairs are not made in a timely fashion, some of the homes are barely habitable, there are rat infestations, asbestos in ceilings, leaks, black mold.”
In its response to the audit, Caltrans promised to clean up its repair and improvement policies by the end of 2012, with many of the changes addressing cost management.
Reed said Liu, Caltrans Director Malcolm Dougherty and Brian Kelly, the state's secretary of Business, Transportation and Housing, will meet with tenants in mid-December.
Anthony Portantino, who during his just-ended term in the state Assembly requested the Caltrans audit, said the interests of the tenants should be preserved as Caltrans untangles its problems.
“Caltrans has not been a good landlord for decades,” Portantino said. “We had to pull the scab off the mismanagement, and the tenants are sort of caught in the middle of that.”