Now City Council Takes a Look at How it Manages Its Own Rental Units

City owns 10 residential units now, may buy as many as 30 more over next five years.

Published : Monday, September 9, 2019 | 4:45 AM

The Pasadena City Council on Monday will discuss recommended policies that will determine how the City should manage City-owned rental properties, including those that the City may acquire in the future.

Currently, the City owns 10 residential properties in Pasadena which are operated as affordable rental housing for very low-income persons who receive rent subsidies under the federal Section 8 housing program.

These properties include five condominium units located at 64 N. Mar Vista Avenue, a unit at 333 N. Hill Avenue, a unit at 125 N. Allen Avenue, a unit at 2386 E. Del Mar Boulevard, and two units at 217 S. Marengo Avenue.

These properties are managed by Fertig and Gordon Companies, Inc., a professional property management company, under contract with the City.

Earlier, the City Council said formal policies for managing City-owned rental housing should be established, since the existing inventory of City-owned rental housing properties do not constitute what is commonly referred to as “public housing,” which could be subsidized through federal funding, according to an Agenda Report by Pasadena Housing Director William Huang.

The City’s acquisition and operation of the properties in the existing inventory also do not fall under the role as a Housing Authority, which in state law is defined as a” corporate and politic public body” that can “carry out, acquire, lease, and operate housing projects for persons of low income…”

In 1989, the Pasadena Community Development Commission (“PCDC”), as the legal successor in interest to the Pasadena Redevelopment Agency, was restructured and granted the powers, duties and responsibilities of a Housing Authority.

When the PCDC was dissolved in 2011 in accordance with state redevelopment dissolution law, the City did not take any action to establish a new Housing Authority. Because of this, the City-owned inventory of rental units are not subject to state requirements pertaining to a Housing Authority. A tenant in one of the existing properties who violated their lease, for example, could be evicted without the benefit of administrative appeal to the City.

Through the City Council’s Economic Development and Technology Committee, the Housing Department will present a set of recommended policies for managing City-owned rental housing during Monday’s meeting.

Among these are that ownership of properties in the rental housing inventory will be held by the City, that the City will contract with a third party professional property management company to manage the rental properties, that the properties in the inventory will carry property and liability insurance coverage,, and that vacancies in the inventory will be marketed through 

The Housing Department also recommended that the selection of tenants will be subject to the City’s local preference and priorities policy, and listed a set of parameters that shall govern the acquisition of additional properties for the rental housing inventory.

Properties for acquisition shall also be limited to individual condominiums, single-family residences, and multifamily rental properties not exceeding 20 units, according to the recommendations.

The Housing Department is also recommending that replacement or operating reserve funds of an appropriate amount should will be set aside for each property, and that surplus cash flow from the operation of the units may be used for Department of Housing administrative costs to reduce the · Department’s dependence on the City General Fund.

Under these new policies, the Housing Department foresees the City acquiring from four to six units annually over the next five years, based on the City’s past track record of right-of-first refusal acquisitions, Huang’s report said.

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