Open up and say … lawsuit
Ventura’s affordable housing woes continue
By Stacey Wiebe 07/27/2006
Two years ago, Maureen Dean was ready to move out of her condominium in Ventura’s Seneca Gardens and into her new home. All she needed were a few moving boxes and the keys to her new place. Today, she’s still in the condo, and suing the City of Ventura to change that.
To make improvements to the condo — which Dean and her then-husband had planned to purchase, improve upon and sell for a profit — the pair refinanced three times and took out two lines of equity on the home they purchased for $146,000 in 2000.
Improvements were made and her mortgage is currently about $380,000, Dean said Tuesday, but when it came time to sell her condo, she was told she could sell for no more than $240,000 — though nearly identical units in the same complex are selling for $400,000 and up. Why? Because the condo Dean and her husband lived in was designated as affordable housing.
“When all of us bought it, no one told us it was low income housing — nobody,” Dean, 37, said. “Imagine our surprise when people started trying to sell and discovered it was low income. Not at any time did anyone ever say it was low income.”
According to Dean, who lives in the D building of the complex, which includes A, B and C buildings, the D building is the only building that was designated for affordable housing, though she said there is little, if any, difference between her condo and those of her neighbors in the other buildings.
What’s more, Dean said, with a combined income of about $80,000, she and her husband would not have qualified for low income housing. “None of us could have qualified for low-income housing,” she said. With her home owner’s association fees increasing from $260 to $300 per month for water, trash and landscape maintenance by the end of the year, Dean said she also doubts such steep costs are designed for those in affordable housing.
Recent concerns at City Hall over discrepancies in the city’s affordable housing program are currently being investigated — but Dean is quick to say that she and her neighbors aren’t trying to slip through loopholes in the system. Instead, she and two of her neighbors have filed a class action lawsuit against the city.
“We aren’t trying to pull a scam,” Dean said. “I’m stuck. I can’t buy my new house now. I can’t sell it … It’s really hard because I got divorced and I don’t have the income of my husband anymore. I need to live in a place I can afford.”
Chris Norman, Ventura assistant city attorney, said Tuesday that the city is in the process of deciphering what was revealed to whom and when. “In terms of the transaction for the purchases, we’re trying to figure out what was disclosed.”
The city’s official position, Norman said, is that there were very specific covenants, conditions and restrictions — or CC&Rs in lawyer speak — at the time that the units were purchased. “All the owners in that area have to abide by the CC&Rs,” he said, adding that resale price constrictions and mandatory owner occupancy are included among those restrictions.
“It was up to the developer to disclose this information to the purchaser and, whether or not that happened — at this point, I don’t know,” Norman said.
In 2001, the city contracted with the Housing Authority of the City of San Buenaventura in order for the housing authority to monitor the city’s affordable housing program and to “make sure sales were complying” with the program, said Norman, who added that, in this scenario, all information about purchases in the affordable housing program would have been forwarded to the housing authority.
Calls to the housing authority were not returned.
Still, Norman said, “The purchasers have documents and, in the purchase agreement, it should disclose that there were restrictions.”
Dean insists that she was never given such documentation.
Attorney Christoph Nettesheim of Ventura is representing Dean and the two other parties named on the lawsuit. His theory is that there may have been too many parties overseeing operations at Seneca Gardens. “Part of what happened, I believe, is the city handed part of it off to the housing authority, but part of it was handled by the Bulmer [Development] Corp. and there was no oversight.”
The Bulmer Development Corp., based in Woodland Hills, is involved in three suits with the city that are still pending, Norman said. All three suits, which involve a total of 17 parties, involve either Seneca Gardens or Seneca Highlands, a complex adjacent to Seneca Gardens.
To complicate matters even more, Nettesheim argues that there is some question as to how, why and when the affordable housing units became affordable housing in the first place. “Some people were actually told that they were buying affordable housing — but that the designation would expire and they could sell the units at market rate,” he said. “What it appears is that someone said, ‘Gee, too many of these are being sold to unqualified buyers.’ It appears to me that someone dropped the ball and is just trying to pass the buck.”
Attorney Paul M. Kelley of Los Angeles insists it isn’t his client, the Bulmer Development Corporation, who dropped the ball. Kelley, of Donfeld, Kelley & Rollman, said Bulmer started getting approvals for the Seneca projects in 1986 and sold its last units in 2002. The projects included an array of townhomes and apartments that would be converted to condos.
Along the way, Bulmer and several investors formed a small company, Seneca Gardens, Limited, committed to the Seneca Gardens project. Over time, the company became so indebted that, when lenders threatened to foreclose on the D building, the company simply handed it over. In short, Bulmer didn’t sell the units, Kelley said.
A company called Seneca Mountain View Condominiums, LLC finished the project and sold the condos, Kelley said — but the company no longer exists.
“There are two sets of victims here,” Nettesheim said, “the buyers who bought into something misrepresented to them and the people who need affordable housing and don’t have it because of this screw-up.”