Hemet abuses redevelopment

May 6, 2013

By Nick Sibilla

Carina Alvarez has a dream for a comfortable retirement.  But it’s turning into a bureaucratic nightmare.

Carina bought a four-plex on Mobley Lane in Hemet for $170,000 back in 2010 as an investment.  She then spent $60,000 overhauling the property.  She repaired the roof and replaced carpets, flooring, bathtubs, locks, windows, water heaters and kitchen cabinets—just a few of her many improvements.  To help Hemet crack down on illegal activity in rental properties, Carina joined the city’s Crime Free Multi-Housing Program.

But Mobley Lane has taken a turn for the worse.  According to Carina, the area has turned into a “ghost town,” while “taxpayer-funded property is being left to rot.”

Unbeknownst to her when she first bought her property, the city of Hemet had a very different idea for Mobley Lane.  The city planned to acquire all 16 four-plexes for an affordable housing redevelopment project.  In 2010, the Hemet Housing Authority purchased 11 of the 16 properties, but then boarded them up.  Six months after she moved in, Carina received a letter from the city that Hemet wanted to buy out—or potentially force out through eminent domain—Carina and the other three remaining private property owners on Mobley Lane.

The state’s redevelopment program had allowed cities to siphon property taxes from schools and other public infrastructure and seize land through eminent domain through redevelopment agencies.  But redevelopment became infamous for waste and violating Californians’ property rights.  Over the past decade, the Institute for Justice “catalogued more than 200 projects that abused eminent domain across the Golden State.”  To top it all off, according to California Controller John Chiang, redevelopment agencies have racked up more than $30 billion in debt.

So in 2011, the state abolished its redevelopment program and more than shuttered 400 redevelopment agencies that had operated across the state.  Cities are now charged with winding down their redevelopment efforts and selling off assets—like Hemet’s 11 vacant, boarded-up properties that surround Carina’s homes.

Crime magnets

Meanwhile, those abandoned houses have become a magnet for crime.  Mobley Lane has been plagued with break-ins, trash, car thefts and graffiti.  Thieves strip metal from outdoor air conditioning units.  Carina even had to notify the city after she learned a drug dealer was living in a Hemet-owned four-plex.  After a year of living on Mobley Lane and dealing with the high crime, Carina moved out, saying, “It was too dangerous for me to live there.”

She now lives in Orange County, but continues to rent out her property on Mobley Lane.  Yet the city-owned, vacant four-plexes are still damaging her property values.  “We’re losing $1,000 every month because of the vacancies,” she said in an interview. 

Frustrated with this urban decay, last July Carina and another property owner devised a plan to revitalize the neighborhood.  The two brought along two investors who are willing to offer more than $2 million to purchase all 11 four-plexes from the city.  Carina hopes this private redevelopment would turn Mobley Lane into “a nice gated community.”  Considering that Hemet is currently facing a budget shortfall of $2.7 million, that private investment could be a huge boon.

Yet Mayor Robert Youssef called that plan “premature.”  In an August 2012 letter, he stated the city “must first gain clear direction from the State regarding redevelopment dissolution and then after perhaps can entertain proposals to clear or redevelop the properties.”

But as of January 2013, 34 redevelopment agencies around California have been completely dissolved.  This list includes agencies in cities much bigger than Hemet, like San Francisco and Sacramento.  So why can’t Hemet move more quickly to liquidate the Mobley Lane project to willing investors?

For Carina, she just wants this Mobley Lane fiasco to end.  She wants people to know “the injustice of what the city is doing to us.”  Her neighborhood has deteriorated and bureaucrats continue to stonewall her private redevelopment plan.  “It’s been three years.  When are they going to do something?”

Nick Sibilla is a Maffucci Fellow at the Institute for Justice.