Suburban Renewal

As many as 50 dilapidated, foreclosed homes in Pacoima and Canoga Park will be renovated and resold at discounted prices to first-time buyers and low-income families as part of a program jointly funded by government and business.

The $100-million Enterprise Home Ownership Program will buy, rehabilitate and resell the homes beginning in June, offering to defer buyers’ interest payments for 30 years or until the homes are resold.

The program is coming at a much needed time and will help ease housing shortages in those areas, officials said.

“The San Fernando Valley is experiencing an affordable-housing crisis,” said Alan Greenlee, director of external affairs of the Enterprise Foundation, which administers the program. “We have a huge influx of people coming into the area, but only a small number of new homes are being built. The supply and demand are going in different ways. The supply is going down, but the demand is going up.”

A study by the Real Estate Center at the Anderson School at UCLA last November found the northeast Valley and East Los Angeles are the two fastest-growing parts of the county and will continue to be through 2005.

While the county population is expected to increase by about 1% over the next five years, the northeast Valley is due to grow by rates ranging from 6.4% in Sun Valley to 8.2% in Mission Hills, according to economist Stephen D. Cauley, associate director of the UCLA Real Estate Center.

Many apartment dwellers in these areas are poorly educated immigrants who lack the earning power to move up to single-family homes, he said.

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While the annual per-capita income in the northeast Valley is $9,266, families need an annual income of more than $63,500 to afford a median-priced home of $160,000 with a monthly mortgage of $1,482, according to a report last year by the Los Angeles Housing Crisis Task Force. City and federal housing studies show that more than 30% of northeast Valley residents live in poverty, the area’s apartments have Los Angeles’ highest rate of building and safety code violations, and overcrowding is 37% more severe than the rest of the city.

Only 6% of the city’s 8,762 public housing units are in the Valley.

City officials, who advocate homeownership, support the program’s idea.

“I’m welcoming it with open arms,” said Los Angeles Councilwoman Laura Chick, whose district includes Canoga Park. “It will help the individual family and help the overall neighborhood.

“When people live in a home they own, they are more interested in improving the neighborhood and keeping things safe. When people have the chance to buy their own home and live in it, those kind of residents will help make the neighborhoods stable.”

With funds from city and federal governments, nonprofit organizations and private businesses, the program will buy and renovate about 1,800 foreclosed, decrepit properties from the U.S. Department of Housing and Urban Development in Boyle Heights, Watts, Highland Park and South-Central Los Angeles, in addition to Canoga Park and Pacoima.

The organization will purchase the homes from HUD for half the appraised price, and the homes will be resold at that price plus the cost of renovations. The final price will range from $115,000 to $135,000, Greenlee said.

For example, Enterprise will purchase a $130,000 home for $65,000, but will do about $60,000 of renovations and resell the home for $125,000, he said.

The program is committed to buy every HUD home in the areas for the next three years, fixing them and updating the foundations and plumbing, Greenlee said.

He estimated that the organization will purchase about 15 homes a year in Canoga Park and Pacoima over the next three years, an effort strongly supported by Councilman Alex Padilla, whose district includes Pacoima.

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Rehabilitating existing housing stock “will improve the housing crisis in the northeast San Fernando Valley. This is an excellent example of smart development,” said David Gershwin, a spokesman for Padilla.

“In the northeast, the density is not as high as the inner city, but the occupancy per dwelling unit is the highest in the Valley,” Gershwin said. “There are multiple families living together, and it’s a significant problem for those living in converted garages.”

Potential buyers may receive information about the program by calling (888) 673-3467.