Council approves plan to buy foreclosed homes

The Huntington Beach City Council voted narrowly to approve a pilot program to buy foreclosed properties and then sell them as affordable housing.

On a 4-3 margin, council members voted Monday night for the more than $1 million plan, which was billed by the city’s economic development department as a way to prevent neighborhood blight and help the city meet requirements for affordable housing.

The city plan would use a little more than $1 million to buy up those homes most likely to cause blight in neighborhoods if left empty, then sell under special loans to approved applicants, said Stanley Smalewitz, the city’s head of economic development. The city would be looking for state and federal money to expand the program later, he said.

“The intention would be to work with local lenders, identify foreclosed homes in neighborhoods where either there are issues of deterioration or there are possibilities of transient use, and to try to get those back on the market as soon as possible,” he said.

According to the plan, those low-to-moderate income applicants would get priority if they lived or worked in the city, especially if they were city employees.

Some council members weren’t so sure, saying they didn’t think the city government could necessarily sell those houses any better than private bank in the currently gummed-up markets. Members Don Hansen, Devin Dwyer and Joe Carchio voted no.

“While I think the aim and the intent is pretty solid behind this program, I’m approaching this with a high level of skepticism on our ability to handle this,” Hansen said.

Also, Hansen said he worried about the time between buying a home and selling it, when homes could remain vacant.

“I’ve heard of these things taking hundreds of days,” he said. “We would essentially be inheriting management of properties while vacant, right? . . . Who’s responsible?”

The city will deal with applications, negotiations and take other necessary actions on “parallel tracks” to keep those properties moving quickly, Smalewitz replied.

Those interested in being added to a mailing list about the Purchase Foreclosure Program can e-mail [email protected].

MICHAEL ALEXANDER may be reached at (714) 966-4618 or at [email protected].