The California State Auditor released a report Thursday confirming Caltrans' mismanagement of 345 homes along the 710 Freeway corridor in South Pas, Pasadena, Alhambra and L.A.
The report states that tenants' rents are on average 43 percent below market rate—estimating that Caltrans "missed the opportunity to generate roughly $22 million in rental income between July 1, 2007, and December 31, 2011."
Here is an overview of findings in the report:
- Caltrans has spent an average of $6.4 million per year on repairs to SR 710 properties; however, it could not demonstrate that the repairs for 18 of the 30 projects we reviewed were reasonable or necessary.
- To maintain the SR 710 properties, Caltrans has transferred an average of $4.7 million each year to General Services since fiscal year 2005–06. However, Caltrans does not provide proper oversight of the repairs General Services performs.
- Caltrans also stated that it does not charge market rates for many of the SR 710 properties because in 2002 the former Caltrans director instructed the District 7 office not to increase rents to market rates.
- Once Caltrans completes the necessary reviews and plans for the SR 710 extension project, it can determine if it requires all of the properties that it currently owns.
- The sale of these properties will be restricted by legislation enacted in 1979 known as the Roberti Bill, which requires the State to offer the properties at significantly reduced prices to any current tenants who have low or moderate incomes and have not owned real property in the three years prior to the sale.
The California State Auditors gave a slew of recomendations to Caltrans to ensure the following:
- That the repairs it makes to the SR 710 properties are necessary and reasonable;
- That it collects fair market rents for the SR 710 properties on the State’s behalf;
- Only eligible tenants receive the benefit of the affordable rent policythat all taxable fringe benefits or gifts state employees receive are appropriately included in their gross income;
- That only eligible tenants receive the benefit of the affordable rent policy.
For the full report, click HERE.
This audit was requested by Assemblymember Anthony Portantino after a Los Angeles Times public records request last year, in which Caltrans provided documentation of roof repairs and replacements between 2005 and 2010 on homes it ownes in Pasadena.
Patch Asks: Are you surprised by these findings? Do you live in a Caltrans-owned home? Do you think Caltrans should sell these properties?
as its own policies require. Consequently, it cannot be sure that all of the tenants continue to qualify for the program. For those tenants who no longer qualify, the difference between the fair market rental value of the property and the rent they pay—an average of $16,200 per year per property—would be considered a gift of public funds."
When the audit report came out, Many tenants received a letter from Caltrans stating that they were going to raise our rents by 10% every 6 months Starting march 1st 2013 until the cost of our homes were withing "Fair market Value", the "Value" ONLY caltrans has calculated, or knows how they came about that figure. I know That I have not received a 20 % increase in my pay in 1 year, and I doubt anyone else has either.. This is designed to evict us by way of outrageous rent hikes.