710: New law clears the way for Caltrans to sell houses along extension route

Gov. Jerry Brown has signed a law that allows Caltrans to sell property it currently owns in “as-is” condition. The legislation is intended to end the agency's decades-long management — some say mismanagement — of houses along the proposed route of an extension to the Interstate 710.

The bill, SB 416, is aimed at the "surplus homes" owned by Caltrans, which were first acquired in 1954 along the right-of-way of a proposed extension to the 710 Freeway. That project has been in the planning stages for years.

South Pasadena City Manager Sergio Gonzalez says the bill will have a positive effect on the city.

"In a nutshell, it returns the properties back to private ownership, and it promotes home ownership," Gonzalez said. "It eliminates any possibility of a surface route since now the properties will be privately owned. And, lastly, I think Caltrans really appreciates this, it takes them out of the landlord business."

The city has long been opposed to the extension of the freeway, which would have created a surface route through South Pasadena, stating it would not improve local traffic and instead be harmful to the environment. 

Besides the 710-expansion project, the properties themselves have seen some problems over the years.

In 2012, a state audit found that Caltrans wasted millions of dollars in its management of the state-owned homes.

RELATED: Audit: Caltrans misused millions on '710 property' management

The bill also creates a SR-710 Rehabilitation Account, which is where the proceeds of the home sales will go. 

Gonzalez says there are more than 100 Caltrans-owned properties in South Pasadena that are subject to be sold. There are nearly 600 homes in all, and about 400 are occupied by tenants. Caltrans says it is unclear how many will go on the market.

"We will know how many properties will become surplus and subject to sale once a project alternative is determined," said Caltrans spokesman Mark Dinger. "Our next step is to seek approval of regulations that would govern how the properties would then be sold."

When the property does go on the market, it will be at "fair market value" and under certain priority guidelines, according to bill language. One such condition is requiring Caltrans to offer tenants in good standing priority to purchase the property they currently reside in.

Assemblyman Chris Holden (D-Pasadena) co-authored SB 416, along with primary author Sen. Carol Liu (D-La Cañada Flintridge).