Caltrans-Owned Homes Tenants Victorious in Court Decision That Has Statewide Implications

Three women tenants who sued Caltrans over the sale price of their homes have won their appeal.

Angela Flores, Marysia Wojick, and Priscela Izquierdo claimed that Caltrans’ imposed an “inflation-adjusted price” on low-income tenants seeking to purchase their homes in the defunk 710 Freeway corridor.

The state seized homes in Pasadena, South Pasadena and El Sereno more than 50 years ago for a now-defunct freeway extension.

The decision has implications for all of the Caltrans homes seized for the freeway.

Around 450 properties remain owned by Caltrans; about 110 in Pasadena, about 70 in South Pasadena and about 270 in El Sereno.

Since 1995 Caltrans has sold roughly 50 properties to tenants, cities, and real estate developers. In the first case in 2018, the Superior Court ruled that Caltrans lacked a regulation imposing an “inflation-adjusted price.”  Caltrans adopted a temporary 2019 regulation and reimposed the higher prices on 13 tenant families.

“In August 2019, Caltrans offered to sell appellants the homes that they rent from Caltrans at Caltrans’s original purchase price adjusted for inflation,” according to the court’s decision. “That same month,  appellants filed a petition for writ of mandamus and/or injunctive  relief compelling Caltrans to instead sell the homes to appellants  at the original acquisition price—without adjusting for  inflation—and to “re-draft all proposed sales documents.”

Of those, 10 families paid the higher price, but the three low-income women sued again. The temporary regulation expired in 2019.  But in 2020 the trial court sided with Caltrans in the second suit.  The women appealed and have now won.

The March 23, 2022, Court decision relied on a 2021 statute banning Caltrans from charging an inflation-adjusted price. The case will go back to the Superior Court to decide the price and whether the attorney, Christopher Sutton, will be paid attorney fees by Caltrans, as he had been in the first lawsuit. The women contended the “inflation-adjusted price” was always illegal and that the 2021 law merely recognized the existing rule. The Appeal decision will be “published” as a statewide precedent on which laws apply when an injunction is sought against any public agency.

Caltrans has 30 days to seek a rehearing or review by the California Supreme Court, but both are unlikely.

At least 30% of the tenants now living in Caltrans Route 710 properties will qualify to buy their homes under the Roberti Law at a price based solely on their income.

In a separate July 2021 injunction, Caltrans was ordered to halt the sale of an apartment building at 626 Prospect in South Pasadena because the buyer did not include tenants.  A similar sales process for affordable housing is occurring in the abandoned 238 By-Pass Corridor in the northern California city of Hayward involving about 200 Caltrans properties.

In 2021, Assemblyman Ward of San Diego introduced AB950 to apply the Roberti Law sales process to Caltrans statewide, as it had applied statewide from 1979 to 1985. AB950 passed the Assembly 69-0, but stalled in the State Senate.  Caltrans’ 2021-2022 budget lists $51 million in expected rental income from thousands of rental properties, making Caltrans one of the largest landlords in California.