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Report: Caltrans Passed Up $22 Million in 710 Rental Income

The report, requested by Assemblymember Anthony Portantino, states that tenants' rents are on average 43 percent below market rate.

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.

The average cost to taxpayers was $70,994, which is higher than what a typical homeowner would pay, the publication reported.

yeahian August 17, 2012 at 04:10 PM
Good for the people living their. Cal trans should not sell the homes
yeahian August 17, 2012 at 04:10 PM
There
Otis August 17, 2012 at 10:07 PM
My best surprised face :-() !!! You mean CalTrans boondoggled this? OMG, I am floored because they are such an effecient, well oiled machine....<sarcasm off>. Unfortunately just another ineffecient state agency bleeding money and hey, I DO think that the actual workers, the guys in the "cone zone", (many of who are contractors), have a very, very difficult and demanding job. That said, with the state of things in California, you would think the desk jockeys running the "real estate" division or whatever it's called could manage their assets properly. It can't be that hard!!! 22 million that could have gone to fixing a few potholes or whatever. The people that live in these houses do not own them, they are subject to the same laws and regulations as normal renters except it appears as if they are getting a nice, cheap deal on behalf of your taxes. This whole mess could have been avoided if someone had the cajones back in the day to just have built the extension. What, 40 years ago now? The 710 will never be extended, and frankly unless you were born after 1990 you really don't have a dog in this race because us middle-age folks will all be long gone before that day ever happens. Peace out
Daron Anderson August 19, 2012 at 09:40 PM
Oh the 710. It makes sense on paper, aerially, and logically. The map looks like someone forgot to finish construction. I suppose the eminent domain has been tried and shot down. It baffles me, as the 210 ripped right through Pasadena. If you had a house there, sorry, freeway is coming through. Done deal. We have the 210. I see the argument that there are the homes in the quiet neighborhood there, but truthfully, aren't Pasadena Ave & Fremont st hell to drive through? I know there are historic houses, but how good is the quality of life in the neighborhood anyway when you're surrounded by blocked streets and one-way traffic? Wouldn't there be some releif in the city traffic if the freeway came through? The burden on South Pasadena streets would be lifted, as the traffic could get where they are going. If noise is the problem, what about design the first above-ground tunnel freeway system? Basically you would drive through a huge building and ventilation would be open to the roof, avoiding as much noise pollution as possible?
Ivan G August 20, 2012 at 02:59 AM
Why not tunnel underground?

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