Encinitas clears home sale to investor, snubs low-income applicants

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ENCINITAS – Residents are expressing frustration and bewilderment after two homes for sale to very low-income households in Encinitas were sold to unqualified investors with the city’s written approval.

In October 2020, a house in Cardiff sold for $ 138,000. Last summer, a house near Desert Rose Way in the community of Loden in Olivenhain sold for around $ 112,000 – both were sold to investors to convert them into rental units rather than low-income households. income for the purchase.

As part of the city’s density bonus and affordable housing programs, houses intended for very low-income households are apparently also allowed to be sold at bargain prices to investors willing to keep the units as housing. low income rental for 55 years and with city approvals.

During this time, the city must keep records of the tenants of the property to ensure that the house is rented out to qualified households.

In March 2021, a representative from Woodbridge Pacific Group, a developer responsible for the Desert Rose community, emailed the town of Encinitas indicating that they currently have a list of around 80 households looking to buy the home on Portola. Road.

However, the email said their list also included two investors, asking the city what documents it would need to provide if it were to choose an investor to buy the house.

In response to a request for a public record from Julie Graboi, a resident of Encinitas, the city provided a fully redacted list of the 81 applicants, according to documents provided to The Coast News.

Following this correspondence, Lillian Doherty, Director of City Development Services, gave Woodbridge written approval for the sale of the property to La Jolla investor David Santistevan, senior vice president of Colliers International, with title to the property taken under Santiara, LLC.

In another email from Santistevan to the city, he states that the company owns and operates several low-income rental units in San Diego County.

According to the California Secretary of State, Santiara is owned by Nancy Mauriello, from Newport Beach, with Santistevan appointed CEO.

A signed municipal document later shows the final listed sale to Santistevan’s other company, Scramark, LLC – not Santiara – with Santistevan appointed as a director. The document also includes the signatures of Doherty, City Manager Pamela Antil and City Lawyer Leslie Devaney.

In a reply by e-mail to Nicole Piano, city housing management analyst, Santistevan clarified that “we wanted to limit the number of properties in Santiara, LLC, so I formed a new entity, Scramark. I am the manager of both entities.

One of the people who requested the purchase of the Desert Rose house, Encinitas resident Leah Sorenson, told The Coast News that she was disappointed with the way the city handled the housing situation.

“It makes families like me think I have the option of buying a house in the town where I grew up at a price that I could actually afford,” Sorenson said. “And then we never get a response or we get turned down and we find out that they instead sold to an investor or a developer.”

Sorenson says she has applied for a few affordable housing in the city without success, including the Cardiff house also sold to an investor last year.

The city’s website currently has no affordable homes listed as available for sale. According to Sorenson, the city informed her that there is a 10-year waiting list for affordable rental housing in Encinitas.

The town and Woodbridge have yet to respond to The Coast News’ requests for clarification on the sale of the Desert Rose house.

As part of the application, Sorenson and others must prove their income level before entering the loan process.

Sorenson said she couldn’t afford the attorney fees to fight the city in her process, but thinks she or anyone else going through the process of applying for an affordable home that is ultimately sold at an investor should be compensated for helping them buy a market. house rate in town.

“If you’re not going to give me a real chance in one of these units, then fine, give me a real chance in a regular house,” Sorenson said. “But hardly anyone wants to face the city, it’s a big fight.”

Although these homes still have to be rented out to qualifying low-income households for 55 years after the sale to the non-qualifying investor, the question is still raised by Sorenson and others, what is the point of a d Homeownership Affordable If The Homes In The Program Will Often Not Belong To Qualified Low Income Families?

“Being able to pass this on to the future is also important; a legacy, ”Sorenson said. “You don’t have to have all your money to just rent. It’s a mess. “


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