September 30, 1997 - From the September, 1997 issue

Anaheim Offers a Proactive Model for Dealing with ‘Blight’

With today’s dwindling resources and shifting HUD, recovering even individual housing units from blight [read linked article for why “blight” is racist and ethnically prejudiced] is a victory. But the City of Anaheim, in partnership with The Related Companies of California, has gone one better, recovering the entire South of Romneya neighborhood, now known as Paseo Village.

TPR looked at the innovative public-private partnership behind this project in the following interview with the City’s dual head of Housing and Redevelopment, Elisa Stipkovich, Related Principal Bill Witte, and Paseo Village Special Project Director Christie Reiff.


“It was a step-by-step approach which really required the support of the communities both around & inside that neighborhood."

The City of Anaheim appears to be engaged proactively in eliminating blight in its older neighborhoods. More specifically, the first 89-unit phase of the Paseo Village affordable housing project came on-line in June. Could you fill our readers in on the history of the neighborhood and what led to the blighted conditions that you have recently begun improving? 

Elisa Stipkovich: The South of Romneya area is part of what we call our Patrick Henry Neighborhood Council. It's a broader area that was defined many years ago when we had established neighborhood council areas that were part of the Community Development Block Grant (CDBG) Program. 

South of Romneya is largely made up of parcels with individually owned and operated four-plexes, six-plexes or multi-family structures on them. These conditions are a real problem throughout Southern California because of the lack of appropriate maintenance and management, which tends to lead to blight.

How has the City proceeded in tackling this neighborhood blight? What's the strategy? 

Elisa Stipkovich: The City, as I said, was involved in that neighborhood about 15 years ago, dealing with the community, itself, and asking them what the problems were. Many of the problems we found pointed to these two particular apartment areas—South of Romneya and Park Vista. There were crimes and social problems, physical decay, over­crowding—typical blighted conditions. The community input enabled to engage a number of City departments including Police, Code Enforcement, Community Services, Parks and Recreation, Community Development (our department) and Planning. We used a taskforce approach to address the problems. 

It's a longer story how we went from code enforcement and dealing with minor rehab to deciding that we needed to lake a more aggressive approach to really solve the problems. 

In a County (Orange) that has, itself, gone through bankruptcy and has, in some measure, an aversion to government taking proactive action, how were you able to mobilize the resources of the City of Anaheim to successfully engage in this renewal effort? 

Elisa Stipkovich: The key was that we had the support of the community—the surrounding single-family homeowners as well as the tenants already living in the area. 

We found, however, that the individual South of Romneya property owners typically were neither willing nor able to make any real improvements to their properties. That's why we made the decision after literally years of trying to work with them to take a more aggressive approach. We decided to acquire these properties under the Housing Authority, convey the combined properties to one ownership and create one parcel map. 

We conveyed the parcels over to a developer, The Related Companies, who would properly rehabilitate the units, and, by combining properties, make more efficient use of the land and add some stability in terms of long-term management and maintenance. 

It was a step-by-step approach which really required the support of the communities both around and inside that neighborhood. 

Is a public-private partnership approach the preferred strategy for the City of Anaheim? Could you elaborate? 

Elisa Stipkovich: We don't like to go into any activity unless we feel that the private sector acting alone really can't handle it. Certainly in this situation, there was just no economic incentive for those property owners to make significant changes. So we knew it was going to take some government intervention. But we also knew that ultimately the solution would lie in a partnership with a private sector company that could come in and manage the project in an economically sensible way, eliminate overcrowding and correct many of the social problems and crime issues that we were seeing.

Certainly when you get to the point that the Police Department, Code Enforcement and other City officials are saying this is a real problem, this is the appropriate role of government. 

Bill Witte, what attracted Related to this joint venture project; and is Paseo Village a case study with import for any other municipalities in the basin? 

Bill Witte: First and foremost—just picking up where Elisa left off—is that for a private company, be it non-profit or for-profit, to risk the potential exposure and time a project like this could represent, they must see the commitment of the City in which you're operating. Anaheim had not been involved in a project like this before, but the City was still willing to put its money where its mouth is and put up the type of risk-capital that you really can't expect the private sector to do. The City started buying or otherwise tying up properties without any guarantees from anyone else, even before all the financing was committed. That's the first condition.

Related to that, and obviously paramount, is that we were aware that the Mayor and the Council were very much behind this. As you said, Orange County is not an area that typically thinks government should throw money at problems. But when you see that kind of unanimity and commitment, it’s extremely important.

Finally, Anaheim has a structure wherein Elisa controls all the housing-related entities involved in this project under one roof: The Housing Authority, Community Development and Redevelopment. And that's very, very helpful because in some communities that is patently not the case. Additionally, the City had the staff capacity and commitment to really take this project on.

So what specifically is the broader lesson for other communities in the metropolitan area that have the same blighted conditions in some of their neighborhoods?

Bill Witte: The broader lesson can be summarized by something that Mayor Daly in Anaheim said: During the '60s and '70s, in much of Southern California—certainly in Orange County—master planning was considered something you did to create an Irvine or a Rancho Santa Margarita—that is, to accommodate significant exurbanite growth. But 20 years later, the real master planning challenge is no longer to design new communities (which have pretty much happened) but to redo the older areas that have become significant sources of blight.

Equally important, the police departments and other city agencies can quantify the drain on municipal resources represented by these older, blighted areas. A lot of communities are beginning to wake up to the fact that they may have to take a proactive role and maybe even spend money to save money.

Elisa: Your thoughts on Bill's assessment?

Elisa Stipkovich: I agree. We certainly were willing to put the necessary funding together to make this happen, and it really did take a cooperative effort. We used our redevelopment set-aside money and CDBG money. And, of course, the tax credit program was critical.

Bill Witte: Relocation was also a very critical element in this project. The Housing Authority's Section 8 rental assistance resources defrayed a huge amount of cost and made the relocation process a lot smoother.

Elisa Stipkovich: We put all of our tools into the program: the funding sources, the redevelopment/housing money, Block grant funds, HOME money as well as the Section 8 program and vouchers. In addition to that, it really helped to have both our Police Department and Code Enforcement staff working with us. In fact, we set up a mini Neighborhood Center fairly early on to help the community work with the Police Department and Code Enforcement on important issues—there had been severe crime problems as well as a preponderance of code violations.

We had a lot of cooperation in helping the Council see that this wasn't just one or two buildings—a high percentage of those buildings were creating these problems. The Police Department was involved because of drug-dealing and things of that nature.

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The owners were not doing anything to evict those tenants who were creating those problems or to address overcrowding. About 50% of the units had been in an overcrowded condition.

Now everyone has been either successfully relocated to a larger unit that fits their family size or put back into the project under non-crowded conditions at affordable rents. The tenants understood how important this was. And that's an important point about working with the tenant community: If they understand that there's a long-term benefit to them, they'll support the project.

Paseo Village (as South of Romneya is now called) is a gated community. Perhaps, Elisa, you could elaborate on why the City and the developer chose to gate it? And does the fact that it is gated impact its ability to influence development in the surrounding area? 

Elisa Stipkovich: The simple reason for gating is to prevent any people from going in there who are merely just hanging out in order to create problems—particularly with drug dealing. In fact, Park Vista was initially not gated but the developer felt that doing so assured the tenants that they were not going to allow drug dealing. 

Frequently it's not people living in affordable housing who are creating the problems—it's the people who have taken over the streets. 

Bill Witte: We asked, and the City immediately agreed, that Citron Street, the main spine bisecting the project, would be privatized and then gated as part of the development. It's really the only effective way to take disparate properties like this and manage them as one. 

There was complete unanimity on that fact, including support from the surrounding homeowners. 

Elisa Stipkovich: Actually, the surrounding single-family property owners asked us to close the through-streets, which we did prior even to Related's getting involved. So they were not only supportive, they demanded that we cut off the through traffic. 

On a more abstract level, what community development tools exist in 1997 to really impact blight, since HUD's budget has been cut and clearly the housing agenda's not what it was 5 to 10 years ago? 

Elisa Stipkovich: Though we don't get enough HUD funding, redevelopment set-aside money played a key role in our being able to help fund this project. Without it, financing would have been very difficult. The other big plus was tax credits—really just about the last of the federal tax laws helping us on the affordable housing side. We also took advan­tage of federal HOME money, which we've used in this project. 

Another thing we can't overlook (even though it is a very difficult issue in Orange County) is that we used our Housing Authority power of eminent domain to help finalize the acquisition on several properties. Without eminent domain, we would not have been so successful in unifying the whole area. Typically it wasn’t a matter of property owners' not wanting to sell, but strictly price. And where we weren't able to agree on price, the courts would decide, thus our power of condemnation keeps that from holding up the project.

Are you satisfied with the way the tax credit program is presently being administered in California? 

Christie Reiff (Spec. Project Manager): This project went beyond being simply a housing project, in terms of the effect it has on that whole area. It's coaxing other rental landlords into fixing up their projects to make them more competitive, since they see the area is getting better. 

But the way the tax credit program is set up right now, it's very difficult for us to make the kind of upfront investment that we had to in this case. It's hard to make the investment necessary to assemble the parcels when there is something of a lottery situation with tax credits. 

Bill Witte: One thing some of us are trying to pass on to the Tax Credit Committee in lieu of major changes is administratively giving local governments more of a say in which projects get credits. For example, in Anaheim, where they're putting in so much effort, time and money, it's clearly a public priority, as opposed to someone who just shows up with a project and meets the letter of the law but may or may not enjoy much public support. That is one area they could improve on. 

The flipside is that the City of Anaheim, much more than most cities in this State, has made it very clear, before spending money, what its priorities are. That way, developers, instead of chasing projects that may or may not have public support, can focus. It makes sense to justify resource allocations when the public and elected officials have a plan. This is a city where it works. The rewards are considerable.

Elisa, what other kinds of projects, similar to Pasco Village, is Anaheim engaged in renewing? What other examples are you engaged in that play off this model?

Elisa Stipkovich: Every time we do something this big, we learn something.

One critical element of the success of Paseo Village that we haven’t mentioned is the land-use plan. Before we decided to go forward with the project, we assembled a planning group to help us redesign the area. We have done a physical plan for another very large neighborhood called Jeffrey Lynne, near the Disneyland area. We've been studying that area now for a number of years and we're trying to figure out a way to implement the plan.

Incidentally, these are all areas that we have identified in the Housing Element of our General Plan as key areas to be rehabbed. So we've been addressing them one at a time as a priority for our housing funds.

In closing, what are your thoughts about the tax incentives and disincentives that flow from the current State-local fiscal relationship and what changes would you like to see to encourage home rule and a return of planning to local government?

Elisa Stipkovich: I'm thinking now more as a Redevelopment Director than as a Housing Director, but there is a real problem with the sales-tax issue. It needs to be resolved by moving toward some other methodology of distributing sales tax money. It really is artificially driving land uses in many cities.

There is not enough attention paid to an even apportionment of land uses based functioning community really needs—i.e., the types of jobs created by certain land uses, cultural uses, and residential uses.

The issue really cuts right to healthy economics and quality-of-life issues, and trying to balance the two without all of these artificial incentives for certain land uses. It's a very basic problem with the way sales and other tax revenues are distributed in this State.

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