Photo by Jack GouldResidents of Huntington Beach are still talking about Dave Garofalo, the city's ethics-challenged former mayor forced from office last year after pleading guilty to conflict-of-interest charges.
Now they're talking about Pamela Julien-Houchen.
A real-estate agent who joined the H.B. City Council in 1996, Houchen has recently come under scrutiny for ethical lapses of her own. Earlier this year, she voted to allow a paintball tournament on the beach; The Orange County Register later revealed that the event's promoter used Houchen as a real-estate agent and hired her husband, Bryan Houchen, to remodel his office. Last week, the Weekly reported that Houchen took advantage of a city perk for part-time officials and billed the birth of her triplets to a taxpayer-funded insurance plan.
Now there's evidence Houchen may have violated city law when she converted a Huntington Beach apartment building into four separate condominiums without applying for a permit from City Hall.
In May 2001, records obtained by the Weekly show, Houchen purchased a four-plex on Green Street near Huntington Harbor for $500,300. Within a year, she had refurbished and sold each of the four units as condos. Taken together, the four sales totaled $1,102,500. Houchen never declared her ownership of the property in financial-disclosure forms filed at City Hall.
Vince Periolat purchased one of those condos from Houchen in December 2001 for $250,000. He and his wife were renting an apartment down the street and looking for their first home when they noticed a for-sale sign in front of a four-plex that had always been an apartment building. Periolat said he and his wife paid less than the asking price because the condo was still under construction.
"Her [Houchen's] husband, Bryan, was doing construction work on these units," Periolat said. "[He] gutted the inside, put in new fixtures, a new oven, a new toilet. . . . It was my understanding that she didn't own it very long. It was a business: she is in real estate, and her husband does the [remodeling] work."
Houchen did not respond to calls seeking her comment for this story.
County records show the four-plex was built in 1976. That same year, Huntington Beach's City Council passed an ordinance requiring city approval for all condo conversions. Housing experts say the time-consuming permit process protects apartment tenants, condo buyers and the city's stock of affordable rental units.
"Condos demand a significant price, and many people who would like to live in such places can't afford to buy them," said Joseph DiMento, a professor of planning and law at UC Irvine. "They are increasingly of interest to people concerned with affordability because they are appreciating at such a significant rate. If you can convert to condos, you can make some big profits."
"It is good for cities to have a balanced housing stock that crosses all economic spectrums," said Howard Zelefsky, Huntington Beach planning director. "You lose housing stock if you have too many condo conversions. The fewer apartments you have, that drives up rents."
According to Zelefsky, the city's ordinance also requires property owners to give 180 days' notice to any tenants affected by a conversion. "The theory is that if you live in an apartment and have three kids in school, you should have enough time to buy the condo or to find another apartment," he said. "The state wants to protect tenants."
Zelefsky said his department is working with the city attorney to investigate numerous suspicious conversions. "It is a very laborious task of looking and trying to find which apartment buildings have been converted," he said.
But after checking the address of Houchen's four-plex, a city planner said, "I don't think it went through the process. I did the last condo conversion project six years ago, and it wasn't for this property. Any application that comes in, we have in here, and I don't see anything in there."
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City-approved condo conversions take time and money. Mike Adams, a realtor and retired Huntington Beach planning director, said he's applying on behalf of a client to convert two three-unit apartment complexes into condominiums.
"To do the process, you need to file for a conditional-use permit with the zoning administrator," Adams said. "The fee on that is $1,170, and on top of that, you have to do notification labels for properties within 300 feet, and you need a map showing where all the buildings are that provides an analysis of the site."
Adams said that he anticipated spending well more than $10,000 to complete the entire permit process.
"Once you get all this paperwork completed, it is still a matter for discretionary approval that has to go to the planning commission," he said. "Once you go to a public hearing, there are all kinds of concerns that could be imposed on the project, and that could be cost-prohibitive. It's a pain in the ass. A lot of people get frustrated going through the city and getting permits, but it's to protect the public."