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Wednesday, September 22, 2010

Lawsuit Over Bungled City Housing Program Moves to State Courts

Posted By on Wed, Sep 22, 2010 at 3:15 PM

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Following a setback in federal court, a lawsuit over a badly managed affordable-housing program has been refiled in San Francisco Superior court, where the lawyers for aggrieved residents enrolled in the program say they hope they'll have better luck.

The troubled housing program, which was chronicled last year in a SF Weekly cover story, dated to the 1970s and aimed to install middle- and low-income homeowners in residential condo units throughout the city. However, many in the program claim they were never informed of a gamut of restrictions on their properties -- governing everything from home improvements to who could buy or inherit the condos -- and that an ordinance passed in 2008 to codify and extend those restrictions illegally deprived them of home equity.

The lawsuit also shed light on decades of mismanagement of the housing program. Many participants over the years sold their homes at market rate while the city turned a blind eye, prompting the current plaintiffs to argue that it's unfair they should be held to a different standard.

However, the suit has not had initial success in U.S. District Court, where federal Judge Claudia Wilken dismissed significant parts of the complaint in April, stating that other claims could be pursued in state court.

Heidi Timken, one of the lawyers for the 60-odd homeowner plaintiffs in the case, said the new lawsuit is virtually identical to the one filed in federal court, except that claims about constitutional violations of due process and equal protection have been dropped.

"We've discovered some new things that we didn't have fully developed when we filed in federal court," she said. "Really, the setback is timing. We lost some time -- the federal court took a very long time to rule, and it was not something that we expected."

The city has filed a response in superior court denying the allegations.

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