City Council members Carl DeMaio and Lorie Zapf just issued a memo calling for a $500,000 limit to be placed on the San Diego Housing Commission’s freedom to acquire property without first getting council approval.

The memo comes in response to our story last month about a quiet policy change back in 2009 that allowed the city’s affordable housing agency to spend tens of millions of dollars buying property without the City Council first approving each deal in turn.

That policy change was presented to the council as a small part of the agency’s plan to tackle the local foreclosure crisis. But the commission rarely employed the policy to deal with foreclosures and instead spent most of its money on riskier, more complicated public-private development deals.

DeMaio, former City Councilwoman Donna Frye and Councilman Kevin Faulconer all said they believed at the time they approved it that the policy change would only apply to the commission’s purchasing of single-family foreclosed homes.

That’s disputed by four other members of the City Council, who said they knew the scope of the new policy went beyond buying single properties and wouldn’t only apply to foreclosures.

Since it was handed the new freedom, the unelected commission has loaned tens of millions of dollars to private developers to build new affordable housing projects and renovate old apartments.

Those are exactly the sort of complex deals the City Council needs to examine carefully, DeMaio and Frye said when I interviewed them for the August story.

“Your story brought to light troubling facts,” DeMaio told me this afternoon. “This, I believe, strikes a happy medium. It provides them the flexibility they say they need to address foreclosed homes, but for larger transactions, it will provide public oversight.”

“That’s what troubles me the most, that they were able to use the flexibility we gave them for large-scale transactions of public monies, and that’s simply not what I think the council intended,” he added.

I quizzed DeMaio on why only he and Zapf — the two most conservative members of the Democrat-majority City Council — signed the memo, which requests that the policy be discussed at the next meeting of the Housing Authority.

He seemed confident he will be able to build support for limiting the commission’s freedom.

“I think the council members will want to see this tightened up,” he said.

Will Carless is an investigative reporter at voiceofsandiego.org. You can reach him at will.carless@voiceofsandiego.org or 619.550.5670.

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Will Carless

Will Carless was formerly the head of investigations at Voice of San Diego.

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