2 Colleagues Decry Mayor for Action on Condo Plan : Thousand Oaks: Judy Lazar is accused of moving secretly in relaxing restrictions on a housing project.

A move by Thousand Oaks Mayor Judy Lazar to relax restrictions aimed at reserving an affordable housing project for low-income families has drawn harsh criticism from two councilwomen, who say the mayor acted secretly and unilaterally.

Lazar argued that her action was unavoidable, and said it would not compromise the project’s overall affordability.

The dispute is the latest episode in a long-running controversy about the Groves, a 91-townhouse complex next to the Thousand Oaks Auto Mall that has been designated for low- to moderate-income families and first-time home buyers.

Councilwomen Elois Zeanah and Jaime Zukowski, along with their community supporters, have repeatedly assailed the development as ugly and unsafe because it bumps up against the Ventura Freeway, exposing residents to noise and pollution.

But a council majority, including Lazar, has generously supported the Groves by reducing development fees, relaxing some design standards and permitting oversized banner advertisements. They say such steps were needed to promote affordable housing.

The clash intensified this week when Zeanah and Zukowski charged Lazar with misleading the public about the condominiums’ long-range affordability.

“The community has not been alerted; it has been done out of the public’s view, and that’s what I find wrong,” Zeanah said.

When the council first approved the development, it established resale restrictions designed to keep the townhouses in the hands of low- to moderate-income families for the next 15 years. Buyers could earn no more than 120% of the county’s median household income.

But Lazar unilaterally authorized the city manager to weaken those restrictions, saying she was forced to make the change to comply with federal regulations. Affordable housing experts across Ventura County agreed that Lazar’s action was unavoidable.

In practice, Lazar’s move changes very little, they said.

Buyers must still promise to sell only to low- or moderate-income families for the next 15 years. Also, all townhouses must be owner-occupied, so would-be landlords cannot snatch up the units and make a windfall by renting them.

But Lazar’s action waives the resale restriction when a buyer fails to make monthly payments and a bank must foreclose.

Thus, the institution that holds the note on a condominium in foreclosure--in most cases the Federal National Mortgage Assn., commonly known as Fannie Mae--can auction foreclosed property to the highest bidder, regardless of the new buyer’s income level.

Realistically, the Groves townhouses--now selling for $130,000 to $170,000--would be unlikely to bring in high-end buyers at an auction, housing officials said.

Yet Fannie Mae demands complete freedom to sell foreclosed homes at the best price possible.

Although the federal agency has accepted the clause requiring owner-occupancy, Fannie Mae will not allow Thousand Oaks to reserve the condos for lower-income families in the event of foreclosure, according to the city’s housing services manager, Olav Hassel.

“It may sound controversial, but it’s very standard,” said Lynn Jacobs, president of Affordable Community Inc., which is building 151 low-priced homes in Ventura. “Every loan I’ve seen since 1990 has that clause in it.”

City Manager Grant Brimhall said: “It’s a non-issue. If we didn’t have the clause, we wouldn’t have the project. The mayor did the right thing.”

Nonetheless, skeptics believe the mayor should have brought the matter before the full council and listened to public testimony. Just five days after Lazar took action on her own, the council met for a study session on development fees and could have discussed the issue as an agenda item.

“My concern is full disclosure,” Zeanah said. “We voted based on our expectations that the project would be affordable and would remain affordable. Those conditions have been modified. We have been misled.”

Explaining her action, Lazar said she had to move quickly to put the project in compliance with federal standards so potential buyers could close escrow on their deals.

A full four weeks after her move, however, only one buyer has closed escrow on a Groves condominium. At least a dozen others should close this month, as 26 of the two- and three-bedroom townhouses have sold.