Will Carless continues his investigative report on how the City of San Diego is blowing millions:

In late 2008, as foreclosures flooded the local housing market and the nation’s economy hovered on the brink of meltdown, the San Diego City Council scrambled for ideas to tackle the crisis here.

Desperate to show leadership on a red-hot political issue, it turned to its affordable housing agency for help.

The San Diego Housing Commission responded with a plan: It could buy foreclosures and tackle the city’s epidemic head-on. But the commission, which is overseen by a board of unelected appointees, first wanted to be set free.

The agency wanted to buy properties without the City Council’s approval. Waiting as long as 90 days for the council to approve the bids would unnecessarily delay highly competitive deals that had to be done quickly, the commission argued.

The City Council agreed. At a March 2009 public meeting, it approved a new policy for the agency, handing it the power to spend public money buying property with radically reduced oversight. Given that this was about fighting the foreclosure crisis, Councilmen Tony Young and Ben Hueso reasoned that cutting down on bureaucracy made sense.

“Now we’re actually going to address this issue,” Young said then.

In the two and a half years since that meeting, however, the Housing Commission has rarely used its new power to buy foreclosures.

The agency has bought just eight foreclosed single-family homes and one foreclosed apartment building in that time. That’s 45 units out of 756 units the commission has bought or built since then.

Rather than mopping up after the foreclosure crisis, the agency has instead used its new freedom to spend more than $70 million buying non-foreclosed apartment buildings and lending developers tens of millions of dollars to build new affordable apartments.

The commission has been able to make those deals while bypassing the City Council, avoiding the public scrutiny it once would’ve faced.

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