Drive through parts of El Sereno, Alhambra, South Pasadena or Pasadena and you’ll notice something strange.
Homes sit behind aging fences, looking like they should belong to families—except they aren’t. For decades, they’ve been owned by the State of California, waiting for a freeway that was never built.
In the middle of one of America’s worst housing shortages, hundreds of homes have spent decades trapped in government limbo. California politicians say the state desperately needs more housing. Yet for decades, the state itself has kept hundreds of homes off the market because of a long-abandoned freeway project.
This is not just an old freeway fight. It is about what government owes the public when it takes private property for a public purpose and then never delivers that purpose.
It raises an interesting question – if government can take your home for a public project, what happens when that project never gets built?
The original plan was to extend the 710 Freeway north to connect with the 210. I have always thought that connection made sense. Anyone who has driven through that part of Los Angeles County knows the freeway gap creates real traffic problems.
Whether someone supported or opposed the 710 extension, California still produced the worst possible outcome. The state bought the homes, never built the freeway, and then spent decades failing to unwind the damage. That failure did not just leave a scar on the map. It cost taxpayers millions of dollars, kept hundreds of homes outside the normal housing market, and left neighborhoods dealing with the consequences of a government project that never reached the finish line.
Caltrans began acquiring properties along the proposed State Route 710 corridor in 1954 to assemble the land needed for a freeway extension connecting the end of the 710 in Alhambra to the 210 in Pasadena. According to an August 2023 California Transportation Commission presentation, Caltrans had acquired roughly 460 surplus properties for the SR-710 extension. The extension was never built. Caltrans refers to the project as the “now canceled freeway extension project on State Route 710.”
The nonpartisan California State Auditor examined the program in 2012 – and what it found was astonishing.
Caltrans did not just own the properties. It managed them poorly.
Between July 2007 and December 2011, Caltrans passed up roughly $22 million in rental income, collected only $12.8 million in net rental income, and spent $22.5 million on repairs from July 2008 through December 2011.
The audit found that Caltrans failed to charge market rent for most of the 404 properties it owned, worth an estimated $279 million. For 345 of those properties, Caltrans charged tenants little more than half of market rent. The auditor’s legal counsel advised that renting the properties below market constituted a prohibited gift of public funds unless those rentals served a public purpose.
It also spent millions on repairs, and still failed to put many of the properties back into productive use.
Meanwhile, hundreds of homes that could have housed families instead sat tied up in bureaucracy while California’s housing crisis grew worse.
The sales process has moved forward, but slowly. In August 2023, Caltrans said it still owned about 120 vacant single-family homes and multifamily residential units along the 710 corridor. By August 2024, the California Transportation Commission reported that only 45 property sales had been approved, with 23 closed transactions. That is modest progress for a problem decades in the making.
Now the issue is being audited again. The State Auditor has opened a new inquiry into Caltrans’ administration of the SR-710 Sales Program. The audit will review whether Caltrans followed the Roberti Act, the state law governing how Caltrans must sell surplus residential properties along the 710 corridor, including who gets priority and when some properties must be offered at reduced prices. It will also review whether the sales process has been timely and whether affordability criteria were properly defined, applied, and documented.
There is also a property-rights issue here. As PRI’s Steven Greenhut has written, eminent domain is “traditionally limited to public projects such as freeways, parks and schools.” According to a legislative finding in AB 113, Caltrans began acquiring property by eminent domain in the 1950s for the uncompleted 710 corridor. Property owners were told the state needed their land for a freeway. Decades later, the freeway was dead, the homes were still under state control, and the communities that lost private property were left with years of delay.
Taxpayers deserve responsible management of public assets. Neighborhoods deserve better than vacant or deteriorating homes tied up in government limbo.
The lesson from this story is for government to avoid inappropriately using eminent domain to start with. Beyond that, government should move these properties out of state control, sell them through a clear, lawful, and market-oriented process, and get Caltrans out of the housing business.
Anthony Velasquez, MBA, is Pacific Research Institute’s Communications Specialist.