HOUSE-LOTTERY WINNERS LOSE OUT THREE WHO EXPECTED CUT-RATE HOME PRICES GET NASTY SURPRISE.

Byline: Alex Dobuzinskis Staff Writer

GLENDALE - The Glendale Housing Authority voted Tuesday to approve a $14.7 million housing project that will provide 24 affordable housing units for sale, the most of any housing project in the city's history.

Also Tuesday, the authority revisited the terms of a seven-unit affordable housing project at Elk Avenue that received $753,000 from the city, allowing the developer to sell three of the units at the market rate to accommodate the increased cost of the project.

That left three applicants for the previously below-market units out in the cold, after they had gone through a city-sponsored lottery for a chance at home ownership.

The cost of the affordable units on the 3-year-old Elk Avenue project rose from $190,000 to $329,000. Officials said that the increase in price pushes the envelope on affordability, but City Manager Jim Starbird said the project has the added benefit of revitalizing the neighborhood it is located in.

The Housing Authority voted 6-1, with Councilman Bob Yousefian voting no, to allow the developer of the East Elk Avenue project to sell three of the seven units at the higher rate. The cost of the project has apparently risen from $2.1 million to $3.1 million, in part because of rising construction prices, officials said.

The Housing Authority, acting also as the Redevelopment Agency, voted 5-1 - with City Councilman Frank Quintero dissenting and one abstention - to approve the 24-unit project on West Doran Street. The city is investing $3.2 million in the $14.7 million project to build the craftsman-style multi-family condo project at Doran Street and Central Avenue.

In a complicated investment structure, the project is tied to another housing project in Pasadena that must be completed before work on the Glendale project can go forward. Work on the Glendale project is expected to begin in 2007 and be completed the following year.

Serozh Mokhtarian, 53, said his family is losing out on a chance to own its first home now that the city has allowed the developer of the Elk Avenue project to sell three of the units at market rate. Mokhtarian, who works in a bank processing center, is fifth on the list of applicants and there are only enough units for four applicants.

``This is kind of a broken heart for the rest of the people (who) were not able to get it,'' he said.

The units could be sold at prices hundreds of thousands of dollars above the affordable price that the city set in negotiations with the developer. City Councilman Ara Najarian said the decision came down to salvaging the project as a whole.

``It's how many people do you bring on the boat with you after the Titanic sinks,'' Najarian said. ``Too many and everyone sinks but you hate to leave open space there.''

Alex Dobuzinskis, [phone]

alex.dobuzinskis(at)dailynews.com