The San Antonio Housing Authority unanimously approved Thursday the demolition of 39 homes in the Blueridge subdivision.
The homes were part of the Mirasol Homes development project on the city's West Side.
Shortly after moving in, residents complained of mold, subpar roofing and the lack of basic features, like windows and back doors.
"I thought the moment I opened the door that I was going to get something new, but it wasn't," said Blueridge resident Carol Zaragoza. "It was a slap in the face. Our dream became a nightmare."
In 2011, SAHA settled a $20 million lawsuit with KB Homes.
The money will be used to pay for the demolition and construction of new homes and to pay off the mortgages of the homeowners who vacated their properties.
SAHA deconstructed the vacant homes and found that the foundations were not built with the adequate rebar, window seals did not have necessary insulation against rainwater, the number of nails used to nail down the shingles was less than standard, and many of the heating, ventilation, and air-conditioning systems after six months developed mold.
"(KB Homes) were trying to cut corners, shave costs," said SAHA chairman Ramiro Cavazos. "People that live in the neighborhood that have lived there for many years know that these homes were subpar. They need to be torn down and rebuilt so the neighborhood stays vibrant and cohesive."
Randy Zaragoza has spent years making repairs to his house.
Given that SAHA had engaged a third-party project manager to oversee the day-to-day construction of the original homes, he does not believe the new homes will be much better.
"It doesn't matter if (homes) are up to code because the public is not going to trust the city anymore because of the houses," he said. "What they need to do is demolish all 250 (Blueridge subdivision) houses."
SAHA hopes to start the demolition process within the next 30 days.
"Everyone deserves a good neighborhood, a good home," Cavazos said.