HAYWARD -- For years, Frances Montalvo Palacios dreamed of buying the home on B Street where she lived with her parents decades ago.

The family had rented the home from Caltrans, which had bought it and several others in the 1960s and '70s to make room for a proposed freeway in the Hayward hills. This past summer, she found out that Caltrans was auctioning the now-boarded-up house and two other properties nearby, finally disposing of them years after the freeway proposal was scrapped.

But when the auction takes place Wednesday, Palacios won't be bidding, shut out by the price tag and the house's sad state of disrepair.

1465 B Street
1465 B Street

"It was absolutely heartbreaking to go inside and see the damage that has been done to that home," said Palacios, who attended an open house Saturday. "There's broken glass everywhere. The windows are broken and boarded up." And it appeared that people had been squatting downstairs, she said.

The house at 1465 B St. is one of three properties that Caltrans will sell at Wednesday's auction in Hayward. The others are a house at 1436 C St. and a triplex at 22645-22649 Fourth St. Next week, the state agency will sell another five.

Caltrans has sold 39 residences it had bought in Hayward, said RocQuel Johnson, the agency's branch chief for public affairs.

Johnson acknowledged there has been a problem with vandalism at a few of the homes. "We've had to go in and re-repair homes that had already been sold," she said.

Palacios was a high school sophomore when she moved with her parents and two brothers into the house. She later graduated from Hayward High, went to college and married. Even though she moved away, she said she still considered the Queen Anne cottage home.

"My parents kept the place up. We had birthday parties, family gatherings -- I have emotional ties there," she said.

After her father became disabled in the 1990s, Palacios' parents moved because he could no longer climb the house's stairs. Both parents are deceased, and over the years, she has occasionally driven by to check on the home that holds so many memories for her.

"I watched it deteriorate over the years," said Palacios, 55, who now lives in Lafayette.

At the open house, she saw graffiti, tossed liquor bottles and a condom in the driveway.

After touring the house she once called home, Palacios was shaken. "I sat on the stairs for a while and watched people come in and out. I wondered about all the bad stuff that has happened there."

The cottage was built around 1880, according to a Hayward staff report. The city has designated it a historical resource, which qualifies it to be considered for special property tax breaks.

Caltrans has set an opening bid of $180,000 for the three-bedroom, one-bath house, listed as a "contractor's special" because of its poor condition. Palacios said she spoke with a contractor at the open house who estimated bidding could go as high as $300,000. That's out of her price range.

"If I could afford it, I would purchase it. For me, it's priceless," Palacios said. "And I would carefully, tenderly restore every spot of that home."

Contact Rebecca Parr at 510-293-2473 or follow her at Twitter.com/rdparr1.

Caltrans auction
The state Department of Transportation auction for three properties in Hayward begins at 11 a.m. Wednesday at 1436 C St., with registration at 10:30 a.m. For details, go to www.dot.ca.gov/property.