The 2018 Annual California Developer’s Conference, co-hosted by Century, brought together affordable housing developers, lenders, and investors to share insights, connections, and hors d’oeuvres at the Beverly Hills Hotel. Panels covered federal, state, and local issues and developer concerns in a post-tax reform world. Chris Thornberg returned as keynote speaker to paint a positive picture of the economy while encouraging developers to support all types of housing development, noting that market-rate housing helps free up rent-controlled housing to low-income residents. You can download Mr. Thornber’s presentation and the presentation from the Federal Update panel, below.
The 15th Annual California Developers’ Roundtable hosted by Downs Pham & Kuei, LLP and Century brought together an overflowing crowd of California’s top affordable housing developers, lenders, and investors at The Peninsula Hotel in Beverly Hills on March 3, 2015.
“The mood was upbeat to say the least. Optimistic energy and conversation filled the room upon hearing the positive market outlook on interest rates, rental housing starts, the increasing need for Affordable Housing, especially in California. An impressive array of speakers and attendees were on hand to reinforce the depth of experience and ability this group has to continue to make a positive impact on Affordable Housing going forward. We are in good hands to meet the changing environment and challenges of this mission,” said Mr. Kelly Sands, President of ICON Builders, who attended the conference.
This year’s panel discussed, among other topics, the local economic forecast and market conditions, the future of debt financing, and developer opportunities. According to Christopher Thornberg, Founding Partner of Beacon Economics and a speaker at the event, “California was among the nation’s stronger economies in 2014 with the labor market turning a corner, but there is also growing inequality of income and wealth, and a lack of housing that has resulted in an exodus of families with incomes of under $100,000 from the state.
Six years ago, the employment outlook and real estate industry were facing tough times. However, as 2015 begins, economic indicators are more favorable. “With the increase in financial resources and new funding through state and federal programs, the outlook for affordable housing looks encouraging,” said Aaron Wooler, SVP of Century, in the debt financing panel.
While developers are waiting for the new AHSC and VHHP funding sources, as well as LIHTC and bond allocations, the event gave everyone an opportunity to discuss larger issues and also share some creative tidbits. Peter Barker, President of Valued Housing, said, “Opportunity arises with innovative thinking. For example, obtaining an independent appraisal commissioned by a developer showed a FMV significantly above purchase price, which helped to generate additional credit in the recapitalization model.”
It was exciting for Century to be a part of this year’s California Developers’ Roundtable, and we hope to see everyone back next year.
Southern California’s “can’t miss” affordable housing event is just around the corner. SCANPH will host its 25th Annual Conference on Friday, November 1st at the JW Marriott Hotel in Downtown LA, and it’s not too late to register and take part in the most dynamic affordable housing events around.
This year Century is sponsoring, exhibiting, and participating in an early afternoon panel titled Social Impact Reporting: Telling Our Story. Brian D’Andrea, President of Century Villages at Cabrillo, will join the session moderated by Century’s Loan Officer, Neha Shah, to share insight into the successful adoption of investor-focused impact reporting which demonstrates the social, environmental, and economic returns on investment.
Century will be attending Housing California’s Annual Conference in Sacramento again this year, so be sure to stop by our booth and say hello. Online registration is closed, but onsite registration will be available at the event running between April 16-18. Be sure not to miss the Golden State Acquisition Fund panel, where our own Neha Shah will be sharing insight into some of the program’s less obvious applications.
The preservation and creation of affordable housing has been a longstanding goal of both Los Angeles County and many of its 88 cities, but the demise of redevelopment agencies delivered a blow to low-income residents struggling in one of the nation’s most difficult housing markets.
On March 5, 2013, acting on a joint motion by Chairman Mark Ridley-Thomas and Supervisor Gloria Molina, the Board of Supervisors unanimously reaffirmed the county’s commitment to providing permanent housing for low-income residents. The Supervisors transferred $15 million to the Community Development Corporation for affordable housing in Los Angeles County.
Assemblymember Holly Mitchell joined Mayor Andy Weissman and a well-rounded panel of housing developers (Los Angeles Housing Partnership and Habitat for Humanity), investors (Bank of America and Union Bank), and other leading advocates at the Culver City Council Chambers at last week’s Affordable Housing Roundtable. The first such event hosted in Culver City generated a lively discussion with local residents and community leaders contributing great questions and possible solutions to financial and legislative roadblocks. Read more
Everyone knows about the “Fiscal Cliff,” which was probably more like a small hillock. And by now, most folk know that Congress and the President figured out a last minute (actually, it was after the last minute, but who’s counting) compromise to avoid the tax increase components of the problem. But the popular press has concentrated on the costs and benefits for individuals, families and big businesses. There were some features in the H.R. 8, the American Taxpayer Relief Act of 2012 (ATRA), that will change some rules for developers of affordable housing as well.
The Small Area Fair Market Rent (SAFMR) program may have many effects on the subsidized housing landlords. One of the desired outcomes may be that lower income tenants will have the opportunity to move to housing in higher cost neighborhoods. However, another effect may be that landlords in lower cost neighborhoods will see a loss of income and become reluctant to rent to Housing Choice Voucher tenants.
Each year, HUD calculates and publishes Fair Market Rents (FMRs). The FMRs are the basis for determining payments made to landlords on behalf of lower income tenants for a variety of programs, primarily the Housing Choice Voucher. FMRs are set for an area, most often a county or metropolitan area, and represent the amount that would have to be paid for housing (including rent plus utilities) for privately owned, decent and safe rental housing with suitable amenities within the area. The FMR is set so that most housing within the area, excluding luxury units, would be affordable to a tenant holding a Housing Choice Voucher.
However, because counties can be very large and diverse, especially in densely developed metropolitan areas, there are some neighborhoods where the FMR is much too low to allow Voucher holding tenants to rent, and in other neighborhoods, the FMR is more than the surrounding submarket rents. In order to try to adjust the FMR system to these market areas, HUD has developed the Small Area FMR (SAFMR), publishing applicable rents for the Housing Choice Voucher (HCA) and Moderate Rehabilitation Single Room Occupancy programs on October 5, 2012. Read more
USA Today recently ran a series of articles, under the lead “GREEN INC. Environmentalism for Profit,” regarding the US Green Building Council and their LEED certification process. LEED stands for Leadership in Energy and Environmental Design, and is a self-proclaimed “voluntary, consensus-based, market-driven program that provides third-party verification of green buildings.” LEED standards come in four basic flavors: LEED Certified, LEED Silver, LEED Gold, and LEED Platinum.
The stories make several points of interest, among them that the LEED standard, while “voluntary” and entirely private, is required by more than 200 federal, state and local government agencies. And many of them provide meaningful incentives for developers who achieve LEED ratings. USA Today reports that the Palazzo Hotel and Casino in Las Vegas received a $27 million tax credit over 10 years due to Nevada’s delegation of the responsibility for determining who should get tax subsidies to the US Green Building Council.
It should be remembered that the US Green Building Council does not have a complete monopoly over environmentally friendly construction standards. Many states, including California, have adopted “green building codes, and there is at least one other private organization, Build It Green, has a program of rating developments. Build It Green’s GreenPoint rating system also provides certification of residential developments, and is also used for marketing purposes.
California also has a statewide standard in the CALGreen Code, adopted in 2010, which sets minimum construction standards with a goal of reducing the overall carbon output to the environment. This is one part of the state’s efforts to reduce greenhouse gas emissions from all sources, mandated by AB 32, a state law which mandates rolling back greenhouse gas emissions to 1990 levels by the year 2020. The CALGreen Code has both mandatory and optional provisions, which are implemented at the local level by city and county building codes. In the case of Los Angeles, for example, the local building code incorporated essentially all of the CALGreen Code standards and essentially replaced the LEED-based standards with the new state code, while applying them more broadly than CALGreen required. Several other cities also have adopted local codes stronger than the CALGreen minimum requirements, including San Francisco and San Jose.
The tone of the USA Today articles was somewhat disparaging toward the US Green Building Council standards. The articles questioned how the LEED standards were created, are administered and the methods used by developers to receive certification. Regardless of those factors, the question now is whether the LEED certification matters any more? Or has it reverted to its origins–a marketing tool?
On October 4, the Los Angeles Business Council hosted the 2012 Mayoral Housing, Transportation and Jobs Summit at UCLA. For over a decade now, the LABC has been organizing these discussions of issues with elected officials, business leaders and members of the community.
The report released at this year’s Summit, Building Livable Communities: Enhancing Economic Competitiveness in Los Angeles, describes how rising rents, a shortage of new residential development and still inflated home prices that remain well beyond the reach of middle-income families in Los Angeles County are causing a widening affordability gap for Southern California residents.
Failing to adequately address the problem will cause Los Angeles to become far less attractive to current and future employers, and less competitive against other metropolitan areas where quality and affordable workforce housing is in far greater supply. Of the large metropolitan areas discussed, only New York and San Francisco had less affordable housing.
“The vast majority of housing units in the County are unaffordable to the typical worker. With housing production 40 percent below target levels, the problem will only grow when you factor in the laws of supply and demand,” said Paul Habibi, the lead author of the report and a professor of real estate at the UCLA Anderson School of Management. Read more
Century Housing finances affordable housing developments throughout California. From acquisition loans to bridge and construction loans, Century has worked for more than 20 years to provide tax-credit developers and infill developers with innovative loan solutions and responsive service.