Developers and investors think big at Developers’ Roundtable

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.

 

 

Los Angeles County’s new and improved Housing Innovation Fund

Century LA County Housing Innovation Fund II

We are excited to announce that Los Angeles County has closed on LACHIF II, a high-LTV revolving fund providing acquisition and predevelopment financing to nonprofit and for-profit developers throughout the county. As an approved member, official loan originator, and the first lender to utilize the fund, Century is excited about the opportunities that LACHIF II will deliver to LA developers, and ultimately, to low-income residents struggling to find an affordable home.

LACHIF II highlights include:

  • Loan-to-value of up to 95% to for-profit borrowers, and up to 100% to nonprofit borrowers.
  • Loan amount up to $15,000,000
  • Loan term of up to 6 years

Visit Century’s LACHIF II page for a more detailed term sheet or call Aaron Wooler at 310-642-2019 to see how Century can help with your project.

Aaron Wooler Can’t Stop Talking About The GSAF

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You may have caught our Senior Vice President, Aaron Wooler, at the Novogradac 20th Annual Affordable Housing Tax Credit Conference earlier this month, where he took every opportunity to praise the utility of the Golden State Acquisition Fund and share Century’s experience in leading loan originations under the valuable program. To date, Century has closed seven loans and is projected to close five more loans through the GSAF before the end of the year, totaling $64,342,500 in financing. There’s plenty more capacity, so don’t hesitate to give Aaron a call at 310-642-2019 or to visit the Century lending page for details.

See Aaron at the NH&RA Developers Forum

Aaron WoolerOur Senior Vice President, Aaron Wooler, will be speaking on the “Policy & Programs in Context: How Will Affordable Housing Fare in 2013 and Beyond” panel at the National Housing and Rehabilitation Association’s 2013 Spring Developers Forum held Wednesday, May 8th, in Marina del Rey. Learn about the future of affordable housing finance and speak with Aaron about your next project. You can find event and registration information at the event site.

Stop By Our Booth at Affordable Housing’s Largest Conference

Housing California LogoCentury 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.

Visit the event site for more information.

Golden State Acquisition Fund Launches

HCD logoThe long awaited  Golden State Acquisition Fund (GSAF), a $93 million source of flexible acquisition financing to developers throughout California, has made its official launch thanks largely to seed money from the California Department of Housing and Community Development.

As an official loan originator, Century is now taking applications from both nonprofit and for-profit developers. Fund highlights include loan amounts of up to $13,950,000 with up to 100% LTV and up to a 5-year term.

For details please see the Century GSAF Term Sheet or call Aaron Wooler at 310-642-2019.

Also, Affordable Housing Finance posted a nice summary.

Small Area FMRs – What Will They Mean for Landlords?

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

Building Livable Communities – the Annual Housing, Transportation & Jobs Summit

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

Clean Air, Green Jobs – – and Affordable Housing?

Governor Brown signed two bills which will provide direction as Cap and Trade revenue investment decisions are made in coming years.  SB 535 (State Senator Kevin de León) and AB 1532 (Assembly Speaker John Pérez) create a framework for the state’s investment strategy for the funds which will be generated under the terms of California’s Global Warming Solutions Act (AB 32).  SB 535 requires that a minimum of 10% of the investments of from the Greenhouse Gas Reduction Fund be targeted to identified neighborhoods, with one-quarter of the investment required to demonstrate a benefit to those communities.

AB 1532, creates the Greenhouse Gas Reduction Fund to hold the revenues from the Cap and Trade auction, and sets up a public process for development of investment plans, hearings, annual reporting and active oversight of the expenditure of those revenues.  AB 1532 specifies 7 categories of investment for the Greenhouse Gas Reduction Fund, among them, “sustainable infrastructure projects, including transportation and housing.”  With estimates of first year revenues in the $1 billion range, having access to this capital should be good news for housing developers, especially those who depend on subsides to produce below market rate housing, in light of the loss of redevelopment funding and exhaustion of the Housing Bond funds from Propositions 46 (2002) and 1C (2006).

But, will housing developers really get access to that capital in meaningful ways, or will the funds be invested in other activities?  And should the funds be invested in housing, instead of other areas which would result in greater reduction in greenhouse gas emissions? Read more

Has the Granny Flat Finally Arrived — as the Graduate Flat?

Lennar, a well-known and fairly traditional home builder active in California, made the news recently because they are offering a new product in their Crescent Heights at Sky Ranch subdivision in Santee, a suburban city east of San Diego.  One of the three models offered incorporates what they are calling their NextGen, Home Within a Home.  Essentially, this is a studio apartment, with a separate one-car garage, included within the same structure as a fairly standard 4-bedroom (plus ‘Bonus Room’), 3-bath, 2-car garage suburban home.  The studio unit has its own separate entrance from the outside, kitchenette and space for a stacked washer and dryer.

The home is priced at $610,000, and has about 3,650 sq.ft. in total, or about $167/sq.ft.  For the San Diego market, it is in about the middle of the price range.

Is there a market for this “new” type of home?  Lennar seems to think so, and the national press has been talking about the demand for multigenerational housing for some time.  CNN Money wrote about it in April 2012, a year ago, the New York Times pointed out that it was a new trend a year before that, a recently published book, Together Again, notes articles going back to at least 2005 on their promotional website, AARP has a whole blog site dedicated to the issue.  It has been discussed in various “learned journals” (I happen to like the article in New Geography). Read more