Century Impacts in September

Mariposa Villa (pictured): $1,400,000 in acquisition financing to developer Leo Lee Family Trust will help convert a parking lot into 33 rental units. With little new construction and rehab of older residential and multi-family buildings within the immediate area, as well as easy access to public transportation, Mariposa will provide much needed workforce housing to LA’s Korea Town. The acquisition loan will convert to a Century construction loan, reducing holding costs.

New Construction Loans: Century provided $1,610,540 in construction financing to developer Komova Chandran Holding, LP to finance the construction of Komova Apartments, a 5-unit multifamily development in Boyle Heights located near the Metro Gold Line. Century also provided a $1,820,000 construction loan to developer Say West Properties for Rosewood Apartments in Los Angeles, an 8-unit townhome-style development that features a handicap unit and energy efficient appliances.

New Hayward and Palm Desert Projects: Developer New Cities Investment Partners received bridge financing totaling $14,445,000 to build Maple & Main Apartments in Hayward and The Sands Apartments in Palm Desert. The Hayward development consists of 240 units, 20% being affordable to families earning up to 50% of AMI, and is located within walking distance of the Hayward BART stop. The new Palm Desert community will feature 412 units with the same mix of market-rate and affordable homes, and is a welcome addition to a city with no other new affordable homes in its pipeline.

Monterey Gateway Senior Apartments: Humboldt County’s most productive developer of affordable housing, Danco Communities, obtained acquisition financing totaling $3,240,000 to purchase a 1.86-acre site in Gilroy that will be improved with 75 units of affordable senior housing through 4% tax credits and operating and capital subsidy from the County of Santa Clara bond funds. The affordability restrictions are weighted towards the deeply affordable with 37 (50% of total) restricted to 30% AMI. The development will include solar roof, community garden, and a decomposed granite gated dog park.

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

Mixed-Income Housing…Will it Finally Be Favored?

Two of Century’s largest clients, Meta Housing and AMCAL Multi-Housing, are featured in an article about mixed-income housing in the March/April 2012 issue of Urban Land. The author, Patricia Kirk, highlights several public-private ventures in Portland (OR), Austin, and especially Southern California, where public agencies financial assistance made vibrant communities with a range of income levels possible.

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Meta Housing received financial help from the city of Tustin for Coventry Senior Apartments

Read more

Transit Oriented Development and the H+T Index

MoveLA held their 4th Annual Transportation Conversation last week, and, as usual, it was filled with golden nuggets of knowledge delivered by the wise men and women who work in the fields of transportation, urban development and housing.

One of the themes was the need to link new transit with the businesses, workers and residents of the communities being served by LA’s growing fixed guideway public transportation system.  It is recognized that transit location has an effect on property values and development patterns.* (See the post Getting Ahead of the TOD Train in this blog for some examples of how Century has worked with developers in this arena.)  There was some discussion on how LA can accelerate its transit construction program and how best to plan for the kinds of development that will optimize the use of the transit and benefit the community, without leading to gentrification. We will be talking more about some of those ideas in the coming weeks and months. Read more

Getting Ahead of the TOD Train

Forward-thinking developers are excellent customers. An article in Monday’s Los Angeles Times highlighted NMS Properties’ purchase of the Denny’s restaurant site at Colorado and Lincoln in Santa Monica, and how the property is near the expected end of the Metro Rail to the beach. The train won’t be running for at least four years (and could be more), but NMS will be well positioned with 250 apartments close to the coming station and in a newly zoned commercial corridor along Lincoln Blvd (per Santa Monica Patch).

Porposed light rail, from Santa Monica LUCE Study

from Santa Monica LUCE study

Our second deal with NMS, Century provided a $9 million acquisition loan, giving them the time to get their proposed development through the city’s approval process. While the price of $300 per foot is close to peak prices from five years ago, the value is generated by the allowable density in the corridor, with residential buildings permitted to have at least one extra floor. More apartments means more residents means more vibrancy on the street, the key amenity for a walkable, sustainable neighborhood, especially when transit is added to the mix. Read more

How Much Parking Is Too Much?

Capital BuildingHow much parking is too much? For housing near transit stops, more than one per dwelling, according to the California Infill Builders Association.  They are sponsoring a bill in this year’s California Legislative Session, AB 710, authored by Assemblymember Nancy Skinner of Berkeley, that would prohibit cities and counties from requiring the builders provide more than one off-street parking space per dwelling unit, or more than one off-street parking space per 1,000 sq.ft. of floor area for nonresidential uses, in areas near transit.

Why is this a big deal? Well, off-street parking is expensive and adds a lot to the cost of development.  Builders can show that building off-street parking spaces can cost from $2,500 to $25,000 each, depending on whether the parking is part of surface lot, or in an underground or above-ground garage.  The costs vary a lot because land costs differ so much between different parts of California.  But there is no question that off-street parking is expensive and adds to the cost of developing housing and other buildings near transit. Read more