Century Annual Report Hitting Mailboxes

century_ar_2012Look out for the Century’s 2012 Annual Report due to arrive sometime this week. The theme, Lending Matters, explores the tremendous opportunities for investment throughout California with diverse examples of Century’s acquisition, bridge, and construction loan products in action. If you have not joined our mailing list, please add your address here and download the PDF version of the report.

Lending Matters in May

On May 29th, Century attended the Grand Opening of Terra Bella in Bell Gardens, where we received a Letter of Recognition from Congresswoman Lucille Roybal-Allard for our contribution. The 65 unit low-income senior housing project, developed by Abode Communities, was supported by a $3,179,000 Century acquisition loan.

Also last month, developer Prakash Chandran received $593,000 in Century construction financing to build four workforce apartments in a low-income census tract of the Pico-Union district in Los Angeles. Construction is set to be completed by the end of the year.

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.

Three Loans, Over $30,000,000 Invested

Century ended 2012 with three standout loans to three very deserving developers in Southern California:

-Treadstone Companies received $14,130,000 in bridge financing for Warwick Terrace Apartments; 108 units in Compton.

-Bromont Villas, 49 units in Sylmar, will be developed by Yoram Hassid thanks in part to Century’s $7,850,000 construction loan.

-LOMCO was awarded a $9,000,000 acquisition loan for the 162 unit senior development Huntington Concord.

Please visit our lending page to learn how Century can help finance your next project.

Times Article Spotlights Redevelopment Deadline Disputes

Los Angeles Times LogoLast week, the Los Angeles Times published a nice summary of the issues surrounding the deadline for handing redevelopment dollars back to the state.

Our own Tim O’Connell, senior director of policy and advocacy, provided a quote in reference to the diffulties facing affordable housing developers, saying “there’s a lot of uncertainty, and in the real estate development business, uncertainty is absolutely the worst thing you can have.”

You can find the entire article on the Los Angeles Times site.

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

Is “Green” about the Environment or Money?

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?

Is Preserving Housing Affordability Still a Priority?

The latest figures from the California Housing Partnership Corp. indicate that there are over 50,000 apartments in the state at high or very high risk of converting from their current subsidized rent levels to market rents.  This dwarfs the ability of the housing community and public agencies to develop new housing, and loss of this housing stock would be catastrophic to the residents, who would be forced to move into fewer and fewer affordable units.  Extending the affordability of this rental housing stock must be a part of any effort to assure that lower income Californians have a place to live and raise their families.

So I read a recent article in Affordable Housing Finance entitled Housing At Risk with considerable interest.  The article outlines how three policy changes will affect the ability to preserve the affordability of the 800,000 units in the nation facing possible loss of affordability. Read more

Has the Market Hit Bottom? Is Now the Time to Buy?

The news has been filled with conflicting headlines the last few weeks.  On the one hand, the National Association of Realtors® reported that sales in April are “up strongly from a year ago,” but down from March.  And, the California Association of Realtors® reported that “home sales and median price both jumped in April.”  That is great news, because it points to a recovery from the mortgage foreclosure crisis.

Then the headlines told us that the Case-Shiller Index, one of the nation’s leading indicators, showed that home prices have reached their lowest point since the peak in 2006.  And, the Federal Housing Finance Agency, the conservator for Fannie Mae and Freddie Mac, reported that mortgage interest rates are still below 4.  That is a lower interest rate than at any other time since 1980, and less than one-half of what it was during the savings and loan crisis at the end of the 1980s, the last time the U.S. experienced a banking and real estate collapse.   Low interest rates make housing more affordable, so buyers are willing to pay more, which usually supports higher prices.  If prices are still dropping while interest rates are at historic lows, then the market must still be in trouble, and not recovering at all.

So where are we really?  Has the housing market bottomed out and started to recover, or are things still headed down to an even deeper bottom?  Read more

Apparently, Century Is a Nice Place to Work

NonProfit Times LogoEver wonder why Century employees are always happy to hear from you and help you with your financial needs? The NonProfit Times has shed some light on this auspicious behavior by naming Century as one of the 50 best nonprofits in the nation to work for in 2012.

We’re honored to be recognized, but it wouldn’t be right not to share the credit with you, our developer clients and partners. Your hard work and determination in providing for people in need is what inspires us to do our best in creating an environment where good people and good ideas can thrive.

Read the NonProfit Times article.