$100M Fund Formed for Affordable Housing in LA
- Jul 22, 2008
The City of Los Angeles has joined forces with Enterprise Community Partners to establish the $100 million New Generation Fund, the city’s first multi-million-dollar financing tool for the development and preservation of affordable housing. The New Generation Fund is owned by Enterprise and is being backed financially by a consortium–consisting of Citi, Wachovia, Enterprise Community Loan Fund, Merrill Lynch, MetLife and HSBC–that has endowed the fund with $100 million. Additionally, the City, the Ahmanson Foundation, the California Community Foundation and the Weingarten Foundation are supplying a total of approximately $14 million in credit enhancements. The pre-development and acquisition fund is designed to combat homelessness and provide a greater pool of dwellings for low- and moderate-income residents by making early stage financing of as much as $10 million per project available to developers of affordable housing properties. The financing will be provided at 130 percent loan-to-value for non-profit organizations and 95 percent loan-to-value for for-profit developers. Additionally, Enterprise will help participating developers to go green by offering free access to green development consulting. On target to increase to as much as $150 million one year from now, the fund dovetails with the city’s plan to preserve and construct approximately 4,000 affordable housing units annually until 2014.Many developers are already stepping up to the plate to augment the affordable housing supply in Los Angeles. According to a first quarter report by real estate investment services firm Marcus & Millichap, approximately 2,300 units affordable housing units are scheduled for delivery by the close of this year. Meta Housing Corp. broke ground less than two weeks ago on a mixed-use project in South Los Angeles with 80 apartments atop retail space. In February, Golden Boy Partners broke ground on a 107-unit urban infill project designed for working families in South Gate in Los Angeles County. Preservation efforts are also in the works. A few months ago, the Apartment Investment and Management Co. announced plans for a comprehensive upgrade program that will preserve affordable housing for 400 low-income seniors at Grand Plaza Apartments in Chinatown, courtesy of $20 million in financing from the California Housing Finance Agency. Enterprise, headquartered in Columbia, Md., is a leading provider of capital and expertise for the development of affordable homes and communities. The organization has raised and invested approximately $9 billion in equity, grants and loans to develop or preserve 240,000 affordable housing residences.