The Agency transforms luxury apartments into affordable housing

Right next to the release of Topanga Canyon from the 101 Freeway is an excellent example of modern and luxury life.

Built in 2020, Woodland Hills Clarendon apartments include huts by the swimming pool, a fire terrace and a 24 -hour community room with a kitchen and a billiard table. The apartments themselves are spacious – on average units of two bedrooms, the 1,000 square feet are higher and cost more than $ 3,000 per month.

Now, a key part of this is about to change.

In December, the 335 units complex was acquired by the housing authority in the city of Los Angeles, which is transforming it into a mixed income property, while retaining luxury equipment.

The authority, which has used a unique form of funding, considers acquisition as a model to extend its portfolio of affordable housing, including in areas like Woodland Hills which are close to jobs and good schools.

“It is really important for us to create housing opportunities and open access to stable neighborhoods,” said CEO of the housing authority, Lourdes Castro Ramirez.

Under the Plan for Clarendon, around a third of the units will be reserved for low -income households, defined as those who make 80% or less of the median income in the area. The rest will be put aside for intermediate income households, which represents up to 150% of median income.

The rent will vary depending on the income, but for a cleaning of three in the low -income branch, a two -room room will cost a maximum of $ 936 per month – a few thousand dollars below the current levels.

Some average income units do not differ much from the market rate, but the housing authority has said that the overall average rent should always be 32% lower than it was under the former owner.

Local Housing Authority is best known for having complex traditional public housing complexes such as Nickerson Gardens in Watts and for the administration of the federal program of section 8, which subsidizes rent that low -income tenants pay to private owners.

Less known is that the authority has approximately 150 other rental properties, with a mixture of units at market rate and affordable units, mainly bought in the 1980s. But last year, Housing Authority reserved $ 30 million to increase acquisitions.

The first large property acquired using these funds was Clarendon apartments of $ 156 million. The agency has carried out $ 12.5 million compared to its $ 30 million funds as equity and issued from exempt tax bonds it sold to private investors to cover most of the others.

Clarendon funding also included a low interest loan of $ 5 million from La4LA, a new organization defended by Mayor Karen Bass who uses philanthropic dollars to finance affordable housing.

In total, around 11% of funding to acquire the Clarendon came directly from the government and philanthropy, the rest of private bond investors.

All parties – bond investors, housing authority and philanthropic funds – expect to obtain at least one return on investment.

Sarah Dusseault, the main strategist of La4LA, said that by taking advantage of the investment of non -profit and private sectors, the Clarendon model allows rare government dollars to go further and provide an opportunity to significantly improve the affordability crisis. Not only can the model support acquisitions, but also Dusseault, but it could be used to build affordable housing cheaper and faster, in part because in relation to the government’s financing process today, there are fewer obstacles to collect funds on the bond market.

“We can actually have the capital available on the scale we need,” said Dusseault.

Before the purchase of the housing administration, the Clarendon put aside 8% of the units for low -income families, but the agency extends considerably the number available and puts rent restrictions on all units. Annual rent increases for tenants will also be capped at 4%.

Despite this, the Housing Authority plans to earn around $ 1 million a year on property during the first years, according to an agency report, money that can be used to provide its tenants with more services or acquire additional units.

One of the reasons why the Clarendon should still produce income is only as a government agency, the housing authority does not need to pay property tax.

In this way, the acquisition of Clarendon was similar to the offers that other cities have concluded in recent years, in which they had associated themselves with private real estate companies to acquire properties and reduce rent.

The housing authority, however, said that its model had the potential to produce more accessibility than these agreements, because unlike private companies, the agency does not charge costs and has access to a certain type of funding from the federal government that only housing agencies do so.

For example, the Housing Authority receives money from the Ministry of Housing and Urban Development which will subsidize the rent of many property tenants who make very low or extremely low income.

In total, there will be 24 units reserved for households earning 30% or less of the median income in the area and additional 42 for those with 50% or less median income – affordability not affected in most private partners transactions.

The housing authority hopes that the Clarendon is not unique and explores ways to find more money for acquisitions.

For the moment, said the agency, all tenants are left from the previous owner and can stay as long as they wish. When they move, they will be replaced by low and average income residents who will pay the rent deemed affordable according to their income.

Of the 335 units of the Clarendon, the vast majority are one and two chambers which, according to the housing authority, are the most requested for low -income households.

Unlike most buildings where families live, tenants will have all the bells and whistles: new household appliances, “intelligent” CVC systems, a community shopping center and huts by the pool under the palm trees.

“It’s,” said Castro Ramirez, “a wonderful building.”