Big Win!

Century Celebrates Legislative Win for West Los Angeles VA Campus

Big Win!

Century, as a proud member of the West LA Veterans Collective, joined Senator Dianne Feinstein and Congressman Ted Lieu (both D-California) in applauding President Joe Biden for signing the West Los Angeles VA Campus Improvement Act into law Wednesday. Both the Senator and the Congressman are long-time supporters of the West LA VA Campus and champions of this new legislation.

“This legislation has been years in the making,” Century Senior VP Brian D’Andrea said. “Thanks to the leadership and perseverance of our legislative champions, this bill  will accelerate and enable the creation of thousands of units of permanent, supportive housing for our community’s Veterans at the West LA VA. We are incredibly grateful for all of the hard work and dedication that brought this legislation to life.”

The West LA Veterans Collective is a Veteran-led, mission-driven collaborative team that also includes U.S.VETS, long-time partner of Century’s, and Thomas Safran & Associates. More information about the West LA Veterans Collective is available here: www.wlavc.org

“I want to thank Senator Feinstein and Representative Lieu for their commitment to Los Angeles veterans and determination to get this legislation enacted into law so quickly,” U.S.VETS CEO Steve Peck said in a recent press release. “The bill…will help put a roof over the heads of Veterans in need and promote their housing stability, long term health and recovery.”

The law authorizes the U.S. Department of Veterans Affairs to use funds collected from leases and other use-agreements on the West LA VA campus for the development of supportive housing and services on campus. Further, it increases the time period for enhanced use leases on the campus from 75 to 99 years. Increasing the length of leases will help streamline the construction of more than 1,200 units of supportive housing on campus while reducing long-term costs.

“This is an incredible win for Century, the West LA Veterans Collective, and our community’s Veterans,” Century CEO Ron Griffith said. “With approximately 1,450 permanent supportive housing units planned, this legislation brings us one step closer to our vision of creating a vibrant, cohesive, and supportive housing community for homeless and at-risk Veterans and their families.”

More information about West Los Angeles VA Campus Improvement Act is available here: Office of Senator Dianne Feinstein

Pandemic Puts Homeownership in African American Communities at Risk

In the post-COVID-19 era, African American homeownership in Los Angeles County is predicted to reach an even more concerning level. During the 2007 recession, foreclosure rates among African American homeowners were three times that of non-Hispanic Whites. According to the recent UCLA Center for Neighborhood Knowledge’s Saving Black Homeownership report, the significant homeownership gap between these groups had only started to close between 2010 and 2019, albeit at an extremely slow pace. However, whatever progress made has now been disrupted by COVID-19.

Compared with non-Hispanic Whites, African American households experienced more job losses during this pandemic. As a result, this vulnerable demographic was about twice as likely to have hardship with mortgage payment. Between April and October 2020, about 3,665 new preforeclosure notices were served. Unfortunately, this rate is more than one-and-a-half times greater in African American neighborhoods.

To preempt the crisis, the UCLA study recommends a series of actions, including:

  1. Prompting elected officials to secure a plan before the inevitable post-COVID-19 evictions and foreclosures happen. This should include a Mortgage Relief Fund or assistance program to cover all or partial missed mortgage payments for low- and moderate-income homeowners, with consideration to the most vulnerable homeowners and neighborhoods.
  2. Continuing to monitor developments in real-time and identifying homeowners who fall behind on their payment.
  3. Addressing funding and access to resource inequalities, such as supporting organizations that can reach struggling homeowners, including those who don’t know about or have trouble accessing resources that can reduce foreclosure risk.
  4. Requiring lenders to provide disclosure to mortgage holders about housing counseling and other available resources.
  5. Building on current policies for an inclusive solution for all homeowners in Los Angeles County. Improving existing policies allow local governments to prioritize and give support to the most vulnerable families and neighborhoods.

It is crucial to take action on the current challenges to African American homeowners. Addressing the needs of at-risk homeowners’ calls for policy reforms with the goal of keeping families in the home by helping those who are behind on their mortgage. Time is of the essence, as thousands of vulnerable residents are certain to lose their homes in the near future.

Read the full UCLA report

California Developers’ Conference

The 2018 Annual California Developer’s Conference, co-hosted by Century, brought together affordable housing developers, lenders, and investors to share insights, connections, and hors d’oeuvres at the Beverly Hills Hotel. Panels covered federal, state, and local issues and developer concerns in a post-tax reform world. Chris Thornberg returned as keynote speaker to paint a positive picture of the economy while encouraging developers to support all types of housing development, noting that market-rate housing helps free up rent-controlled housing to low-income residents. You can download Mr. Thornber’s presentation and the presentation from the Federal Update panel, below.

Chris Thornberg’s Keynote Presentation

Federal Update Presentation by Michael Novogradac, Todd Crow, and Fred Copeman

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.

 

 

Southern California’s Biggest Show Is Almost Here

Southern California’s “can’t miss” affordable housing event is just around the corner. SCANPH will host its 25th Annual Conference on Friday, November 1st at the JW Marriott Hotel in Downtown LA, and it’s not too late to register and take part in the most dynamic affordable housing events around.

This year Century is sponsoring, exhibiting, and participating in an early afternoon panel titled Social Impact Reporting: Telling Our Story. Brian D’Andrea, President of Century Villages at Cabrillo, will join the session moderated by Century’s Loan Officer, Neha Shah, to share insight into the successful adoption of investor-focused impact reporting which demonstrates the social, environmental, and economic returns on investment.

Stop By Our Booth at Affordable Housing’s Largest Conference

Century 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.

LA County Supervisors Approve $15 Million for Affordable Housing

The preservation and creation of affordable housing has been a longstanding goal of both Los Angeles County and many of its 88 cities, but the demise of redevelopment agencies delivered a blow to low-income residents struggling in one of the nation’s most difficult housing markets.

On March 5, 2013, acting on a joint motion by Chairman Mark Ridley-Thomas and Supervisor Gloria Molina, the Board of Supervisors unanimously reaffirmed the county’s commitment to providing permanent housing for low-income residents.  The Supervisors transferred $15 million to the Community Development Corporation for affordable housing in Los Angeles County.

Supervisors Gloria Molina and Mark Ridley-Thomas had urged the board to set aside $75 million for five years, $15 million of which would be allocated this year.  However, because of the uncertainties of economy and potential budget issues, the Board members voted to decide about allocating the remaining $60 million until the annual budget process.

Supervisors Molina and Ridley-Thomas urged the balance of the board to dedicate the total amount available to affordable housing.

“I am advocating for and committed to affordable housing having top priority consideration for the use of these resources,” said Supervisor Ridley-Thomas. “On any given night in Los Angeles County, over 50,000 homeless individuals live on the streets. The majority have untreated illnesses or disabilities, so affordable housing can and must be the priority. It has implications for our communities and workforce dynamics.”

“I think what’s important is that this is not money that should be allocated in a different direction. I’m hoping we’re not going to layer this with all kind of other competing interests,” said Supervisor Molina.  Affordable housing advocates cheered passage of the motion, noting the significant challenges they face since the dissolution of redevelopment agencies.

Representatives from 15 organizations testified in support of the Motion by Supervisors Molina and Ridley-Thomas, including Century Housing, Corporation for Supportive Housing, for-profit and not-for profit developers Abode Communities, A Community of Friends,  American Communities,  the Cesar Chavez Foundation, Hollywood CHC, LINC Housing, New Directions, Palm Communities, Thomas Safran & Associates, West Hollywood CHC, the City of Pasadena, and the Executive Directors of SCANPH and Shelter Partnership.

This action follows the October 2012 commitment when, in response to a joint motion by Supervisors Mark Ridley-Thomas and Zev Yaroslavsky, the Board unanimously approved $11 million in funding for affordable housing projects that is expected to result in approximately 176 new units.

This places Los Angeles County right behind the City and County of San Francisco in dedicating ‘boomerang’ funds made available by the dissolution of redevelopment agencies to continued funding of affordable housing.

Positive First Steps for Affordable Housing in Culver City

Assemblymember Holly Mitchell joined Mayor Andy Weissman and a well-rounded panel of housing developers (Los Angeles Housing Partnership and Habitat for Humanity), investors (Bank of America and Union Bank), and other leading advocates at the Culver City Council Chambers at last week’s Affordable Housing Roundtable. The first such event hosted in Culver City generated a lively discussion with local residents and community leaders contributing great questions and possible solutions to financial and legislative roadblocks.

Topics included creative ways for replacing funds for the $8 million in annual investment lost with the dissolution of Redevelopment Agencies, project versus tenant based Section 8 vouchers, and parcel size, density, and parking restrictions as major hindrances to large scale development. The panelists and participating residents were optimistic about the future of affordable housing in Culver City, with current developments such as Tilden Terrace, Globe Avenue, and Irving Place paving the way for more robust investments.

“We are looking to legislators to recreate a vehicle to help support affordable housing,” said Mayor Andy Weissman in addressing ways to offset the loss of redevelopment dollars. Given the energy and commitment on display at the event, projects such as Del Rey Square in development just down the street from the City Hall may be a real possibility for Culver City veterans, seniors, and other low-income residents.

Learn how you can help support affordable housing with the California Homes and Jobs Act.

Read more about the Roundtable in Kelly Hartog’s post on the Culver City Patch, which contains a link to a PDF summary of current affordable projects in Culver City.

Some Cause for Celebration

Everyone knows about the “Fiscal Cliff,” which was probably more like a small hillock.  And by now, most folk know that Congress and the President figured out a last minute (actually, it was after the last minute, but who’s counting) compromise to avoid the tax increase components of the problem.  But the popular press has concentrated on the costs and benefits for individuals, families and big businesses.  There were some features in the H.R. 8, the American Taxpayer Relief Act of 2012 (ATRA), that will change some rules for developers of affordable housing as well.

Low-Income Housing Tax Credits (LIHTCs):  Back when the LIHTC was created, the tax credit rates for the two forms of LIHTC (i.e., the “9%” and “4%” credits) were actually nine and four percent.  However, those rates were allowed to float over time and have gone up and down depending upon capital market forces.  Novogradac & Company and other firms have reported those LIHTC percentages, which have exceeded 9% in some years (infrequently) and been as low as 7.5% in some recent years.  As part of the Housing and Economic Recovery Act of 2008 (HERA), Congress fixed the credit percentage for 9% LIHTCs at nine percent, and that provision had been extended, but was due to expire at the end of 2012, which would have returned the floor rate for 9% LIHTCs to the floating level, and probably have dropped it as much as one-sixth.

 

Unfortunately, they did not also fix the rate for 4% LIHTCs, and that has continued to decline, until it is now below 3.25%.

 

ATRA, which addressed the tax side of the “Fiscal Cliff,” extended the floor percentage for 9% LIHTCs until the end of 2013.  It also redefined the applicability of the higher rate by applying it to allocations made by state housing finance agencies before January 1, 2014, rather than linking it to the “placed in service date,” as it had in the past.  That effectively extends the extended floor rate into 2014 for previously allocated LIHTCs and 2015 for LIHTCs allocated in 2013.  This change does not apply to commitments of future year LIHTCs during 2013.  And, once again, the 4% LIHTCs were not included in this extension.

New Markets Tax Credits (NMTCs):  Although NMTCs are not directly useful for housing developments, they have frequently been used to subsidize the nonresidential portions of mixed use developments, especially transit oriented development.  ATRA retroactively extended the NMTC program for 2012 and 2013, provided for annual allocations of $3.5 billion, and extended the time for reallocated unused funds until 2018.

Military Housing Allowance:  ATRA extended a provision that allows military families to exclude their basic housing allowance from their income for purposes of calculating whether the household qualifies as a low-income tenant until December 31, 2013.  This will permit military families who qualified as low-income under this provision to stay in their current homes, and others to qualify for housing assistance.

Mortgage Forgiveness Debt Relief Act:  Sometimes just called the Mortgage Debt Relief Act, adopted in 2007, provided a significant tax benefit for homebuyers who received some form of debt forgiveness as part of resolving their home mortgage problems.  Normally, if a taxpayer receives a debt reduction, the cancellation of debt is treated as income for tax purposes.  During the mortgage crisis of the past half dozen years, many thousands of homebuyers negotiated mortgage principal reductions, or agreed to “short sales,” in order to escape unsupportable mortgage debt.  The Mortgage Debt Relief Act allowed taxpayers to exclude the cancellation of debt from their incomes for tax purposes.  This Act was scheduled to sunset at the end of 2012, but ATRA extended it for another year.  Loss of this tool would have adversely affected the 2012 National Mortgage Settlement agreement entered into between most states and the five largest mortgage servicers.

Mortgage Insurance Premium Tax Exemption:  ATRA also reinstated the deductibility of private home mortgage insurance premiums in certain cases.  Originally created in 2007 as part of the Tax Relief and Health Care Act of 2006 for one year and later extended, this deduction expired at the end of 2011, but has now been reinstated for tax years 2012 and 2013.  While the full deduction is only available to those with taxable incomes of $100,000 or less, taxpayers with incomes of less than $110,000 qualify for a proportion of the total.

Unemployment Insurance Benefits (UIB):  While not strictly a housing program, the Federal Emergency UIB program has become a lifeline for many hundreds of thousands of Americans who lost their jobs and have exhausted their state UIB eligibility of 26 weeks.  Historically, Federal UIB payments were provided to the states for up to 99 weeks of eligibility in times of recession.  Earlier changes in 2012, adopted by Congress and signed by the President, modified the extension period, limiting it to 73 weeks in states with the highest unemployment rates (including California) and reducing the extension period to 40 weeks in states with lower rates of unemployment.  In California, this extension spared about 400,000 unemployed workers from losing their benefits at the end of 2012. However, ATRA does not extend additional UIB for those who have already exhausted their eligibility, and the funding may be cut as part of the sequestration process that was deferred for two months (see below).

The extension will allow the unemployed to keep paying rent, and feeding their families for a little while longer.

“Fiscal Cliff” Part II:  What ATRA did not do was address the spending side of the Federal Budget, Debt and Deficit issues facing the President and Congress.  It did push off the sequestration issue for two months to allow the new Members of 113th Congress, in both the House of Representatives and the Senate, to be sworn in, find their offices, elect their leadership and settle into their new committee assignments.

However, Fiscal Cliff, Part 2, the battle over expenditures and raising the debt limit has already been joined between those who would cut deeply into social service programs and entitlements, and those who want to preserve the safety net for those hardest hit by the recession and slow recovery.  Stay tuned for more debate and conflict in the halls of power.