Century Launches Note Program To Fund Affordable Housing

 

Image of Anchor Place at Century Villages at Cabrillo

Investors are offered an investment-grade opportunity to support Century’s efforts to address social inequalities associated with housing shortages worsened by the COVID pandemic


Culver City, CA 
(February 1, 2021) — Century Housing, a nonprofit Community Development Financial Institution (CDFI) dedicated to creating quality affordable housing throughout California, today announced the launch of an offering of up to $50 million of Century Sustainable Impact Notes (Notes), giving retail and institutional investors the opportunity to support Century’s efforts to address social inequalities associated with housing shortages worsened by the COVID pandemic, while promoting sustainable development. The Notes have received an investment-grade rating from Fitch and S&P and are available in denominations as small as $1,000.

In June, Century became the first CDFI to be rated by both Fitch and S&P, two of the world’s leading providers of independent credit ratings, earning a rating of AA Stable and AA- Stable, respectively. A second-party opinion by Sustainalytics also confirmed the environmental and social benefits attributed to Century-financed affordable development. All net proceeds will be used to support the financing of affordable housing in underserved communities.

Alan Hoffman, Senior Vice President and CFO of Century Housing, said, “The shortage of housing options for low-income households and the related chronic homelessness are being compounded by the COVID pandemic. A stable home is the first step to recovery, and the benefits produced by affordable housing, including improvements in health, education, and employment, are undeniable.”

Century-financed communities typically provide affordable housing to low-income families, seniors, veterans, and youth and offer on-site services, including health clinics and case management. Of the 4,278 homes Century financed in 2019, 76% had a green component, such as high energy-efficiency standards, sustainably sourced materials, and close proximity to transit in order to limit greenhouse gas emissions caused by long commutes. On average, these apartments are affordable to households earning half the median income in the areas where they live.

Century Sustainable Impact Notes are expected to be available beginning on or about February 1, 2021, with maturities that range from six months to 20 years through Incapital, LLC, a leading underwriter and distributor of securities.

“Century’s Notes offer investors the opportunity to address critical social and environmental needs while earning a financial return,” said Ron Griffith, President and CEO of Century Housing. “We are excited to be working with Incapital to give more investors the ability to increase the supply of critically needed affordable housing and to participate in our mission of serving our most vulnerable community members.”

Century provides financing for all stages of the creation and preservation of affordable housing and specializes in early-stage financing, including acquisition and bridge loans. For more than 25 years, Century’s expertise has reliably allowed affordable housing developers to secure important financing, take advantage of current programs, including COVID-related federal aid like Project Homekey, and navigate other state and city resources necessary for affordable housing communities to thrive.

The offering will be made only pursuant to a prospectus and pricing supplement. Copies of the prospectus and the relevant pricing supplement may be obtained from Century’s website at century.org/invest. In addition, financial professionals may obtain copies of the prospectus and relevant pricing supplement through Incapital’s Legacy™ platform. The S&P and Fitch ratings should not be the only factors investors rely upon in making an investment decision in the Notes. Before you invest, you should carefully read the prospectus and the relevant pricing supplement for more complete information about Century and the offering. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Looking Back on 2020

As we reflect back on a challenging 2020, we’d like to recount a sampling of the Century team’s proudest achievements. These accomplishments reflect the best of Century’s values, advancing our mission of making homes the cornerstone of a thriving and just society.

  • Century celebrates 25 years of service with two $25,000 donations to charter schools that we established and helped operate. Both schools are located in Inglewood and serve low income, minority communities. Find out more at https://century.org/25th/
  • Century closed loans totaling approximately $209M, which will create and preserve 4,544 affordable homes for families, seniors, and veterans at a average affordability of 46.5% of AMI and will help create more than 4,400 construction jobs. We continue to be the highest volume CDFI lender to affordable and workforce housing in the State.
  • Our remarkable Century Villages at Cabrillo staff responded rapidly to the pandemic to provide supportive services, community engagement activities, and property management services, addressing the acute needs of their vulnerable population. This included the coordination and deployment of COVID resources for residents including masks, COVID testing, food vouchers, Internet access, and more, resulting in one of the lowest infection rates compared to similar shared living areas.
  • Century was assigned a ‘AA’ Rating with a stable outlook by Fitch Ratings, one of the major nationally recognized financial rating organization. This rating joins our current S&P Global’s AA- rating and makes Century the first CDFI to be rated by both Fitch and S&P.
  • Century issued $85 million in ESG municipal CUSIP bonds to advance our mission throughout the state of California, becoming the first CDFI to come to market with a municipal bond CUSIP. The third-party opinion by Sustainalytics attests to both the environmental and social benefits that will be created by the homes made possible by these bonds.
  • Our Long Beach development, The Beacon, received numerous prestigious awards, including SCANPH Development of the Year, AIA-LA Residential Architecture Award, PCBC Gold Nugget Grand Award, and Multi-Housing News Excellence Award.
  • In July, a required VA public hearing took place, which cleared the path for development activities at the West LA VA campus. Century and partners Thomas Safran & Associates (TSA) and U.S.VETS continued advocacy for the West LA Campus Improvements Act, which was introduced to Congress by Senator Feinstein in the fall. TSA broke ground on Building 207 and the Dry Utility Trunkline. Visit wlavc.org to learn more.
  • Century and partners, HACLA, Richman Group, and National CORE submitted the One San Pedro Transformation Plan to This plan was the result of extensive hands-on community outreach, planning and design work, and due diligence and assessment activities. It will pave the way for future development activities, including up to 1,400 homes, parks and open space, and commercial and supportive service space. Find out more at www.onesanpedro.org

 

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?

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

Should Housing Destruction Be Part of the Recovery Plan?

Everyone is familiar with the collapse of the Housing Bubble, even if we don’t all agree on what caused it. There seems to be a consensus that, like an alcoholic, the Housing Market will not begin to recover until it hits bottom and takes responsibility for its own future, instead of manipulating and cajoling others to support it.  And most people realize that the Housing Market has not yet hit bottom–even though no one seems to know how far down the bottom really is.  In California, the Housing Market has only fallen back to 2003 price levels, which were considered too high then.

When the Housing Market was higher than a kite, everyone was saying that the laws of economics were out of kilter, that housing was too expensive and regular working folk couldn’t afford to buy or even rent a place to live that was within their ability to pay.

Here in California the Housing Market was considered so far out of balance that, in 2002 and 2006, the voters approved Housing Bonds totaling $4 billion to pay for homeless shelters, affordable apartments, and to subsidize first-time homebuyers.

Today, many people are saying that housing is too cheap, despite all evidence to the contrary (more on that another time).  Public agencies at all levels, financial institutions and the real estate industry are doing everything they can to enable the Housing Market to get high again.  And they have come up with a remarkable tool to do that.  Read more