New arrangement will ‘create an opportunity for housing stability for current and future senior residents,’ says Housing Department
Published : Tuesday, October 29, 2019 | 4:56 AM
A former affordable housing complex, converted to market rate housing in 2014, will become affordable housing once again.
The Pasadena City Council Monday unanimously approved the terms of a new loan and ownership arrangement for La Villa Lake. The development is a 114-unit apartment complex owned by CNS La Villa Lake, LLC.
According to a Housing Department report presented to the Council by William Huang, Pasadena’s Director of Housing, La Villa Lake was constructed in 1970, financed and subsidized by the United States Department of Housing and Urban Development (HUD). The project was operated as affordable rental housing for low income senior citizens until 2014, when the owner acquired La Villa Lake and opted out of the HUD funding program.
The change resulted in the conversion of the project to market rate housing. Residents were provided with Section 8 rental subsidy vouchers to assist with replacement rental housing. According to the staff report, of the total 114 residents currently residing at La Villa Lake, 37 are seniors who were original tenants prior to the ownership change in 2014.
Much of the discussion Monday centered around a key issue that allowed a reduced parking requirement of 71 spaces. The owner previously told the Housing Department that operating La Villa Lake as senior housing would be “financially infeasible under the use restrictions.”
Enter Developers Affordable Housing Access, Inc., a non-profit corporation, whose mission, according to its website, is “creating and preserving quality affordable housing and empowering low income individuals and communities through social services and community building.”
AHA’s portfolio includes ownership of 145 affordable housing communities totaling nearly 19,000 units, mostly in California, according to the Housing Department staff report.
AHA, on behalf of the owner, then submitted a proposal to the City in August 2019, which included a series of basic implementation components:
- Capital and accessibility improvements funded with City loan assistance in the amount of $580,000 and Owner equity in the amount of $105,320, with senior low-income housing deed restrictions in favor of the City, for a duration of 55 years.
- Transfer ownership of La Villa Lake from the current owner to a new, to-be-formed limited partnership, CNS La Villa Lake, LP before the end of 2019.
- Refinance and restructure La Villa Lake as a low·income housing tax credit project. The LP would apply to the state for tax credits and bond financing in 2024, which is the earliest this can occur in conformance with the “10-year ownership rule” under tax credit regulations.
The Housing Department report noted that the new transfer would “preserve 114 units of high-quality senior housing for persons age 55 and older, ensure long-term affordability with restricted rents for the next 55 years, and create an opportunity for housing stability for current and future senior residents.”
Members of the City Council were overwhelmingly pleased with the agreement, which Mayor Terry Tornek called a “win-win all around.”
“I wish this was a situation that happened more often,” said Councilmember Andy Wilson, while Councilmember Margaret McAustin told Shawn Boyd, chief investment officer of AHA, ‘We need more developers like you. Please stay in touch.”