New Generation Fund Invests $155 Million for Los Angeles Affordable Homes
Responding to the need for flexible capital in a tightening market 10 years ago, a public-private partnership made up of Enterprise Community Partners (Enterprise), the Los Angeles Housing + Community Investment Department (HCIDLA) and a multi-bank coalition created the New Generation Fund. The fund’s goal was to quickly provide flexible acquisition, predevelopment and moderate rehab financing for affordable housing developers.
And a decade later, the fund has provided more than $155 million to create and to preserve about 2,600 homes in 27 affordable housing communities in the city of Los Angeles.
“Through the New Generation Fund, we were able to create a highly successful solution to a tremendous need, developing capital tools needed to accelerate creation and preservation of affordable homes,” said Jacqueline Waggoner, vice president and Southern California market leader, Enterprise. “Our public and private partners’ expertise was needed to solve what at the time seemed an insurmountable challenge.”
Richard Gerwitz, co-head of Citi Community Capital, says that certain issues like affordable housing are best solved through cross-sector partnerships. “We think the private sector is able to assess risk and put out capital in an expeditious manner and to manage risk over the long term. The Public sector guides policy and makes sure that residents and constituents are taken care of, and together over the years, we have worked with the city in making sure that large parts of the population are served by affordable housing.”
The $155 million in New Generation Fund investments to date not only creates new housing but preserves existing affordable housing which is critical as well, notes Rushmore Cervantes, general manager, HCIDLA. “With the private investments, the City is able to stretch limited resources, which has led to the creation of 2300 affordable homes as well as preserving 315 affordable units that otherwise would potentially have converted to market rate housing. That is significant because we are not only building new affordable housing but also trying to preserve every single housing unit possible.”
Anita Nelson, chief executive officer of SRO Housing Corporation, recalls how timely the funds were to acquire properties to provide more affordable homes. “It was at the height of the economic downturn, and it was hard to find financing. With this new funding source, we were able to acquire a site – and set up and cover predevelopment costs – that is now home to 107 formerly homeless and low-income residents.”
Now focusing on the current market challenges, the New Generation Fund is heavily utilized by housing providers to acquire sites for new construction and preservation for affordable housing.
For more information about New Generation Fund, please visit www.newgenerationfund.com.