Rebuilding Affordable Housing
Advocates find different ways to put needy families into quality homes
By Rebecca Kuzins 08/09/2012
Creating affordable housing is difficult in the best of times — and these are not the best of times.
By some estimates, as many as 20,000 of the 55,270 households in Pasadena are in need of affordable housing, because their occupants are paying more than 30 percent of their incomes for apartments or homes, or are living in crowded or substandard housing.
And yes, the city of Pasadena’s budget for affordable housing has been drastically reduced due to cutbacks in local, state and federal funding. Further complicating matters, state lawmakers and Gov. Jerry Brown passed a law last year eliminating the Pasadena Redevelopment Agency and more than 400 similar city and county organizations. The state traditionally provided redevelopment agencies with funds for new development, with 20 percent of this money set aside for affordable housing.
Affordable housing advocates maintain the elimination of these funds will severely hamper construction of new units. “It’s a seismic shift,” said Charles Loveman, executive director of Heritage Housing Partners, a Pasadena-based nonprofit housing developer.
“It will take a long time for people to fully understand the full impact of the loss [of redevelopment agencies], and affordable housing will be particularly punished. It will be very challenging to start new projects, since the primary vehicle for affordable housing was redevelopment money. I don’t see anything else on the horizon.”
Despite the gloomy financial forecast, some Pasadena-based developers and affordable-housing advocates are continuing to rehabilitate and build rental units and homes at below-market prices. Three of these organizations — Affordable Housing Services, Heritage Housing Partners and Trademark Development Co. — are employing different techniques to successfully address housing needs.
Affordable Housing Services (AHS) rents apartments to some of Pasadena’s poorest residents — people who are homeless, formerly homeless or earning low or very low incomes. The organization owns and manages two apartment buildings in Northwest Pasadena: A residence at 1516 Navarro Ave. houses six formerly homeless tenants in six one-bedroom apartments, and the organization is renovating a 1917 property at 270 Parke Ave. to provide eight additional units with two- to five-bedrooms apiece.
AHS works with city housing officials to obtain and renovate its buildings and receives funding from the city, the federal Department of Housing and Urban Development (HUD) and private financiers, among other sources. The Parke Avenue rehabilitation has received help from St. Mark’s Episcopal Church in Altadena, the Neighborhood Church and the Ecumenical Council for Pasadena Area Congregations (ECPAC), which have purchased a washer and dryer, paid tenants’ security deposits and provided other assistance.
“Pasadena, for all of its schizophrenia about affordable housing, has a wealth of good will about doing this kind of work on homelessness,” said Michelle C. White, the agency’s executive director.
As a nonprofit agency, whose tenants pay some of the lowest rents in the area, AHS faces numerous challenges in finding the money needed to provide its services. White explained that the organization’s housing projects require financial subsidies in four areas: the costs of acquiring or renovating properties and maintaining reasonable mortgages on them; the costs of operating the homes; subsidies to provide case management services for the homeless tenants; and rent subsidies for tenants who pay only 30 percent of their income for their apartments.
Tenants receive federal Section 8 subsidies to help cover their rental costs. In addition to subsidies, White said tenants also need a range of case management services because “the system is so much harder to negotiate.” These services include advice about how to obtain employment, job training and healthcare. “Most people are making nowhere near the amount of money they need to buy clothing and food,” she added. For that reason, the Navarro Street property has started to plant a garden in which residents can grow edible fruits and vegetables.
AHS would like to build another residence on the Navarro property, which could be sold to a moderate-income buyer. Income from this sale, says White, would help “to make sure resources are still available.” The organization is also meeting with local churches to persuade their members to rent available apartments at below-market rates.
But for the most part, the agency, like many affordable housing developers, is, in White’s words, “biding our time to see how we can come up with additional money.”
Heritage Housing Partners (HHP) has two goals: preserving some of the area’s architecturally significant and historic residences, and providing homes at below-market rates for low- and moderate-income buyers. Since its founding in 1998, the agency has renovated or constructed 146 units, 57 of which have been sold.
The idea for HHP originated with Pasadena Heritage, the architecture preservation organization that partnered with the city of Pasadena in 1984 to buy, relocate and renovate Gartz Court, the city’s oldest bungalow court. HHP was later spun off from Pasadena Heritage, and in its initial years the new organization purchased and rehabbed several historic residences in Pasadena and South Pasadena, selling these homes to households earning between 80 percent and 200 percent of the area’s median income.
In 2008, HHP completed its most ambitious project to date: Fair Oaks Court, a mix of rehabbed and newly constructed homes located at 608 N. Fair Oaks Ave. The complex’s 41 units provided housing for a wide range of incomes, including 33 low- and moderate-income units and three workforce units for people whose incomes exceeded that of low- or moderate-income purchasers but who couldn’t afford to buy a market-priced home in Pasadena. HHP partnered with the city of Pasadena to develop the project.
Since then, HHP has completed an even larger complex. The 60-unit Doran Gardens, located in Glendale, consisting of three renovated structures and 57 new units, will provide affordable housing for first-time homeowners. This project, a partnership with the city of Glendale, includes a public park on the property.
In addition, HHP has renovated Herkimer Arms, the only known apartment building designed by noted Pasadena architects Charles and Henry Greene. Herkimer Arms, which contained eight apartments, was moved from its location on the campus of Fuller Theological Seminary and relocated at 407 N. Raymond Ave. Here, the two-story structure was remodeled to provide two single-family residences, one on each floor. Another historic building, the 1894 Hammond House, was also relocated from Fuller to this property and was converted from student apartments to a four-bedroom residence. The property is also the site of the Carriage House, a newly built single-family residence.
These homes at Herkimer Gardens are currently for sale, with the Carriage House priced at $259,900, the Hammond House at $419,900, and the Herkimer Arms units at $379,900 and $399,900. These homes are available to buyers whose annual gross household incomes cannot exceed $47,250 for one person to $83,680 for seven people.
HHP is currently working on a few other developments. But Executive Director Charles Loveman explained that the organization, which in the past has relied on state redevelopment funding, has been unable to begin work on other projects due to the elimination of this revenue. “With redevelopment agencies, you had 40 years of law and precedent,” he said. “It was a well-defined area of public policy. Now, that whole legal framework is gone. It’s bad public policy.”
Joel Bryant, principal of Trademark Development Company, LLC, walks the tightrope between running a for-profit company and providing affordable housing.
Philosophically, Bryant said he doesn’t believe all housing should be sold at market rates. “But I also don’t feel that the government should build affordable housing. I feel the government should help professional developers build affordable housing, and that affordable housing can be done as a for-profit enterprise.”
The latest example of Bryant’s philosophy come to life is Washington Park Classics, a newly built complex of eight, single-family attached townhouses on the northeast corner of El Molino Avenue and Washington Boulevard. The complex replaced a liquor store that was considered a neighborhood nuisance because of drug dealing — and a murder — that took place on the site. Bryant describes his project as a “two-for” because he “got rid of an ugly use and provided a needed thing.”
Six of the eight units will be sold at below-market prices, while the others are available at market rates, with costs ranging from $398,000 to $445,000. First-time buyers who qualify for the six moderate-income units will pay only $261,000 for a two-bedroom unit or $291,000 for three bedrooms, with the remainder of the price subsidized by city and state funding. “The subsidies are a tad higher than normal,” said Bryant, but he maintained that his projects provide quality housing for buyers. The units, he added, will attract “people who live here and rent and will now have what might be the only opportunity to buy.”
Washington Park Classics was financed with a combination of state and city funding, as well as money from Century Housing, a Culver City-based lender that specializes in affordable housing. Bryant maintains that the current recession has made many other banks and private financial institutions “very cautious” about investing in housing for low- and moderate-income buyers.
A Pasadena native, Bryant attended John Muir High School and USC and now lives a few blocks from his Washington Classics project. Since 2002, his company has built several housing complexes in the San Gabriel Valley, including homes in Azusa and Glendora. Some of his other projects offered below-market-rate homes, including: the Lincoln Classics, two single-family homes at 459-461 Lincoln Ave. in Pasadena; Alta Street Classics, six moderate-income units in Arcadia; and Allen Brigden Classics, with five affordable units, built on the site of an abandoned gas station at Allen Avenue near Brigden Road in Pasadena.
Like other developers, Bryant sometimes complains that Pasadena’s procedures for creating affordable housing projects are difficult and frustrating. “Pasadena is particular about architecture and the design of projects. They want the new projects to fit in with the older housing,” he says.
Despite these drawbacks, he maintains that Pasadena is open and willing to create lower-cost homes, and he praises many of the people who work for the Housing Department and other city agencies. “The process is difficult,” he says, “but the people are great.”