Calls for proposals to develop the remaining metro property at the corner of Wilshire and Crenshaw Boulevards, attracting bids from seven heavyweights in homeless housing.
Apart from large nonprofits such as Abode, Path and Bridge Housing, the eighth bidder who hasn’t produced a flat, has come up with a bold plan to do everyone else.
Better Angels, a nonprofit founded by billionaire tech entrepreneurs, said he turned his attention to homeless people, who he said would build 212 affordable units on the property, as well as a medical office building without double the taxpayer money.
Unlike other bidders, whose proposals rely on tax credits and other government grants, the better Angels said it would provide 30% of capital as equity and surplus traditional loans, making it faster and cheaper than a typical affordable project.
Amid several homeless plans initiated by its founder Adam Miller, Better Angels set out to develop an ambitious mission to uncover the traditional view that affordable housing cannot be generated without taxpayer subsidies.
“The goal is to show how to make money to do affordable housing because we believe … the only way to solve the affordable housing crisis is to let capitalist work,” Miller said.
Miller, with a $300 million investment fund, attempted to attract for-profit developers to stay away from the luxury market and offers small developers the opportunity to think beyond duplex and ADU.
Meanwhile, Better Angels also bids for a project to redevelop the former Kaiser Permanente facility in Pasadena. It proposes a housing and mental health hub that includes 300 market-priced, affordable and supportive units that were formerly homeless.
It also participated in a bid for the Los Angeles Community College District Competition, requiring recommendations for producing student housing. If selected, it will build a 54-unit apartment for City University students at Silver Lake at the sunset junction of Silver Lake, rather than favoring or exiting foster caregivers.
Better Angels hopes to build a 54-unit apartment for City University students at Silver Lake at the sunset junction of Silver Lake, rather than favoring or exiting foster caregivers.
(Onyx Architects, Inc.)
Metro and LACCD announced that the winners will be appointed this summer. Bidding for the Pasadena project will be closed in May, with a decision expected to be made sometime this year.
Win or lose in these bids, Better Angels is supporting two smaller projects that are being completed. Later this summer, a breakthrough apartment will be held later this summer, which will replace an abandoned single-family home in southern Los Angeles. Later this year, a permit for eight-story 72-unit building is expected to be awarded a block from Manchester Avenue in Westchester.
Miller promoted his housing model to replace the decades-old double subsidy system that used tax credits supplemented by other government grants to fund sustained operations.
Tax credit development is slow and expensive because leasing subsidies must be secured before fundraising, and financing can be a one-year process involving competitive applications from multiple institutions. While at the developer, in most cases, nonprofit homeless service providers charge land fees.
By providing capital with the strokes of the pen, better angels have the potential to reduce the process for years.
“It’s a very simple structure,” said Anthony Gude, chief developer of the Westchester project. “You don’t have to use public subsidies. This makes the capital stack simpler and more reliable.”
Good said the 72-unit project will cost $15.5 million. $215,000 per unit, about one-third of the construction cost of the current tax credit.
An artist rendered the eight-story, 72-unit building planned by Better Angels, one block from Manchester Avenue in Westchester.
(Demaria design)
However, savings in time and cost are a trade-off. Despite being classified as affordable, the project will not be part of the homeless housing system. To make a profit, its rent will exceed the very low level required to get people straight off the streets. As part of the approval process, Gude promised to limit 55 units of low income (for 80% of the region’s median earnings) and 15 units of the middle income level. On average, low-income units are priced at about $2,000, he said. While this will be about 40% less rent than other new high-rise buildings in the bustling area north of LAX, it is much higher than the low-income level required for tax credit projects.
This difference is evident in the application of the Metro Wilshire/Crenshaw project. Better Angels’ subway proposal will be 80% of the median income in 170 units and 42 units, accounting for 110% of the median, the latter of which is commonly known as labor housing.
All seven competition proposals using tax credit financing will provide some units for 30% of the median income, which are considered acutely low income, most below the median.
AndréF, Director of Housing and Chief Investment Officer of Better Angels. Bueno said the goal is to create new housing and ensure affordability, which will serve homeless people directly by leasing from master leases to nonprofits, or, if there is no master lease, by leasing from people who own federal Section 8, but not using them in a competitive stock market.
Miller describes it as homeless housing with “downward protection”.
Software developer Adam Miller is trying a new way to prevent homelessness, offering unfavorable micro-loans to those facing impending eviction through his 1P foundation in Los Angeles.
(Gary Coronado/Los Angeles Times)
“We have the flexibility to ensure that our limited partners get rewards,” he said. “We are trying to demonstrate that a better way to do this is less costly for the government and is more effective in creating housing.”
Miller has built Cornerstone Ondemand into a global training and development company, and he will focus on philanthropy after the sale in 2021.
After establishing an organization supporting research on gun control solutions, Miller and his wife Staci Miller turned their attention to the homeless, becoming their main local mission for the country.,,,,, Create a Stepper Fund, an irrelevant, forgiveable micro-loan program to help people facing evictions. It has offered 700 loans with a return of 65%.
In 2023, the miller incorporated Better Angels United Inc. into several programs’ umbrellas. It conducts resource days across the county to help homeless people connect with services. It also hired a technical team to create mobile applications for outreach workers and centralized shelter databases.
After the Los Angeles fired, Better Angels built a resource navigator app and established a relief fund.
Its Affordable Housing Fund was created by Better Angels for-profit subsidiary to attract capital to develop affordable housing.
“We expect the returns on these projects will be market interest rates – double digits of internal rate of return – we think this will encourage many others to enter the space and build net new affordable housing,” Miller said.
Miller plans to promote three types of housing. About 45% of the fund will be used for standard new housing construction. Another 20% will invest with Good River Partners, founder of Good River Partners, aspiring to build housing for young people who are transitioning from foster care.
Miller hopes to work with housing developer and modular maker Sola Impact for the rest to help long-time South Los Angeles homeowners turn their properties into multifamily apartments.
“The idea is not only to create new affordable housing, but to provide intergenerational wealth for people in their communities,” Miller said.
Market rate developer Andrew Slocum is buying the abandoned building to build an affordable multifamily apartment in South Los Angeles.
(Dania Maxwell/Los Angeles Times)
Gude and Andrew Slocum, who led the project in South Los Angeles, said their plans were only possible, simply because state and local affordable housing incentives, including executive order 1 by Mayor Karen Bass, simplified approval.
Among other bonuses, the five-story building in southern Los Angeles and the eight-story building in Westchester only requires minimal setbacks from the street without parking.
“Every lever we need to pull,” Good said.
