2022 Summer Issue - 45

California, for example, set up the HomeKey program
in 2020 specifically to create affordable housing
through adaptive use of existing properties because it
is a quick and cost-effective way to create affordable
housing compared with new construction, Arrowsmith
says, noting that other states have similar programs
or provide grant dollars for affordable housing.
HomeKey provides grants to local governments
to acquire assets for conversion to housing. The
program, which has already provided 6,000 housing
units, is part of an overall $12 billion initiative
to produce up to 16,000 homes to help eliminate
homelessness.
" Soft money is a big driver of value in conversion
projects, " Arrowsmith says, noting that for-profit corporations
like Apple, Google, Amazon, and Microsoft
provide low-interest loans in certain geographies for
affordable housing projects to help offset the cost of
acquisition and rehabilitation of conversion projects.
Arrowsmith notes that soft money often makes
projects viable that otherwise could not be built using
only LIHTCs and other traditional hard-debt financing.
" When soft money is incorporated into the capital
stack, tax credits can be leveraged to a broader
degree to help finance more projects, " he explains.
Michael Massie, chief housing development officer
at Jamboree Housing Corporation, a nonprofit
affordable developer/owner based in Orange County,
California, says that the amount of soft money a
project brings to the table is a major factor in the
state awarding LIHTCs. California holds a competition
for LIHTCs, with selection based on a point system.
Points are awarded on various criteria, such as the
project's proximity to schools and parks, developer
expertise, and the amount of soft money the developer
has secured.
Working with Local Governments
Local governments are supportive of affordable housing
conversions, which makes the entitlement and/
or rezoning processes quicker and easier than for
market-rate projects. Some local governments also
provide incentives to increase the stock of affordable
housing. San Diego, for instance, implemented a
package of incentives for affordable housing projects
that includes a 50 percent density bonus, the elimination
of all fees for projects that are 100 percent
affordable, and fast-tracking of approvals.
SUMMER 2022
URBAN LAND 45
Over the last two years, Jamboree has done eight
hotel-to-housing conversions, totaling 755 units, in
partnership with local governments in Sacramento,
Orange, and Milpitas counties using LIHTCs, HomeKey,
and other soft money sources. Jamboree also
has three applications pending for the next round of
HomeKey funding.
" We are pursuing hotel conversions as an asset
class, focusing on extended stay because we can
get them done quickly and cost-effectively, " Massie
says. " We got into this and now know what we don't
know. " For example, he says that no mechanism was
in place in Anaheim to convert hotels or motels to
housing, so Jamboree worked with the city to craft a
citywide hotel/motel conversion ordinance.
Massie explains that community pushback is an
obstacle to creating supportive housing for those
living on the street, who often have mental health
problems. He also emphasizes that the quality of
supportive services is key to gaining community support
for these projects.
Architect Manuel Salazar, managing director and
senior associate at Los Angeles-based Y&M Architects,
which specializes in affordable housing design,
redesigned a 70-room Econo Lodge motel in Anaheim
built during the 1970s for Disneyland tourists into
Buena Esperanza, a Jamboree supportive-housing
project for people experiencing homelessness. He
A community center was added
at Buena Esperanza in Anaheim,
California, to provide a place
for supportive services and a
gathering place for residents.
JAMBOREE BY JUANTALLO.COM
http://www.JUANTALLO.COM
2022 Summer Issue

Table of Contents for the Digital Edition of 2022 Summer Issue
