LACAHSA AWARDED $660,000 TO KICKSTART OPERATIONS, MAKE BUILDING HOUSING IN LA COUNTY FASTER, MORE AFFORDABLE
SCAG funds will help L.A. County Affordable Housing Solutions Agency (LACAHSA) develop and launch plan to radically simplify, speed up how affordable housing is built
LOS ANGELES, CA— LACAHSA announced today that the agency has been awarded a $660,000 grant from the Southern California Association of Governments (SCAG). Funds will help the new agency establish a strategic plan to guide operations, including the design of new pilot programs to radically simplify how affordable housing can be funded and built in Los Angeles, attract new private investment capital, and prevent homelessness in the process.
One affordable housing pilot will unlock a tax exemption tool that enables affordable housing developers to tap into one single private loan, bypassing the often complex public financing and tax credit models that make housing development in LA so slow and expensive. This is not currently happening at scale across the region and corrects a key failure of our current affordable housing financing system: the costly, slow “capital stack” process, which forces developers to assemble multiple public loans and tax credits over many years, driving up costs.
“This is such a big moment, a new era toward making housing more affordable for all of us,” said LA County Supervisor Holly Mitchell, who began her term this year as LACAHSA’s first Board Chair. “We are all so frustrated at how difficult and expensive it is to break the logjam in our housing crisis. LACAHSA is our first-ever regional approach to making housing more affordable across the whole county. The award is like rocket fuel to help get us off the ground and make the first projects possible to accelerate how we produce and preserve affordable homes and prevent people from falling into homelessness.”
LACAHSA was created by a 2022 state law introduced by then State Senator Sydney Kamlager and is governed by a board of committed leaders and experts from communities across LA County. The main goal: make housing more affordable through a regional approach. LACAHSA will advance equity and prevent homelessness at the scale of the problem, helping people stay housed through countywide programs including eviction protection and rental assistance, and scaling up the preservation and production of affordable housing.
“LACAHSA is the missing piece we’ve needed for decades in order to tackle our housing crisis with bold, scalable solutions across our whole county,” said Elise Buik, President & CEO, United Way of Greater Los Angeles. “We’ve essentially created a Metro for housing–something LA desperately needs in order to solve our housing crisis at the true scale of the problem.”
The property tax abatement tool is made possible by the state welfare property tax exemption (WTE), where housing developers can enter into joint development agreements with LACAHSA. By entering into a joint agreement with LACAHSA, developers receive a tax exemption provided they guarantee quality affordable units long-term. Because the developer no longer has to pay property tax, it changes the economic structure of new housing and rehab building projects. The math works, so units that would otherwise be subject to market pressures stay affordable.
As a public agency, LACAHSA can attract private investment through this tax exemption, acquisition and land banking, and other innovative strategies. Additional flexible public investment is critical to addressing the housing crisis and has the power to radically simplify how affordable housing is developed and preserved. Similar approaches have been instrumental in creating thousands of new homes in San Francisco, New York City and Texas.
Last December, the Housing Authority of the City of Los Angeles (HACLA) tested the tax abatement model to preserve affordable housing. The purchase of the Residences at Woodlake, a 276-unit apartment community in Crenshaw, was made possible through the same property tax welfare exemption LACAHSA will use. Rather than raising rents, costs are reduced due to the money saved through the exemption of property taxes. Now LACAHSA will have the capacity to scale up this approach across the County.
“Private investors are a necessary part of maintaining affordable housing in LA, but they have stopped investing due to the perceived bureaucracy,” said Jennifer Keith, Managing Partner at Ethos Real Estate. “LACAHSA will pave a way for more private capital to invest in housing and maintain affordable housing in Los Angeles County. With LACAHSA, there is the potential to build on what we started, and expand this anti-displacement investment strategy on a much larger scale.”