L.A. City/County Public Pension Funds Invest in Phoenix Realty's Workforce Housing Developments

Why is the housing department putting resources into Phoenix Realty's Genesis II workforce housing fund?

Mercedes Marquez: One of the most important things about this project is that it is along transit, in what many would call an emerging neighborhood and what most of us would call a traditional working class neighborhood in L.A. that has never gotten its fair share. And suddenly the opportunity to have a mixture of both homeownership and rental opportunities right at the Gold Line stop makes it very worthwhile.

Also, few homeownership opportunity come to this neighborhood. So it's important to make sure that some of the moderate-income families that live here get a shot at moving from rentals to homeownership. So we've put in $3.75 million of LAHD funding to ensure that 55 of the 168 units are set aside for moderate-income buyers between 80 percent and 150 percent of the median household income for the area.

Is this collaboration a one-shot deal, or is it part of a growing trend? Is this workforce housing niche growing, or just a fad? Is the Phoenix model replicable and scalable?

It's a growing trend. I think we understand that together, both public sector and the private sector, we can intervene in this market and identify emerging markets, which include neighborhoods like Lincoln Heights, many parts of South Los Angeles, San Pedro, the northeast Valley. There are many opportunities to get ahold of the land and do townhouse and condo development for first-time homebuyers. And if we do it together, we can make sure that we meet the price point from the very beginning of the deal, which is what happened here.

In the November election the state housing bond passed and the city's bond failed. Did either include line items for workforce housing? Will there be a renewed local effort to float a housing bond?

On the state level, Prop 1C includes $300 million for transit oriented development. That particular money does not have income levels attached to it, so it is the most promising opportunity to build workforce housing.

The bulk of those funds simply re-fund very successful programs, like MHP, farm worker housing, rehab programs, and others that limit the income level at about 60 percent of average median income. The money for transit oriented development money is brand-new, and it will bring an infusion into Los Angeles, which we will leverage. On the local level, 25 percent of Prop H was targeted for homeownership, and a significant percentage was directed at workforce housing. So if there's any place where we lost out, it would be workforce housing and permanent supportive housing.

Mayor Villaraigosa's Remarks

Before I get started, let me just share a little bit with you. I grew up here. I rode my bike all through here. I went to the pool at Lincoln Park. To see a beautiful development like this in this part of town shows you how important these kinds of investments are to revitalize the community and focus and maximize the other resources that we have in terms of light rail and transit oriented development and urban infill and the workforce housing that's so important.

Last week, we were disappointed by the narrow defeat of Measure H. But with 62 percent of Angelenos voting in favor of tackling our city's housing crisis, the message was loud and clear. We need to come together as a community and face our housing crisis. We need to be like those communities of Pennsylvania Dutch who come together on a Saturday to raise a barn for a neighbor. And we need to do so creatively, and we need to leverage our assets intelligently.

Just 12 percent of families in Los Angeles can afford a median-priced home. We have the smallest middle class of any major American city. The fabric of our community is weakened every time a fire fighter or a nurse decides they can't afford to live here anymore. If we want good schools and safe streets, we need to commit ourselves to making Los Angeles a place where a teacher or a policeman can afford to buy a house and raise a family.

Measure H was one part. Fully funding the Housing Trust Fund at $100 million each year and leveraging more than $1 billion was another. But if you remember, we also said during my campaign that we need to be strategic. We need to create public-private partnerships using pension funds to make smart, cost-effective investments in housing.

We can do it by maximizing every public dollar, by working harder to find "win-win" investments with our pension systems, by leveraging what the public sector can offer with what the private sector can offer, and we're very excited.

On Saturday, the Department of Housing committed $3.6 million to this project. Today we are announcing an innovative public-private commitment to create more housing for middle-income families. That means my friends the camera operators-I spend more time with them than with the reporters; I like those guys; the other ones I tolerate!-can buy a house. A teacher or firefighter can buy a house. This is about a new commitment to Los Angeles, and I want to acknowledge the three out of the four largest public pension funds in Los Angeles that are making a combined $65 million investment in the Genesis Workforce Housing Fund II.

These investments are important. They create synergies and leverage more money, and they are doing what we have to do in this city. Today the public pension funds provided more than just a jump start for Genesis II to reach its goal of $150 million and creating over 2,000 homes in the L.A. region.

Not only did the Genesis Fund helped build the beautiful condominiums surrounding us today, the city's Affordable Housing Trust Fund contributed $3.75 million that helped 55 homeowners make their down payments to live in these beautiful homes!