January 30, 1994 - From the January, 1994 issue

Kingston: Century Freeway Housing Agenda for ‘94

G. Allan Kingston is executive director for the Century Freeway Housing Program (CFHP), a state program under the Department of Housing and Community Development that has assisted in providing more than 2,000 affordable houses to families of low and moderate income. The CFHP has been offered as a model community development program that not only provides housing, but will leave a legacy of innovative concepts and techniques in preventive social services, public/private partnerships and job creation. The Planning Report interviewed Mr. Kingston regarding CFHP’s past successes and future goals.

What is the mission of the Century Freeway Housing Program?

The mission of the Century Freeway Housing Program (CFHP) is to provide affordable replenishment housing for the housing which was taken as a result of the construction of the Century Freeway. Beyond that, we feel that our goal is to provide a certain quality of life opportunity for everyone that lives in the housing units in the program and see they have a chance to constructively enjoy being part of our society like anyone else.

What is the geographical boundary of the Century Freeway Housing Program? What communities should be focused on your activities?

Basically, our focus is the Los Angeles Metropolitan community, save the San Fernando Valley. The rules we play by are those in a federal consent degree which says that we can go no further that 12 miles either side of the route of the 1-105 Century freeway. Basically that means on the north up to the Santa Monica Mountains, down to the south touching into some cities in Orange County, and we can go out to the east to about Whittier. That area takes in a tremendous amount of territory. 

Is there any priority given to the neighborhoods nearest the freeway? 

At one time, there was a priority given to communities which were along the route of the freeway, but that no longer is the case. Replenishment of housing happens throughout the metropolitan community and when you have such a geographically integrated community as Los Angeles, replenishing the housing five miles away from the freeway, is as important and as meaningful as replacing it half a mile away from the freeway. 

What are the other benefits in addition to the housing that has come out of the Century Freeway Housing Program? 

I am very proud of this housing program. It has done more than just provide shelter. One of our guiding concepts has become leaving a legacy of projects that will show people in the future how you might bring about affordable housing and at the same time provide some assistance in the social service area, particularly in preventative social services. We've been getting a lot of support from these types of programs by Governor Wilson. 

What we've tried to do is maximize those opportunities in academic counseling for children, child care facilities, and establishment of finance opportunities in the inner-city neighborhoods. But in addition to that which has happened as a part of the housing program, at the request of the court and under the guidance of Judge Pregerson during the last twenty years, we are now involved in helping to fund other services including a pre-apprentice training program in connection with the carpenters' union, which has trained over 5,500 youths from inner-city neighborhoods. Seventy percent of them have found employment as a result of this training where they otherwise might have been out on the street. This makes it a one-of-a-kind program. 

Another part of the program is the Century Freeway Housing Affirmative Action Committee  which has monitored some of the stiffest equal opportunity employment goals and stiffest minority and women business enterprise goals of any project that I've ever heard of. Also part of this program is the office of the advocate, which is an ombudsman office available to anyone residing within a Century Freeway Housing development.

You've been helpful in funding almost 2,400 affordable housing units, spending maybe $175 million on this effort. What is the agenda for 1994 for Century Freeway Housing? 

The 2,400 units represents only a segment of what has already been completed. We already have commitments for another 2,500 units of housing which we are working on right now. We are now negotiating development agreements, talking about monitoring construction, talking about the actual completion of units of affordable housing that we have been spending several years negotiating with both non-profit affordable housing sponsors and for-profit developers. For the future, we will be trying to put all of those commitments through the process to completion. By the end of the year, we will end up with a good 50 projects and more than $300 million worth of development value. 

A lot of non-profit and for-profit developers are waiting patiently for more funding opportunities in early 1994. What is the status of these funding opportunities? 

We can say that there is some hope that we will have what we call "rollover” monies of approximately $20 million, perhaps eventually as much as $40 to $50 million, that will be available for new projects. Indeed, we are targeting late spring of 1994 as the time to put out on the streets a solicitation for development proposals for the use of that money. 

There an very few funding sources available to fund affordable housing projects and cities are trying to leverage funds available. What calculations led you to decide to not put out an RFP until late spring? 

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It's simply a result of economic conditions we find ourselves in today with real estate. We are dependent on funds which we generate from projects we own and are selling to the private sector. The same consent degree requires that we sell back to the private sector. We haven't been able to sell our product as quickly as we anticipated three or four years ago. In the last year or so the demand for our product has declined tremendously, so we have to wait until we sell the product in order to get the funds to recycle the dollars back into the community. Otherwise, if we had the funds we would be out there tomorrow. 

When will you been making your funding decisions? 

In general, we have proposed that if we can get our requests out in late spring, we would be making decisions sometime towards the early summer and having funds available sometime in August or September of 1994. 

What are the outlines of the concerns you are hearing from the non­profit and for-profit housing community regarding their hopes for the Century Freeway Housing program? 

We have been asked to continue in the role that we've been playing in the restructured program: to continue the flexibility of our funding so that we are sure to have land acquisition and construction financing available. That flexibility includes leveraging of our funds with other sources. In addition, we have continued to get a wide variety of interesting, deserving projects, from senior housing to transitional to SRO housing to hotel projects and even ownership condominium townhouses. I've tried to indicate to the community, for this next time around, that we will be looking for a variety of projects and getting the funding out as soon as we can. 

But how can you satisfy this growing demand with less and less resources? 

One of the things that we've been looking at in terms of trying to expand the reach of our funds is to work with local jurisdictions (the city of Los Angeles 'Housing Department, for example) to try to partner our money with funds that they may have available, either through housing set-asides or bond money or housing certificates for ownership. We want to work with other funders, local jurisdictions and agencies in any way, shape or form to leverage our funds. Everyone is making do with less and less resources during a period of expanding need, so we are looking for partnerships wherever and whenever we can. 

What is the best profile of a match for what you at Century Freeway Housing and different cities would like to fund?

I think an ideal match for us is to have about two and a half to three dollars for every one of our program dollars. The ideal mix for us is going to continue to be where we are going to be able to set up to secure land and secure pre-development costs. I think the cities need to continue to do two things. First, they have greater flexibility with regard to making their bridge and gap loans. Sometimes those are really important because they are able to hold on to the piece of property or bridge across until a main source of income comes in. Cities provide more flexibility for putting projects together then the state does in its ability to provide the loans and security. So if the cities continue to do this, then we can step in and both reimburse them in the short-run in a pre-development or construction loan phase, and also step in to reimburse them at the conclusion or the long term financing. There is no ideal mix, but I think that we've done projects leveraging as many as six different funding sources, including tax credits. Frankly, that's too many. You need to have at most three. You really can't do it with at least two sources any more. You need about three or four. 

What is the role of the for-profit developer in this mix? 

For-profit developers have as much of a role as they want to play. The Kaufman & Broad's of the late 1990's and into the 21st century are out there today, but they may be non-profits the way the housing business is going. The smart for-profit developers are looking at affordable housing and what affordable housing means. We now know that we are going to be have tax credits around for at least a little while. And I think we might have reached the end or going out around Los Angeles and building tract developments. On the edges of everything, homes aren't selling as fast as they've been in the past. Those who understand what it takes to put these affordable housing together are going to be the people, along with a segment that is going to be very upper end, who are going to run the housing industry of the 21st century. 

What about the question of the timing of the various funding sources, how can that be coordinated to avoid projects stacking up in the system? 

Those who are successful in answering the solicitations which we put out and which the cities put out will be able to figure it out because there will be such a strong desire to get the projects done. They will figure out n way to do it. It's not easy. The problem is going to be for the cities to figure out ways in which they can provide additional funding themselves, because there will be a time when there will not be a Century Freeway Housing Program to provide those funds. What I would like to see is an attempt at a regional funding agency which might grow out of a combined effort or several different cities, localities and agencies. Certainly when you have a type of 500-pound gorilla like the city of Los Angeles, we sometimes tend to look at that as large part of what we do. But 20 to 25 percent of what we do is with the other cities and counties that are part of this area. When you combine all these different governmental agencies you begin to have a force where, even if everyone put in just a little bit, you could in a combined way provide an opportunity for people to find funding. But I think that would take a long look for many people on a regional basis, rather than just one-by-one, city-by-city basis.

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