Rose Apartments is home to young adults who are at risk of being homeless and others who have lived on the streets.
Located in Venice, California, the 35-unit development is among the recent properties serving a growing number of people between the ages of 18 and 25 struggling with homelessness.
“To me, affordable housing has impacted my life in so many ways,” says Coral, one of the young residents. “Personally, it has helped me stay away from temptations and situations that aren’t good for me or my well-being. Without affordable housing, I don’t know where I would be right now. I wouldn’t be inside my home, safe and sound, like I am now.”
She had been experiencing homelessness for about 16 months prior to moving into her apartment, with part of that time in transitional or shared housing.
Coral is not alone. On a single night in 2023, more than 34,700 people younger than 25 experienced homelessness on their own in the United States. That’s a 15% jump, or 4,613 more youths, than the year before, according to the latest data from the Department of Housing and Urban Development (HUD).
The count found unaccompanied youths experiencing homelessness were more likely than all individuals experiencing homelessness to be women or girls (38% versus 30%).
In addition, another 7,184 youths were experiencing homelessness as parents, with at least one child.
Rose Apartments, developed by Venice Community Housing (VCH), has half of its units dedicated to transition-age youths (TAY) and the other half for others who have been chronically homeless.
“We have found it to be such an amazing intergenerational mix,” says Becky Dennison, executive director of nonprofit VCH. “We have core programs for youth. We have our high school on-site. People can get a diploma on-site in an individualized program. There are training programs for young people and additional support for the other adults. But a lot of things happen together. The community has built strong ties.”
The longtime nonprofit began in Venice and has expanded into Los Angeles’ Westside. For much of its 35 years, it has worked with youths in some form, including operating a construction program and other employment training.
VCH has been developing housing specifically with youths in mind for about four years.
The approximately $21 million Rose Apartments was built on land that VCH owned and used for its offices. Working with the architects at Brooks + Scarpa, the team reimagined the site with housing about three years ago.
“This is a population who needs to feel safe and secure but also connected to social activity,” says Angela Brooks, managing principal at Brooks + Scarpa. “The courtyard, lifted off of the ground floor, allows us to have a protected social space that is both visually connected, yet physically separate from the street. It is also in a great location, connected by foot to public bus lines and many amenities.”
Not only does the courtyard provide a protected open space, it allows light and air into each unit and a place to see and be in a green space.
“We know that when you can see a green space you feel closer to it, you feel calmer,” Brooks explains. “A courtyard ringed with housing is also a historical precedent in the area and a beloved housing type. It provides a critical social function and is also perfect in the California climate because it also allows us to reduce our energy load. The building is ‘solar-ready,’ and all of the appliances within the units are electric.”
Rose Apartments was recently named an honor winner in the 2023 Residential Architect Design Awards, affordable housing category.
“Design is a public benefit,” Brooks says. “These buildings last for at least 60 years, and they should be designed well. We also know that a well-designed building gives people a sense of dignity and can actually make them healthier both mentally and physically. That is something well worth it and more cost effective than medical care, incarcerating people, or keeping them on the streets. We always use standard materials and building types (wood framed/stucco) and try to maximize them to the fullest.”
The apartments are targeted to residents earning no more than 30% of the area median income (AMI), and 34 of the homes have project-based Section 8 vouchers from the Housing Authority of the City of Los Angeles.
Major funding sources include:
- $11.3 million in tax-exempt construction financing from Bank of America;
- $5.5 million in 4% low-income housing tax credit (LIHTC) equity from National Equity Fund;
- $2.8 million in No Place Like Home funding from the Los Angeles County Development Authority;
- $6.4 million in Proposition HHH funding from the Los Angeles Housing Department;
- $3.2 million in Special Needs Housing Program funding from the California Housing Finance Agency; and
- $2.6 million from permanent lender California Community Reinvestment Corp.
VCH is not done. This year, it will open three new buildings with 97 total units. Two of the buildings will have units targeted to TAY.
“We’ll be able to welcome a lot of people home in the next six months,” says Dennison, who has led VCH for eight years.
Her team will be opening The Journey, a 40-unit development with half of the units for TAY, around the corner from Rose Apartments in the spring. VCH’s partner, Safe Place for Youth, will provide services on the ground floor.
VCH is also working on Marian Place, the redevelopment of several existing bungalows in Venice to provide nine units, with six of the units reserved for young adults. Well Baby Center, another VCH partner, will provide services on-site to parents and young children.
Developments serving TAY may require a greater focus on education and employment programs, Dennison says. But, that’s been part of VCH’s history. “It’s almost like being able to match our expertise,” she says.
Collectively, people may also underestimate the amount of trauma that the residents have experienced even at their young age, according to Dennison.
“While young people are resilient and at a stage in their lives where education, employment, and enhancements will help them grow, they’ve been through a lot,” she says. “Housing stability takes time. The building of trust takes time. Basic life skills take time. That’s not true for everyone. Not everyone is the same. … The things that lead young people to homelessness can be different in some ways than for adults.”
Residences on Main
Other organizations are also working to help youths at risk of homelessness.
Over the years, LA Family Housing (LAFH) has worked with TAY at several of the 30 housing properties it operates in Los Angeles, but those developments were not specifically targeted to that population. That changed in 2020 when LAFH opened Residences on Main in South Los Angeles in 2020.
Seeing a growing need to house young adults, the nonprofit targeted 15 units at Residences on Main to young adults and the remaining 35 units to others at risk of homelessness.
“It’s our first building that has one- to three-bedroom units because we recognized that some TAY are solo and some have one or more dependents, so we wanted to create a wider variety of unit types given that what we were seeing with that population was a real variety of needs in terms of the size of the units,” says Stephanie Klasky-Gamer, president and CEO.
Residences on Main was built with a strong focus on TAY in mind, but the LAFH team made a choice from the beginning to create a development that would serve a mixed population.
One reason for this was to help make sure the building could be leased successfully. Financing for the development included funds from Proposition HHH, a $1.2 billion bond measure that local voters passed in 2016 to build supportive housing. The funding required qualifying tenants to be chronically homeless, and it’s challenging to find younger people who meet the federal definition of chronically homeless, says Klasky-Gamer.
LAFH also wanted to provide more housing opportunities to homeless families. Many new permanent supportive housing communities focus on chronically single adults.
Residences on Main was built on two adjacent lots, one of which was owned by the city.
“We had to compete through an RFP to be awarded the site,” explains Klasky-Gamer. “The problem was to build on the city-owned parcel, we couldn’t get more than 30 units, so we picked up the adjacent parcel.”
LAFH needed to “lot tie” the properties for the projects, which meant it had to acquire both parcels. It couldn’t buy one and lease the other, so the city agreed to sell its property as well.
Most of the other Proposition HHH deals involving city-owned land had long-term lease agreements, with the city maintaining ownership, according to Klasky-Gamer.
The approximately $30 million development also utilizes LIHTCs awarded by the California Tax Credit Allocation Committee and syndicated by National Equity Fund. Other partners include the city and county of Los Angeles, construction and permanent lender JPMorgan Chase, bond trustee U.S. Bank, and an Affordable Housing Program grant from the Federal Home Loan Bank of San Francisco through City National Bank. Corporation for Supportive Housing and Local Initiatives Support Corp. also assisted.
LAFH worked with Y&M Architects on the development.
“What we have found is that the young adult population tends to be more self-sufficient than some of our other target populations, particularly in our more recent buildings that have been permanent supportive housing for single adults with chronic or persistent mental illness,” says Klasky-Gamer. “There’s more engagement with our case management relative to seeking employment.”
The Launchpad
Cohen-Esrey Development Group is at work constructing The Launchpad, a 50-unit permanent supportive housing community targeted toward young adults in Colorado Springs, Colorado.
The firm is teaming with The Place, a local nonprofit, to support residents typically between the ages of 18 and 24 who have aged out of the foster care system or otherwise don’t have a stable place to sleep at night.
Cohen-Esrey is bringing its extensive development and construction experience to the project, while The PLACE will provide services to residents when the doors open later this year.
“This population is often overlooked with housing,” says Jon Atlas, managing director. “There’s been housing for seniors and people with various disabilities, but there’s been an unmet need for this population of young adults who don’t have a place to live. That was the impetus for it. The PLACE is doing great work, and we decided to partner with them to see if we could help try to solve this issue at least in a small way in Colorado Springs.”
Atlas adds that The Launchpad aligns with the company’s core values of having a positive community impact and providing residents with a maximum level of support.
With the project’s younger population in mind, the development team sought a location that would be walkable to different amenities. As a result, The Launchpad is being built across the street from a grocery store and close to transit stops as well as employment opportunities.
“We also worked with Shopworks Architecture, which utilizes trauma-informed design,” Atlas says. “That played a large role in how the property was designed to make sure that the residents are comfortable.”
The design principles included making sure there’s good lighting and avoiding blind hallways to help people feel secure.
It is the first property that Cohen-Esrey is developing with a focus on young adults. As with most affordable housing developments, one of the biggest challenges was assembling multiple layers of financing for the $20 million development, which adds complexity to the deal, says Atlas.
On the positive side, the different sources of financing demonstrate the strong support the project has generated. Like the other developments, The Launchpad uses the LIHTC program, sometimes referred to as Section 42 after its specific section of the Internal Revenue Code.
Major funding sources include:
- $10.9 million in federal LIHTC equity from Merchants Capital;
- $5.25 million from Colorado Springs, El Paso County, and Colorado in soft debt;
- $3.1 million in permanent debt from the Colorado Housing and Finance Authority; and
- $200,000 in other energy credits and rebates.
“Any supportive housing project requires a tremendous amount of support from city, county, and state resources in the form of soft financing—since most of the rents are at a very low AMI level and likely have a Section 8 project-based contract to help specific populations,” says Linda Hill executive vice president, tax credit equity, at Merchants Capital, the tax credit syndicator for The Launchpad. She notes that there was about $5 million in soft financing from the state, county, and city for the project.
Permanent supportive housing developments may also face some underwriting challenges for developers.
“A supportive housing transaction needs to include partners that understand the services that are required for the tenant population,” Hill says. “With The Launchpad, Cohen-Esrey teamed up with The PLACE, which has experience dealing with TAY and young adults in Colorado. It is imperative that the development sponsor works with ‘boots-on-the-ground’ partners who know how to handle the tenant population and can provide the supportive services needed for the project. It is also imperative to have a development partner with a solid balance sheet and liquidity, like Cohen-Esrey, to help financially support the transaction over the compliance period, if needed.”
Key Points
There are other considerations.
“Going back to basics, the LIHTC program has a general public-use requirement, but you are permitted to serve members of a specified group under a federal or state program or policy that supports housing for that specified group,” says Emily Blumberg, a partner at Klein Hornig, a law firm focused on affordable housing and community development. “In general, if you have state or federal financing that is targeting youth aging out of foster care or at risk of homelessness, then you can dedicate units to them and still fit within Section 42 requirements.”
Although generally a unit does not qualify for LIHTC if all the occupants are full-time students, Section 42 contains exceptions to the restriction on student eligibility that are relevant to projects targeting youths aging out of foster care. Blumberg works with developers to confirm occupancy goals align with Section 42 requirements, as well as fair housing and civil rights requirements and those of project financing and subsidy sources.
Even though the Age Discrimination Act prohibits distinctions based on age in programs and activities receiving federal financial assistance, HUD’s associated regulations provide that you can take age into consideration if necessary for the normal operation or the achievement of a statutory objective of a program or an activity. In addition, if a recipient operating a program provides special benefits to children, such use of age distinctions shall be presumed to be necessary to the normal operation of the program. Housing for youths leaving foster care or other youths at risk of homeless that receive financing targeted at serving this population would typically fall into those categories, Blumberg explains.
While developments may target residents ages 18 to 24 at entry, developers should not expect that residency can be terminated when someone turns 25. At LIHTC developments, evictions need to be for “good cause,” and it’s doubtful that aging out of a program would be considered good cause, according to Blumberg.
Services are also a vital component of any permanent supportive housing development.
“You want to make sure that there are appropriate supports and services available,” Blumberg says, noting that she often works with developers to prepare agreements and plans with their service providers and management agents so everyone is on the same page and understands the statutory and regulatory requirements at play for a given development.
In addition, developers should be aware of any overlapping requirements of the project’s financing and subsidies, says Blumberg. For example, funding sources may come with requirements regarding applicant referrals.
HUD’s Foster Youth to Independence (FYI) initiative makes Section 8 Housing Choice Voucher assistance available to public housing authorities for youths aging out of foster care at risk of homelessness in partnership with public child welfare agencies that coordinate supportive services. The Housing Opportunity Through Modernization Act allows these vouchers to be project-based, notes Blumberg, but the authorizing statute provides that an FYI voucher may only be used by a qualifying youth for a limited time period. A PHA can adopt a waiting list preference to assist youths leaving FYI who are at risk of homelessness.
Homeward Central Harlem
In October, Homeward NYC, Type A Projects, and Azimuth Development Group hosted a ribbon-cutting ceremony to celebrate the opening of Homeward Central Harlem, a 50-unit supportive housing community for formerly homeless young adults in New York City. The new development comes at a time when the city had the largest number of unaccompanied youths experiencing homelessness of all major cities with 3,673, followed by Los Angeles with 2,871, according to HUD’s latest counts.
It’s also notable that Homeward Central Harlem is an LGBTQIA-affirming environment. Although LGBTQIA individuals are estimated at about 7% of the total population, approximately 40% of all homeless young adults identify as LGBTQIA, according to the developers.
The new community leased up in just six weeks, estimates Jeannette Ruffins, CEO of Homeward NYC, which operates two other supportive housing residences designed to meet the needs of LGBTQIA young adults. Residents were referred by the city Department of Homeless Services, the Department of Youth and Community Development’s Runaway and Homeless Youth program, and the Administration for Children’s Services Foster Care.
Homeward Central Harlem nearly doubles Homeward NYC’s capacity to serve LGBTQIA young adults. The nine-story building features furnished studio apartments and on-site services, including counseling, case management for residents to access financial and health care benefits, life skills coaches, social workers, and more.
A key service is to connect residents with baseline benefits, if needed, to help ensure they have food and can take care of basic needs. Young people often don’t think about health care unless they become sick or injured, so Homeward NYC also works to connect residents with primary care to set up good patterns for the rest of their lives.
Residents must be between the ages of 18 and 25 at entry, but there’s no time limit for how long they stay. Residents must also have been in a shelter or street homeless or were at risk of homelessness with significant housing instability. They’ve also been high utilizers of city services. This includes young adults aging out of foster care.
“I’m not one of those people who think that everybody who moves out of homelessness needs supportive housing, but I do feel that LGBTQIA youth are particularly vulnerable,” says Ruffins, who has led Homeward NYC for more than five years. “They’ve often had periods of homelessness and fractured relationships with their families. They may not have felt like they’ve had a home in a long period of time.”
Some people aging out of foster care have also had periods of homelessness even though they were technically in the system, she adds.
At Homeward Central Harlem, there’s an almost even split of residents 18 to 21 and residents 21 to 24.
Financing partners for the $22.8 million development include federal LIHTCs that generated more than $14 million in equity. The funding partners are New York State Division of Homes and Community Renewal, the city Department of Housing Preservation and Development, the city Department of Social Services, KeyBank Community Development Lending & Investment, Hudson Housing Capital, Enterprise Community Partners, and Freddie Mac Multifamily. Rental assistance is provided through the NYC 15/15 supportive housing initiative, and residents pay only 30% of their income toward rent.
Ruffins notes that it’s becoming increasingly difficult to build a 100% supportive housing project for several reasons, including the demand and desire of many municipalities to have conventional affordable housing, the push to build larger developments to create economies of scale, and potential NIMBY battles.
While there are different opinions on creating a development that’s entirely for young adults versus a building with a mixed population, Ruffins raises another possible configuration to consider.
“Could you do a building that’s 100% for young adults but 60% supportive housing and 40% affordable?” she says. “It would provide a mix of incomes, but I don’t know that anyone has proposed this for young adults.”
While the 2023 point-in-time count found nearly 35,000 unaccompanied young adults who were homeless, HUD says the number could be larger.
Developments like Homeward Central Harlem and the others are helping to meet the needs of many youths at risk.
“Thanks to this program, I am no longer in the streets surrounded by drugs or violence,” says Coral, the resident at Rose Apartments. “I no longer have to look over my shoulder or live in constant fear. Affordable housing has also given me access to many other things like mental health services, stable housing, and food security. I love having a place that I can call my home.”
