A former industrial storage facility will be transformed into a 376-unit housing community north of downtown Los Angeles.
Thrive Living secured entitlements for the site last year and recently began construction of a contemporary six-story mixed-use apartment complex that will help meet the need for more affordable and workforce housing in the city.
Rents for all the units will be attainable for low- and moderate-income residents earning up to 80% of the area median income (AMI). Some examples of moderate-income residents are teachers, nurses, and other essential workers for whom housing costs often exceed more than half of their income, according to project supporters. The building will also welcome individuals with Housing Choice Vouchers.
Like other Thrive Living communities, the 1457 North Main Street project is privately financed without the use of low-income housing tax credits (LIHTCs) or other scarce public resources.
“Our non-subsidized financing model enables us to make a bigger impact and move faster to build more affordably priced housing without concern for ceilings imposed by limited tax credits,” said Zak Tendle, a company principal, in a statement.
JPMorgan Chase, through its Workforce Housing Solutions group (formerly Capital Solutions), is providing a $68.5 million construction loan to an entity controlled by Thrive Living, which anticipates completing the Main Street project by December 2024. Walker & Dunlop helped arrange the financing.
This is JPMorgan Chase’s first construction loan to a 100% rent- and income-restricted workforce housing multifamily community that’s not utilizing housing subsidies.
“This fully rent-restricted Main Street project fills a significant gap between affordable housing for low- income families funded with LIHTC and unrestricted market-rate housing, providing safe and stable housing with attainable rents in high-quality new construction with vibrant community amenities,” says Lionel Lynch, director of the Community Development Banking Workforce Housing Solutions group.
The Main Street development is an example of the type of projects that the team aims to support, but the group will be pursuing a variety of scalable solutions to catalyze workforce housing, Lynch tells Affordable Housing Finance.
Instead of looking to serve residents at a specific AMI threshold, he says his team’s approach is to look at local needs and create housing opportunities that offer a notable cost savings for renters.
The Workforce Housing Solutions group is looking for rents to be at a meaningful discount to market, which as a rule of thumb would be at least 15% from unrestricted market rents. It is also open to supporting developments that have a mix of rent restricted and unrestricted units, but it would like at least half of the homes to have rent restrictions, Lynch says.
Officials say the Main Street property features “a cost-effective, innovative design approach that drives down construction costs while maintaining quality.”
An affiliate of Magnum Real Estate Group, the company has a goal of building upward of 5,000 units of affordable and workforce housing each year in California.
