Century Housing Corporation

Century Housing Corporation
Predecessor Century Freeway Housing Program
Formation July 26, 1995 (1995-07-26)
Type Nonprofit organization, CDFI
95-4540326
Legal status Tax exempt charity under IRC Section 501(c)(3)
Purpose Affordable housing development and finance
Headquarters Culver City, CA, USA
Coordinates 33°59′16″N 118°23′23″W / 33.987670°N 118.389844°W / 33.987670; -118.389844Coordinates: 33°59′16″N 118°23′23″W / 33.987670°N 118.389844°W / 33.987670; -118.389844
Region
State of California
President & CEO
 Ronald Griffith
Sr. Vice President & CFO
 Alan Hoffman
Sr. Vice President of Lending
 Aaron Wooler
Sr. Vice President of Housing
 Brian D'Andrea
William G. Brennan, Yvonne B. Burke, Earl G. Fields, R. Steven Lewis, Carrie Hawkins, Daniel B. Lopez, Alec G. Nedelman, Louise Oliver, Darroch "Rocky" F. Young, Kristina Olsen
Slogan More Than Shelter
Website centuryhousing.org
Formerly called
 Century Freeway Housing Program

The Century Housing Corporation, often called Century Housing or simply Century, is a Culver City, California-based private, nonprofit lender to developers throughout the state of California that aims to provide quality, affordable housing to low- and moderate-income wage earners. Originally founded as the Century Freeway Housing Program in 1979, Century Housing and its predecessor have financed more than 21,000 homes.

History

Century Freeway

Century Housing, and its predecessor, the Century Freeway Housing Program (CFHP), was initially created in response to the environmental and social impacts expected from development of the Century Freeway, one of the last urban segments of the Interstate Highway System to be developed in an existing urban area before fiscal realities ended the growth of freeway development.[1] The Century Freeway was originally included in the 1958 Master Plan of Freeways and Express ways prepared by the Metropolitan Transportation Engineering Board (MTEB), and previous plans dating from 1956, and was proposed to go from the Los Angeles International Airport east to the City of Riverside.[2] Despite being referenced with different route numbers, it remained a part of the California highway master plan, and by 1979 was included in District 7 Highway System as I-105, was planned to extend from El Segundo immediately south of Los Angeles International Airport (LAX) about 20 miles east to intersect with Interstate 5 in Norwalk, passing through the communities of Los Angeles, Hawthorne, Inglewood, Willowbrook, Lynwood, Paramount, Bellflower, Downey, and Norwalk. Ultimately, due to the opposition of Norwalk and the lack of capacity on Interstate 5, the right of way was terminated at the western edge of Norwalk, just east of the intersection with Interstate 605.[3]

Keith v. Volpe

In 1972, before the construction of Century Freeway began, members of the community brought a lawsuit against the state and federal agencies responsible for the funding and construction of the freeway.[4] The suit sought to require changes to the design of the freeway to reduce the environmental effects of the freeway on surrounding communities and regional air quality, mitigate the economic effects of the disruption to the community, extend employment and subcontracting opportunities to local residents and businesses, eliminate perceived racial and economic discrimination against displacees seeking replacement housing, and assure the availability of replacement housing for residents whose homes would be destroyed by the construction activities. The U.S. District Court issued a preliminary injunction in July 1972, prohibiting further work until federal and state officials complied with environmental and relocation assistance statutes.[5] asked the issued an injunction to stop the state and federal governments from constructing the freeway until its environmental impact—including the depletion of the housing stock in the area surrounding the proposed freeway—could be evaluated and minimized. The case, presided over by then-District Court Judge Harry Pregerson, prevented construction for several years.

In 1979, the parties to the lawsuit entered into a Consent Decree (amended in 1981),[6] and the Court lifted the preliminary injunction, permitting construction to go forward. The Consent Decree imposed a replacement requirement on the transportation agencies, under the provisions of the Uniform Relocation Act requiring public agencies to provide replacement housing as a "last resort" where it is found that there is an inadequate supply of housing to accommodate the persons being displaced by the construction.[7] The Consent Decree established three separate programs: (1) 1,025 units were to be built through rehabilitation of new construction and made available to eligible purchasers or renters (the 1025 Program Segment); (2) 1,175 units were to be built to meet the needs of corridor residents eligible for benefits under the relocation act (the 1175 Program Segment); and, (3) as many units as possible were to be built from a federal commitment of $110 million plus the state's pro rata share (the $110 Million Program Segment). Any proceeds from sale of the housing developed by the $110 Million Program Segment were to be recycled into the program for reuse in developing additional housing.

Century Freeway Housing Program

The terms of the Consent Decree required development of replacement housing. In order to carry out this mandate, the Century Freeway Housing Program (CFHP) was created as a division of the California Department of Housing and Community Development (CalHCD). CalHCD created the Century Freeway Replenishment Housing Program, Housing Plan and Environmental Assessment in 1982.

Housing Plan and Environmental Assessment for Century Freeway Housing Program pursuant to Keith v. Volpe lawsuit

[8] This plan implemented the Consent Decree's three programs within a "primary zone" of development approximating a band within six miles of the I-105 right-of-way. The CFHP was charged with creating a minimum of 3,700 homes at prices that fit the budgets of low- and medium-income families to replenish the housing stock that would be lost due to the construction of the freeway. The work of the CFHP was overseen by the Federal Highway Administration, as well as California state agencies.

Initially, the CFHP acted as a developer, acquiring land, and building single-family homes, condominiums, and rental apartments, or purchased completed units from private developers on a turnkey basis. In 1987, media reports claimed that the CFHP housing program was a failure, pointing to high costs, high vacancy rates, and opposition to the public housing development model being used for some housing.[9][10][11] The charges led to calls for investigations by Congress and the grand jury.[12] The Center for Law in the Public Interest (CLIPI), representing the plaintiffs in the Keith v. Volpe lawsuit, proposed in 1988 that the housing replacement program be completed by a to-be-formed nonprofit corporation, not CFHP. The proposed Century Community Housing Corp. would have been charged with building 2,500 new dwellings in three years, compared to the 1,300 units completed by CFHP over the prior seven years. The new entity was to be governed by a board including elected and appointed officials from affected cities, and was expected to compete for tax credits, tax exempt bond allocations, and other federal, state and local housing finance resources against other affordable housing developers to leverage the funds from the FHWA and Caltrans.[13]

While CLIPI's proposal was not accepted, CFHP did alter its approach. In 1989, after several years of direct development activity, the CFHP was restructured to become a lender to provide a more efficient development process and to maximize leveraging opportunities with public and private lending sources.

Privatization

In July 1995, after the completion of the freeway and meeting of the initial housing development goal, all parties agreed to the privatization of the CFHP as the Century Housing Corporation, the only known conversion of a California state program to a private, nonprofit corporation. The Court retained oversight of the new entity, including appointment of members to its Board of Directors. The initial Board included Carl Covitz, Norm Emerson, Carrie Hawkins, G. Allan Kingston (who had served as the Executive Director of CFHP and was acting as Administrator/Trustee during the transition, and later would be President/CEO of the new nonprofit), Stephen McDonald, Robert J. Norris, Jr. (who had served as Associate Director of CFHP, and would later become Executive Vice President of the new nonprofit), William Park, William Robertson, and Ronne Lynn Thielen.[14]

Century, now governed by its Board of Directors, was admitted as a defendant in Keith v. Volpe and became a party to the Consent Decree, with the responsibility to manage the assets of and honor the obligations of the Housing Program. Among other changes, Century Housing proposed altering some of the limitations of the Consent Decree, including expanding the geographic area in which its operations could be undertaken. Originally constrained to a zone of communities lying within six miles of the freeway right-of-way, the Consent Decree was amended to expand it to include communities within twelve miles of the freeway. Century Housing sought to expand this zone even farther away from the freeway, as well as shift its housing financing from outright grants or "soft debt" deep subsidy long-term financing which the borrowers were not required to repay for decades, to shorter term financing which developers would be expected to repay. This was opposed by plaintiffs representatives.[15]

Century Housing

Century’s role—stocking the housing market with more options for working families and individuals—continues through loan and credit enhancement products, including construction financing, bridge loans, property acquisition and predevelopment loans, subordinate bond guarantees, subordinate bonds, and credit lines.

Lending

Century provides development capital to both for-profit and not-for-profit developers seeking to build housing that will be rented at affordable prices to persons and families who have moderate-, low-, very low- and extremely low-incomes throughout California. Most of these developers utilize government subsidy program funds as long-term (>20 years) capital, as well as funding from private financial institutions. While these government housing subsidy programs are highly competitive, once the developer receives commitments from these agencies, borrowing on short-term basis, e.g., to buy the materials and hire the labor to construct the housing, is relatively easy to acquire. However, financial institutions consider any loan made before the proposed projects have been approved for these government subsidy programs to be high risk, because of the uncertainty of whether, and when, such commitments might be secured. Century provides loans in this space successfully, and has had a very low default rate (<2% since its founding).

Century funds its loans to affordable housing developers from a combination of its own capital assets, lines of credit provided by commercial banks and charitable foundations, and participation in publicly sponsored loan funds, including the City of Los Angeles New Generation Fund,[16] the Los Angeles County Housing Innovation Fund[17] and the State of California Golden State Acquisition Fund.[18] Century's financing of housing developments is typically early-stage, relatively high risk capital provided to borrowers to acquire property, perform necessary predevelopment studies and analyses, line up construction and permanent capital from public agencies and other private lenders, and acquire needed permits from public agencies. For some developers, Century also provides construction capital. The entitlement and financing process may require two or more years, and Century's loans are usually repaid from the construction or permanent financing the developer acquires from others.

Housing

Upon formation, Century assumed all of the assets and liabilities of the Century Freeway Housing Program, which included a considerable portfolio of rental apartments, as well as notes from loans made by the Freeway Program secured by single-family homes, condominiums and apartment buildings developed during construction of the Century Freeway. Over time, almost all of the owned properties were sold or transferred to other community development organizations, and most of the notes have been repaid as older developments are refinanced, often in order to renovate them to maintain the quality of the housing. However, Century has remained as owner, developer and property manager of one significant property, and has acquired interests in several other smaller properties in the greater Los Angeles metropolitan area.

Century Villages at Cabrillo

The Century Villages at Cabrillo,[19] a 27-acre site in western Long Beach originally housed families assigned to the Long Beach Naval Shipyard, which was closed by the 1991 Base Realignment and Closure Commission (BRAC). In partial satisfaction of the requirements of the McKinney–Vento Homeless Assistance Act, when the Long Beach Naval Shipyard was closed, the BRAC deeded the Cabrillo and Savannah Navy Housing sites to the City of Long Beach, with the understanding that the property would then be transferred to Century Housing for development of housing to assist the homeless, and to the California State University, Long Beach Foundation (CSULB Foundation)[20]

On the portion conveyed to the CSULB Foundation, the existing structures were demolished and replaced by a technology park, vocational center and job incubator.[21] A portion of the remaining undeveloped property is proposed for development of a "big box" retail store.

The portion of the property which passed to Century Housing has been developed in stages to provide housing for homeless persons, including emergency shelters, transitional housing, a substance abuse recovery program[22] operated by the U.S. Department of Veterans Affairs, and permanent supportive housing for households with family members who are disabled. Services are provided by some 20 health and employment readiness organizations, both public and private. The property now houses over 1,000 previously homeless men, women and children, over half of whom are armed forces veterans.

Active Century Affiliates

Century Housing has created special purpose affiliates to undertake specific activities. Some of these are single-asset entities which own properties and are structured as limited partnerships or limited liability companies to facilitate compliance with federal tax laws, particularly the requirements of the Low-Income Housing Tax Credit (LIHTC) program. Others are designed to manage relationships with financial institutions who provide capital which Century Housing lends to developers of low- and moderate-income affordable housing. In addition, there are four affiliated corporations:

Past Century Affiliates

Century Housing assumed responsibility for several Century Freeway programs not directly related to its primary mission of housing finance and development, and created other affiliates to provide services to the community. These programs were operated under Century Housing's More Than Shelter umbrella of services. Most of these programs have either been incubated to full independence, integrated with other community development organizations, or closed because other organizations provided the same services.

References

  1. ↑ Taylor, Brian D. (Winter 1995), "Public Perceptions, Fiscal Realities, and Freeway Planning: The California Case", Journal of the American Planning Association, 61 (1): 43–56, doi:10.1080/01944369508975618
  2. ↑ "California Highways: The History of Southern California Freeway Development (Part 2-1950s)". California Highways. Retrieved 2015-01-04.
  3. ↑ "California Highways: The History of Southern California Freeway Development (Part 3—1960s and beyond)". California Highways. Retrieved 2015-01-04.
  4. ↑ Note: Keith v. Volpe is the name of several separately reported cases, some of which are only tangentially related to the actual construction of the Century Freeway. Some of the cited cases are: 960 F.Supp. 1448 (C.D.Cal.1997); 965 F.Supp. 1337 (C.D.Cal.1996); 644 F.Supp. 1312 (C.D.Cal.1986); 643 F.Supp. 37 (C.D.Cal.1985); 618 F.Supp. 1132 (C.D.Cal.1985); 501 F.Supp. 403 (C.D.Cal.1980); 352 F.Supp. 1324 (C.D.Cal.1972); and appeals, Keith v. Volpe, 858 F.2d 467 (9th Cir.1988); 833 F.2d 850 (9th Cir.1987); 784 F.2d 1457 (9th Cir.1986); Keith v. California Highway Comm'n, 506 F.2d 696 (9th Cir.1974) (en banc), cert. denied, 420 U.S. 908, 95 S.Ct. 826, 42 L.Ed.2d 837 (1975)
  5. ↑ Keith v. Volpe, 352 F.Supp. 1324 (C.D.Cal. 1972). Aff'd en banc sub nom., Keith v. California Highway Commission, 506 F.2d 696 (9th Cir.1974), cert. denied, 420 U.S. 908, 95 S.Ct. 826, 42 L.Ed.2d 837 (1975)
  6. ↑ Zamora, Anthony N.R. (September 1989). "The Century Freeway Consent Decree". Southern California Law Review. Los Angeles, CA: University of Southern California. 62: 1805–1844.
  7. ↑ Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended, Sec. 206, Act No. Public Law 91-646 of January 2, 1971. Retrieved on 2015-01-04.
  8. ↑ Century Freeway Replenishment Housing Program: Housing Plan & Environmental Assessment (PDF). Sacramento, CA: California Department of Housing and Community Development. August 6, 1982. p. 172.
  9. ↑ Mitchell, John L. (May 21, 1987), "Residents Protest Housing Project : Century Freeway Relocation Complex Assailed as 'Blight'", Los Angeles Times
  10. ↑ Trombley, William; Hebert, Ray (December 27, 1987), "Litigation, Confusion : Road Paved With Good Intentions", Los Angeles Times
  11. ↑ Trombley, William; Hebert, Ray (December 28, 1987), "Bold Housing Program Develops Big Problems: Plan Plagued by Shoddy Construction, Cost Overruns, High Vacancy Rates, Opposition", Los Angeles Times
  12. ↑ O'Connell, Rich (December 31, 1987), "Hahn Calls for 2 Probes of Freeway Work", Los Angeles Times
  13. ↑ Trombley, William (July 25, 1988), "New Housing Plan Urged for Century Freeway Route", Los Angeles Times
  14. ↑ Keith v. Volpe, Order Appointing Century Housing Corp. Board of Directors (U.S. District Court, Central District of California October 13, 1995).
  15. ↑ Mitchell, John L. (March 23, 1997). "Freeway Feud: Battle: Years after suit ended over housing people displaced by I-105, dispute flares over whether remaining $100 million should subsidize residences near highway or be an endowment with broader goals.". Los Angeles Times.
  16. ↑ http://newgenerationfund.com/
  17. ↑ http://www.liifund.org/news/post/liif-partners-with-public-and-private-sector-to-launch-60-million-los-angeles-county-housing-innovation-fund/
  18. ↑ http://www.goldenstate-fund.com/
  19. ↑ http://centuryvillages.org/
  20. ↑ http://www.foundation.csulb.edu/
  21. ↑ Bechtel, Elisa; Tibbet, Casey (April 2013). Historic Resources Assessment: California State University Long Beach Foundation Project. Long Beach, CA: LSA Associates. p. 29. Retrieved 2015-01-06.
  22. ↑ http://www.longbeach.va.gov/locations/Villages_at_Cabrillo.asp
  23. ↑ "Archived copy". Archived from the original on 2014-12-20. Retrieved 2015-01-07.
  24. ↑ http://www.youthbuild.cceoinc.org/
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