The City of Los Angeles has promised to pony up $10 million to help leverage $50 million from a consortium of banks and other lenders to buy land for new affordable housing projects.
The move comes as Los Angeles struggles with some of the least affordable rents - and what's said to be the largest population of unsheltered homeless - in the country.
"It’s our hope and expectation that we’re going to see the fund create more affordable housing going forward than it has in the past," said Jeff Schaffer, a vice president of the nonprofit Enterprise Community Partners, which committed $750,000 to the New Generation Fund, which it also manages.
Schaffer said affordable housing developers struggle to cobble together funding and have to go to multiple lenders.
"Oftentimes, by the time they put the money together, the land was sold to another developer," Schaffer said.
The city also has an affordable housing trust fund, but its coffers are running dry. Federal housing funding have fallen off, and money from redevelopment agencies disappeared when the organizations were dissolved by the state several years ago.
On Monday, he praised the expansion of the New Generation Fund.
"The public and private sectors must work together to preserve and expand affordable housing," Garcetti said in a written statement. "The New Generation Fund is an excellent example of how the City can leverage limited resources to pursue these goals."
The New Generation Fund was started in 2008 to help affordable housing developers compete with builders of market-rate apartments. It has already provided $69 million in capital to developers and led to the construction and preservation of 1,355 affordable apartments, Schaffer said.
Banks who have committed capital to the fund - including Citi, Wells Fargo, Metropolitan Life, JPMorgan Chase and Deutsche Bank - have agreed to offer lower interest rates to developers.