Slowly but surely, higher-income urban pioneers are joining the traditional low-income tenants and homeowners in L.A.'s inner city.
The most visible of the new inner-city projects catering to these tenants are coming developments by Tom Gilmore and Geoff Palmer in the downtown area.
"Both of these projects are spearheading where the market is going, which is not income-restricted," said Donald Spivack, deputy administrator of the Community Redevelopment Agency. "There is a particularly large segment of people in the middle and upper-middle class who would be interested in a downtown living environment."
G.H. Palmer & Associates is developing the largest apartment project in Los Angeles near Seventh Street and the Harbor (110) Freeway downtown. The 658-unit Medici complex, set to open in June, is a low-rise, suburban-style complex with swimming pools, a park and some retail shops.
At the other end of downtown, and perhaps the better-known project, is the Gilmore Associates development at Spring and Fourth streets, a redevelopment of an historic bank building that will result in a series of loft-style apartments targeting a young, artistic crowd.
Spivack divides incoming inner-city residents into three sectors. The most attractive segment for developers are the arty pioneers and trendsetters who want to live in neighborhoods where they feel they can walk around and have conveniences and entertainment at the tips of their fingers.
The second segment is people who want to live close to a Metro station. "You'll be seeing this more in the Mid-Wilshire and Hollywood area. There's going to be a lot of housing being developed in Hollywood due to the extension of Metro," Spivack said.
The third and biggest segment is low-income residents. Housing for this segment of the population is generally, "done with some level of public financing, and virtually all of it is done by nonprofit developers, and most have roots in religious institutions," Spivack said.
More market-rate housing is expected to be developed in the inner city near the new subway lines in areas like Hollywood, Mid-Wilshire and downtown, and a few projects are already underway.
For example, Academy Village in North Hollywood opened in anticipation of the subway line arriving later in the spring. Two-hundred of the 250 apartments in the project are market-rate and 50 are for affordable housing tenants. In addition, Regent Properties is developing a 300-unit project just south of Hollywood and Vine consisting of 80 percent market-value and 20 percent affordable housing.
Still, many developers are scared off by market-rate housing in inner-city areas.
"I'd love to do market rate. But I don't have confidence enough that I can get the rent to sustain them," said Tom Saffran of Tom Saffran & Associates, a for-profit housing developer that has built a number of affordable housing projects in inner-city areas. "I can't build a one-bedroom apartment for less than $100,000 a unit, and that's in Hollywood where the land is cheaper."
Meanwhile, more developers are recognizing the need to expand the size of their units to accommodate the extended families that tend to live in affordable housing. Rather than ignore the overcrowding problem that comes from extended families living together, which is often the case with low-income tenants, developers and lenders are working out ways to deal with it.
"We're seeing changes in lending. Fannie Mae has changed its underwriting requirements, which reflects extended families," said Neal Richmond, director of UCLA's Advanced Policy Institute, who is doing a study on inner-city housing. Richmond says many lenders are now looking at the income of an entire household, rather than the two primary homeowners, when qualifying families for home loans.
Esperanza Community Housing in South Los Angeles is currently developing four affordable housing buildings. These former slum apartments are being rehabbed with larger units to deal with overcrowding issues. One building originally had 104 units, but now has 44.
Similarly, Hollywood Community Housing is developing a number of buildings with expanded apartments for extended families. The agency's 38-unit building on Normandie Avenue just south of Hollywood Boulevard will include 20 large family units with three- and four-bedroom apartments.
UCLA's Richmond stresses that the need for affordable housing isn't going anywhere, no matter how many market-rate and luxury apartments come on line in inner-city neighborhoods.
"The wave of the future is always more poor people," he said. "There's always going to be incredible growth there."
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