More than two years ago, North Hills-based nonprofit Penny Lane Centers launched a development division. Now that supporting organization is gearing up to break ground on its first apartment projects. The developments — one in Pacoima and one in San Fernando—will offer permanent supportive housing chock-full of social services for young adults fresh out of foster care and often lack the skills to find a job or live on their own. “What happens to these kids when they are 18 years old and the system is no longer paying for them? Basically they run this risk of becoming homeless because they don’t have families to go back to,” Penny Lane CFO Bernie LaFianza said. A 20-unit apartment project in San Fernando is expected to break ground in the summer. And dirt should turn at another 27-unit apartment project in Pacoima in late 2012, although funding is still being locked down and the ground breaking could be delayed. Units in both projects will also be offered to low-income individuals. Reduced prices for all tenants will be given through Section 8 vouchers. “This is huge” for us,” said Jonathon Dilworth, development manager for Abbey Road, Penny Lane’s development organization. Sticking with the Beatle’s theme, Penny Lane, a children’s social service provider, launched Abbey Road, the organization’s development arm, in 2009. The new supporting organization was created to focus on larger-scale developments and limit the liability to Penny Lane. Penny Lane has built smaller supportive housing units in the past, but nothing of this scale, LaFianza said. Although many nonprofits in the region are struggling with an increasing demand for services and declining funding, Penny Lane is expanding. The North Hills nonprofit has grown from 422 employees in 2010 to 542 last year. Penny Lane has had that opportunity to grow, Dilworth said, in large part because it got its financial house in order just prior to the recession. When LaFianza became CFO in late 2007, he instituted departmental budgets, putting services such as insurance policies out to bid, instituting a requirement that programs had to at least break even, and requiring that staff seek approval for any expenditure over $5,000. He also sought to maximize revenue by spending the full amount that the organization raised through government grants, which increases the chances for future funding. Often if a nonprofit comes in under budget, it is viewed as evidence that it doesn’t need as much money. According to documents filed with the IRS, Penny Lane spent nearly $2 million more than it took in during 2007. In the first six months of 2008, the nonprofit had an $809,000 surplus. And from July 2008 to June 2009, Penny Lane saw a $736,000 surplus, according to the filings. Penny Lane has often faced opposition to its projects, including the Pacoima development, from neighbors who argue the projects will increase traffic and house criminals, Dilworth said. When people hear about low-income housing they tend to leap to conclusions, Dilworth said, and think that all such housing is similar to high-rise projects built in the 1970s that became breeding grounds for criminal activity. “The biggest thing they didn’t have is a supportive service agency that was in charge (to make sure) the tenants were on track,” he said. The projects, which are joint developments with Los Angeles Housing Partnership, come with a plethora of services provided by Penny Lane. The Pacoima project, dubbed Moonlight Villas, and the San Fernando project, named Mid-Celis Apartments, will include mental health services, child care assistance, job skills training, help with money management and more. Although the projects are geared toward helping disadvantaged youths, there is an economic component to the buildings. It’s more expensive to pay for the social costs of homelessness, which often includes incarceration, than to provide housing and services so at-risk individuals can “become functioning, contributing members of society,” LaFianza said.
Apartments to Benefit Young Adults in Foster Care
