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Saturday, Apr 20, 2024

Nonprofit Homemaker

So how exactly does Many Mansions — a nonprofit organization dedicated to helping low-income residents rebound from or avoid poverty by providing quality housing at below-market rents — find “mansions” in this real estate market? Simply put, the Thousand Oaks-based nonprofit could not fulfill its core mission without one key element: money. Many Mansions creates about three to five new housing projects a year, with each averaging about $20 million, drawn from sources that include conventional bank loans, federal and state grants, and private donors. The organization has strategic geographic expansion plans, with many more mansions on the horizon. The nonprofit is in the early phases of a 26-unit Sun Valley edifice with ongoing talks for two more in the Los Angeles market. “We just started our expansion into Los Angeles County,” said Vice President of Housing Alexander Russell. “We’re definitely actively looking for sites in L.A.” Currently, Many Mansions’ many mansions house between 1,200 to 1,500 residents, with the average household just over two people per residence. “We own and manage 500 units plus we manage an additional 205 units for the Area Housing Authority of the County of Ventura, for a total of 705 units,” said Russell. Partnering on funding Across from Hansen Dam, at the Sylmar-Lake View Terrace border, about 49 units of affordable housing are slated to materialize exclusively for formerly homeless veterans. With an estimated price tag of $20 million, this complex — which will have on-site services, a community garden and picnic areas — will be built on a parcel of land owned by the city of Los Angeles. Many Mansions, in a joint venture with L.A. Family Housing, is currently working on securing funding for this development, with a hoped-for early 2019 construction start. The organization has a half-dozen other joint ventures currently in play, with the Housing Authority of the County of Ventura, Los Angeles County Family Services and other partners. The 40-unit, 9.6-acre Ormond Beach Villas in Oxnard will become the first permanent housing for veterans in Ventura County. In September, Walnut Street Apartments — in tandem with the Area Housing Authority of the County of Ventura — will see 24 more units of housing open in Moorpark, opposite city hall; and the L.A. Family Housing and Area Housing Authority of the County of Ventura collaboration Mountain View in Fillmore promises 81 units replete with energy efficient windows and LED lighting. “We are probably on pace to complete two to three developments per year but we are building our pipeline,” Russell told the Business Journal. “With regards to financing, the first thing we do is borrow as much conventional bank financing as the rental revenue will support. We then fill the gap through the federal or state Low Income Housing Tax Credit program and several other federal, state and local loans – usually with long terms of 55 years with favorable interest rates that are repaid from net cash flow. Usually niche grants, private donors and partnerships help pay for the on-site services that we provide to help break the cycle of poverty and improve our residents’ lives.” Many tenants come to learn of Many Mansions via third-party referrals through social service agencies. But the wait list is long. “We don’t even do active marketing (and) we have over 2,000 families on our waiting list,” Russell said. To qualify for housing, much of which is federally funded, applicants go through extensive screening processes, criminal history, rental history and financial checks and any negative deviations from a clean record might lead to residents losing their tenancy. “We serve a variety of populations – homeless, veterans, low-income. We have our own waiting list that anyone can get on,” Russell explained. The organization strives to not operate as a handout. Every tenant pays rent, Russell said, and working is part of the criteria to obtain housing. As for the monthly payment, “we size it so they can afford the rent,” Russell said, estimating the amount at 30 percent of monthly income. The nonprofit is assistance-driven, providing a structure to help the homeless integration back in society. Each complex has services such as after-school tutoring, free summer camp and other educational components. “All of our properties have programming,” Russell said. “We don’t want to just provide housing and say good luck. We want to break the cycle of poverty.” Beyond Conejo Until a decade ago, the nonprofit would rehabilitate bad assets through renovations. Esseff Village in Thousand Oaks, for example, was a converted motel and is the organization’s only mixed-use property, with office space that used to host an East Ventura County jobs site and a police substation for bicycle cops. Completed in 2012, Terry’s Place in Oxnard is a duplex acquired during a soft market. “We can make a small asset work,” Russell said. “We can make larger assets work too. We have been focusing in general on larger developments, especially 50-plus units. We’re not going to acquire 200 to 300 units.” Many Mansions is open to an adaptive reuse – converting a school or factory building into housing — but has yet to attempt one. Completed in 2012-13, Peppertree Apartments was the last time the entity acquired a site to rehab. Since then, Many Mansions has eschewed acquisitions in favor of teaming up with builders and develop low-income communities from scratch thanks to changes in funding and partnerships. Family properties have playgrounds and barbecue picnic sites while newer complexes are green properties with solar panels that provide utility savings. The planned housing also has community gardens, basketball courts, swimming pools, car ports and murals. All properties have laundry rooms and free wi-fi. “We’re constantly looking at new innovations,” Russell said. For example, Many Mansions enlisted General Motors’ Maven to create car-sharing spots at Villa Garcia and Esseff Village, both in Thousand Oaks. Electric car charging stations will also be onsite. “(Oxnard’s Ormond Beach Villas) will be our first with garages,” said Russell, who wants to provide more car space to tenants. “The Fillmore and Moorpark projects will have garages. Tandem garages have been cost effective to balance the lower-density needs. It’s kind of a balance of efficiency and amenities.” As for expanding beyond the region, Russell said Many Mansions will eventually look into what it can establish in Orange and Santa Barbara counties “but not at this point. We’re going to stay as a regional nonprofit,” he maintained. Ventura County beginnings Originally a rental assistance program, Many Mansions has evolved over the years into its present role as a builder of low-income units. Many Mansions’ biggest impact has happened in Thousand Oaks, where it has been headquartered since its 1979 founding. Early on, Many Mansions collaborated with the city of Thousand Oaks and Conejo Future Foundation to purchase land, utilizing federal tax credits. The strategy resulted in the 29-unit Schillo Gardens. Many Mansions partnered again with Thousand Oaks to purchase Shadow Hills with 101 units and rent levels set at 50 to 60 percent of the median income. The organization witnessed a flurry of activity by the late 1990s. It opened more complexes all over Thousand Oaks: the 11-unit Stoll House (1998); the 80-unit Villa Garcia (2000); 51-apartment Esseff Village (2001), 27-room Richmond Terrace (2003); 25-unit Hacienda de Feliz (2005); 72-unit Bella Vista (2005), and 60-unit Hillcrest Villas (2013). Many Mansions opened its first housing complex outside of Thousand Oaks in 2003 with Simi Valley’s 14-unit Casa de Paz. The organization has greatly expanded since 2002, when attorney Rick Schroeder became the organization’s president. But the nonprofit has suffered the same ups and downs as other real estate developers. “When I started, there were zero units in the pipeline,” Russell said. “The Great Recession happened and it set everyone back.” Since then, the organization has adapted to the post-recession market. “Over the last two or three years, we re-capitalized a few of our assets, which allowed us to have a predevelopment fund to aggressively go after deals and have more working capital for new projects,” said Russell, who earned his MBA at California Lutheran University. Russell believes now is the most exciting period for Many Mansions’ mission, with one success feeding the next one. “It’s a positive feedback loop,” he continued. “We have a good team (of core senior and junior level executives) and over 80 employees, mostly on the property management side.”

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.

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