Veterans’ housing project is in limbo

A bill guaranteeing that affordable apartments proposed for a San Fernando Valley veterans campus be solely for veterans passed the House of Representatives on Monday despite claims that it could delay or derail the very housing it seeks to support.

“The bottom line is it stops a housing project for disabled veterans that has been underway for four years now,” said Dora Leong Gallo, chief executive of Community of Friends, a nonprofit developer.

Community of Friends and another nonprofit group, New Directions Inc., with the support of the Department of Veterans Affairs, have been planning to convert two buildings at the VA’s Sepulveda Ambulatory Care Center into about 150 housing units for disabled, homeless vets.

The groups intended to seek low-income tax credits and federal housing funds to renovate the buildings, which were damaged in the 1994 Northridge earthquake.

A “veterans-only” requirement would run afoul of federal and state nondiscrimination laws, which means the two nonprofits would have to raise money privately for the $40-million project.

The bill’s sponsor, Rep. Brad Sherman (D-Sherman Oaks), acknowledges that the housing will be more difficult to fund if his bill passes in the Senate and is signed into law.

But he countered critics who insist that the bill would put a stop to any housing, saying that “dozens and dozens” of other nonprofit agencies have been able to build veterans’ housing without using public money.

New Directions and Community of Friends planned to get around nondiscrimination laws by marketing the units to veterans and giving them preference over non-veterans.

Developers of two similar projects -- Century Housing’s Villages at Cabrillo, a 200-veteran complex in Long Beach, and the St. Leo Residence for Veterans, 141 studio apartments run by Catholic Charities in Chicago -- were able to use federal funds and rent solely to veterans by using such legally accepted “preference” policies. The two agencies wrote letters in support of the Sepulveda project.

“Certainly, the clear intent of the sponsor, New Directions, is to achieve a veteran-only facility,” said Claude Hutchison, director of the VA’s Office of Asset Enterprise Management. “This is an important project and there’s a strong need for services of this type in the Los Angeles area.”

Los Angeles has one of the largest populations of homeless veterans, estimated at 20,000 to 24,000, out of a nationwide population estimated at 200,000. According to the VA, there are fewer than 1,000 units of long-term housing plus support services for veterans nationwide.

Sherman’s bill also called for putting the project out for competitive bid and to include in the lease guarantees to maintain adequate staffing and an alcohol-free environment. Alcohol is not permitted on the Sepulveda property.

The North Hills West Neighborhood Council initially had concerns about construction noise, traffic and pollution, and whether residents would comply with alcohol rules but came to support the project after meeting with New Directions in 2004.

Last month, however, the council voted to support Sherman’s bill because of concerns that the congressman raised about the 75-year lease the VA was offering.

“I have no doubt that New Directions would run a fine program, and they have such a heart for veterans,” said Lewis Brown, council president.

“But we won’t be here in 75 years. Some of our folks have been in business and real estate and know what a contract means. If you don’t write [specific restrictions] in the lease and someone chooses not to do it, you’re pretty stuck.”

mary.engel@latimes.com