Joint Venture Proposes Affordable Homes in Valley

In a project that could be the first of its kind in Los Angeles, a nonprofit group plans to build 30 affordable single-family houses to sell to low-income residents in conjunction with the city Housing Authority.

If approved by federal housing officials, who fund the local authority, the planned $4.3-million development in Lake View Terrace would be one of the first home-ownership projects developed by the authority in cooperation with a nonprofit organization, New Economics for Women, a Los Angeles-based Latina group. It would also be NEW’s first venture in the San Fernando Valley.

Although both partners in the venture say that no building will take place without the approval of area homeowners groups--which have succeeded in derailing previous planned public housing projects--NEW and the Housing Authority are racing to get necessary city and federal approvals as cutbacks in federal housing funds loom.

“The timing right now is critical,” said Bea Stotzer, president of NEW’s board of directors.

Stotzer, who helped found NEW 10 years ago, is seeking assurances that some funding for the organization’s share of the project--estimated at about $1.3 million--will be available from the city if the U.S. Department of Housing and Urban Development approves the project. Besides seeking funding from city grants, Stotzer said NEW also plans to apply for state, federal and private grants.

Meanwhile, city Housing Authority officials are anxiously awaiting approval from HUD as the federal department’s fiscal year winds up later this month. Word is expected sometime in early October, said Charles Cofield, development director for the authority.

The project represents a trend in public housing policy away from building subsidized rental units toward development of dwellings for sale to low-income residents, HUD officials and others said.

When the Housing Authority bought the two-acre parcel at the corner of Pierce Street and Foothill Boulevard in 1991, it planned to build low-income apartment units on the land. But homeowner groups, including the Lake View Terrace Improvement Assn. and the California Glen Homeowners Assn., protested and the authority dropped its plans.

Last year, NEW, which owns and operates several hundred subsidized rental housing units in Los Angeles--mostly occupied by single mothers and their children--looked into purchasing a parcel next to the authority’s property, located on the northwest corner of Pierce Street and Foothill Boulevard.

City Councilman Richard Alarcon, whose district includes Lake View Terrace, helped arrange a meeting between NEW and the authority, facilitating a joint agreement, Stotzer said. Homeowners groups weighed in, too, providing NEW with a list of guidelines regarding security, landscaping and other concerns. Stotzer said more meetings will be held to apprise homeowners of the development’s status.

But this marriage of public and private interests could break up if Congress further reduces HUD funding, officials said.

HUD’s budget--already cut by more than $5 billion this year--may be reduced again next year, making it difficult to develop innovative, cooperative housing projects like the one planned in Lake View Terrace, according to HUD officials.

“Even people at HUD are unsure how the funding is going to shake out,” said Doug Campbell, a legislative assistant for U.S. Rep. Howard L. Berman (D-Panorama City) in Washington. “We’ve got every member [of Congress] fighting for projects in their own districts.”

But Campbell noted that housing policy seems to be moving toward home ownership projects such as the one proposed in Lake View Terrace and away from high-rise apartments.

At its Lake View Terrace development, NEW plans to offer social service programs such as day care and continuing education classes to residents. The homes, targeted for sale at $50,000 to $90,000 depending on size, would be marketed to families who currently live in subsidized housing. Down payments would be small, ranging from as low as 1% to 5%, Cofield said.

“We’re looking for low-income residents of public housing in good stead, with good social history, who seem to be motivated, want to own their own homes and have some means to put a down payment down,” Cofield said. “Not an amount that would break them, but not some windfall gift, either.”

Cofield added that the program, if successful, could help people make the transition from receiving public assistance to becoming “taxpayers and mortgagers.”

He added: “HUD is now pushing joint ventures, partnership, teaming. They want to get out of the rental housing game. They don’t want to continue to have it be a burden on taxpayers. This project, if it’s done right, could save taxpayers millions of dollars.”