from SPPD Staff Reports
The new Puerta del Sol development in the Lincoln Heights neighborhood of east Los Angeles is more than just another mixed-use development complete with street level retail environments and proximity to mass transit. It’s a mixed-income development that is addressing the L.A. housing crunch, and at the same time, revitalizing a forgotten manufacturing and industrial neighborhood.
So say SPPD alumni Sid Paul and Alex Saunders, members of the Master of Real Estate Development Class of 2003, who are working together on the project.
“Avenue 26 was a closed down site,” explains Paul. “It was previously occupied by a Bassett Furniture manufacturing facility and prior to that, a brick manufacturer.”
Now the land features 165 new housing units that cater to a specific market niche. Aptly named workforce housing, the Avenue 26 neighborhood is primarily designed for the large number of middle income professionals — those who are highly educated with significant earning potential but few home purchase options in the region.
Paul, vice president of for-sale housing at AMCAL Homes, oversees deal sourcing, acquisition, development financing, and the sell-out of all for-sale housing products for the company.
Saunders is senior vice president of Phoenix Realty Group, a national real estate firm providing capital and expertise to urban and infill developers focused on middle-market for-sale and rental housing, low-income tax-credit housing, and community revitalizing commercial projects. Paul and Saunders come together when AMCAL looks to finance their developments — not only because they were classmates at SPPD, but also because the two companies have similar missions in mind.
“AMCAL is committed to providing affordable housing,” says Paul, who heads the company’s workforce housing division. “We partner with Phoenix to create affordable housing options for middle income buyers with $50,000 to $120,000 in combined household income.”
Through their mutual mission, AMCAL and Phoenix are addressing the housing needs of immigrants in the Los Angeles area — but not necessarily recent immigrant groups such as Latinos.
“The new immigrant population in L.A. is actually down,” says Saunders. “Right now, they are going to San Bernardino or Riverside Counties, or to the Midwest, where more affordable housing exists.” However, over time these same immigrant groups will look to move back to urban areas like Lincoln Heights once they’ve established their careers and buying power.
According to Saunders, second- and third-generation immigrants are the individuals purchasing homes in their developments.
“Roughly 30 to 40 percent of buyer profile is Asian, and primarily Korean,” explains Paul. “We are also seeing retiring Baby Boomers wishing to downsize.”
The latest result of the AMCAL-Phoenix partnership is the Avenue 26 master-planned Puerta del Sol development, which includes 165 condominiums — with offerings ranging from studio-sized apartments to four-bedroom, two-bath units, priced from the high $200,000s to the high $400,000s.
With the adjacent developments totaling over 300 tax credit units that offer low income rentals and government purchase assistance subsidies for home buyers, the Avenue 26 community provides a variety of mixed-income housing options for those would who otherwise have to look to the outlying Riverside and San Bernardino Counties to buy a home.
Previously, Lincoln Heights was a post-war, veteran community — the workforce community of the day, according to Saunders. “Following the mass commercialization of the car and ensuing sprawl of Los Angeles, builders sought open land elsewhere. Lincoln Heights was forgotten,” he says.
As a result, the existing housing stock is dated and down in Lincoln Heights. “Numerous families were living in single units,” Paul notes.
The new development offers a host of options for buyers and renters in a neighborhood that is experiencing a renaissance due to the close proximity to downtown. By design, the community’s plan also includes retail space to promote economic growth in the area — as well as access to the city via the Lincoln/Cypress subway stop on the Metrolink Gold Line.
Beyond the market demand for more affordable housing options is the societal need to address shifting demographic trends in the area.
Explains Paul: “People are looking for housing closer to L.A. for quality of life. They want to forgo the time they spend commuting back into the city centers. The suburban alternatives also are becoming higher priced.”
For the home buyers, it is all about time and money, Saunders explains. What’s more, Angelenos delay starting families as compared to the past, creating a market of young professionals who desire housing options that are closer to the city’s economic and cultural centers.
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