KeyBank – which is based in Cleveland but has been expanding into the California market – recently provided more than $50 million in construction and low-income housing tax credit financing for two affordable housing projects in Los Angeles.

The first project, at 121 N. Mathews St. in Boyle Heights, will be four stories featuring six one-bedroom apartments, 33 two-bedroom apartments and a manager’s unit. Four units will be reserved for people earning 30% of the area median income (AMI). In 2024, for a two-person household that equated to $33,300, according to the L.A. County Department of Regional Planning.

Another four will go to those with 50% AMI ($55,450 for two people); 23 units will be at 60% AMI ($66,540 for two people); and then eight units will go to 80% AMI ($88,800 for two people).

The next project, 6018 Brynhurst Ave. in Hyde Park, will be a four-story 50 unit building with seven one bedrooms, 42 two bedrooms and a manager’s unit. Similar to the first project, the majority of units – in this case, 29 – will go to households earing 60% AMI. Five units will be reserved for 30% AMI, another five will be for 50% AMI and 10 will be at 80% AMI.

Matthew Haas, a senior relationship manager for KeyBank’s Community Development Lending and Investment division, said these projects caught his eye for several reasons including the sites’ proximities to L.A. Metro rail stations and an impressive cost per unit. Developed by Irvine-based real estate firm HVN Development, the projects see an average cost per unit of about $333,000. Meanwhile, the cost per unit to build affordable housing in L.A. “regularly tops $1 million,” according to real estate insights platform CoStar News.

‘Where money and margin come together’

Haas said he was excited to partner with HVN Development, noting that the firm’s Chief Executive Tommy Beadel is “very committed in trying to relieve the crisis that’s happening in the county of LA.”

Additionally, Haas pointed out the need for more dense housing in the projects’ specific neighborhoods.

“This was an opportunity to take some lots that had some single family and duplexes and triplexes and make them larger, more dense areas,” Haas said. “So that was another benefit of why we wanted to do these.”

When KeyBank and HVN partnered up, Haas said the projects needed a full suite of financing. For KeyBank’s role, this consisted of $23.3 million in 24-month construction loans, $10.7 million in low-income housing tax credit financing and $16.2 million in Freddie Mac TEL permanent financing. Some additional project financing came from HVN, as well as the California Housing Finance Agency.

In addition to Los Angeles’s longstanding housing crisis, Haas said especially now following the wildfires and the city’s $1 billion budget deficit, projects like these are critical.

In Los Angeles County, KeyBank Community Development Lending and Investing has provided over $260 million in financing accounting for the creation of 622 affordable housing units.