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Tuesday, Aug 9, 2022

Landlords, Nonprofits Team for Programs to House the Homeless

While the homeless situation in Los Angeles presents ongoing challenges, efforts to ease the problem have also created some unique

Landlords, nonprofits and government agencies have recently found themselves acting as partners to address the issue.

The goal is to find mutually agreeable solutions to help reduce the homeless population, which last year topped 66,000 in Los Angeles County, according to the Los Angeles Homeless Services Authority.

Programs have been created in which a property owner receives some income for participating, and support groups are able to provide transitional housing.

“Moving people into permanent housing is very slow because of the shortage of available units and the willingness of landlords to accept tenants who are experiencing homelessness,” Heidi Marston, executive director at LAHSA, said during a Zoom presentation in February.

One example is LeaseUp, a program by LASHA and PATH.

The program matches landlords with underserved renters. Landlords get market rents for their properties, plus other incentives, while the organizations get people who are having difficulty finding housing into units instead of having them end up on the streets.

From November to February, more than 1,200 units were added to the program by 600 landlords.

Jennifer Hark Dietz, PATH executive director, called the program a “triple win program for landlords, tenants and communities across Los Angeles. (Landlords) recognize the program’s value to their tenants and to their bottom line.”

Other programs aimed at getting individuals off the streets include Project Room Key, where the county uses hotel and motel rooms as temporary housing.

Organizations like Brilliant Corners, Covenant House and Step Up are working with landlords to find permanent housing placements, too. In most cases, the tenants are paying the rent, but these organizations help secure government subsidies and other forms of rental assistance.

Programs like LeaseUp offer landlords market-rate rents, which experts say is enticing to the property owners.

BJ Turner, founder of Beverly Hills-based Dunleer, works with groups including PATH and Covenant House to fill vacancies in his buildings with people needing transitional housing. He has filled 40 units this way.

He called the programs a “win-win” because he was able to get market rents for his units while helping those in need.

“Through Covid, a number of people that lived in apartments have moved out to go and live with family or with a roommate to save on costs. As a result, there’s been a lot of turnover, and that’s led to increased vacancy,” Turner said.

He said individuals, not the organizations, lease the unit, but the renters receive support from groups like PATH and oftentimes a rent guarantee. Most people are assigned a case worker as well to help them in the future.

Dan Tenenbaum, founder of Brentwood-based Pacific Crest Real Estate and board member of the California Apartment Association, was part of the landlord advisory group for LeaseUp. Since the program was launched, he has housed 25 formerly homeless people at his properties.

“When we had a pretty tight vacancy market, we did it because it was the right thing to do,” Tenenbaum said. “Now with Covid … apartment owners are experiencing higher vacancies, and it’s become a smart business decision.”

Quick actions
One of the benefits, he added, is how quickly LeaseUp gets people in the units.

“Part of what they do is they provide a pretty quick turnaround in terms of inspection to payment,” Tenenbaum said. “Basically, as soon as a unit is rent ready, they can have a representative check out the unit quite quickly … then they sign a contract, and the apartment owner can receive rent effective the day of the inspection. That’s often better than renting it off to the market where you may have more down time.”

The organization pays a holding deposit while it finds someone for the unit.

Tenenbaum added that he gets a security deposit for two times the monthly rent of the unit and damage protection through the program.

Ariel Yarrish is the homeless and housing initiatives manager of South L.A.-based SoLa Impact, a real estate fund that develops and manages affordable housing. The group has 1,500 units and another 1,300 coming by 2024.

SoLa has worked with companies and nonprofits alike to make housing more affordable. It has partnerships with more than 40 organizations “where the organization takes care of a lease on behalf of the individual or family,” Hyatt said.

The groups it works with include PATH’s LeaseUp program.

But there are still some difficulties associated with these programs. Some landlords said other tenants are against having formerly homeless or at-risk individuals in their buildings.

And these individuals still need to be given services by a case worker. It can be more difficult to provide those services for things like career counseling because, according to experts, more complete services can be given at entire buildings dedicated to supportive housing than traditional multifamily properties.

Tenenbaum said the units his company rents to formerly homeless or at-risk individuals to are “spread out in the properties and within the building” because of the perception of a “risk of having problems with other tenants.”

But he added that at some of the older, rent-controlled properties, there’s already a mix of people and people paying a variety of rents, which makes the new tenants less distinctive.

Services still needed
Dunleer’s Turner said that some of his product, like studios and smaller one-bedroom units without parking, lend themselves well to programs like LeaseUp.

Tom Bagamane, founder of Brentwood-based Giving Spirit, said people who have been homeless for a while have become “deprogrammed,” and work needs to be done to assimilate individuals into their new homes.

“They’ve found that their comfort and their safety and their security with the tent … translating that back into an apartment with showers and beds and furniture sometimes is a very, very difficult transition. Often landlords and folks who are well intentioned in terms of getting people housed have been surprised to find our formerly homeless friends are still sleeping on the floors after moving them in,” Bagamane said.

He added that people need assistance on a permanent basis and that “if they are going into a building without supportive services, I would caution the landlord that they need more.”

He added, though, that some of the nonprofits and programs like LeaseUp do offer services.

Many programs are targeting people at risk of becoming homeless and who have been unable to find housing but are not actually on the streets.

But experts and landlords agree that programs allowing homeless and at-risk individuals to rent vacant units for market rents are likely here to stay.

“A program like this is going to have sustainability,” Turner said.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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