BOYLE HEIGHTS, Calif.--(BUSINESS WIRE)--Nov 15, 2024--
The East LA Community Corporation (ELACC) is proud to announce a significant milestone in its mission to enhance housing sustainability and improve public health in the Boyle Heights community of Los Angeles. As part of ELACC’s ongoing commitment to improving living conditions, ELACC is transitioning to an all-electric energy system across its housing portfolio. This shift not only aims to reduce its carbon footprint, but also addresses critical public health issues in Boyle Heights.
“At ELACC, we believe that affordable housing must also be sustainable housing. By integrating sustainability into the core of our development strategy, we are not just preserving homes for low-income families—we are creating healthier, more equitable communities,” says Monica Mejia, President and CEO of ELACC.
As the economy continues to evolve, low-income families are often displaced and lose out on the benefits of development in their neighborhoods. ELACC tackles the negative effects of gentrification – such as displacement and development without community input - through comprehensive programs and services built on three key strategies: community building, asset development, and financial empowerment.
To address these challenges, ELACC is implementing a comprehensive decarbonization strategy across its portfolio of 24 properties encompassing 482 housing units and 2,500 tenants. The first two projects undergoing this transformation are Lorena Terrace Apartments, built in 2003, and Vallejo Apartments, built in 1920, which will positively impact 300 tenants. The two properties will receive roughly $2.5 million initially for project improvements, and the entire portfolio will receive $500,000 for solar improvements.
Key upgrades include at the first two properties:
These efforts are part of the Retrofit.LA cohort, an LADWP-funded initiative designed to develop strategies for achieving 100% clean energy for all Angelenos by 2035. Sustento Group serves as overall program manager for Retrofit.LA, guiding and supporting ELACC and other cohort members through the entire process of portfolio analysis, pilot project selection, scoping, and financing. As part of this cohort, ELACC assembled the $3,000,000 parent-level revolving credit facility to begin executing improvements.
This innovative structure solves several major issues by enabling investment of new dollars into mid-cycle assets without disrupting the existing capital stack; the newer building, with stronger financials, will cross subsidize the older building that would not have been financeable otherwise, the owner can recycle capital as incentives are received, and redeploy capital into new projects, eventually working through the entire portfolio, which will work to significantly reduce overall financing costs.
This approach shows how to tap into the $27 billion available from the EPA’s Greenhouse Gas Reduction Fund ( GGRF ), and expand funding significantly by catalyzing private capital, in order to make a real impact in solving the problem.
“An equitable energy transition requires intentionally designed strategies – and intentional actions,” says David Hodgins, CEO of Sustento Group. “Together, through Retrofit.LA, we have developed an integrated project development and financing model that unlocks new possibilities for nonprofits to reduce carbon emissions, while enhancing financial stability and advancing equity. We hope this can serve as a precedent for the industry as we collectively work to operationalize the US EPA’s Greenhouse Gas Reduction Fund.”
In partnership with the Housing Partnership Network (HPN) and Inclusive Prosperity Capital (IPC), a leading nonprofit decarbonization lender, Sustento and IPC linked the Retrofit.LA cohort with a group of Community Development Financial Institutions (CDFI’s) from HPN’s Housing Sustainability Collaborative. This collaboration resulted in a new green financing venture, SURE – Sustainable Underwriting for Resilience and Efficiency.
This multi-lender learn-by-doing process resulted in the development of a novel revolving credit facility, secured by incentives, allowing ELACC to fund decarbonization retrofits across its portfolio without disrupting existing financing agreements. Two national nonprofit CDFI’s, HPN’s Housing Partnership Fund leading the transaction and Raza Development Fund (RDF) as a participating lender, helped create this innovative financing structure.
“HPN and our CDFI partners are pleased to support ELACC and to bring a creative new green lending product for the affordable housing sector,” says Robin Hughes, Housing Partnership Network’s CEO and former CEO for a Los Angeles based non-profit affordable housing developer. She applauds the project, which “represents the City of Los Angeles’ commitment to simultaneously addressing the city’s housing shortage; preserving and strengthening existing affordable housing stock; and making it more environmentally sustainable and healthier for residents and the community.”
“Health equity, safe housing and climate resilience go hand in hand. We commend ELACC’s proactive approach to enhancing climate resilience by addressing health access through sustainable living conditions. At Raza, we are proud to partner with HPN to provide financing for this forward-thinking initiative, empowering communities to thrive in a healthier and more sustainable future,” says Annie Donovan, RDF’s President & CEO.
“The fusion of affordability and sustainability in their financing structure will help shape the future of housing development across the country, demonstrating how nonprofits and public initiatives can work together to build greener, more resilient communities,” says James McIntyre, Chief Strategy Officer with IPC.
ELACC is leveraging incentives from four key programs as the primary source of loan repayment: LADWP’s Comprehensive Affordable Multifamily Retrofits (CAMR) Program, California’s Low Income Weatherization Program (LIWP), TECH Clean California, and the South Coast AQMD’s Multifamily Affordable Housing Electrification Program (MAHEP).
The Association for Energy Affordability (AEA) is the program implementer of CAMR, LIWP, and MAHEP, and also implements the multifamily components of TECH. Thanks to the resources provided by LADWP, CSD, and SCAQMD, AEA is able to serve as project manager, enrolling ELACC in the various programs, scoping the projects, providing technical assistance, and overseeing the installation of clean energy technologies.
“ELACC’s vision and determination to improve the health, safety, and financial well-being of their tenants by employing a portfolio level decarbonization strategy is truly inspiring. Their willingness to venture into the unchartered waters of these innovative new financing models will help pave the pathway for many other affordable housing developers in the years to come,” says Andy Brooks, Senior Director at AEA. “We’re honored to be part of a project that is set to become a national model.”
The projects also received notable support from The Ahmanson Foundation and the Wells Fargo Foundation.
“Wells Fargo is proud to support ELACC’s initiative as a part of our efforts toward innovative solutions that can increase access to affordable, sustainable housing for vulnerable populations and communities,” says Jeffrey Schub, Interim Co-Head of Sustainability. “A comprehensive approach is key to a successful transition toward a resilient, equitable, sustainable future.”
The upgrades will deliver multiple benefits: ELACC anticipates tenants will save approximately $12,000 annually in utility costs while enjoying improved health outcomes from eliminated indoor air pollution. These efficiency improvements will reduce energy and water consumption, enhancing drought resilience, while supporting Los Angeles' goal of 100% clean energy by 2035.
Recent assessments show that 80% of tenants in ELACC’s portfolio suffer from chronic illnesses, with air pollution in Boyle Heights being particularly severe. Studies have demonstrated the harmful impact of gas stoves on indoor air quality, contributing to higher asthma rates. A recent study in The International Journal of Environmental Research and Public Health suggests that eliminating gas stoves could prevent 20% of asthma cases in California.
ELACC is collaborating with UC Berkeley to survey tenants, assessing the health and financial impacts of moving away from carbon-emitting technologies. This survey will provide valuable insights for stakeholders and policymakers.
“LADWP is committed to 100% clean energy for 100% of Angelenos. We designed our Comprehensive Affordable Multifamily Retrofits (CAMR) incentive program to provide the flexibility and technical assistance that customers need to drive deep savings, stack incentives, and position for financing. ELACC’s project is a prime example of how LADWP wants to help affordable housing providers integrate clean energy solutions into the fabric of our city,” says David Jacot, Director of Distributed Energy Solutions with LADWP.
ELACC remains dedicated to advocating economic and social justice in Boyle Heights and East Los Angeles by fostering grassroots leadership, developing affordable housing, and enhancing economic opportunities for low- and moderate-income families.
“This new financing model allows us to upgrade our buildings and lower costs for residents, while reducing our environmental footprint and ensuring that our vulnerable communities in Boyle Heights and East LA are resilient in the face of the climate crisis,” says Adalia Rodriguez, Chief Operating Officer for ELACC. “You can let your buildings age, or you can do something.”
View source version on businesswire.com:https://www.businesswire.com/news/home/20241115344793/en/
CONTACT: For more information, please contact:Adalia Rodriguez
Chief Operating Officer
East Los Angeles Community Corporation (ELACC)
(323) 859 8051
arodriguez@elacc.org
www.elacc.orgDavid Hodgins
Founder & CEO
Sustento Group
(970) 319 6611
dmh@sustentogroup.com
www.sustentogroup.com
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: RESIDENTIAL BUILDING & REAL ESTATE BUILDING SYSTEMS COMMERCIAL BUILDING & REAL ESTATE ALTERNATIVE ENERGY CONSTRUCTION & PROPERTY STATE/LOCAL ENERGY SUSTAINABILITY FINANCE BANKING PROFESSIONAL SERVICES ENVIRONMENT PUBLIC POLICY/GOVERNMENT URBAN PLANNING UTILITIES
SOURCE: East LA Community Corporation
Copyright Business Wire 2024.
PUB: 11/15/2024 12:30 PM/DISC: 11/15/2024 12:30 PM
http://www.businesswire.com/news/home/20241115344793/en