LA buys homes under construction through Project Homekey

1630 W Florence Ave, LA (Google Maps)

The City of Los Angeles wants to use Project Homekey funds to purchase an apartment complex under construction.

The Los Angeles Housing Authority is set to pay developer Haroni Investments $ 49.5 million for the 128-unit apartment complex at 1654 Florence Avenue, according to Urbanize.

Project Homekey was conceived by the state as a successor to Project Roomkey, a pandemic-era program to rent out vacant hotels to people experiencing homelessness.

Project Roomkey is intended to buy hotels directly to convert to temporary and permanent support housing.

An acquisition of the project on Florence Avenue in south Los Angeles appears to be the first time the city is buying a building other than a hotel through Project Roomkey.

The state received $ 2.75 billion in federal funds to fund Project Homekey over the next two years. The state allocated about $ 358 million to LA County and county counties, all of which must be used by Jan. 31, 2022, according to Urbanize.

If the deal with Haroni goes through to $ 49.5 million, the purchase would turn out to be significantly cheaper on a room basis than what LA has spent on building supportive homes from scratch through Measure HHH.

The average price per unit for a HHH development is around $ 559,000, while LA’s purchase from Haroni would work out to around $ 387,000 per. unit.

Earlier this week, the LA Housing Department requested about $ 30 million in Project Homekey funds to buy three hotels with 143 units between them, all of which would become temporary support housing.

In total, LA has acquired 15 hotels with $ 120 million in Project Homekey funds and $ 60 million from other sources. They have 744 units between them.
In September, city officials expected to be able to purchase between 500 and 1,000 hotel rooms through Project Homekey over the next two years.

Government officials estimate there are 40,000 homeless in Los Angeles City and about 65,000 nationwide.

Haroni submitted plans for the development in late 2018 and used transit-oriented community rights to increase the number of units.

The unit number was later reduced from 136 to 128.

[Urbanize] – Dennis Lynch