How do you lead $1.5B+ in real estate development while balancing public policy, community trust, and financial returns?
In this episode of No Vacancy, Taylor Avakian speaks with Geoff Moen, Director of Development at HACLA, the Housing Authority of the City of Los Angeles. Geoff dives into how HACLA is transforming underutilized public land into vibrant, mixed-income communities — and what it takes to partner with private developers while keeping affordability at the core.
You’ll learn:
- How HACLA structures large-scale public-private partnerships
- Strategies for financing housing with LIHTC, bonds, and gap funding
- The redevelopment of Jordan Downs, Rancho San Pedro, and more
- Balancing speed, scale, and stakeholder trust in public housing
- Why public land holds the key to solving LA’s housing crisis
A behind-the-scenes look at the most impactful public development agency in Los Angeles.
Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market.
🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian
📈 Connect with me:
Website: https://www.thegroupcre.com/
Email: taylor@thegroupcre.com
X: https://x.com/TAYVAY_
LinkedIn: https://www.linkedin.com/in/tayloravakian/
#NoVacancyPodcast #HACLA #GeoffMoen #AffordableHousing #PublicPrivatePartnership #UrbanDevelopment #LosAngelesHousing #TaylorAvakian #RealEstatePodcast #HousingCrisis #LIHTC #PublicLand
We run the section 8 program in the city of LA. That's a very big, yes, very big deal and a very hot topic right now. That generates cash flow. We use that to support our operations to pay my salary, to invest in buying properties, to invest in building property. You can have that attached to your property. Those are 20-year contracts that can be renewed. The advantage to you of course is now you've got a contract that essentially doesn't guarantee but more people are comfortable underwriting that. We don't really know and I should say we don't have the details. My understanding of what was proposed was not to eliminate it in totality in the sense that I believe the idea was to take the money potentially reduce it but block grant it to the state.
Great. Well, first of all, thank you for having me, uh Taylor. It's really nice to be here. I really enjoy the podcast. Um I guess the first thing I want to say because I think there's a lot of confusion about like what Hackla is and um it's the housing authority of the city of LA. That's what it stands for. What I think is interesting about it is that it's not a department of the city of Los Angeles. It's a separate legal entity from the city. The connection that we have to the city politically is that, you know, like a like a corporation has a board of directors. We have a board, they're called commissioners, and all of those commissioners are appointed by the mayor of Los Angeles. So, that's our connection to the city. But, you know, we have a separate budget. We have separate processes.
So, we're able to kind of do certain things independently. They often call us part of the city family. And so, we work very closely with the city. And of course, you know, it's very important to us that we're implementing the the mayor's priorities. Um, but but basically, um, you know, what we're about at Hackla is building creating affordable housing for people in LA. We focus only within the city of Los Angeles. Okay. So, we use all these different tools that we have. I'm sure we'll get into that, but that's basically our mission. Affordable housing primarily for people of lower income, very low income, etc. The other thing that I think we'll get into and I'll just touch on is we run the section 8 program in the city of LA. That's a very big yes, very big deal and a very hot topic right now.
Um, so we run the section 8 program within the city which has all the section 8 vouchers. We have about 53,000 of those vouchers. We also have an entity that manages federal, what they call PBR, section 8 contracts across Southern California. That's another 60,000 vouchers that we manage. We own uh and operate about 6,000 units of traditional public housing. And I'm I'm hopeful we'll talk about that a little bit, too. We're redeveloping some of those sites. And then, you know, finally, um the thing is that I think we'll also talk about we we own a portfolio of kind of regular conventional multif family housing. So, we own about 3,500 units directly ourselves and then we own about another 3,500 in partnerships with for-profit nonprofit partners and it's housing, you know, much of it is income restricted for lower income individuals. Some of it is market rate housing.
So, it's a mix of of things that we do. We don't um I think this was kind of surprising to folks is that we we don't have we don't get like sales tax revenue and we don't get property tax revenue, right? So, how do we operate?
Well, we we we operate the section 8 program. There's administration fees that we get from that that pays for all the staff that work on that. And we manage the ones even that are, you know, across Southern California that generates fees for us, which is great. But then we also have this real estate portfolio, right? And that generates cash flow. You know, some of it is leverage, some of it is not, but that generates cash flow. and we use that to support our operations to pay my salary to invest in buying properties to invest in building properties. So that generates uh income for us. So that's really how we kind of keep the lights on and what a lot of what we're
doing. It's really a business. I mean, it's a business at the end of the day that you guys are providing a missionbased service for the city of Los Angeles, but you have to run it as a business as such and understanding utilizing the tools that are available to a public entity like you guys. And we're we're going to dive in so much. I'm I'm curious to know though like how did you get to where you are today? How did you get to being the head of development for uh Hacka?
All right. Can I can I go off on a tangent for two or three minutes because I was I I was hoping we'd talk about this and I was trying to think about how to kind of talk about it succinctly, but you know what I I guess what I'll say
It's kind of an interesting story. I think what I'll say is kind of to start is I grew up in uh Minneapolis, Minnesota. And if you've ever been there, you're familiar with it. I grew up um in the 1990s there. I think that and by the way that's actually where the the the LA Lakers came from. I don't know if you know Minnesota they were the Minneapolis Lakers. So I've always been kind of a Lakers fan. Now I'm a Wolves fan and um they're doing great. But but anyway, what I wanted to say about that is you you probably remember this and a lot of people remember that in the 1990s a lot of central cities in the US had become depopulated due to de-industrialization, disinvestment. you saw a lot of inequality and in Minneapolis we had 30 or 40% of the population decline after World War II.
So by the time I was growing up, we saw the effects of a lot of that living in a city. And the reason I bring all this up is I think I had this kind of impulse like gosh, we should really be trying to rebuild these cities. You know, we should be investing. We have infrastructure. Cities are the engines of, you know, I mean, you didn't really have the vocabulary for it as a kid, but you kind of had this sense like this is the engine of of innovation, of economic development, of social progress, you know, all these things that we kind of feel why we like living in cities. Yeah. So that was kind of my impulse, but I didn't really know what to do with it. My parents were public school teachers, but I was very interested in the field. Um, coming out of school, my first
job, I actually ended up working in New Orleans, Louisiana through the mayor's office. I got assigned to the city planning department. So, I was doing planning, post- disaster recovery planning. Wow. And it was about trying to help the city to rebuild. Um, that was a very fun and interesting job, but I still had this impulse that I was kind of drawn to the business side of things and getting things done. When I was in college, I had been on one of the chairs of the entrepreneurship club. I kind of had that impulse, too. I decided to go back to school and I went to school uh on the East Coast for a master's program, but I kind of had the idea that I wanted to work in this affordable housing space cuz I had been really exposed to it
uh in New Orleans because a lot of the focus was we want to rebuild and build units, but we need affordable housing, too. And there was a lot of tax credits and things that came up around that. And so, I kind of went in with that idea that this is kind of the field that I want to be in. And I really focused my time there on taking all the classes I could, you know, networking, doing internships, etc. that were focused on that. And I kind of realized like, yes, this is a field that I really enjoy. Um, when it came out, the the excuse me, the job that I got, I worked for a national nonprofit affordable housing owner and developer called POA in Boston, PH. And that was a great experience. Um, you know, to to kind of make a long
story short and not make it too boring, I I was living on the east coast. I was working kind of across the country, but not on the west coast. My at the time I was married, my ex-wife's family was out here in LA. We wanted to be out here on her family. So, I my I came out here and through kind of networking um I I had um got the opportunity to work for a company here that I hope a lot of your listeners will know named Standard Companies. Yeah. I worked for Jeff Jagger working on doing what they call west coast production which is kind of running deals on the west coast affordable housing acquisition rehab tax credits section 8 all that stuff I had been doing in Boston I did it out here um but fast forward um and that was a fantastic experience which you know
I could talk more about but this thing opened up at Hacka which I did not I never thought I'm going to work for a housing authority I you know the one thing I knew about Hackla was nobody was doing projects on the scale that Hacka was because they were working on redeveloping these major public housing sites and I thought that's that's pretty cool. Um, and so I kind of just decided, well, let me kind of look into it and hear more about it. Um, and I heard from some folks I knew in the industry like, yeah, they're really good. You should talk to them. It turned out that Hackla was had kind of a very entrepreneurial mindset, wanted to do big things and also wanted someone who understood kind of the business side really well because they wanted to go grow through acquisitions and partnerships.
And that was something that I had a lot of experience in. And I saw it for me as an opportunity to grow in managing a team that was also working on groundup development projects and and to manage a a very large team which was a way for me to grow as well and also to work with some new programs you know work directly with public housing which was something that I hadn't done understand some of the federal programs and the state programs that deal with that. So that's really kind of what led me there. I had a great experience at Standard, but I just felt like this is a good opportunity for personal growth and to grow within California, and that's really what drew me to
it. Jeez, man. Well, it's funny how the public sector realizes that uh some people who've had experience in the private sector and who need to optimize every little thing to make the most out of it can actually benefit someone. You've had the experience, right? You know what's going on. And that actually helps when you have someone who's done things. um what can you explain the difference between public, private and um like nonprofit? What is the difference between those different entity structures?
Well, you know, um a lot of people would say probably, you know, sort of nonprofit is kind of a tax status, right? Um and and to some extent that's true of government. I think in the public sector, you have in all these different things, you have different kind of powers and things that you can do. you also have different responsibilities um and you have to some extent you know different tools but when we talk about um affordable housing you know I've worked in public sector nonprofit and for-profit a lot of the financing tools that we're using are the same across sectors so we're using the low-inccome housing tax credit that's one of the biggest programs the section 8 program is the most important program we have for affordable housing in US and people across sectors are using that
um And then we have certain things in the public sector that we can kind of layer on top of that. There are other things like certain tax advantages like in Los Angeles we have the ULA tax on transfers but if you sell to a housing authority or a public entity you don't have to pay that. So that helps us. Wow. The other thing that we can do as a government that in the private sector you can't do is I can issue taxexempt government bonds to finance things. Right. So you know normally you're going out and you're getting a mortgage for your property. Mhm. And that mortgage is pegged to the Treasury usually, right? Depending on the term, etc. Um, a lot of affordable housing, you're using tax exempt bonds. If you're a private entity, you can there's only so many that each state can issue.
The advantage is the rates are lower because the interest income the investors, you know, pay tax on. But if you're in the government and you don't have private equity in your deal, I can issue those bonds and there's no there's no cap on it. So I if it if it's a public purpose to have housing, which it is, just like having an airport or a sewage point or anything else, you know, we can issue bonds and that helps us get to a lower cost of financing and I don't have to compete with other developers and, you know, keep them from getting resources because I can issue that as a government without having to deal with that that cap. So that's an important tool that we have.
Well, there's that's a great question. There there's the It just really depends, right? Sometimes people talk about something called general obligation bonds. You probably heard about that. Yeah. That's basically like making a personal guarantee. That's when the government makes a general obligation means all of your assets are at risk to pay the people that you borrow money from. Yeah. We generally don't do that. Okay. Obviously, that's very risky. Yes. Um there the other thing usually what they're called is multif family mortgage revenue bonds. meaning that like a loan that you would get, they're secured by the property, the interest in the property, right? And so we do that. Um sometimes we go and get an independent credit rating. We did that with Fitch uh last December for some bonds that we issued. So we didn't guarantee payment, but Fitch looked at the deal and
said, "This is a really good deal. It's underwritten really safely. We'll give it an A rating." And that helps you to get an even lower interest rate on those bonds. Then some of the bonds are not rated at all. And you have investors in the bond market almost like private equity investors, right? Because they're taking equity level risks. They're looking at the deal very closely and then they're deciding what kind of rate are they willing to take for that risk. And so that's how so there's there's all different kinds of bonds is my point in saying
that. Does that change the timeline on like how does it work from closing a deal? Right. Because if you're going to be financing it from bonds, typically you need to know that you can sell the bonds. there's there's a desire for those bonds. So, how does that determine your length of escrow or does that affect anything when it comes to actually purchasing a building?
You know, it takes it takes a little bit of time, but the if I had to boil it down to its simplest thing, right? What's happening is the bonds are what they they call them underwriters. They're investment banks that sell the bonds, right? Yeah. They're going to write up something they call an official statement. It's basically kind of a report about the deal and the bonds and what's being offered to investors that can be done fairly quickly. You know, I did a deal um with Standard back in 2019 and you know, we probably had the deal done and sold within two or three months. Wow. You know, so you can do it very quickly. The last deal that I did at Hackla, it took longer. But the reason why is because we were also using a HUD program called Restore Rebuild, which we should talk about a little bit, okay?
Where we were able to bring in some section 8 project base to the building. But in order to do that, we had to get HUD approval. We had to go through certain steps that take a lot longer. So that took about almost 8 months. Okay? If we weren't doing that though, we could have closed much faster. The point I'm trying to make, and I hope that, you know, if there are people that want to sell us properties, they're hearing this, is that we can move quickly. I need to the other thing I want to say about that, Taylor, is that and I just kind of want to get this plug in for for potential, you know, sellers out there is the other thing that we did, you know, we talked about general obligation bonds and saying we don't want to put our general obligation credit on the line.
What we did with our general obligation essentially was put it onto a line of credit that we have with City National Bank. And the advantage there is if I have to close really quickly, I can do it all cash and I can say, you know what, I'm going to go through the HUD process and I'll go through the bond process later and I'll just close all cash right now. Got it. And on that, we're guaranteeing to make the payments. Now, we're doing it in a way we're buying a building that we that can afford to make the payments. Yeah. But that way we mitigate that risk by saying if I have to close faster, I I can do that. I want people to feel comfortable that we if we say we're going to close, we're going to close. We don't we don't back out.
a nonprofit. You're a public sector, which means you are you technically a forprofit that you want to try to bring revenue to the city from your operations while also providing housing.
Like you're trying to generate a profit, right? The one distinction I would make is we don't make a profit in the sense that we are government and we actually work through nonprofit corporations that we create. We don't make a profit in the sense that no private individual owns our properties. We don't distribute dividends, you know. So in that sense, it's not a profit, but we do have, you're right, cash flow. Yeah. We have what you might call retained earnings or surplus cash, right? But that is cash that we keep to be able to invest in the next deal and to pay our salaries, to pay for programming, resident services. So it all goes back in some sense into affordable housing. In that sense, it's very similar to a nonprofit corporation. There's a mission motivation, but the basic idea is that no private individual owns the equity
to partner with you guys. Well, um, one of the my the first things that, and I can't take credit for this, but because my my boss, um, my my current boss, Jenny Scan, who was there, had this idea, but we have a program called Innovative Partnerships, and it's kind of like an RFP. Technically, we call it a solicitation, but it was one of the first things that when I started, she was like, "You got to get this up and running." And so what we did was to create this uh essentially it's like an invitation right to for-profit uh nonprofit could be other governments to say you know well our mission is we're trying to add affordable housing right we have certain goals that we're trying to to do deeper affordable housing you know a lot of things that you would you would expect to see more units but
we don't necessarily have all of the answers some people might have an idea about ways that we could be a good partner to them we had ideas about things that we could do. Um, and you know, we have, like, for example, we have a very competent team. We have a a great team that works in asset management and development. We're very good at applying for and getting funds. We can invest money into projects. We can apply to HUD in certain cases to put project based vouchers into projects. We were really looking particularly for projects that, you know, might not be able to move forward, but for a partner like us that could come in and help to push it over the the edge for whatever reason. Um, to answer your question, it's an open and rolling solicitation. We have it on our website.
If you just Googled Hackla innovative partnerships, you would see you can literally download kind of like our uh the criteria that we have that we need to evaluate. you could put it together and you could literally send us an email with that as an attachment. And we've had many people do that. We've entered into about eight or nine of these partnerships so far. Some of it is buying property where we partner with private equity investors like a Vanif, which I don't know if you if you're familiar with them, but big big um national owner, private equity owner of affordable housing, naturally occurring affordable housing. We partnered with a local group called Ethos to do some acquisitions where we take a market rate property and then we restrict some of the units for lower income people in the long run for households that are below 80% or 60% of AMI.
And there's a there's a property tax exemption associated with that. Got it. There's certain things that you need to get that tax exemption. One of them is you have to have a nonprofit partner. So we can do that role. You have to have some kind of public money. So, we can lend money to the partnership or we can grant money and that makes it eligible. And then you have to have people who are, you know, lower income and they're living with the and there's a regulatory agreement that goes on the property that we can put in there, too. So, we've done that. We've also partnered on the development side with developers. But basically, it's all from people having an idea and proposing something to us. Because I'm public, I can't call you up and say, "Hey, Tyler,
I've got a great deal for you." That's not fair, right? Because I'm public sector. But if you propose something to me, I can respond to it and say, "Let's talk about does this work for us?
How can we, you know, how can we make it so that every everyone is, you know, able to participate and we're getting as much affordable housing as we can for the
Um, can we talk about section 8 for a second? Because that is over the last 12 months, I've dealt a lot with section 8 properties. We've we've sold a bunch and we've been a part of a lot of um sales where a a majority of the tenants are on section
Can you explain to me what is going on in SE with section 8? How are you guys involved? What's the difference between projectbased and then individual tenant-based section 8? Walk me through a little bit about that.
So, you know, section 8, um, just like, you know, starting from like the the broadest level goes back to 1937 in the New Deal, they had something called the United States Housing Act. And a section of that act is called Section 8. The idea behind section 8 was let's have a program where people who are who are lower income families can pay 30% of their income towards their rent and then the government through what is now HUD gives money to housing authorities to pay on top of that up to the le a certain level um that is you know that increment is paid by the government and that that is called a housing assistance payments contract. So, as a landlord, you'll get a section 8 contract. A lot of your, you know, you're familiar with this, a lot of your listeners, that's kind of the basic level behind it. Um,
you know, section 8 is the most important program that we have to support affordable housing, right? The thing that it brings is assurance of payment, right? Because the government always pays its portion of rent. It always has as the program has been in place. So, a lot of people rely on that and it's a very important program because it the idea behind it also was let's give renters and households choice where they want to live. So, if you're a landlord, you have to attract people into your into your building, right? The neighborhood, the amenities, etc. They have to want to live there. They have a choice. That was the idea. Um, so those are often called tenantbased vouchers, right? And we have about, like I said, something like 53 or 55,000 of them just in the city of LA that we manage. The the federal law allows us as
a housing authority to project base up to 30% of those vouchers. So we've got, you know, 50ome thousand. We can project base, you know, call it around 15,000 of them. What that means is we can take some of those vouchers and say if you've got a building and you want to have 20% of your units or 50% or 100% in some cases, right, where you're going to everyone who lives there will qualify for a section 8 voucher. You can have that attached to your property. Those are 20-year contracts. They can be renewed. The advantage to you, of course, is now you've got a contract that essentially guarantees your rent. doesn't guarantee, but more people are comfortable underwriting that. Um, and so, so that's a really important program that that has been used all across the country to help build affordable housing in particular
and preserve it because a lot of these older buildings and there are other there, you know, we manage those 53,000 like I said through Hackla. There are other there's also there's another section 8 program called PBR that has, you know, all across the country um that uh covers other units. Like I said, we manage about 60,000 of those, you know, vouchers from an administrative standpoint at Hacklet. You know, what's happening right now is um a couple of things. The right now we're operating. So, the funding comes from the federal government, right? It is it requires a federal law. It's a congressional act, which is the budget, right, that appropriates the money to pay for all the section 8 contracts say this is your rent. By the way, it's subject to federal appropriation, right? the government has always appropriated money to pay it. Um, right now we're operating under a continuing
resolution that interestingly actually added money to section 8. So I think people are worried about section 8 because a lot of the stuff they're hearing, but we actually had an increase in the budget for section 8, which is great news. Part of the reason to have that was because the rents have to go up every year to to keep pace with inflation, right? And we had a problem where they hadn't raised the rents because there was a continuing budget from the previous year. Um, Hackla was actually in shortfall, meaning that we h because they hadn't added more money to the budget. If you projected it out, we didn't look like we had enough money to pay all the contracts. And that's why we stopped issuing new contracts because we had to make sure that we preserved money. Now, more money has been appropriate.
HUD is still in the process of allocating it to the housing authorities, but you know, we're hopeful that um that you know, enough is allocated to us and the other housing authorities to to allow us to issue all the vouchers that we can issue. Now, you know, the administration has announced just recently that they want to block grant section 8 to the states. I think there's a lot of, you know, fear around that, rightly so. Um, you know, you'll never find a stronger advocate for section 8 than the housing authority, right? But what I would say um to you know your your listeners is you guys are developers, you own real estate. It's a political thing, right? So use your trade groups, use your industry association, use your clout and talk to congressional representatives and not just in California, right?
You got to get out into some of these other districts in the country and remind the legislators how important this program is. Section 8 is in every congressional district. There have been many proposals to cut it over the years. It's never happened. I should say not just to cut it, but to sort of eliminate it. That hasn't happened. And I think the prevailing wisdom in industries that's because it's such a bipartisan important program. So, you know, we're comfortable and hopeful that that, you know, kind of cooler heads will prevail here, but we'll have to see. You know, it's it's a political decision. It's up to the administration ultimately to Congress. So that's why I would say like we got to remind folks get out there and talk to your Congress people and talk to, you know, other Congress people.
So if someone So what they're proposing is is potentially getting rid of section 8. If that were to happen, what h how like there's 53,000 people or landlords or tenants who like what even happens in that situation? Do we even know?
We don't really know. And I should say what what they've you know we don't have the details but our my understanding of what was proposed was not to eliminate it in like in totality in the sense that I believe the idea was to take the money potentially reduce it but block grant it to the states so not have it run out of HUD but say all right California you can have X dollars to aortion how you want to do. I think that was the idea. I don't know you know I don't know all of the ins and outs of it so I can't really speak to that but I think that was the idea. So, I don't think we should expect that the idea was there wouldn't be any section 8 whatsoever that it would change and be managed potentially in a different way. But, you know, you're you're right.
I mean, the real risk about it is that if it did go away or if it did shrink, I mean, we are using these vouchers, right? People are living in these housing units. If they're, you know, if you had a contract and the contract says, "Hey, Jeff, you know, you got to pay me this money and I'll give you this housing unit in return for this time period." if I stop paying you, you know, that contract is void, right? So, that's that's the real fear. And I I don't mean to be glib about it. It's very serious. Ultimately, if the money isn't appropriated at at some point down the road, you've got a problem where these contracts can't be honored and then you've, you know, potentially you've got people that are going to lose their housing. Yeah. You know, that's the reality of it. That's why it's very important that
a county level and they changed on a city level. And so I'm curious to know because that was a big conversation piece where people were either underwriting a specific rent
that section 8 was going to be or they were expecting this and now it's significantly less for different zip codes. It it was kind of broken out by zip code now. Can you explain to me the scenario or situation with that?
I should I forgot that you're like you're really like well educated in the weed here. So, it's but I'm it's No, I'm glad you asked cuz I think it's it's it's created a lot of consternation and I think confusion, right? Yes. Um, but just for anyone who's interested in affordable housing and doesn't know as much about section 8, what you're referring to is what we call the voucher payment standard.
You can go to it. It's incredible. And but what I think is important to remember about the VPS is a lot of people, I'm sure you've, you know, you know them, they'll look at it and they go, "Okay, here's my zip code. The VPS for a one-bedroom is $2,500. Great. So, I'm going to underwrite. I'm going to get 10 vouchers and I'm going to get $2,500." The thing that's important to remember is that technically speaking, the rent that you get in your contract is the lesser of the voucher payment standard or the market rent for that unit. So, you're not guaranteed to get it. If the market is higher than the VPS, you get
Got it. Now, for many, many years, there was one voucher payment standard as you pointed out, right, for the county, for the whole city. Until very recently, we had you just went to the website. It was like you got a onebedroom, this is the rent wherever in the city it's located. But years ago, there was a movement to say, well, that does that make sense? because some parts of the city have higher rents, some have lower rents, and part of our goal is to make sure that these housing choice vouchers that people can choose to go into neighborhoods that the rent might cost more. So, the idea behind it was let's create what they call small area fair market rents. And that's essentially what you're seeing on our website now. A couple years ago, we started to implement the small area fair
market rents, which by the way is now, you know, what HUD uses across the country. Yeah. And the way that we did it was we kept that citywide rent for for probably half or more of the city, something like that. And then we created three tiers that were higher than that level. And so if you were in the west side or Woodland Hills, your rent under your voucher could be higher than it could have been in many other parts of the city. The intent behind it was always, hey, we're going to make the whole city be in a tier of a small area of fair market rent, essentially a neighborhood based rent. But that first year that we did it, we had one for the whole city and then three that were higher. And then the next year, we came in and said, now we're implementing the whole thing.
So some areas are actually going to be below what the citywide tier was, and some are going to be above. And so some people uh had properties in certain parts of the city where they were getting the citywide voucher payment standard this year and then they were underwriting a deal for next year and going, "Okay, great. That's going to be the rent." And then they saw, uh-oh, now based on my zip code, you know, the rent is lower. So that was really the idea behind it. And that's really what happened. To finish that out, we also we had, you know, we had uh lowered the rents fairly considerably in certain parts of the city. And it's not so much that we lowered them as that that's what the market rates for. HUD reports on that. We kind of had to go with that.
But we did then after we released that and realized that was creating a lot of problems. We went to HUD and said, could we actually adjust this? But we did raise the rents in some of the lower tiers to get them higher because obviously the most important thing is that people are getting housed and want to create a lot of um difficulty in the market around that. But that's really the idea is I think long run we should be thinking about the fact that we do need to have this small area fair market rent system that you know that's that was the idea behind this this program in the first place. So that idea I think is here to stay, but I know we we always have to try to m you know, sort of adjust it to make sure that it's working across the
city. How do you determine the amount that a unit is going to be allocated per the renovation like status? So what I mean by that is you said that that is the upper limit of what someone can get for that, but they can get below that, right? Depending on whatever that market rent is. How do you determine if some if I have a vacant unit and I want to put put a section 810 in there and my voucher limit is 25. How do I know if I'm going to get 21 22 25? How can you determine what the actual amount is going to be?
Well, I'll tell you my philosophy on it is if you've got a building and you've got 50 units or 100 units, you've always got some natural turnover, right? You renovate a unit, you put it on the market, you know what the market rent is, right? A good data point is what am I getting in this building if I don't have the section 8?
So, so you know that. So, that should be your gut check is like don't think you're going to get necessarily more from section 8. I mean, you could the market is always changing, right? But to answer your question directly, we actually I should say like we as Hackla use a third party to do rent comparability studies. So, what they're going to do is look at other properties in the same neighborhood or nearby, same, you know, similar sizing, and they try to make adjustments for amenities and different things. But that's how they try to calibrate so that it's a reasonable thing if someone challenges is to say, "Look, here are the comps. This is how we got to that number." And that's what they're really going to do. If you're in a neighborhood where you could look at 10 other buildings
that are very much like yours and they all have rents that are higher than the voucher payments they are, there's a very good chance you're going to get that that maximum VPS rent.
It's a good question. Um, you know, the county is run by a different housing authority. It's called uh LACDA. Okay. Los Angeles County Development Authority. Um, and I think really the the answer, well, there's a couple of different answers to it, but one is, you know, we're talking about different geographies. And so they're they're when they're looking at small area fair market rents, it's not in the city, but they also have areas that are getting higher rents and areas that are that are getting lower rents based on where they're located. Okay? So it's it's so that entity is like Hackla, but for the just for the county outside. By the way, I do want to tell you one other thing about this if it's okay digression, which is because I think that you know it says something about Hackla and also
about this section 8 issue for for landlords, but it goes to this this this rent issue which is over the past few years, you're familiar with this. We bought a lot of brand new buildings. We use this program called Homekeep which was a very interesting and great program. We use that to buy brand new buildings and we're able to put unhoused people in some cases coming from encampments. Some people were living in cars, all kinds of different situations, but able to get them housed very quickly. But in most of those buildings, we had a section 8 contract that
And that we used that to be able to well, we bought the buildings on a line of credit together with the state money. We took that risk, but we had underwritten what kind of permanent mortgage are we going to be able to get? And we used the voucher payment standard rents and our thought process was hey these are brand new buildings right of course we're going to get the voucher payment standards and so what I I just want to convey is like when we did it and I'm talking about the housing authority itself we own these buildings in some cases when the rent comp studies came back we didn't get the voucher payment standard rate we were 5 10% off some buildings did get it but not all of them did and so and that those were brand new units I lived in so that
you know it's just something that I think people have to think about and I would build a little bit of cushion into your underwriting and that's something we had to learn the hard way ourselves.
Exactly. What happens when last year your voucher payment system was 25 for onebedroom and now in that specific fair market value it's 22. What happens in that scenario where the current tenant has a voucher that's paying them 25, but then if someone moves out or they're they're currently in there, are you honoring that current rent and that voucher payment or is should should landlords be expecting that to to drop?
No, I think what they should be concerned about is when there's turnover. We don't lower the rents on people that are okay in the units. um you know and most of the you know you'll see that written in the contract to have language to that effect and we check that box on our project based vouchers as well. Um but it really is an issue when a new unit comes up for rent because we can't approve a rent that exceeds the voucher payment standard for a contract in that
So basically when I'm seeing that too in some buildings that I'm selling is it's a negative proforma as in they've had rents that were at the higher voucher limit and the lower voucher limit is lower and so we can't underwrite if there's vacancies for that limit. So they're actually they're buying a property that when turnover happens the cap rate is going to be lower which is typically not standard in the city of Los Angeles. Mostly you know the rents are below and and you can increase it. So it's it's very interesting.
Like you have to price that risk in in terms of cap rates which comes I want to talk about homelessness because that has been such a a politically hot topic in not only the country but California, the state of California and the city of Los Angeles. like what is your take on the current homelessness situation? Why does it feel like it keeps getting worse? The budget for homelessness keeps going up. Like what are we doing wrong or what needs to be fixed?
Mhm. Well, a couple of thoughts on that. Um, you know, cuz I What is driving homelessness, right? A lot people have different theories about that, but there have been some studies about it. Some of it is mental health. Yeah, some of it is addiction, right? A lot of it is just good old-fashioned poverty and inequality, right? People have differing studies and data about how much is causing each, you know, component of it. But I do think it's important to remember that there are a lot of people in our city and in our country who if they have an economic shock, they lose their job for a couple of months, you know, their car breaks down, they they don't actually have the resources to get through it. Um, and so for a lot of us, it's it's hard to remember.
A lot of our fellow citizens are in that that situation, and some of them don't have families and friends that can go to or they can only go to for so long. Um, and so that, you know, that is is certainly part of what's, you know, driving the problem. The other thing I would say is, you know, I always I tend to look at the world through an economic lens. I mean, I think I'm, you know, to be in this in this affordable housing
But I think you have to understand, you know, the economics of the business. The economists and the accountants kind of see the world in the clearest terms when you think about it, right? Because everything has to be on the ledger and everything is a trade-off, right? So I guess the reason I bring that up is to say I think it's always helpful to quantify the problem, right? And you know, you've probably thought about this. You know, you're in the business. If if we've got people living on the street and we want them to live in housing as we do, what does that cost on a per unit basis? and then multiply that out. We count every year. We do a census. I was in it this a couple months ago to go out across the entire city in the county and check and count how
And then, of course, there's also, you know, they need rental support. They need services. Obviously, that's very important and that's very expensive. I guess the reason I bring it up is to say if you did that I think what you would see is that it's a very large number to state the obvious.
Of course we have. But if you compared the number that we've put in our budgets to deal with it relative to the magnitude of what it would actually take to eliminate it, I think you would see there's a a very large difference. Interesting. And the other thing that I would say about it is um you know this was this was kind of hurtful in a way. There was a uh a local uh publication maybe a year or so ago that you know wrote some articles about what we had been doing in the home key program and saying that we were overspending money on this and um you know I had certain issues with the way that that was presented. But I think the broader point that I would make is did we spend a lot of money? Yes. But did we spend it efficiently? I think that we did.
You know, we were able to buy housing units on average at $400,000 a unit, right? We housed thousands of people. Yeah. And by the way, Hackla was the largest user of the HomeKey program in the entire state of California across the the first three rounds and LA County was the second. So, we have brought in as much of the state resources as we can and and I just want to point out we have housed thousands of people. That is an important accomplishment. I don't think that we should we should take away from that or feel bad about that. That was a good thing. If our goal is we want everyone to be housed and I think a lot of us feel that way. It is going to take more resources. We have to be honest about that.
It's going to take more resources and we have to use them efficiently and we will do that. You can trust me. I'm telling you I will use them efficiently. We go after the money. We're very cognizant of the fact that it's public money and it has to be used efficiently. And by the way, the other thing about it, which is great, is I would say to this administration and to everyone that isn't it wonderful that we're able to buy a building that's produced in the market so that the developer who took a lot of risk is able to recycle that capital, pull money out, maybe do another project, show to the market, hey, like there's there's a way to sell your buildings in a way so that we're stimulating the market to produce more housing. That's the other thing that we're trying to do. We're we're building it.
We're building it with the tax credits and the other programs, but shouldn't we also use these other tools that we have and buy buildings that stimulates the private market to produce more? So that so we're doing that as well. And I guess what my point is is like yes, we are using a lot of resources. The other thing I would say is to be honest like you know a lot of people feel like it's not getting better, but it is. You know what we did the homeless count it is going down. So it costs money, but everything costs money if you want to make a change in the world 100%.
So then this is something that I've been thinking about too and and we talked about this a little bit before, but so the obviously these are headlines, right? So take them with a grain of salt, but there's a little bit of truth to that as well. So everyone's seen the million-doll per unit homeless housing development that was built. It cost a million dollars per unit. People are like, "What the hell? Oh my gosh." you know when we can't sell buildings these old older 1920s buildings for 110,000 and the thought process logically I think most people would say is well why don't you know housing authorities just buy the buildings that are 110 120,000 per per unit and put you know you that seems like a 10x less cost in terms of building so one I guess twoprong like why are the
headlines coming out that it's costing a million dollars per unit to build homeless housing and why are those funds not being diverted to going and purchasing up buildings that cost significantly less which obviously you were doing but like why does that even exist?
Mhm. Well, if I could take the second question first um because it is kind of counterintuitive and I had that same thought when I started Hacka, you know, it's like, hey, like let's buy the the least expensive units on the market. But I think that a couple of thoughts. One is um you know when we buy units people are already living in them and a lot of the focus on public resources is how do we create new units right so the point I'm saying there is that a lot of the resources are driven towards production and construction logically right so we don't have the same uh pool of resources when it comes to acquiring existing buildings the biggest resource I have is the bonds like we talked about which is basically borrowing money to buy buildings, right? And then as units turn over, we move people in uh
at different income levels. The rest of that is the is our money essentially hackless equity like we talked about money that we generate by owning properties. So, we have to fill that that gap just like any other buyer or investor would. But the other thing about the $110,000 buildings, you know, is that the reality that we all know is that part of the reason they're $110,000 is because they're very old and there's a lot of deferred capital needs. Mhm. And because we don't have tax credits as a source, you generally can't get tax credits for a variety of reasons to be able to acquire and and rehab those buildings. We don't really have a good source, right? Because we're trying to keep the rents low. We can't just, you know, a value ad investor would say that's fine.
I'll buy it, but I'll fix up the units and then I'll get more rain and I'll I'll invest equity for that purpose. But we have very limited equity and I don't have a source to pay for the rehab. You know, the other thing to I think put yourself in my shoes is like I'm a public entity, right? If I buy a building from you and you know the second I take it over, I got the keys, people are going, "Oh, now the government owns it." So every problem that's there is a public problem and people you know rightly they want it fixed right away and and if we don't have resources to do it that creates a problem and there's a so there's a different I think level of expectation sometimes when the public sector gets involved and for that reason that in some cases motivates us to
say well let's buy a building now put the financing in place that's in good shape so that we can hold this without having to invest 40 50 $100,000 a unit and hold for 10, 15 years until we can refinance it, take out some equity and put some of the, you know, put a new roof on. Maybe we have to, there's all kinds of things that you have to do to buildings. Um, when you talk about the million dollars a unit, I mean, that's a hot topic, right? What I would say about that is is two things. One, we have done a couple of development projects that are over a million dollars a unit now at Hackla. those projects. And we're partnered, by the way, with some top-notch private developers, um, related companies, bridge housing, Michael's organization, fantastic organizations.
No. I think you should come out and see it because it's a beautiful it's a beautiful community and and and the work that has been done there I think is really wonderful and I would really love to show it to you. Yeah. Um but the reason I bring it up is that if you go to our public housing, it was built in the 1940s, 1950s, um the buildings are past their useful lives.
We have to demolish the buildings. The buildings are also like a lot of the land in LA. There's stuff in the soil. Well, we have to remove a lot of soil. That's very expensive. The other thing that people may not be aware of, maybe they are, is that when these um housing developments were built in the 40s, they had a different philosophy. They didn't even put streets in, you know, they don't have basic infrastructure like streets and sewers the way that we have the way that we built other parts of the city. So, when we go in to redevelop it, you know, we want to have streets and infrastructure and all that.
I mean, it's very expensive. So, I'm saying for our projects, that's a part of why it costs a million dollars a unit. Another part of it is when you're using public funds like from the state, which we all have to do to build these projects. Um, you know, we have to pay prevailing wage. Mhm. Everything is trade-offs. I mean, is it wrong for construction workers to get paid a living wage for the work that they do? I mean, I don't It's not, of course, right? But it it does cost more than it can cost, you know, to build other other projects in the market. And so the other thing we use a lot of different financing sources, you know, and there's very high soft costs, legal fees that go into doing that because we have to cobble together a lot of different funding sources, right?
Um, and you know, the other thing is that a lot of people don't always realize is in the affordable housing space, a when we're talking about new construction deals, developers are doing this for a fee, right? They have to get paid a fee because the deals because they're income restricted. They don't throw off a lot of cash flow and you have to use some of it to pay back some of these soft loans, you know, you get from the state.
But those fees have to be paid and capitalized and even the part that isn't paid up front shows up on the sources and uses as a use. and people. So, some of it is paper in that sense. It isn't all cash, but um but you're right, it is a very high number, but but there's a lot of components that go into doing it, right? And it's public money. There's a lot of politics. Everyone needs to do things a certain way and that that's kind of how it all comes out.
If if you had to build a system, a better system than what's currently the situation with affordable housing, homelessness, the way that these deals are funded, like how would you build a system? What would that look like? Give me Have you ever thought about like what's the most efficient way for us to provide as much affordable housing as possible?
Yeah. Well, look, I mean, I'm going to give you a little bit of a political answer to that's fine. I get it. But I would say this, you know, I think that especially now there's a tendency to kind of want to oversimplify things. That's a human Yeah. intuition like let just tell me like give me one simple thing. I I would say it doesn't necessarily have to be one thing or either or, right? I think that you know building and adding to the housing stock is very important. You know, it's expensive. Um a lot of this isn't rocket science. you know, we can remove barriers like, you know, I just read abundance by Ezra Klein talk a lot about this. We all know this. If we relax zoning, you know, SQA, there's a lot of topics that we could talk about there, we could make it easier to build
that would maybe bring the prices down a little bit. Um, so I think the traditional kind of tax credit program is very good and with more resources. There are things that have been talked about for a long time like lowering the uh percent of the deal that has to be financed with private activity bonds like we there's a lot of things that you could do to tweak to make that program produce more and so that would be important. Um I think section 8 is the most important program in the country. So when we talk about advocacy it's not just preserve it it's how do we expand it because that helps stimulate the private market as well. And then finally, you know, when we talk about on the uh the acquisition side, I mean, when you think about it, you know, if if we're if we're paying taxes, I mean,
the federal government could take that tax revenue and distribute it to the states or housing authorities or whatever to say, let's let's set a target for you're going to buy X number of units every year in the market, and that incentivizes developers to build more as well. You're not going to buy every unit that's produced, but maybe you're going to buy a certain amount and people are going to say, "Hey, if I build something that meets these criteria, you know, a certain kind of bedroom mix that is important for the the city based on its needs, like maybe I can sell it that way." I think that would be an efficient thing to expand upon. Yes. Right. So, I'm not saying let's get rid of the tax credit program. I'm saying let's expand that and let's also think about how we can build on this other tool set that we
have. Why? So, I sat in I'm part of this um organization called ULI and we sat with the city when they were coming up with this new CHIP and AHIP and M.Y.I.P.
Yeah. And if you think about it, it's almost impossible for us to get to that number when they're in their time frame, especially with how long it takes to actually get these things built. Are you involved in that at all or like how do we fix the actual sheer volume of of buildings that which brings me back to ULA a little bit because obviously ULA is very beneficial for you because it gives you an advantage when you're buying buildings but for everyone else they're like oh like this is you know makes I don't want to build cuz it doesn't Hackler can't buy every new building that that's being built. So, how do we fix the shortage of the housing situation? Are you guys involved with that or what what is the what's the situation there?
Yeah, it's it's a little bit complicated because you're right, ULA benefits me or Hackla as a buyer obviously and and I have a responsibility the public to
But there's a broader question economically about what does it do to uh incentivize or disincentivize investment and production of new housing and people have released different studies about that and I'm probably not the most you know qualified to speak to that. I will say that you know the voters of Los Angeles chose to do that. We don't really get involved with politics at that level of um you know uh sponsoring legislation. I I I I think it's fair to say um when I think about what could we do to uh talk about the 400,000 units, you know, I think about things like how did we build millions of housing units in this country in the first place, right? One of the the biggest things that we did was create the federal agencies, Fanny, Freddy, you know, um the Federal Housing Administration.
And you know to state the obvious, if you could bring down the cost of capital and make it easier to leverage to build, I think that would stimulate a lot of production. But you're I understand you're totally right. I mean people it is very risky to build real estate and that risk has to be compensated with a certain kind of reward and people are looking at it and saying there's no reward in it left for me. They're not going to build. It doesn't make sense. They'll do something else with their time. So we have to lower that cost of capital and incentivize the market to produce housing units as well. But it's not, you know, to my mind that's a that's a much broader, you know, kind of federal policy level, state policy level. Ultimately, you'd be talking about, you know, what like lowering providing programs that would have
a lower interest rate perhaps to for construction loans. You know, we even we have that marginally for affordable housing. But, you know, that's really what it is is the is the cost of capital and the ability to leverage more I think is what would incentivize a lot more people to build. What is your goals?
What what are your current um outlays looking like right now? Well, it's it's funny you asked that because um we we we don't have a numerical goal right now for acquisitions. I think the idea is let's do as much as we can. Um, you know, I I don't want to sound like a copout. I mean, part of it is you want to be nimble and flexible, right? Um, we're trying to use the resources that we have to do as many units as we can. You know, last year we bought about 500 units. Um, you know, but do I want to say we're going to do that every year? I think it would be great if we could buy a thousand or 5,000, but that I I don't realistically have the resources to do that right now, but we're always working on how do we bring in more resources.
Are there other resources from the city and the state that we can use to help us cobble together to do more stuff? So the answer is, you know, as much as we can, which which is not doesn't sound good, but you know, we did 500 units last year on the acquisition side. We built a couple hundred units. You know, I talked about Jordan Downs. That's a fantastic community. You know, that was 700 public housing units. Wow. And the plan that we created was we're going to rebuild it with 1,600 units. Some of it's market rate. Mostly it's affordable housing, one for one replacement of public housing. We're more than halfway through it right now. We built a new shopping center in Watts which is a beautiful thing and has brought commerce into the community and it's a gathering place. So, you know, but we're doing as much of
the redevelopment as we can based on the resources we can get access to, you know, but also everybody's got to eat. All the other developers have to get resources, too. So, you know, I I want to do as much as we can, but to also make sure that we have a healthy housing ecosystem in the city. What it means is figuring out how to expand upon the programs and the resources we have now, but also create new ways to finance. And that's what we are spending a lot of time thinking about. How do I bring in other money that's not in this space right now that we can use so we can buy more units so that we can build more
units. Interesting. If selfishly, if I wanted to sell u a building to you guys right now, right, or or help a client sell a building to you, what is the current buy box? What does it look like? What are your guys' kind of requirements?
Mhm. Yeah. Well, um I would say so on our website I have a whole list of like different crazy I would encourage people to just go to Hackla just Google Hackla acquisitions and you can see that. But if I could highlight a few things you know that are important to us I would say you know unit count very important right there is tremendous need and a lot of political pressure to deliver units. So, I'm very focused on, you know, I'm probably not going to spend a lot of time trying to buy a 20 unit building, right? Because in some sense, it would be the same amount of work as buying a 200 unit building. I need units. Like you just said, we need 400,000 units, you know? So, I have to focus on larger properties. That's one thing. Um, the second thing is
historically, we talked about the section 8 program. We've had a lot of people with section 8 vouchers that couldn't use them in their and they couldn't use them in certain neighborhoods. You know, so what what our mindset has been and other other owners have taken this mindset too is we want to be a landlord to our section 8 voucher holders so that they can always have a place to live.
Well, if you have a section 8 voucher and you're one person, you can live in a studio or you can live in a one bed. Most people would prefer to live in a one-bedroom unit given that choice, right?
Um, but I'm trying to buy units that are ones and twos. On our section 8 waiting list, most of the demand is for one and twobedroom units. We also need family units, threes, some for, you know, small number one bedroom, but primarily it's onebedroom and two bedrooms. So, that's what I'm going to be focusing on. We also we talked about the the voucher payment standards. you know, we we had a a policy that we would like to have units in areas of higher opportunity, the higher voucher payment standards again because our section 8 voucher holders when we look at the map generally for whatever reason have not been able to find housing in those neighborhoods as much. So that's we bought a deal in Woodland Hills last year. Part of the motivation was we've got people that want to live in Woodland Hills but there's very few
opportunities for them to be there. So that's um the other thing I think I mentioned to you once before was I think it's counterintuitive is you know we like to have some parking in our buildings. It's not very attractive to have no parking. And I know that can be kind of anathema to the urban planning you know kind of group uh that is very pro hey we got we we've got to get away from this car culture but the reality is you know working people a lot of them need to take cars to their jobs or whatever. So and so there's actually a lot of demand for parking. So, I'm not saying we have to have two car, you know, two spaces per unit. But I don't I also at the same time, it's very hard for us to buy buildings that have
parking. How are you pricing cap rates, GRM, price per unit? Like, how do you look at the actual deal level metrics and I assume that's depending on what
Well, like you know, we joked, I'm always looking for a good deal, the highest cap rate I But but when you think about it like this, you know, I think that the blessing and the curse that I have is I don't have a lot of equity, right? Meaning that I'm leveraging very high in my capital stack. And what that and I I can get a little bit better rate than anyone else can because I have the ability to issue tax exempt bonds, but ultimately when you think about it, it becomes a cap rate exercise for me. Yeah. Also, because we're public sector, we have a property tax exemption. But when you think about it, I have to use as much of that tax exemption as I can to provide affordability, right? And so if I buy a market rate building, I'm going, okay, well, I have to get as many
80% AMI units and 50% AMI units and 30% AMI units as I can in there. So I can't just not provide affordable housing. Our whole goal is to provide affordable housing, right? So um I say it to say that it's primarily the way that I think about it is driven by cap rate. Okay? And I'm looking for, you know, as everyone is, a good opportunity to maximize my ability to bring units online that don't need a lot of capital intensive work like we talked about, at the highest cap rate I can get. That's ultimately what it comes down to, you know, but I realize it, you know, cap rates depend on neighborhood and various factors. We want to be in Woodland Hills or the west side, that's going to be a different cap rate than, you know, downtown or certain other neighborhoods.
So, we we try to look at all that, but ultimately, Taylor, we're paying fair market value. The deals have to appraise. Yeah. And just so everyone knows, if they don't appraise, I have to walk away. A couple of times I've had to walk away because we thought we had we had the right price for a deal. We went into due diligence. We got an appraisal, didn't appraise, I had to say, "I'm sorry. I can't I can't go out and get another appraisal. Like, if the appraisal doesn't appraise, I'm out."
And so, you you still are active. You guys are looking at deals. You're dealing with everything that's going on in this market. And so your focus is still finding the capital sources and growing the portfolio. Like that is that is the mission that you specifically are spending a lot of your time
doing. Yeah. I mean that and I just want to say this um so folks understand like also that's 100% right. Also the development deals with our partners that we're doing both on the public housing side and outside of that. Um, and then on the capital side, I have a capital markets team within my department that does bond issuances, that does uh line of credit, that does agency financing, all that stuff. So, we're working on all these things simultaneously, just like an any other kind of big development shop would be doing. And one thing I do want to say on that, um, I was at a conference, I think it was last week, um, and, uh, Ken Lombard was speaking. I don't know if you know Ken, but he's the CEO of Bridge Housing, one of the one of the biggest, you know, nonprofit housing developers um in
the country and they're our partner on on Jordan Downs. And he said something and I was like, dang it. Like that was exactly the right way to say it. But what he said was um and I want to say it about our team at Hacklo to your your your audience is, you know, I I look at it as, you know, I want this organization, if I'm a part of it, to have a culture of excellence. And I think that we do.
I say it to say like I don't want people to think, oh gez, like it's a nonprofit, it's a government, it's going to take them very long, maybe they can't execute. We have bought like 40 deals in the past few years and once we go hard, we always close. And I think that reputation speaks for itself. But I'm just trying to point out like we can be a great partner and we can also be a great buyer. And I want people to realize that that we take that very seriously. I take it seriously. My bosses take it seriously. Our board takes it seriously. my team takes it seriously. You know, if if we have to talk about something at 8:00 on a Sunday night, you know, you got my cell phone, we can do it. I want to make sure that partly because like it's an interesting field.
It's something I care about. And like I said, I want to be associated with excellence, but it's also important to all of us. Like it is public money. Like you guys should get a good deal for it. But I want people to know that if they're dealing with us, they're not trading on the ability to execute or anything else. You've got a good partner here.
They don't care. They're just there to collect their paychecks, which is clearly not the way that you've approached Hackla and the business and and the way that you guys run that, which is is a breath of fresh air for me personally and dealing with housing as it it is an issue um across the state of California and and the country. So, I love to hear that. I'm happy that that's the case and I love that I can send you a deal at, you know, Sunday at at 8:00 p.m. and you're going to get back to me as soon as you can, which is which is great. Um, one thing before we wrap up, I want to touch about the hotels and motel when when Home Key was going on. Is that still a thing or like what what's going on with that aspect
of Hackla? So, yeah. Um, Homekey uh has had a few rounds of funding. Now, it's in a round called Home Key Plus, but they had three rounds before that. in the first round. Um, Hackla, both for ourselves and in contract with the city of LA, bought a bunch of hotels, which I think is what, you know, you're referring to. The thing about hotels is they're cheaper to buy, right? But they really can only function as interim housing because they're not full-on apartment units. And in some cases we took the hotels and and actually converted them into apartments into you know we took uh we have a well in in partnership we did this um actually not too far from here um at uh in Kenoga Park and we also did it in North Hollywood to a Best Western and that's great you know but it's
very timeconuming um and it's very expensive actually as I'm sure you're aware to convert a hotel room to a full apartment. So to answer your question, after that first round, we focused more in conversation with the city of LA on, hey, we need to buy apartments, right? So that they're like we talked about earlier, they're good to go now and we don't have to worry about converting them later. People can move in the next day. So we really focused on buying apartments. um you know the city of LA again separate from Hackla but the city of LA is also they are very focused on interim housing and they are um in some cases they're master leasing hotels um they purchased a hotel in the city last year that we're asset managing in partnership with them so it's quite possible that we may be doing more
of that you know um at the moment for Hackla ourselves in our portfolio we're focusing on multif family apartments right now But I don't want to, you know, it's certainly possible um that, you know, there may be we might be looking at hotels again in the future, but we're not right now.
What is one thing you want to leave the audience with or maybe something we haven't covered that you feel is important that is discussed? Is there anything that we haven't talked about or anything? You mentioned something previously about some programs or is there anything that you want to leave owners, operators, brokers, investors in the Los Angeles area with that is something important?
Yeah, I mean it's really two things that we kind of touched on, but I just want to reiterate is like I I think we want to be approachable and we want to be a good partner. So, um, you know, I'm hoping that talking here with you, um, and through you, you know, I'm conveying that and I'm getting access to people if they want to reach out like we're we're very much always we don't I don't have to have all the best ideas and the right ideas. I want people to tell me, hey, this isn't working or we need to do something like this or let's think about that. So, I want us to be approachable and focused on whatever it takes to maximize, you know, the number of units and the mission that we're we're trying to accomplish. Um, and then the second thing is, you know, the section
8 program and and just getting out there and lobbying and letting folks know. I think a lot of people are feeling very very fearful about what's talked about with section 8 right now. And I think it helps us all if we have we feel like we're taking some action when we're afraid, right?
The thing that you can do is to get out there and be active and talk to some of these Congress people around the country. We're doing that, you know, but we're a housing authority and we have a vested interest. But I think the people on the other side of the business who own buildings and understand the importance of section 8 program actually have a very strong voice with politicians. And so I would say we'll be a partner with you in that.