Construction begins on LA project called a 'model' for homeless housing

Construction began Thursday on what officials are calling a "model" for what housing for homeless could and should look like in Los Angeles. 

The multi-phase project in East Hollywood known as PATH Metro Villas is expected to eventually house 187 formerly homeless individuals and families. It will also host on-site job training and health services. In addition, the facility, slated for opening in Summer 2018, is expected to have 88 beds for people awaiting permanent housing. 

"It's a town square of services," said Joel Roberts, CEO of PATH.

"This new PATH Metro Villas, we believe is a model that's intended to address and end homelessness in the city of Los Angeles and the county of Los Angeles," he said.

Roberts said PATH Metro Villas represents the non-profit's and L.A.'s shifting philosophy on how to end homelessness. 

PATH started decades ago as a homeless services provider, primarily offering what's known as "transitional housing" for homeless—essentially short-term, dorm-like beds with services aimed to get people off drugs, teach life skills and generally "prepare" them to find housing. 

"PATH has changed," Roberts said. "Housing is the answer to homelessness."

Instead of transitional housing, PATH now tries to get people straight off the streets and into a permanent home. Instead of old-school shelters that offer a cot and a meal and then put people back out on the street at 6a.m., PATH will offer places homeless can stay for weeks on end, with services on site, while they wait for permanent homes.

The key to the city and county's new philosophy is creating stability and permanency in formerly homeless people's lives from the very beginning. And developments like PATH Metro Villas are what local leaders want to fund more of with recent voter-approved revenues from Proposition HHH and Measure H. 

"We want to scale up compassionate, innovative, and effective strategies," he said.

Measure H, a quarter-cent sales tax hike that takes effect in July, is expected to raise $355 million annually for ten years. Proposition H, passed in November, provides the City of L.A. with $1.2 million in bond money to construct housing for the formerly homeless. 

But if PATH Metro Villas is a model property, it also carries indications of the tough fight that's to come as city and county leaders try to make good on their promises to make a serious dent in L.A.'s homeless population. 

One is cost. The three-building PATH Metro Villas project is expected to cost $84 million.

Getting that money was a challenge. 

The funding process, which Roberts referred to as "rocket science," took years and required multiple sources. 

At the moment, federal funding and federal tax credits make up a significant a chunk of the costs—all of which are under threat as President Donald Trump seeks massive cuts from the Department of Housing and Urban Development and pledges to reform the corporate tax code.

PATH Metro Villas, for instance, received $8.4 million through HUD's HOME program, which is now on the President's chopping block for complete elimination. 

"Yes, I'm concerned about the federal funding issue," said Ed Gipson, director of finance and development for the L.A. Housing and Community Investment Department, a city agency that administers affordable housing funds. "If HOME goes away, we're going to need a back-up plan."

Developments like PATH Metro also rely on private investment in the construction phase, some of which is predicated on tax credits for companies that invest in such developments. 

In this case, UnitedHealthCare provided a $12 million investment through the Low Income Housing Tax Credit Program—a program that's seen a decline in market value since the president pledged to lower corporate taxes. 

Another concern is the federal subsidies that help individuals pay rent once they're moved into such properties. 

Though it's unclear what the final federal budget approved by Congress will look like, and if tax reform will go through, L.A. officials are preparing for the worst, Gipson said.

"I don't want to wait until that moment, I want to have a couple pieces of plans in place," he said.