With approximately 25 percent of 10.9 million U.S. renters living with extremely low income, Los Angeles-based Alliant Strategic Development is helping to develop affordable housing units across Southern California. Since its founding 25 years ago, the company has built a portfolio of more than 1,000 affordable housing communities and has created homes for more than 400,000 families across the U.S. Recently, The Registry had the chance to sit down with Alliant Strategic Development’s CEO Eddie Lorin and learn more about the company’s affordable housing initiatives.
Q: Generally, can you tell me about Alliant Strategic Development and how the company got its start?
A: The company Alliant Strategic was started by Shawn Horwitz (just sold Alliant to Walker Dunlop after 25 years), and myself through a joint venture with my company, Strategic Realty Holdings, to develop creative solutions to build and preserve workforce and affordable housing and to serve the missing middle. Initially, Alliant Strategic was formed as ASI – Alliant Strategic Investments – to invest in and preserve affordable housing across the country. In 2019, we founded Alliant Strategic Development as a way to be more involved in the affordable housing process from start to finish. By developing the projects, we can work to create more new affordable housing options rather than just trying to keep existing buildings affordable through preservation.
Q: How significant is the need for affordable housing in Southern California?
A: About 75 percent of those living in southern California are considered to be rent burdened – spending more than 30 percent of their income on rent.
Q: How significant is the need for workforce housing in Southern California?
A: Critical workers like nurses, veterans, teachers, and other “essential workers” as has been coined during the pandemic fall into the rent burdened category, so we need more housing that is affordable to these folks.
Q: Which Southern California markets does the company work in? In your opinion, which areas are most in need of these types of housing?
A: We work all over the Western U.S., including California, Nevada, Arizona, and more. In particular, the Los Angeles County area has the biggest need for affordable housing, though we’re starting to see it in the San Fernando Valley, Orange County and Ventura County areas as well.
Q: Are there any current and/or past projects Alliant Strategic has worked on that you would like to highlight?
A: Our four pack in the San Fernando Valley is set to deliver over 700 units and over 140 units that are affordable to those making less than 50 percent of area median income. We will use recycled bonds which is an innovative structure in itself. We’re really proud to be able to innovate and find solutions in the area that are really going to help and make an impact in these communities.
Q: What challenges, if any, are associated with developing affordable and workforce housing? How is it different from other types of developments?
A: Multiple issues: mainly the cost of capital is challenging. If you want to restrict rents to affordability and have costs stay the same, something has to give and that makes developments very difficult to pencil. The costs for materials and labor remains the same for building and preserving affordable housing as it does for luxury housing, except the rents are vastly different. We work mostly in class “B” meaning the developments we produce are very high quality – we’re able to meet the challenge of providing a really quality, safe, wellbeing-focused place to live at an affordable price.
Q: Can you tell me more about the company’s mixed-use developments and redevelopment programs? How do these fit into the company’s larger vision?
A: Mixed-use means that not all of the apartments are considered “affordable” but the rents are still more reasonable than luxury housing. This is really designed to meet that need for workforce housing I mentioned above.
Q: Looking ahead, what goals does the company have over the next year? What about in the next five years?
A: Our biggest goal is to break ground on the 1,800 plus units we have in the pipeline. This should happen in Q1 2022, and it’s really exciting to see these developments come to life. We’d also like to really get the word out about how sustainable our developments are. A lot of them are LEED silver certified or higher, and many run on the WaterWorks program and have energy efficient appliances. It’s important that we focus on the impact side of housing from multiple standpoints. Our goal is to exceed 5,000 units of affordable and workforce housing (in the next five years.)
Q: Is there anything else I didn’t ask that you think is important to note?
A: We are innovators in structured finance. Good deals are made and not found. We are best at creative, elegant solutions to affordable and workforce housing.
