Wakeland’s New CEO on California’s Affordable Housing Crisis
Rebecca Louie discusses what is hindering construction in the state and how she plans to boost affordable housing production.
Rebecca Louie, CEO, Wakeland Housing and Development Corp. Image courtesy of Wakeland Housing and Development Corp.
California’s housing crisis is notorious. Demand for affordable housing in the state’s biggest urban centers is sky-high, and developers are struggling to strike the right balance between catering to residents’ need for affordable housing and the increasing cost of building.
In the Los Angeles metro, for example, there were 20,176 units under construction as of Aug. 5, with only 2,583 of them catering to low-income residents, according to Yardi Matrix data. In San Diego, developers were working on 8,523 apartments, of which only 18.7 percent were in fully affordable communities, the same data provider shows.
READ ALSO: California’s New Plan for Housing Middle-Income Essential Workers
As a longtime affordable housing advocate, Rebecca Louie knows firsthand what stands in the way of more affordable housing projects in California. Recently, Louie was named President & CEO of Wakeland Housing and Development Corp., a multifamily developer and operator that has a portfolio of 41 affordable communities across California. And her top priority in her new role is to build as much affordable housing as possible, but also to reduce the barriers that keep developers from building.
In this interview with Multi-Housing News, Louie talks about the main issues that hinder construction in the state and reveals how she plans to increase the available resources for affordable housing development in California.
How much has the pandemic worsened housing affordability in California?
Louie: Rents have increased in California by approximately 10 percent since the start of the pandemic. Statewide, the average rent is now approximately $2,200 per month, up from $2,000 per month at the start of the pandemic.
In your view, what are the top three reasons why it is so difficult to build affordable housing projects in the state today?
The Amani Apartments, a 54-unit senior housing project in Mid-City Los Angeles, developed by Wakeland. Image courtesy of Wakeland Housing and Development Corp.
Louie: The top reason is the lack of resources for affordable housing development, including subordinate financing, project-based Section 8 vouchers, limitations on bond volume cap and 9 percent tax credit equity. The second is high construction and other development costs, many of which have been exacerbated by the pandemic. In California—in part due to Proposition 13—new residential development is required to address or pay for significant state and local infrastructure deficits.
The third reason is a lack of political will, which often allows a vocal minority to block affordable housing projects before they are developed.
How do the recent interest rate hikes and the rising inflation impact California’s affordable housing sector?
Louie: Inflation and interest rate hikes are slowing the production of affordable housing. Projects that were feasible six months ago have been delayed or shelved entirely. Developers have to spend longer securing additional funding to make projects feasible, and state, as well as local subordinate lenders, have to increase subsidies on a per-unit basis.
You’ve been in the affordable housing industry for decades, but spent most of your professional life serving in different roles at Wakeland. What made you stick around for so long? Please tell us a bit about your journey within the company.
Talmadge Gateway, a 60-unit affordable senior housing community in San Diego, developed by Wakeland in partnership with City Heights Community Development Corp. Image courtesy of Wakeland Housing and Development Corp.
Louie: I started at Wakeland as a project manager in 2005. I had been working on affordable housing policy at SANDAG, San Diego’s regional planning agency, but this was my first experience being part of getting it built and I knew immediately it was where I wanted to be. Affordable housing development presents new challenges every day. But, in the end, you have this tangible success of a new affordable community that transforms the lives of its residents. Affordable housing gives people the stability they need.
After a few years as project manager, I was promoted to director of operations, and then to chief operating officer and, most recently, CEO. I’ve been incredibly fortunate to get to work in every aspect of affordable housing, including development, resident services and asset management. My time in the industry has given me a big-picture perspective that I get to apply to my work every day. I also work with a smart, talented and dedicated team.
What are your plans as Wakeland CEO & President? What are your priorities?
Louie: My top priority is always to build as many affordable homes as we can, at every level, from family housing to senior housing, to housing for people experiencing homelessness. Wakeland is already one of the top affordable housing providers in California and I want to build on our successes, expanding our scale and impact to serve even more people in need.
Lofts on Landis, a 33-unit affordable community in Chula Vista, Calif., developed by Wakeland. Image courtesy of Wakeland Housing and Development Corp.
I also plan to be a strong advocate for improving our local, state and federal policies to encourage the production of more affordable housing. We are in the midst of a severe housing crisis, with the supply being low, rents being high, and the effects, dramatic.
High housing costs have businesses leaving the state since they can’t retain or attract workers, homelessness is increasing at a rapid rate, and people have to pay large amounts of their incomes toward housing, leaving little for them to spend on health care, childcare and other vital needs. I plan on working with our policy makers to increase available resources for affordable development and reduce the barriers that are keeping us from getting it built.
Could you share a few details about the projects that Wakeland has under construction in California today?
Louie: We have four projects under construction in Los Angeles, all of which will house formerly homeless seniors, many of whom have chronic health conditions. We have two projects under construction in Riverside County. One will include space for a Civil Rights Institute, as well as affordable homes for families and unhoused veterans. The other is an Affordable Housing and Sustainable Communities project that will provide transit- and environmentally-friendly homes for low-income families.
In San Diego, we have four projects under construction that will provide a range of homes for low-income families and individuals experiencing homelessness. All of our projects will come with high-quality services.
The Grove, an 81-unit affordable senior housing community in Vista, Calif., developed by Wakeland. Image courtesy of Wakeland Housing and Development Corp.
What are your expectations for the second half of 2022? How is the current economic landscape going to impact California’s affordable housing market?
Louie: California policymakers have made a significant investment in affordable housing production over the past five years. We are now seeing projects completed and occupied by low-income residents on a daily basis. This high level of current production will continue through the second half of 2022. Wakeland alone has four projects, representing 265 units, scheduled for completion this year.
We have another five projects—316 units—scheduled for completion in 2023. The impacts of inflation and rate increases will diminish project completions in 2024 and beyond. However, California policymakers must continue to invest in affordable housing production to solve our current housing and homelessness crisis. They also need to continue prioritizing strategies to reduce costs and development timelines.
