UCLA Real Estate Wire

LA Times Op-Ed: "Easing LA's Housing Crunch"

"Los Angeles is stuck in a housing crisis with little hope for an easy escape. The standard definition of “affordable” is shelter that costs no more than 30% of a household's gross income; anything higher cuts severely into other types of consumption. Using that metric, to afford the median-priced home, the median household would require a staggering 52% raise, to $96,000 a year from $63,000. A more modest 14% raise would enable that family to rent the median-priced apartment. With housing costs rising faster than incomes, we are likely to retain our title as the least affordable city in the United States for years to come..."

[LA Times Opinion/Op-Ed 8/10/15]

The Three Best Ways to Boost Affordable Housing in Los Angeles

Los Angeles is trapped in a deep housing hole with little hope for an easy resolution. To afford the purchase of the median priced home, the median household would require a staggering 53% raise, from $63,000 to $96,000 per year. If that sounds too lofty, a more modest 14% raise would enable that family to rent the median priced apartment. With housing costs rising faster than incomes, we are likely to defend our title as least affordable city in the United States.

In the August 2015 UCLA Economic Letter, UCLA Ziman Center and UCLA Anderson Lecturer Paul Habibi examines LA's housing affordability crisis and offers the top three ways to ease the crunch. Read more...

The Wall Street Journal: "The Ranch House, Reinvented"

"The ranch house, a single-story home typically with low ceilings and overhanging roof lines became “prototypical of suburban development in the 1960s and ’70s,” especially in the West, said Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles. It later fell out of favor, as buyers eschewed its association with mass-produced tract housing and higher land costs made it uneconomical for developers...."

[WSJ 7/16/15]

UCLA Team Wins $10,000 in HUD Innovation in Affordable Housing Competition

By Laura Krawczyk, UCLA Luskin School MURP ‘15

Our UCLA team had the privilege of being awarded second place along with a $10,000 prize in HUD’s 2015 Innovation in Affordable Housing Competition, held April 21, 2015. This is the second year of the challenge, created to encourage research and innovation in affordable housing, raise practitioner and future practitioner capacity, and foster cross-cutting solutions within the design and community development process. Guidelines require interdisciplinary collaborations through teams composed of graduate students from at least three different disciplines across the fields of architecture, urban planning, public policy, and finance. UCLA team members included graduate students Laura Krawczyk and Precy Agtarap of the UCLA’s Urban and Regional Planning Program, Edith Medina Huarita of the UCLA’s Public Policy Program, and Luis Ochoa and John Whitcomb of the UCLA Architecture Program. The trip to Washington, D.C. was made possible through generous sponsorship by the UCLA Luskin School of Public Affairs and UCLA Ziman Center’s Howard and Irene Levine Program in Housing and Social Responsibility.

The competition aims to replicate real-world challenges, selecting a site and allowing students to work with the local public housing authority in developing an innovative design and financing structure while also addressing the current resident population and larger neighborhood. “It was a great collaborative experience,” said Agtarap, “We learned to compromise and prioritize the needs of the community.”

This year’s site was Bayou Towers in Houma, Louisiana, which is approximately an hour’s drive southwest of New Orleans. The proposal asked teams to address social, economic, and environmental issues surrounding the redevelopment or rehabilitation of an existing 300-unit senior public housing site. Working with the Houma Terrebonne Housing Authority, our UCLA team proposed a deep green retrofit of the existing building, based on the idea of housing as a platform for individual and community health.

Since the most influential determinants of health are social and environmental factors, the proposal created an integrated wellness strategy by promoting preventative healthcare, active lifestyles, and fresh food options. “I learned how valuable and necessary it is to work with interdisciplinary teams to fully understand the needs of the people we want to serve,” said Medina Huarita, who worked on developing multi-faceted services and programming including connections to indoor and outdoor flex space, an edible garden, and intergenerational programming. In addition, an on-site telehealth suite would allow for residents to communicate with on-call physicians in real time via video conferencing technology.

The design promoted a “Sustainable Second Life” for the building, repurposing materials and installing new energy efficient systems to reduce environmental impact and building operating expenses. Each unit was given a balcony for private outdoor space, made from durable phenolic resin panels. Energy efficiency was achieved through a combination of passive and active systems, including air flow panels to reduce humidity in units, water solar heating, photovoltaic energy panels, as well as electrochromic windows that reduce heat gain during the warm summer months. The project was financed through a combination of low-income housing tax credits, Rental Assistance Demonstration vouchers, and subsidies through strong partnerships with local healthcare partners.

“The great part of this interdisciplinary competition was getting our ideas and perceptions from our own field challenged,” said Ochoa. “There were several instances where this challenging of ideas not only made our design and project better, but it truly made it an interdisciplinary one where all our ideas merge together into a single and cohesive project.”

To download the team's "2015 HUD Innovation in Affordable Housing Student Design & Planning Competition" PDF, click here: HUD IAH Presentation Phase II.

LA Times Opinion: "Raise The Minimum Wage, But Don't Forget About The Cost of Housing"

"One of the best reasons to raise L.A.’s minimum wage is the region’s incredibly high cost of housing. Metropolitan Los Angeles is ranked the least affordable rental market in the nation because the city has a dual problem -- low incomes and high costs. Rosalie Ray with UCLA’s Center for the Study of Inequality made the same point last year during a Westside Urban Forum discussion on the rental rate crisis in L.A. She was a coauthor of a study that said Los Angeles is least affordable rental market in the nation and that the solution was to increase renter earnings and the supply of affordable housing..."

[LA Times Opinion 3/30/15]

Los Angeles Downtown News: "Huge Project Breaks Ground in South Park This Week"

"The big investment from a major Chinese company is not surprising to Eric Sussman, a real estate expert and lecturer at UCLA’s Ziman Center for Real Estate. Increasing government regulations and slowing economic growth has inspired many Chinese investors to take their capital abroad, he said, particularly to the West Coast of the United States and Canada. Making a splash with a landmark development in Downtown makes long-term sense, he added. “The Chinese are not going to do suburban projects, so you’re going to see activity in central business districts,” Sussman said. “They’re looking for safe havens for their investment and that’s in major urban hubs.”..."

[Los Angeles Downtown News 3/16/15]

Orange County Register Real Estate: "Senior Housing Can't Keep Up"

"Paul Habibi, a Los Angeles real estate investor and part-time lecturer at UCLA, recently led a group of UCLA students who proposed converting the former Los Angeles Times plant into a mixed-use project that includes offices, 400 loft-style apartments, retail and restaurants. Its owner, Tribune Co., currently is exploring its options for the property. Habibi thinks that because apartments are in such great demand, such projects could be a gold mine for investors. “Building apartments today is like printing money,” he said..."

[OCR Real Estate 1/18/15]

LA Times: "Falling Mortgage Rates Spur Surge In Home Loan Applications"

"Given the weakness in global economies, mortgage rates are likely to stay low for the near future, said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. That should help spur home sales by making housing more affordable, he said. "There is very low probability of rising mortgage rates in the very near future," he said. However, those predictions came before the most recent drop-off in mortgage rates amid increasing concerns with economies abroad. Although the U.S. economy appears to be strengthening, Asia and Europe have been struggling with lackluster growth. "It is very difficult to conjure up a scenario of 5% any time this calendar year," Gabriel said..."

[LA Times 1/18/15]

The Seattle Times: "Developer Sets Sights On Young Families Of Modest Means"

"According to a recent study by the University of California, Los Angeles Center for Real Estate, Los Angeles is the most unaffordable rental market in the United States. The report said 54 percent of renters in Los Angeles, which boasts the largest share of renters versus owners in the country, spend at least half of their income on rent, a category UCLA refers to as “severe rent burden.” Young families are concerned with amenities for children from day care to elementary schools to parks and playgrounds,” says Eric Sussman, a senior lecturer at the Ziman Center. “And they want safe neighborhoods.”..."

[The Seattle Times 12/27/14]

Veteran and Entrepreneur Matt Heidt ('14) Drives Change in Affordable Senior Housing

After more than 20 years in the military — a journey that took Matt Heidt (EMBA ’14) through Navy SEAL training and around the world, and that gained him the Bronze Star Medal for Valor — Heidt ventured into real estate, first in his family’s business and then by starting his own opportunity fund with the intention of adding value to properties in his hometown of San Diego. While his CV is extensive and impressive, Heidt’s ambitions are driven by the positive influence he has on others.

Heidt shared thoughts on his experiences at UCLA Anderson and how the Executive MBA program has enhanced his career goals and personal aspirations.

Tell us about your professional experience before coming to Anderson.

I served as a Navy SEAL for over 23 years, 11 of those on active duty. I’ve traveled all over the world to countries throughout Africa, Asia and South America, often providing health care services as a special operations independent duty corpsman. I had been trained to practice medicine in austere environments without supervision, and so as a part of our Foreign Internal Defense training operations with the host nation, setting up clinics and treating the local populace was a great way to develop better relationships.

After leaving the Navy in 2000, I remained in the reserves for the ensuing 12 years. In my transition from active duty I sampled quite a variety of potential careers. Initially, I began by working with the San Diego Police Department as a clinician on their Homeless Outreach Team, where I focused on performing outreach to transients with mental illness. While that was fulfilling work, it was challenging to support a young family financially. My intent was to complete my bachelor’s degree and become a Special Agent for the U.S. Customs Service, investigating narcotics along the U.S./Mexico border. As it turned out, working for the federal government again, this time as a civilian, was not the career that I was looking for, and after a couple of years it was time to move on.

In 2007 I had the opportunity to deploy to Ar Ramadi, in Al Anbar Province of Iraq, and work alongside several U.S. Special Operations units as an Advanced Special Operations intelligence operator. This was not an environment where clinics were used to assist the people, but as it turned out, we had considerable success in protecting the population and Coalition Forces, and it was not difficult to see how our actions benefited the people.

What inspired you to transition into real estate?

Law enforcement simply wasn’t entrepreneurial. I found it difficult to witness the positive impact of my work. I decided that it was time to work with my father in our family’s real estate business. In 2008, I saw the opportunity to take advantage of the negligent debt underwriting in the commercial market as a way to access underperforming assets, restore their value to the community, and make a profit on the resale. So, I started my own opportunity fund doing just that. After I had a few projects underway, I decided it was time to pursue a formal business education, and I applied to UCLA Anderson and enrolled in the Executive MBA program in 2012.

You just graduated from the EMBA program; what are some of your most memorable Anderson experiences?

In 2013, I was awarded the Peter Bren Distinguished Fellowship in Entrepreneurial Real Estate from the UCLA Ziman Center for Real Estate. I was selected along with three other MBA and UCLA Law students. We had the rare opportunity to have an intimate lunch with Mr. Bren (chairman and president of KBS Realty Advisors); speaking with and learning from one of real estate's most successful moguls was very exciting and memorable. This gave me a clear direction as far as focusing my MBA in a specific area, and as many before me, I thoroughly enjoyed taking Professor Sussman’s entire course schedule. His instruction and real world experience made a strong impact, and I am certain that the lessons learned in those courses will benefit me for the rest of my career.

But my Strategic Management Research project experience is definitely worth noting. Our challenge was to find a financially viable solution to increasing the supply of affordable senior housing using private equity rather than subsidized capital sources in partnership with Mercy Housing, a nationally respected affordable housing nonprofit. Our team was able to demonstrate that not only could a private equity approach to affordable senior housing be profitable for investors, but government programs like Medicare and Medicaid could reduce spending at the same time, which has the potential to revolutionize affordable housing. Just prior to graduation, we presented the results of our research to Mercy Housing, which has since decided to use the presentation and financial model to roll out an investment plan to stakeholders. This project was really a chance for me to merge my military medical training and real estate interests, integrating aspects of each to elevate the lives of people in need.

You returned to campus this summer to volunteer with the Entrepreneurship Bootcamp for Veterans with Disabilities Foundation (EBV). How was the experience mentoring fellow veterans?

While volunteering, I mentored three veterans who had an interest in real estate by reviewing their business plans and sharing my experiences of transitioning from military life to working in the real estate industry. UCLA is a very veteran-friendly institution, and opportunities like EBV make veterans feel welcomed and appreciated. It was an honor to give back to Anderson and to my fellow vets.

What do you have lined up next?

I plan to continue in the entrepreneurial world of real estate in the San Diego area. I'm also involved with the Mighty Oaks Warrior Programs, coaching and sharing my story with other veterans, specifically those who suffer from post-traumatic stress disorder or related health issues. It's really the times when I'm able to help people that I feel the most successful in life.