One of the nation's largest public housing authorities has closed its latest apartment purchase as part of a strategy to increase the inventory of affordable residential units in Los Angeles.
The purchase extends an acquisition spree for the organization, which has sought to convert market-rate apartments into affordable units as opposed to developing them — a more expensive and time-consuming route, some groups note. The Housing Authority of the City of Los Angeles, or HACLA, acquired the 154-unit Emerald Apartments in South Park for approximately $50 million, or $322,665 per unit.
HACLA has purchased north of 40 Los Angeles properties totaling more than 2,750 units over the past four years. Many of those properties are used for permanent supportive housing for formerly homeless individuals and families.
In the latest deal, the market-rate property in downtown Los Angeles will be converted to affordable housing under the federal Department of Housing and Urban Development’s Restore-Rebuild Program. About a quarter of the units will be reserved for households in two categories — earning at or below 30% and 50% of the area median income of $106,000 for a four-person household — while the remaining units will be restricted to households earning between 60% and 120% of the median income.
HACLA’s deals add to a broader push to increase housing affordability in and outside of California.
Los Angeles needs to plan for 225,000 affordable housing units by 2029, with more than half reserved for households earning between 30% and 60% of the median income. Average rents in the city, where construction of apartments has declined by 21% in the past year, are about 30% higher than the U.S. average, according to CoStar data.
“With strong demand for low-cost housing in our city, we laser-focused on increasing the supply of affordable housing and the Emerald represents another step in our comprehensive strategy,” said Lourdes Castro Ramirez, HACLA’s president and CEO, in a statement.
Going affordable
The deal closed in 98 days using acquisition funding from City National Bank. HACLA plans to refinance the property with permanent debt in 2026, continuing its strategy of fast execution and capital recycling to expand its affordable housing footprint as quickly as possible.
Emerald Apartments was built in 2023 and comprises studios through three-bedroom units, with amenities such as a pool, gym, community room and structured parking. The complex is near Crypto.com Arena and the Los Angeles Convention Center, with access to transit and employment centers. No existing tenants will be displaced, the new owners said.
Acquiring properties like Emerald and converting them to affordable housing "is about protecting our neighborhoods and ensuring working-class Angelenos have access to safe, stable and affordable housing,” said a statement from Councilmember Ysabel Jurado, who represents Council District 14, where the complex is located.
The Emerald acquisition mirrors HACLA’s earlier purchase of The Clarendon Apartments in the Los Angeles suburb of Woodland Hills, where the agency paid $141.9 million for 335 units. In both cases, HACLA used a combination of tax-exempt bonds, equity and Restore-Rebuild Program subsidies to convert market-rate units to affordable housing.
As with Clarendon, HACLA will not force existing residents at Emerald to relocate if they do not income qualify. Instead, affordability will be phased in through natural turnover, allowing voluntary income qualification that may reduce rent for current tenants.
The Restore-Rebuild Program, which HACLA used for the Clarendon deal, enables municipalities to convert market-rate housing to affordable units when supply is insufficient. Emerald represents another deployment of this tool in a high-demand urban neighborhood.
The agency’s public status exempts it from the ULA transfer tax, which has helped HACLA compete for large-scale multifamily assets in Los Angeles, experts say.
Six accessory dwelling units and 2,400 square feet of retail space are planned for construction, adding density and community-serving amenities.
HACLA’s portfolio includes 164 properties and more than 60,000 Section 8 vouchers and certificates. The agency frequently partners with nonprofit and for-profit developers and issues tax-exempt bonds to support its acquisition and redevelopment efforts.
For the record
Blake Rogers of JLL Capital Markets represented the seller in the transaction.