Innovative Housing and the Power of Reinvestment

California is in the midst of an acute housing crisis, especially in cities like Los Angeles, where homelessness and affordable housing shortages continue to affect tens of thousands of residents. Against this backdrop, innovative projects powered by Community Benefits Agreements (CBAs) and Community Reinvestment Act (CRA) obligations have emerged as vital lifelines, helping to finance affordable housing developments that provide stability and dignity to those most in need.

One such project, the Burbank Avenue Project in Santa Rosa’s Roseland neighborhood, reflects the power of coordinated public and private efforts, combining federal disaster relief funds and state assistance with financial backing from banks like First Citizens Bank. Burbank Housing, a nonprofit dedicated to developing affordable housing, started the project in 2017 in partnership with the City of Santa Rosa, aiming to revitalize the historically underserved neighborhood.  

“We’ve been building affordable housing for over 40 years, but Burbank Avenue stands out because it represents a new chapter in recovery for Roseland, a neighborhood with a large Latino population,” said Lawrance Florin, CEO and President of Burbank Housing. “This project wouldn’t have been possible without a blend of public assistance and community reinvestment obligations from banks.”

The project is a 64-unit affordable housing development, providing homes for families earning up to 60% of the area’s median income and for formerly homeless individuals. Rents range from $300 to $1,500, ensuring affordability.

The financing of Burbank Avenue was made possible by Silicon Valley Bank (SVB), now operating under First Citizens Bank following SVB’s closure. The transition between the two banks was seamless, maintaining a commitment to affordable housing despite the upheaval. 

“Even though banks like First Citizens are often motivated by profit, their involvement in affordable housing through CBAs and CRA obligations makes a huge difference in getting these projects off the ground,” Florin said. “Without these agreements, we’d struggle to secure the necessary financing.”

In Southern California, a similar project has taken shape. 

Groundbreaking ceremony of the First Street North Project in Los Angeles’ Little Tokyo.

The First Street North Project in Los Angeles’ Little Tokyo, is among “the largest 100 percent affordable housing developments to be built in the City of Los Angeles,” Debbie Chen, Little Tokyo Service Center (LTSC) Director of Real Estate, said about the project earlier this year.

The long-standing relationship between LTSC, a social service and community development nonprofit, and US Bank, reinforced after the bank acquired Union Bank, has been crucial in pushing forward the uniquely community-driven First Street North Project.

“This will be an iconic project that will transform the block,” said Erich Nakano, LTSC Executive Director.

The development project will bring 248 units of affordable housing to the heart of Little Tokyo, with 80 units designated as supportive housing and 63 units set aside for homeless veterans. The project will also feature commercial space for legacy businesses at risk of displacement, a new home for the Go For Broke National Education Center (GFBNEC) and a plaza surrounding its Monument and open green space for community use 

The project’s roots go back decades and involve the collective efforts of residents, businesses, and nonprofits like the GFBNEC, which honors the legacy of Japanese American veterans from WWII. 

“This project represents Little Tokyo reclaiming land that was taken from it, and will now become a community-controlled asset for its future,” Nakano said.

Despite the success of projects like FSN thanks to CRA obligations, healthy skepticism remains about the role of banks. “It’s clear the banks want to meet their CRA obligations, but they also want to make a profit,” said Monica Mejia, President of East LA Community Corporation (ELACC), a Boyle Heights-based economic and social justice non-profit. “They could offer lower interest rates or be more flexible with terms, but they rarely do. There’s no requirement in these agreements for banks to act beyond what the market dictates. But without these agreements, financing affordable housing would be nearly impossible.”

These observations reveal the complexities of CBAs and CRA obligations. 

Representatives from East LA Community Corporation and Umpqua Bank cut a ribbon for the Whittier Phase II Project in Los Angeles.

An example of this includes the ELACC-developed Whittier II Project – a $24 million, 34-unit Permanent Supportive Housing (PSH) complex designed specifically for unhoused veterans and other individuals with incomes ranging from zero to 30 percent of the area median income. Whittier Place II serves as a sister development to Whittier Place apartments, an adjacent three-story building that includes 24 residential units. Umpqua Bank provided the construction loan for the project, while Enterprise, a nonprofit lender, financed its completion.

“The need for housing in Los Angeles is stark—there are over 75,000 homeless people in LA County, and only 10 percent have housing options,” Mejia said. “Projects like Whittier offer more than just a roof over people’s heads; they provide case management and support services, giving people the opportunity to live with dignity.”

Looking ahead, advocates hope to see further development of CRA policies, including the creation of a California-specific Community Reinvestment Act. Such legislation could extend CRA obligations to state-chartered banks, credit unions, mortgage companies and financial technology (fintech) companies, expanding the pool of available funds for affordable housing projects.

“We need banks to not just compete on rates but to be aggressive in supporting these projects because of their CRA obligations,” Mejia said. “If banks had to fight for the opportunity to finance affordable housing with more competitive rates or terms, it would provide a direct benefit to the communities they serve.”

For communities like LA’s Little Tokyo and Santa Rosa’s Roseland, CRA reinvestments have not only funded new housing but also revitalized neighborhoods. These projects provide much-needed affordable housing, preserve cultural heritage, and offer supportive services that help residents stabilize their lives. At the same time, advocates like ELACC highlight the importance of pushing banks to do more, ensuring that CRA obligations lead to tangible benefits for the most vulnerable communities.