Genesis LA is prototyping innovative equity-sharing models that lower the cost of for-sale housing in one L.A. community.
By Amanda Abrams
Sports journalist Lauren Jones has been trying to buy a home in Los Angeles since the pandemic but has repeatedly lost out to out-of-state investors buying up properties, sight unseen. Christian Flagg, a father of five working as a community organizer, had hoped to own a house in South L.A. where he grew up. But with his modest salary, he doubts he’ll ever be able to afford it. Kristin Johnson and her husband have done just about everything they can think of to become homeowners, including lowering their sights from a single-family home to a condo. But after almost five years and over 30 offers, they’re no closer to their goal.
Housing costs have spiked over the past five years across America, and Los Angeles is no exception. Home prices there have increased almost 40% since mid-2019, according to Zillow. That’s true both in more wealthy parts of the city as well as in places like South L.A., which traditionally has been a working- and middle-class Black community. Between 2019 and 2024, housing costs in South L.A. rose from $487,000 to $677,000, making the area far less affordable to Jones, Flagg and Johnson and other Black residents who have long called it home.
Like elsewhere in the country, efforts to address the area’s dire affordable housing crisis have generally relied on federal Low-Income Housing Tax Credits, resulting in the construction of big multifamily complexes. Affordable homeownership, in contrast, has been largely overlooked, despite its capacity to build wealth for homeowners and its great potential as an anti-displacement strategy.
But one L.A.-based community development financial institution has been working hard to create innovative prototypes to advance affordable homeownership opportunities in the area. The organization, Genesis LA, has been collaborating with community groups and combing through relevant policies to help make homeownership possible for lower-income people of color.
It's a challenge, says Tom de Simone, executive director of Genesis LA. “There’s no one solution that will solve all of this. If there was, it would be solved already.”
Genesis LA is part of a national initiative, Connecting Capital and Community (3C), which is run by the Center for Community Investment and funded by JPMorgan Chase. In five cities around the country, teams drawn from key local institutions — lenders and CDFI leaders, developers, public agencies, community organizations and other stakeholders — have been working to create community-specific homeownership models that advance racial equity.
Genesis serves as the convening organization for 3C’s L.A. team, and also provides expertise on financing and lending for potential projects. That expertise, it turns out, has been key. In the years since 3C was launched in 2021, the cost of materials, labor, land and insurance have skyrocketed, driving up construction costs. “The construction market has gone absolutely bonkers since the pandemic,” says de Simone.
Led by Genesis, the team has had to crunch and then re-crunch the numbers to maintain affordability, changing direction more than once.
In late 2022, they had decided to build affordable condominiums, few of which exist in South Los Angeles. “But we couldn’t make it price out,” says Alejandro Gonzalez, who manages the 3C program at Genesis. So the team pivoted.
What they’re focused on now are two unique projects, both taking advantage of equity-sharing models to significantly lower prices.
The first project utilizes SB 9, or California’s HOME Act, which came into effect in early 2022. The legislation allows landowners to divide single-family properties into two parcels, each of which can hold up to two housing units, creating four homes on plots that formerly held just one.
Using some of the funding allocated through the 3C initiative, the team purchased a corner lot in the South L.A. neighborhood of Hyde Park that already contained a single-family home. They plan to build two more units on the lot, capping the total at three dwellings to maintain some open space on the property. The homeowners will sign a tenancy in common contract, a legal document that outlines who owns what and differs slightly from a typical deed governing property ownership.
While the exact sale price is unknown, Gonzalez says the homes will be affordable to families earning up to 120% of the area median income, which in Los Angeles is about $118,000 for a family of four.
The other project takes advantage of a lot at South Figueroa and West 59th Streets, which formerly held a single-family home but is actually zoned commercial. The team plans to build a six-unit building there that will be governed by a land trust.
TRUST South LA, a local nonprofit that’s part of the 3C team in Los Angeles, will own the land, while residents will own the physical homes. Because they’re only paying for the brick-and-mortar dwellings — in this case two-bedroom units of about 720 square feet each – the price will be lower and should be affordable to low-income residents earning up to 80% of the area median income, or $111,000 for a family of four.
“It’s changing the narrative of what ownership can look like,” says Aishah Abdala López, a project manager with TRUST South LA. Her organization will help residents govern themselves and will assist when they’re ready to sell their units. The subsequent sales will result in smaller profits to the sellers than conventional condos, but the units will remain affordable for other buyers.
Both 3C projects are utilizing unique models to push costs as low as possible. As a result, though, buyers may not be able to use traditional mortgages to purchase the units. In response, Genesis is working with another CDFI, Self-Help Credit Union, to pilot a new lending product that can be used for tenancy-in-common projects.
De Simone thinks there’s an untapped market for tenancy in common loans and is hoping these projects will illustrate to other developers what’s possible. “Perhaps this will make it easier for other small multifamily building projects to exist in other neighborhoods — not just as rentals, but to give people a stake in a starter home,” he says.
Genesis’ collaborators say the approach of doggedly seeking new possibilities to better serve lower-income people is typical of the CDFI. “They’re very flexible in thinking something through and figuring out, ‘How can we do this?’” says Oscar Monge, TRUST South LA’s interim executive director. “They’re very unique in that way.”
This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is developed in partnership with Next City.