United for Housing: The Cross-Sector Collaborations Reshaping California’s Affordable Housing Landscape
In today’s challenging housing environment, innovative collaboration has become essential to addressing the affordable housing crisis facing Southern California and communities across the state. Increasingly, developers are partnering with banks, nonprofit organizations, government agencies, and architects to create affordable housing solutions. General contractors like us are also becoming involved earlier in the process as we can provide guidance and value engineering on both new construction and adaptive reuse of existing buildings. Consequently, these cross-sector partnerships are yielding impressive results that benefit communities seeking more affordable housing options.
The Power of Partnership in New Construction
Financial Institutions as Catalysts
Over the past decade, banks have moved beyond traditional lending to become active participants in affordable housing development. For example, in 2020, JPMorgan Chase announced a $30 billion Racial Equity Commitment. A significant focus of the initiative was and still is on providing financing vehicles to increase the supply of affordable housing in this country. Bank of America’s Community Development Banking initiative shares a similar mission. Its range of services includes conventional and permanent financing, tax credits, tax-exempt options, specialized FHA loans, or a unique combination of solutions.
In summary, we’re seeing more and more financial institutions offer:
- Low-income housing tax credit (LIHTC) investments
- Construction-to-permanent loans with favorable terms
- Community development funds dedicated to affordable housing
- Impact investment options targeting housing affordability
Government Agencies Work to Streamline Development
In California, government involvement has evolved from simply providing funding to actively facilitating development. For instance, we’ve seen state and local governments:
- Fast-track permitting for affordable projects under SB 35
- Incentivize developers to increase density in exchange for providing affordable housing units
- Contribute public lands for affordable housing
- Offer tax incentives through California’s Tax Credit Allocation Committee
The California Department of Housing and Community Development has significantly strengthened its support for affordable housing developers. Cities across the region have also implemented inclusionary zoning policies that require or incentivize affordable units in new developments. For general contractors in San Diego and beyond, these policy changes have created new opportunities to build much-needed affordable housing. In fact, Level 3 Construction has been awarded two affordable housing projects in North County San Diego in the past 15 months alone. We’re set to complete South River Village in Oceanside by the end of the month. What’s unique about this 43-unit community is that it is located separate from the developer’s market-rate homes – making it Oceanside’s first off-site affordable housing project.
Nonprofits as Development Partners
Nonprofit organizations deliver essential expertise and critical resources to affordable housing partnerships across California. These organizations maintain long-term affordability through community land trusts; provide resident services supporting tenant stability; and offer invaluable connections to philanthropic funding sources. Their community engagement experience ensures developments meet authentic local needs rather than merely satisfying market demands.
In California, numerous nonprofit housing developers and community development corporations have become integral partners in creating affordable housing. They work alongside private developers, government agencies, and general contractors to implement comprehensive housing solutions that truly serve communities.
A Closer Look at Adaptive Reuse
Office-to-Residential Conversions
With COVID-19 came a rise in remote work. Now, while many businesses are requiring employees to return to the office, others are embracing remote work – even seeing it as a strategy to clear their balance sheets of lease liabilities and underperforming assets. As a result, in urban markets throughout California, office spaces and buildings remain empty. This is where the opportunistic developer thrives. They have options and can evaluate whether a building is a good candidate for an office-to-affordable-housing conversion. Based on experience, historical data, and market trends, they know that:
- Class B and C office buildings with high vacancy rates in downtown San Diego and Los Angeles, for example, are prime conversion candidates
- Central locations provide access to transportation and employment
- Existing infrastructure can reduce development costs
- Recent California legislation (i.e., AB 1277) facilitates conversions by streamlining the approval process
Furthermore, developers are working with experienced commercial general contractors in California like Level 3 Construction to transform outdated office buildings into mixed-income housing. Often – and especially in cases where the building has historical significance – they seek to preserve architectural elements while creating modern living spaces that offer convenience and serve community needs.
Let’s Not Forget About Hotels
The hospitality industry offers another avenue for affordable housing conversions in Southern California:
- Hotels provide existing room configurations that easily convert to studio apartments or larger in some cases
- Common areas, such as lobbies, patios, and gyms, can be repurposed as community spaces
- Building systems and infrastructure for water, sewer, and sanitation are already in place and typically adequate for full-time residential use
- Most properties come with parking and amenities; those in city centers often are located near public transit
California’s Project Homekey represents a successful model where state funding helped convert hotels into permanent supportive housing for formerly homeless individuals, with nonprofit service providers managing on-site support. Due to our expertise in hotel renovation and ground-up construction of affordable housing, we’re receiving an increasing number of calls from developers looking to convert hotels. They’re calling on us because we’ve proven we can deliver much-needed units quickly and at a fair price.
Multifamily Repositioning
From a construction perspective, aging apartment complexes often present the simplest and most cost-effective option for conversion to affordable housing. A qualified general contractor can assess the building’s foundation, electrical, and plumbing. Barring any major, costly overhauls, this type of conversion likely will include: energy efficiency upgrades that reduce utility costs, as well as other modernization that improves quality of life for residents.
Architectural Innovation Drives Affordability in California
California architects are bringing creative solutions that maximize affordability without sacrificing quality:
- Modular construction techniques reduce building timelines and costs for projects
- Efficient floor plans optimize livable space while meeting California building codes
- Sustainable design reduces long-term operating costs while meeting the state’s green building standards
- Adaptive reuse preserves Southern California’s unique architectural heritage
Here in Southern California, firms specializing in affordable housing are creating award-winning projects that challenge stereotypes about what affordable housing looks like and how it functions. As one of San Diego’s leading general contractors, we value the opportunity to partner with experienced developers, architects, and engineers. Through a collaborative approach, we’re able to navigate complex regulations covering the build process, labor standards, and sustainability to deliver communities with broad appeal.
Looking Forward: Expanding the Collaborative Model in California
We know that the affordable housing crisis in California is persistent, persuasive, and cannot be solved by any single entity. Today’s most successful projects demonstrate that when developers bring together diverse partners – from banks and nonprofits to government agencies, architects, and general contractors – innovative solutions emerge. This collaborative approach creates housing that is not just affordable but sustainable, well-designed, and community-enhancing. By involving ourselves earlier in the process and breaking down traditional boundaries between sectors, general contractors can meaningfully contribute to new models for housing development that promise greater scalability and impact for generations to come.