The Art of Affordable Housing

Coalition for Responsible Community Development (CRCD) began in 2005 in the Vernon-Central neighborhood of South Los Angeles with one contract: cleaning up graffiti vandalism. Since then, CRCD has expanded its services to support residents in South LA, starting up programs in youth and adult workforce development, housing and support services, and real estate. Today they are one of the leading African American-led community development corporations in Los Angeles.

In this conversation, Alejandro Martinez, President of CRCD’S real estate arm, CRCD Partners LLC, walks us through CRCD’s mission and work. Here, Martinez debunks misconceptions about homelessness, shares the innovative construction techniques CRCD is implementing, and highlights the power of unrestricted funding. Joining him is Paul Turner, Director, Loan Origination at NFF.

In this video:

• The who, what, and where of CRCD. (0:00)
• Debunking misconceptions about homelessness and affordable housing. (1:09)
• What organizations need in order to partner with government agencies.  (3:37)
• Why CRCD is exploring innovative construction techniques in the affordable housing space. (5:16)
• What organizations like CRCD can do with flexible capital. (7:08)
• Why it’s important to have a team that shares the lived experience of the community.  (9:32)
• Why truly listening and trusting your team is a game changer.  (10:24)
• Martinez’s hope for the future: Working himself out of a job.  (11:37)

ALEJANDRO: What could CRCD do with a blank check?

PAUL: I’m actually getting chills talking about this.

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PAUL: Could you tell us a little bit about yourself and the work that CRCD does?

ALEJANDRO: My name is Alejandro Martinez. I'm the President of CRCD Partners. CRCD Partners is the sister development organization for Coalition for Responsible Community Development, or commonly referred to as CRCD. CRCD is a community-based nonprofit that is focused on improving the needs of residents and businesses in South Los Angeles. We do that through a variety of means, primarily by providing intensive case management services to individuals experiencing homelessness. We do that by providing affordable housing, and we do that by our social enterprises, and with our work with local small businesses in South Los Angeles.

PAUL: We recently visited some of our CRCD’s projects and it was great to see how CRCD incorporates amenities like childcare and even swimming pools in some of its developments. Can you tell me more about the misconceptions people may have about what is affordable housing, and how can we debunk some of those misconceptions?

ALEJANDRO: The first misconception is that homelessness or persons experiencing hardship are unlike us. And I remind folks that the residents that live in our buildings are made up of our mothers, our brothers, our sisters, our cousins. And I find that when I humanize these individuals, I believe that it gives the person that I'm talking to a different perspective because they can relate.

Sometimes folks approach us, and we'll talk about other misconceptions about folks not wanting to have a job or not wanting to go to school. And we just tell them that, first of all, that's not true. Everyone wants a home. Everyone deserves a safe place to rest their head. We provide amenities that we believe complement people's lives. For example, we are developing a gym in one of our buildings, a dance studio, a childcare center, a therapy pool, a garden – a Zen Garden; these are amenities that I think everyone would love to have. But one of the problems is that people think that those amenities are luxuries and that sometimes they start to question whether we should develop and include these “luxuries” in affordable housing. And I'm proud of our organization because we feel that we can have a conversation with anyone to defend just to have these basic amenities in our buildings, because we think that they bring value to the residents and to the community.

PAUL: I know that CRCD partners with government organizations or agencies like the Los Angeles Board of Public Works and the U.S. Department of Health and Human Services. What advice do you have for organizations who are partnering with government agencies?

ALEJANDRO: First and foremost, I think that it is crucial for nonprofits to have their administrative systems in place – that when they apply for these programs that they think about growth, that they think about what they need internally to be successful. Many times when we apply and when we receive a grant or program dollars, the pressure is on us to perform. And it's great to have lofty goals, but it's critical that we have the infrastructure to meet those goals. That infrastructure includes office space. It incudes your back-office support, your HR team, your admin team, and your staff. So, I think when we apply for these program dollars or grants, I think that it's important that we do a little bit of self-reflection about what we need to be successful and then to include that into the proposals and to not be shy about it. Many times, what I've seen in different organizations is that they will apply for these program dollars, but they don't include enough funding for their own operations that are needed to accomplish those goals.

PAUL: Well, Alejandro, I know you're an advocate for looking at innovative ways around construction of affordable housing, and you're exploring some very interesting options. Can you share with us what those are and what would be your advice for others in the affordable housing space?

ALEJANDRO: So, at CRCD we're looking at developing affordable housing using different construction techniques and methods. We're looking at modular housing. We're looking at container housing. But also we're looking at different manufacturing techniques. Right now we are talking to a manufacturer who has an innovative manufacturing technique. What they're using is a new technique called rotomolding, where they have these giant molds, they inject a combination of plastic and other materials to these molds, and quickly they can punch out and produce a part of a modular unit. And the beauty of that is, as they're printing these widgets, as I call them, they can do these very quickly, very efficiently, and then the best part is that when they're done, you can just bolt them together. And we're working with this manufacturer because CRCD has a social enterprise called CRCD Enterprise. And a partnership that we're exploring is that we would like CRCD Enterprise to be the certified official installer of this new modular technique.  And I think that's not the solution to ending homelessness, but I think it's one of many solutions. And I think that we have to explore these.

PAUL: I know you've talked about the opportunities that flexible capital can offer. What could CRCD do with a blank check?

ALEJANDRO: That would be a dream to have a blank check. To give you an example of what we've been able to do with a $2 million pre-development loan that we secured; we've been able to develop a pipeline of over 1,300 units in four years. With a blank check – I'm actually getting chills talking about this. Because as a small nonprofit development organization, we've had to scramble and struggle to cobble up those $2 million. We've been able to leverage those $2 million to over $580 million in real estate transactions today. I would love to say that we can replicate that over and over and over again. And I'm hopeful that we can. But one challenge is having access to the capital.

Another conversation that I'm having with lenders is, I'm asking them to partner with us, to be our partner. Because as you work on larger projects, we're seeing that the banks and investors want to see our guarantees for those projects also increase. And we're finding that sometimes those guarantees are what limit us in our ability to do more projects. So, I think having a blank check would be wonderful. It would be a dream come true. But I think also it would be great to have a true partnership with a lender, with a CDFI, in addition to those dollars; to be our guarantor, to help us program these spaces, and to help us think of innovative ways and solutions that others have done – different, affordable, market rate, or mixed-income type of projects.

One of the hardest challenges for me when I talk to people is to challenge them to be artists. There is art in what we do.

PAUL: Well, CRCD has a neighborhood-based community development approach. Can you share a little bit more about that? And what advice do you have for folks who want to emulate a similar approach?

ALEJANDRO: CRCD was blessed that its founding board was made up of individuals who were born and raised in South Los Angeles. We find that there is value and strength with having individuals on the Board, individuals who work with CRCD, that have lived experience. We believe that that gives us a unique perspective when talking to residents, talking to our funders, talking to our program managers, to really talk about the issues and to get down to the root of the problem that affects residents in our community. We think that having lived experience brings value to the conversation and we pride ourselves in that.

PAUL: What's one lesson your job has taught you that you think every nonprofit leadership should know?

ALEJANDRO: One lesson that I have learned is that I'm not always right. I've learned that I really do need to rely on my team, their ideas, their voices, their lived experience. I've been blessed that I have been in this industry for quite some time, but I sometimes feel like a dinosaur. Because a lot of the ideas, the funding, the innovation that we were using is now outdated. And I find that when I meet with my staff, when I meet with other development organizations and nonprofits, I find that I learn so much more from them. I learn a different way of thinking, of doing, of communicating. I think that having honest conversations with our staff and hearing their experiences and their ideas and their voices really is truly a game changer for us.

PAUL: What are your hopes for the future of the work that you do and what do you need to make this a reality?

ALEJANDRO: My hope is that I can work myself out of a job. We’re building low-income housing. We’re building housing for homeless individuals, families, veterans. It would be wonderful for our industry to build ourselves out of this problem. That would be a goal. It would be wonderful to not see folks sleeping outside of our buildings or outside of City Hall, outside of the Council office, or businesses. Until that time happens, I think that it is critical for us to be as creative as possible, and that includes with our financing, with our partnerships, with our relationships with other organizations, other collaboratives. I think that we have to force ourselves to think differently and to ask questions that sometimes may seem uncomfortable.

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