Case Study

Terracina at Lancaster in Los Angeles County

5 min read

Thinking Big in SoCal Affordable Housing 

USA Properties Fund thinks big.

By developing a large number of affordable housing units in its projects, the Roseville, CA-based firm helps house more families and develops economies that reduce costs.

Its latest project, Terracina at Lancaster, has 264 affordable apartments planned. And Terracina at Lancaster is part of a quartet of projects currently being developed in Southern California by USA Properties, totaling 814 units at about $275 million in financing.

“You get economies of scale with larger projects,” says USA Properties President Geoff Brown. It’s important to create economically viable deals in affordable housing, and it’s easier to accomplish that with larger communities.”

There’s plenty of demand for the company’s communities. USA Properties’ occupancy rate is almost 98 percent. “Vacancy isn’t something we’re really worried about,” Brown says.

USA Properties has about 11,000 units in California and Nevada.

Other projects underway in Southern California include 239 units in Panorama City in the San Fernando Valley, and 311 at two projects in Simi Valley (99 of those will be affordable senior housing). USA Properties has a total of 814 SoCal units under construction.

“Our mantra is creating outstanding communities, and the larger the apartment community, the easier it is to accomplish that objective,” Brown says.

Terracina at Lancaster—located in northern Los Angeles County—is a larger-than-usual development for the company.

USA Properties broke ground on Terracina in May and expects to complete the project in 2023, Brown says. He notes the firm has a second project in Lancaster, not far from the Terracina site.

USA Properties purchased the nearby Avenida Crossing project a few years ago. Brown says that whenever he visits Avenida Crossing, the community manager asks him about developing another apartment community to meet the burgeoning demand for housing in Lancaster.

“We’re doing our grading right now and working on our underground,” Brown says. “It’s a phased project, with 11 three-story blocks of buildings. The first buildings won’t be delivered until the end of 2022. I’m guessing November or December of 2022 we’ll complete our clubhouse, and one or two of the buildings will be completed.”

USA Properties will have a head start on lease up by having the clubhouse and the first buildings finished then, and plans to implement a phased lease up.

Four-Bedroom Units Available
Terracina unit sizes will run up to four bedrooms, for residents at 50 to 60 percent of the area median income (AMI).

“There tends to be a lot of interest in those units,” Brown says. “In a community, like Lancaster, where we’re going to have more families, four-bedroom units will be very desirable. It’s a good unit to have in our portfolio.

It makes a lot of sense.”

Total financing on Terracina at Lancaster is $89 million.

“We’re proud that we’re financing this deal with tax-exempt bonds and tax credits and no other subsidies,” Brown says.

JPMorgan Chase is the lender on the deal, while WNC and Associates is the investor. Total equity raised comes to about $33.5 million, using four percent tax credits.

Plans are for Terracina to have a large community space with a pool, sports court, tot lot and barbecue and picnic area.

The company says that Terracina will offer rents about 35 percent less than nearby market-rate communities, according to RentCAFE. As far as eligibility goes, a family of four with household income of less than $71,000 would qualify under the 60 percent AMI. Estimated rents will range from $1,108 to $1,330 for a one-bedroom apartment, to $1,715 to $2,058 for a four-bedroom home.

Apartments will include energy-efficient appliances and light fixtures, ceiling fans and low-flow faucets, showers and toilets. Ground-floor apartments will have a patio, with a balcony for those on the second- and third-floor units. Residents will also enjoy a long list of community amenities, including a pool, picnic and barbecue areas with shade structures, a tot-lot play area and a sports court for basketball, four-square, hopscotch and tetherball. Walking paths with benches along the way are part of the 11-acre community. USA Properties is a Build It Green Builder.

Activities On Tap
Other amenities at Terracina at Lancaster include a community room with a hospitality kitchen, a computer area, fitness room and on-site laundry facilities. The community will have an after-school resources room, a space where children can do homework or residents can enjoy hobbies or learn new skills, according to USA Properties.

The company places a lot of emphasis on community well-being and resident outcomes, so Terracina will be served by LifeSTEPS, its social-services partner.

USA Properties’ community service efforts include a scholarship program named after J.B. Brown, Geoff Brown’s father and the founder of the company.

“The JB Brown Fund helps residents, whether it’s awarding scholarships to attend college or helping a family pay for their children to participate in youth sports, or even helping a family with an unexpected financial emergency, such as a job loss or a death in the family,” says Brown.

Tax Credit Advisor featured USA Properties in a February 2018 article on resident outcomes.

Brown notes his father had a special feeling for the needs of elderly residents. “I continue what he started. He was very connected to the elderly. He was very passionate about seniors.”

One effort is a pilot program that places a nurse in three senior communities. The aim of this effort? “We’ll see if we can help people age in place because they can’t afford assisted living,” says Brown.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.