LAFH Restructures to Better Serve LA’s Unhoused Population

The Los Angeles region continues to lead the nation in the scale of its housing and homelessness crisis. For forty years, LA Family Housing has been a leader in responding to those dual crises through their direct homeless services and their real estate development activities. This year, the company has taken a bold step to operationalize excellence by separating their two businesses so each can thrive in their unique markets. With the launch of LAFHBuilds, LA Family Housing and its new sister affiliate company will bring increased focus and investment to the tackle the region’s most pressing issues of housing and homelessness.

Some background is important. During the past 17 years, LAFH has grown enormously from a $6 million company in 2007 to a $100 million annual operation in 2024. Its successes have been shared widely, including here in American Builders Quarterly.

While the growth was precipitated by a desire to fulfill unmet need for homeless services and critical housing production, new local funding in 2017 allowed LAFH to invest significantly in both sectors of its business, services and real estate development. A substantial investment in California’s homelessness and housing crisis during COVID led to a second immense wave of growth for the agency. It was at that point it became clear the scale of both operations—the homeless services function and the real estate development and operating functions—were thriving and would be best managed as separate and distinct companies. From that realization, LAFHBuilds was born.

LAFHBuilds now stands on its own feet as a separate organization solely dedicated to real estate development and operations under the leadership of Executive Director Elda Mendez-Lemus. She and her team now have the opportunity to conduct long-range investments in real estate assets that will serve unhoused people in Los Angeles. Meanwhile, LAFH will continue to provide comprehensive services from street outreach to operating interim housing. It will also provide holistic wraparound services to help people transition out of homelessness.

Each company operates in service of the other, and longtime colleagues Stephanie Klasky-Gamer and Elda Mendez-Lemus still see a lot of each other. Klasky-Gamer is the board chair of LAFHBuilds. It’s an intentional choice to continue aligning the missions of the two organizations, which are both made better by the shared partnership.

“We’re a better developer because we’re a service provider, and we’re a better service provider because we’re a developer,” Mendez-Lemus explains. “We want to create the best kind of buildings for our residents, and that cooperation just makes sense.”

The separation also allows for LAFHBuilds to fully spread its wings when it comes to finding creative solutions to both builds and financing. Take the Pano, a former motel site at 8209 N. Sepulveda Boulevard. Construction has begun on 90 units of permanent and supportive housing, with onsite services including case management, transportation assistance, life-skills training, and connections to mental and physical health providers. The Pano is a landmark achievement for a multitude of reasons that LAFH’s president hopes can inspire other organizations across the country.

“First, there’s the different types of construction we’ve been willing to try,” Klasky-Gamer explains. “We’ve done modular, ground-up, stick-built, and, like this hotel site, adaptive reuse. The second part is the creativity Elda and her team are utilizing when it comes to financing these projects.”

Mendez-Lemus says her colleague’s ability to raise philanthropic dollars—about $10 million to date—puts them in a position to secure capital financing. There are more philanthropic dollars than city money for the massive project.

“We feel like this might be a model for the city and the rest of the country,” Klasky-Gamer enthuses. “Philanthropy shouldn’t replace public dollars, but what this development has shown is that it can cost less and get produced faster when you reduce the number of public sources. We’re aiming for single-source financing, and I think it can be done.”

“The private equity initiative demonstrated that changing the financial structure of affordable housing can produce more housing faster at a lower cost, Mendez-Lemus says. “We have a long way to go to create that kind of change, but this is a great step for us.”

“JAG Interiors, Inc. continues to have the pleasure and opportunity to work with a committed and talented team of people directed by Stephanie Klasky-Gamer at LA Family Housing since 2018,” says Jamie General, president of JAG Interiors, Inc. “Elda Mendez-Lemus’s team is passionate about ending homelessness while building sustainable and supportive homes that serve the individuals’ needs for years to come. I applaud them for their hard work and long hours.”

At the time of speaking, Klasky-Gamer and Mendez-Lemus were at a conference, preparing to present on the Pano project and its implications for the industry. The presentation also gave Mendez-Lemus the chance to publicly credit Klasky-Gamer, whom she considers a mentor, for trusting her to lead LAFHBuilds.

“I’m not sure this opportunity would have been granted to a person of color in my position were it not for someone like Stephanie,” Mendez-Lemus says. “She saw the need and opportunity to give me and my team this chance to do something great.”

“Elda was ready to step into this role,” Klasky-Gamer says simply. “I get to see the amazing work she does every day, and the best is still yet to come.”