47-unit supportive housing complex to replace church in South L.A.

An $8-million loan from SDS Capital Group will allow construction to move forward at a new permanent supportive housing development in South Los Angeles, the company announced earlier this month.

The new funding will go to Hermosa Beach-based RMG Housing, which has plans to redevelop the current home of the Southside Bethel Baptist Church with a new five-story edifice featuring 47 one-bedroom apartments.

“This is our seventh PSH investment with RMG and our third project we have financed with a local church partner. We are thrilled to be supporting Bethel Baptist Church’s mission to provide for members of their surrounding community who are most in need. We’re laser-focused on expediting this project so that local residents will have potential access to a home in approximately 24 months,” said SDS Capital founder and chief executive Deborah La Franchi in a news release. “SDS developed and raised the SHF Fund’s $150 million for the singular purpose of creating quality homes for those who are experiencing homelessness. A home is a basic necessity that each of us deserves.” 

The Fund’s quick turnaround and efficiency to finance a project are atypical in an industry characterized by the need for a multitude of funding sources that can take years to aggregate. Another key point of distinction for the SHF Fund is a focus on investing exclusively in projects that are financially sustainable over the long term. This requires that PSH per-unit development costs not exceed $200,000, compared to the $500,000 average costs currently seen in the market.

The Westwood-based firm, which invests in supportive housing project through its $150-million SDS Supportive Housing Fund, focuses exclusively on developments with a per-unit price tag of $200,000 - far below the average cost for projects citywide.

SDS is on track to finance 1,800 supportive housing units through its fund. To date, funding has gone to 310 units.

Southside Bethel Baptist Church, which has occupied the project site at 104th and San Pedro Streets for more than 60 years, will not be abandoning the site. The new development will also include a 1,700-square-foot community room that will double as a sanctuary for church services and other events.

“The Church is proud to be a partner in this very innovative approach to providing Permanent Supportive Housing. RMG and the SDS Supportive Housing Fund are enabling us to make real and positive change right here in our community,” said Pastor Fred Howard in a statement.

Construction is expected to begin in March and conclude by November 2023.