Our Approach to preservation

Better Neighborhoods, Same Neighbors

Preservation of existing affordable housing is faster, greener, and less expensive than new construction. Yet we’re losing existing affordable housing ~10x faster than we’re building new. Now is the moment to come together, to address the underlying factors driving this trend and redesign the system to stabilize our communities.

Preservation = (Rehab + Decarb) + Stabilization 

Our initial objective is to fund the Preservation of a “Batch” of 10 properties from within the Retrofit LA Pipeline – treating this “Deal” as a Systems Event, with a goal to push the edge of the possible, show what the system needs, and shift industry and institutional practices to move the system forward.   

February Updates

Shared Priorities

• Narrative & Storytelling – With support from LADWP, we hosted our second public webinar, focused on best practices in project financing and lessons learned through the development of ELACC’s innovative Revolving Energy Transition Fund (RETR-Fund)

• Case Studies – Advanced development of case studies on completed decarbonization projects, which illustrate how decarbonization fits within the broader context of sources and uses for Preservation

• Fostering Relationships – Broadened and deepened relationships with industry leaders, including SCANPH, UCLA Ziman Center’s Housing as Healthcare Initiative, and the ULI Randall Lewis Center for Sustainability in Real Estate

Pipeline  

• Crafting the Deal - Engaged California Housing Partnership to model “the Gap” on our initial “Batch” of 10 properties, which will support engagement with potential capital providers in Q3

• Building Shared Infrastructure – In collaboration with Retrofit LA Cohort members and the Center for Community Investment, Sustento is revamping its project and pipeline management system to streamline engagement with potential funders and support future scalability of the initiative

• Funding & Capital Structure – In collaboration with the Milken Institute and LADWP, Sustento is engaged with leading CDFIs to co-develop a decarbonization financing pilot program, while engaging money-center banks and philanthropic funders to facilitate the emergence of an ecosystem that can efficiently deliver low-cost blended capital solutions at scale   

Enabling Environment

• Insurability – Launched collaborations with CA FWD, Enterprise Community Partners, and Milken Institute working groups on resilience, risk mitigation, and insurability

• Alignment – Working with Enterprise Community Partners, opened conversations with LADWP and LAHD to improve alignment and coordination of policies, programs, and resources

• Health Co-Benefits – Formalized partnerships with UCLA Fielding School of Public Health, Lawrence Berkeley National Lab, and National Lab of the Rockies (formerly NREL) to translate data on thermal comfort and indoor air quality co-benefits into investable metrics

The system is working as designed – and it’s not delivering the results we want. It’s nobody’s fault – but the responsibility falls to all of us to change it.   

“Out past ideas of rightdoing and wrongdoing, there is a field.  I will meet you there.” – Rumi  

Onwards!   

David Hodgins
Founder & Chief Executive Officer 

Better Neighborhoods, Same Neighbors

Since announcing Retrofit LA's selection for the Sustainable Communities Investment Accelerator (SCIA) in July 2025, we've been testing assumptions, listening closely, and refining our approach. This is the first in a monthly series sharing what we're learning as frameworks meet real buildings, real balance sheets, and real communities.

Redefining Affordable Housing Preservation

Preservation is often framed narrowly as preventing demolition or market-rate conversion. In practice, it means much more: 

• Stabilizing existing affordable multifamily assets within nonprofit portfolios 

• Ensuring long-term affordability, not just short-term compliance 

• Retrofitting buildings to extend useful life, control costs, improve resilience and insurability, and protect residents from extreme heat and poor air quality 

• Protecting local, nonprofit ownership 

• Buying time for the production of new units 

• Preserving our most important asset: community 

Our guiding principle: Better neighborhoods, same neighbors.

A Deal as a System Event

Deals are more than transactions:

• They are units of progress towards the shared priority

• They are shaped by the context in which they take place. By looking at a deal, we can understand the dynamics at work in the enabling environment

• They can be interventions in the enabling environment, in which we test or change new ways of working

If deals are implemented as system events that allow for testing, developing, and strengthening elements of the enabling environment, they make future deals more doable and generate new opportunities.

The enabling environment is strengthened through:

• Advancing needed policies and regulations

• Retooling practices and processes

• Applying or combining resources or funding in new ways

• Fostering formal and informal relationships that last beyond the deal

• Creating forums and platforms for ongoing collaboration

• Shifting narratives

Our near-term objective is to preserve a “Batch” of 10 properties totaling 380 units housing more than 1,000 residents. We’re intentionally treating this batch as a system-learning opportunity.

Despite completing significant decarbonization upgrades, all properties are losing money monthly, have limited ability to raise rents, and lack sufficient reserves for urgent non-energy rehabilitation needs. 

We're exploring blended capital solutions, including 4% Low-Income Housing Tax Credits, CRA-aligned grants and debt, CDFI financing, program-related investments, and philanthropic capital. Through this first "Deal," we aim to surface barriers embedded in policy, underwriting, and capital stacks—and make future preservation deals easier. 

What We Will Produce in 2026

Retrofit LA will generate practical outputs through core collaborative efforts and strategic participation in aligned initiatives: 

• Case studies quantifying how energy upgrades, operating costs, capital structure, policy, and insurance interact in preservation deals 

• A Retrofit LA Field Guide distilling three years of partner experience into a streamlined, replicable process 

• Cross-sector advocacy focused on policy alignment, regulatory reform, and gap-filling capital 

Our priority focus areas:

• Funding & Capital Structure – developing a dedicated, blended-capital preservation fund 

• Health & Social Co-benefits – advancing shared metrics connecting preservation with resident health outcomes 

• Insurability – mapping how upgrades affect insurance availability and cost 

• Narrative & Storytelling – building communications to grow the network and sustain this work 

Building Shared Infrastructure

Our ambition extends beyond a single "Deal." We envision Retrofit LA evolving into durable shared infrastructure that supports affordable housing providers across Los Angeles as they stabilize, decarbonize, and futureproof existing portfolios.

By grounding systems change in real transactions and real communities, Retrofit LA is demonstrating what it takes to preserve affordability at scale—not by displacing residents, but by ensuring they can stay.

More to come next month as this work continues. 

David Hodgins
Founder & Chief Executive Officer