A recent call for proposals to develop a surplus Metro property located at the intersection of Wilshire and Crenshaw boulevards has brought bids from seven esteemed organizations specializing in homeless housing. Among the notable contenders are large nonprofits such as Abode, PATH, and Bridge Housing. However, an eighth bidder, Better Angels, plans to disrupt the conventional funding model for affordable housing while proposing a significant development project on the site.
Founded by tech entrepreneur Adam Miller, Better Angels aims to construct 212 affordable housing units along with a medical office building, doing so without any reliance on taxpayer funds. In contrast to the other bidders, whose proposals lean heavily on government grants and tax credits, Better Angels intends to raise 30% of the capital as equity and finance the remainder through conventional loans. This alternative funding approach promises a quicker and less expensive construction process compared to traditional affordable housing projects.
Miller’s vision is geared toward proving that real progress in addressing the affordable housing crisis can stem from embracing capitalistic principles rather than adhering to a scheme that predominantly relies on taxpayer subsidies. “The goal is to show the way to make money doing affordable housing because we believe that … the only way you are going to solve the affordable housing crisis is by letting capitalism work,” Miller asserted.
With a robust $300-million investment fund, Better Angels is also seeking to attract for-profit developers away from the luxury segment of the market. At the same time, it hopes to inspire smaller developers to construct more than just duplexes and accessory dwelling units (ADUs).
In addition to its Metro proposal, Better Angels is making bids on a redevelopment project of a former Kaiser Permanente facility in Pasadena. This plan envisions a housing and mental health center that will include a mix of 300 market-rate, affordable, and supportive living units tailored for those who have previously experienced homelessness.
The organization has also entered a competition within the Los Angeles Community College District aimed at producing student housing. If approved, Better Angels intends to build a 54-unit apartment complex in Silver Lake specifically for Los Angeles City College students, prioritizing individuals in or transitioning out of the foster care system.
Decisions regarding the Metro proposals as well as the LACCD competition are expected to be announced this summer, and the bidding for the Pasadena project has already concluded, with results anticipated later this year.
Regardless of the outcomes of these bids, Better Angels is actively backing two smaller housing projects that are nearing completion. A groundbreaking ceremony is scheduled for later this summer concerning a 51-unit apartment replacing an abandoned single-family home in South Los Angeles. Additionally, permits are expected to be granted soon for an eight-story, 72-unit building located a block from Manchester Avenue in Westchester.
Miller promotes this new housing initiative as a refreshing alternative to the $450 billion affordable housing financing system that often relies on double subsidies through tax credits combined with government grants. This current system has been criticized for its complexity and inefficiency, with funding frequently mired in time-consuming processes that can take years to navigate.
By simplifying the funding structure—where capital is provided upfront—Better Angels stands to expedite project timelines significantly. Anthony Gude, the lead developer for the Westchester project, emphasizes the advantages: “It’s a very uncomplicated structure. You don’t have to use public subsidies. That makes the capital stack simpler and more reliable.”
The projected cost for the 72-unit project is estimated at approximately $15.5 million, which equates to about $215,000 per unit. This price point is roughly one-third of the prevailing construction costs associated with tax credit funded projects.
However, the savings offered through this alternative method come with certain trade-offs. While Better Angels’ units are categorized as affordable, they will not fall within the traditional homeless housing system. As a way to achieve profitability, rents will be set above the lowest income levels needed to transition individuals directly off the streets.
Gude committed to limiting rent for 55 units aimed at low-income individuals—those earning up to 80% of the area’s median income—and another 15 units designated for moderate-income residents. On average, the low-income units are expected to be priced around $2,000, which remains approximately 40% lower than rents in similarly new developments in the vibrant area just north of LAX.
Better Angels’ proposal for the Metro site also reflects this strategy, offering 170 units at 80% of the area median income and 42 additional units at 110% of the median, termed workforce housing. The competing proposals utilizing tax-credit financing typically promise far more affordable options for those with incomes between 30% to 60% of the median, often categorized as acutely low-income.
André F. Bueno, the director of housing and chief investment officer at Better Angels, explains that the intention is to forge new housing that is guaranteed affordable while simultaneously providing support for the homeless community, be it through master leases to nonprofit organizations or indirectly renting to Section 8 voucher holders who face difficulties in the open rental market.
Miller frames this housing initiative as one that offers “downside protection” for investors. He stated, “We have flexibility to ensure our limited partners get their return. We’re trying to prove out that there is a different, better way to do this that is less costly to the government and more effective at creating housing.”
After successfully building Cornerstone OnDemand into a significant training and development company, Miller shifted his focus to philanthropic efforts, particularly targeting homelessness after concluding the sale of the company in 2021. Alongside his wife, Staci Miller, he initially facilitated a no-interest, forgivable micro-loan program aimed at preventing eviction, which has issued around 700 loans—with a return rate of 65%—before launching Better Angels.
In 2023, the Millers established Better Angels United Inc., a comprehensive umbrella for various initiatives while conducting outreach through Resource Days designed to connect homeless individuals with essential services. Their efforts also include developing a mobile app for outreach workers and a centralized shelter database, showcasing their commitment to addressing homelessness through modern technological solutions.
Moreover, following the Los Angeles fires, Better Angels created a resource navigator app and established a relief fund to aid affected communities. Alongside this array of initiatives, the Affordable Housing Fund has been set up as a for-profit subsidiary of Better Angels, intended to attract investments for developing more affordable living spaces.
Miller anticipates that returns on these projects will align with market-rate expectations, boasting a double-digit internal rate of return. He believes this potential profitability will encourage a wave of new developers to participate in affordable housing construction.
Furthermore, Better Angels envisions diversifying its housing ventures. Approximately 45% of the fund’s resources will be channeled into standard housing projects, while another 20% is earmarked for collaboration with Good River Partners, aimed at creating residences for youth aging out of foster care. The remaining funds will be allocated through partnerships with housing developers like SoLa Impact, with the intention of assisting long-standing homeowners in South Los Angeles to convert their properties into multi-family units.
Miller concludes by noting that this approach is not solely about building affordable housing; it also seeks to foster opportunities for intergenerational wealth among local communities. As the organization moves forward with its projects, such innovations may signal a turning point in how affordable housing is financed and constructed, while aiming to provide practical solutions to some of the most pressing social challenges in the region.
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