HUD Director Offers Plan to Finance Homes : Housing: Loans backed by union and pension money will fund affordable housing in Lincoln Heights and four other local communities.

Federal Housing and Urban Development Secretary Henry G. Cisneros has unveiled a plan to use loans backed by union and other pension funds to finance affordable housing and government office developments in five communities.

Backed by government guarantees in the form of Section 8 housing certificates that pay for a portion of the units in each housing development, the pension funds will help finance projects in Lincoln Heights, Boyle Heights, South-Central Los Angeles, Crenshaw and Watts.

Cisneros said Wednesday that the Los Angeles projects would be used as a model for a national program to boost the affordable housing stock nationwide.

“We have been talking for years about how to bring pension resources to communities,” Cisneros said. “It makes it possible for people to live here, with investments backed by certificates of the U.S. government. What that means is that it will work.”

Cisneros announced the plan at the site--one of five in Los Angeles--of a proposed 150-unit apartment complex, Mission Broadway Plaza, that will be partially financed by $4.6 million in AFL-CIO pension money. In addition, plans call for union workers to be hired to build the developments.

The five developments will cost more than $51.8 million and create 500 construction jobs, 200 permanent jobs and housing for 250 families. Construction should begin in June and take nine months.

Other developments that will use the pension fund financing are Rio Vista Apartments in Boyle Heights, Main Street Housing in South-Central Los Angeles, the state Economic Development Department building at 54th Street and Crenshaw Boulevard, and the Watts Civic Center Office Building.

“By Labor Day, we expect to have $80 million invested and put 1,000 people to work,” said Steve Coyle, chief executive officer of the AFL-CIO Pension Investment Program. “We’re trying to show people that you can take that capital and bring it to bear on the cities of this country.”

Carmen Azzolino, 77, said she would consider moving into Mission Broadway, which will reserve 50 apartments for senior citizens on government assistance.

“We really want seniors in here,” she said. “A lot of them need a good place that they can afford to live and stay in the neighborhood they’re familiar with.”

Neighbors of Mission Broadway at first fought the developer’s plans, which called for a seven-story, 288-unit complex on about four steep acres at Mission Road and North Broadway. They formed the Concerned Citizens Coalition with neighbors from El Sereno and won concessions from the developer, Peter S. Cooke and Associates of Utah, which scaled back the plans.

With new plans to build only 150 units and include a child-care center, the developer had difficulty finding financing, said Los Angeles City Councilman Mike Hernandez, who helped bring the government financing plan to the development.

Although most neighbors involved in the coalition have accepted that the grassy corner with several palm trees will inevitably be developed, they are guarded in their assessment of plans for the site.

“There are still things that we have to overcome, (such as) the traffic problems” and crime, said Frank Wada, a resident and member of the Lincoln Heights Economic Development Corp. that negotiated for the developer with residents.

“The plus is we have more housing that’s affordable.”