$500M Fund Targets Bay Area Affordable Housing Shortage
A consortium of leading Bay Area philanthropy, business and community advocates—including the organization co-founded by Facebook's CEO—is launching one of the largest housing investment funds in the U.S.
A partnership between San Francisco Foundation, the Chan Zuckerberg Initiative, the Ford Foundation, Local Initiatives Support Corp., Facebook, Genentech, Kaiser Permanente, the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation and Silicon Valley Community Foundation have joined forces to launch The Partnership for the Bay’s Future, a regional public-private housing plan that will create one of the U.S.’s largest investment funds to address the regional affordable housing crisis in the Bay Area.
“The Chan Zuckerberg Initiative decided over 18 months ago that they wanted to make a contribution to tackling the housing challenges in the Bay Area, so they asked people what they could do that would be a value-add to the challenge,” Maurice Jones, LISC’s CEO, told MHN. “They took that feedback and turned it into a request for proposals for partners, for an investment fund and a policy fund that would fill niches in the market that would help address protection, preservation and production of affordable housing.”
The Partnership for the Bay’s Future will begin with the Investment Fund and Policy Fund, which together will expand and protect the homes of up to 175,000 households over the next five years. It will also preserve more than 8,000 homes over the next five to 10 years in San Francisco, San Mateo, Santa Clara, Alameda, and Contra Costa counties.
LISC submitted its proposal and was chosen to be part of the partnership. LISC will manage the Investment Fund with national affordable housing experts Capital Impact Partners and the Corporation for Supportive Housing helping its direction. Morgan Stanley is also providing capital for the fund.
“Between last March and now, we’ve been developing new products, raising money and putting together the structure,” Jones said. “The idea is if you really want to make a significant impact in this space in the Bay Area, you have to do it from an investment perspective and you have to have updated policy.”
A Substantial Challenge
The Partnership for the Bay’s Future will begin its mission helping affordable housing as its data shows that two full-time workers making $15 per hour can only afford to live in 5 percent of the region’s neighborhoods today.
“It’s a big problem. The projection is the area will see an increase of about 820,000 new households and 1.3 million new jobs between now and the year 2040,” Jones said. “Between 2009-2019, the area’s median home price tripled from about $290,000 to $900,000. So, it is one of the most challenged housing anywhere in the country that I have seen.”
Initial funding of $261 million has already been secured for an intended $500 million Investment Fund, which is providing a revolving line of credit to the East Bay Asian Local Development Corp., which will support up to six customized projects over the next five years.
Meanwhile the Policy Fund, led by the San Francisco Foundation, will support initiatives to preserve and expand housing focus mainly on strengthening low-income tenant protections. The fund will be administered through two grant programs, the larger Challenge Grants, which will be given to ambitious, comprehensive protection and preservation solutions; and Breakthrough Grants, while will be offered to those with solutions for technical assistance to jurisdictions that have the potential to develop affordable housing at scale.
The Policy Fund has already secured nearly $20 million for its intended $40 million fund.
Earlier this month, Enterprise Community Partners Inc. announced it would deploy $250 million over five years to spur collaboration among the health, housing and community development sectors to develop and preserve affordable homes across the U.S. in a new initiative called Health Begins with Home. One of those groups is Kaiser Permanente, which recently announced a joint Enterprise-managed $85 million Housing for Health Fund in the San Francisco Bay Area and a $100 million national loan fund.
Image courtesy of Maurice Jones