“Conversations with our international colleagues deepened our thinking about how a social enterprise model of creating and managing affordable housing delivers better outcomes and makes efficient use of resources,” Kris Siglin, vice president of policy for HPN, tells MHN. “It’s the combination of business acumen with social mission that makes social enterprises so effective.”
The brief detailed various policy recommendations, based on the British experience, to expand the role of social enterprises in the U.S. affordable housing system. One was the expansion of the Capital Magnet Fund, which awards grants to nonprofit lenders and other nonprofit housing organizations, and requires that they use other sources of capital to achieve a 10:1 leverage ratio.
Also, some public housing stock should be transferred to high-capacity nonprofits, who are in a better position to preserve that housing in some jurisdictions. Moreover, U.S. cities and towns can benefit from a portfolio model for multifamily housing preservation, shifting toward portfolio finance for aging HUD-assisted and Housing Credit properties. Thus, policies should enable housing providers to preserve multiple affordable housing properties at once.
Finally, the brief suggested improved access to affordable homeownership. The Right to Buy policy in the UK highlights the importance of ownership, though if applied to the United States would deplete the stock of rental housing, and so shouldn’t be duplicated stateside. Rather, the brief posited, proven approaches to affordable homeownership—including nonprofit acquisition and rehab and rent-to-own programs—should be expanded.