Building more affordable housing is an especially tough challenge for philanthropy. Funders don't have nearly enough money to solve this problem by themselves and, in any case, solutions hinge on much more than new capital. Issues like zoning, transportation, and access to schools and services all come into play.
Which is why many of the housing efforts funders are involved in right now tend to include various stakeholders and moving parts, with approaches that go beyond traditional grantmaking. A new effort in Washington, D.C. is a case in point.
The D.C. area has seen a rapid increase in homelessness in the past couple of years, with a reported 30 percent increase in the homeless population, according to a government report published in May. To further complicate things, of those homeless, children and their parents outnumbered single adults for the first time since 2001. An estimated 150,000 families are in need of an affordable home in the D.C. region, and that number is expected to double in the next ten years. Residents, businesses, foundations, and the nonprofit sector are looking for more ways to address the crisis.
Now, several stakeholders are partnering to launch an impact investing tool called "Our Region, Your Investment" that is helping to address the rise of housing problems in the region. A Community Development Financial Institution called the Enterprise Community Loan Fund has created a local impact investing initiative which has allowed local residents and businesses to invest $7 million so far. The Impact Note investments are helping to protect more than 200 families in the D.C. area from potential displacement and homelessness.
The Impact Note serves as an investment vehicle for both individuals and organizations who want to keep more families in quality affordable homes with access to good schools, jobs, and transit and health-care services. At the same time, investors earn a financial return. By making an investment of $5,000 or more in the Impact Note, investors can earn between 1 and 3.5 percent interest, depending on the terms of the investment.
Foundations and organizations partnering in this investment include the Metropolitan Washington Council on Government, TD Bank, the Diane and Norman Bernstein Foundation and the Richard E. and Nancy P. Marriott Foundation.
The Diane and Norman Bernstein Foundation, which does not have a public website, provided a $500,000 investment to the fund in June. The Richard E. and Nancy P. Marriott Foundation, which is also investing in the Impact Note, provides grants for education and human services in the Greater D.C. area.
Along with this investment in the D.C. area, Enterprise Community Partners and stakeholders in the Atlanta area have also introduced the The Atlanta Affordable Housing Preservation Challenge which will provide funding of up to $100,000 for innovative proposals to "preserve affordable housing in the Atlanta region and throughout Georgia’s urban centers." This is a collaborative effort of Enterprise, the Georgia Department of Community Affairs, and Georgia ACT, with sponsorship from the JP Morgan Chase Foundation.
The preservation challenge is an idea competition seeking proposals for innovative and practical ways to help keep housing affordable. The competition will select three in January 2017, who will receive small grants to follow up on their proposal. One proposal will be selected to receive a larger implementation grant of $70,000.
The Atlanta region is another area of the country hit hard by the affordable housing crisis. Estimates put the number of insecure, low-income households at 360,000 in Georgia, with these numbers being dramatically on the rise since 2000. Overall in the U.S., an estimated 19 million families are housing insecure, meaning that they must pay 50 percent or more of their monthly income to cover housing. Programs like Enterprise are chipping away at this problem in different regions, but its scale is formidable and it's critical that more funders and other stakeholders jump into this space in a bigger way.