The (Affordable) House Next Door: Local Philanthropy's Expanding Role in the Housing Crisis



The rent is too damn high, especially for people earning minimum wage. This is true not only in big cities, but in small communities, too.

Housing is a basic need and an increasingly urgent cause that more funders and philanthropists are now backing. The Orcas Island Community Foundation (OICF), serving the geographically largest of the San Juan Islands in the northwestern corner of Washington, is one local funder that has joined this nationwide movement. It’s taking a multifaceted approach, supporting housing accessibility through new building projects and policy advocacy.

Philanthropy’s Growing Response to the Housing Crisis

As we’ve written, the scale of the housing challenge makes it a tough area for philanthropy to make impact within. But, a dire need for solutions nationwide inspires more foundations to do what they can; we now see major givers teaming up to advocate for this cause and push for a more coordinated, systemic effort. For example, the recent formation of Funders for Housing and Opportunity brings together some of the nation’s largest foundations and underscores the growing sense of urgency around this issue—especially among funders working on economic mobility.

Health grantmakers, including local health conversion foundations, comprise another group that is increasingly focused on housing. By considering a home an important social determinant of health, they take an upstream approach to wellness. Meanwhile, this is a also prime area for foundations involved in impact investing — recently, multiple community foundations have embraced housing-related investments. A growing number of corporate funders focus on this issue as well, especially in Silicon Valley, where a lack of affordable housing slows economic growth.

The rising severity and visibility of the homelessness problem in many places also drives the growth in philanthropic attention to housing. While homelessness has various causes and is a distinct grantmaking niche, the affordability of homes is an important part of the equation.

The rise in housing costs coupled with the stagnation of the minimum wage — the federal minimum wage of $7.25 has not changed in nine years — makes it hard for many people to find a place to live. Despite raises in some state minimum wages, a widely publicized 2018 report from the National Low Income Housing Coalition finds that a minimum-wage worker can’t afford a two-bedroom apartment anywhere in the U.S., and statistics for one-bedroom rentals are not much better. Meanwhile, the Trump administration works to cut the budget of the Department of Housing and Urban Development (HUD) and increase both rents and work requirements for poor people receiving housing assistance. HUD currently provides housing subsidies to about 4.7 million "very low-income households.”


A Local Funder Steps Up

In Washington, where OICF operates, a household has to earn $26.87 per hour full-time to rent a two-bedroom unit without paying more than 30 percent of their income on housing. The state minimum wage is $11.50 per hour. The foundation describes financially attainable housing as “the most pressing need currently facing the Orcas community.” In response, it gave its largest gift ever, $250,000 in 2018, to the OPAL Community Land Trust’s April’s Grove affordable rental project. April’s Grove will consist of 45 rental townhomes of various sizes with regulated rents designed “to ensure long-term affordability.” Construction is scheduled to begin in 2019. The OICF contribution to the project was possible thanks to a legacy gift from Bob Henigson.

OICF has been at work since 1995, and has given away more than $10 million in grants to a broad range of programs, bolstering many of the 110-plus nonprofits on Orcas Island. Funding areas include the arts, early childhood education, general education, community development and housing, animal welfare, parks and recreation, and workforce development. It also runs youth philanthropy initiatives, empowering younger generations to give locally. Grants typically range from $500 to $25,000, with many in amounts of several thousand dollars; in 2017, OICF distributed more than $2 million.

Advocating for Solutions

Given the limited resources philanthropy holds to address this enormous challenge, it’s not surprising that many funders see policy advocacy as a key way to make an impact. The national Funders for Housing and Opportunity and regional Silicon Valley Community Foundation mentioned above are both deeply involved in political advocacy.

And, along with the direct construction of housing, OICF is also embracing advocacy. In 2018, the OICF board endorsed the Affordable Housing Real Estate Excise Tax (REET) on the San Juan County fall ballot. San Juan County voters approved the measure, a new 0.5 percent REET supporting affordable housing options.

“The funding created by this REET will provide sustained revenue that can be leveraged with other state and federal funding opportunities to increase resources for future affordable housing and to provide necessary repairs for existing housing stock,” OICF states. And, the organization calls on “everyone” to participate in the complex challenge of housing for all, encouraging community members to “invest as donors, volunteers, and voters.”

Along with the major philanthropic efforts, it’s important for hyperlocal philanthropies like OICF to step up, since land use regulations and a lack of local consensus are sometimes the biggest obstacles to affordable housing initiatives. Community groups like OICF often have the connections and sway to get these types of reforms passed. OICF’s contribution to improving the local housing ecosystem through funding new buildings and engaging in political advocacy speaks to the potential and power of multi-sector, community-based housing reform.