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HomeMy WebLinkAboutPublic-Private-Philanthropic Partnership StrategiesGreenstreet, Ltd. 2022 LEVERAGING HOUSING FOR ECONOMIC WELL-BEING Housing for All: PUBLIC-PRIVATE-PHILANTHROPIC PARTNERSHIPS JANUARY 2022 Housing for All: Leveraging Housing for Economic Well-Being ILLUSTRATIVE EXAMPLES WHAT ARE PUBLIC-PRIVATE- PHILANTHROPIC PARTNERSHIPS? In general, partnerships are a collaboration between various groups to achieve a common goal or objective. Traditionally, in affordable housing development, these partnerships have included two primary groups – the public- and private-sectors. In today’s funding environment, the addition of philanthropic partners brings new, flexible capital to projects that can enhance financing, expand services, and create more holistic developments that better meet the needs of the residents and communities. Like most communities, solving the large and complex problem of “attainable housing” is too much for any one organization or entity. Without an unlimited pool of resources many organizations – for-profit businesses, public-sector, and philanthropic organizations – are only able to make minimal investments that in many cases are a band-aid to the real problem. Public-Private-Philanthropic partnerships should be seen as a tool to boost the effectiveness and cost-efficiency of each participating partner’s investment or resource, allowing each partner to accomplish more with less. These partnerships already occur in Hamilton County, but as funding decreases and need increases, these strategic partnerships are more critical. By working in partnership, these organizations can begin to repair the systematic and structural issues at the root of the problem, potentially reducing the need for similar interventions in the future. There are 18,735 low- and moderate- income households (household income under 100% AMI) spending too much on housing each year (cost burdened.) Each year, an average of 33 subsidized units reach their affordability compliance period, putting them at risk of increased rents and displacement of low- and moderate-income people. Between 2010 and 2020 only 468 units of subsidized housing units were built in Hamilton County compared to an increase of 2,528 households in need of subsidized housing (households earning below 80% AMI and cost burdened.) Given current funding and construction trends, it will take approximately 286 years to meet current demand for income-based housing units. PPPPs BENEFIT PHILANTHROPY. As donors become more socially conscious and looked to philanthropy to show greater cost-effectiveness and impact of their donations, philanthropic organizations need to find new and innovative ways to leverage their resources to achieve the higher returns expected by donors. By partnering with public- and private-sector partners, philanthropic organizations can improve outcomes for the communities they serve. By showing greater stewardship of donors’ dollars, philanthropic organizations can build trust and potentially attract more funding. PPPPs BENEFIT MUNICIPALITIES. Funding and resources for attainable housing are decreasing or stagnating while demand continues to increase year after year putting pressure on municipalities to do more with less. By encouraging and facilitating Public-Private-Philanthropic Partnerships, municipalities can leverage existing funding to accomplish goals and objectives. By investing in attainable housing, they can influence the team, location, design, programming, and other outcomes that are important to local leadership and community stakeholders. Low or zero-interest financing for working capital, construction or permanent financing. Direct investments in programming (i.e. financial education, childcare) or building upgrades (i.e energy efficiency, healthy housing.) Financial subsidies to cover lost revenue from inclusion of below market-rate rents. Investments in infrastructure (i.e. streets, sidewalks, parks/open space, parking.) Entitle land, expedite approval processes, or reduce/eliminate fees. Donate or significantly reduce the cost of land. Support pre-development efforts (i.e. market studies) or perform environmental remediation (if necessary.) Greenstreet, Ltd. 2022 PPPPs BENEFIT ATTAINABLE HOUSING DEVELOPERS. Similar to the issue facing municipalities, for-profit and nonprofit developers of attainable housing are competing more and more for a decreasing pool of funds. Competition can have negative effects on unit creation, design and programming, and the available pool of quality developers working in the field. By bringing additional tools and resources to the table, developers can improve the quality of their product, get more units online, and leverage other funding sources. PPPPs BENEFIT LOW- AND MODERATE-INCOME RESIDENTS. Housing in Hamilton County is becoming less affordable to more people and demand is growing faster than supply, creating significant pressure on the housing market. Even at higher incomes, finding available housing is difficult given the lack of inventory. Public-private-philanthropic partnerships could more effectively use available resources to expand the supply of housing. Expanding the supply of long-term attainable housing would create more opportunities for low- and moderate-income households to find appropriately priced housing near jobs and other economic opportunities. LOCAL PARTNERSHIPS COME TOGETHER TO INCREASE WORKFORCE HOUSING NEAR MAJOR EMPLOYER. Located in the Indianapolis Health District, a collection of neighborhoods adjacent to IU Health’s planned consolidated downtown medical campus, the Excelsior stands as a model for how public-private-philanthropic partnerships can create well-designed, healthy attainable housing choices for employees and neighbors. As of early 2022, the planned 80-unit mixed-income residential development was in the final stages of pre-development and is expected to start construction later in 2022. The $15 million-plus project was made possible through a partnership with Indiana Housing and Community Development Authority (IHCDA), IU Health, and the owner/developer Near North Development Corporation (NNDC, a nonprofit developer of mixed-income housing) with financial support from the City of Indianapolis (Lift Indy) and the Lilly Endowment (through IU Health Foundation). In addition to the mixed-income residential units on the upper floors, the first floor will feature community space dedicated to workforce and career development (also in partnership with IU Health), and community-based retail that offers jobs and support to individuals in recovery. The following represents the high-level capital stack used to finance the project. $500,000 $500,000 $11,500,000 $1,000,000 $1,000,000 $1,000,000 NNDC acquired the land (partially in partnership with INHP’s Equitable TOD Fund) and invested it into the project as equity equal to $500,000. Additionally, the nonprofit developer agreed to defer their $500,000 developer fee. First Internet Bank provided $11,500,000 in private debt on the project. City of Indianapolis invested $1,000,000 in HOME grants to subsidize units set aside for households earning below 60% AMI as part of its Lift Indy program that makes larger, long-term investments in neighborhoods. IU Health provided a flexible $1,000,000 grant that will be used to attract matching funds from IHCDA and further subsidize units for residents earning between 60% and 120% AMI or “workforce” incomes. IHCDA provided a $1,000,000 soft loan (10-year term, 0% interest, and prepayment tied to net operating cash flow) to further subsidize units for Housing for All: Leveraging Housing for Economic Well-Being TO BE EFFECTIVE, PUBLIC-PRIVATE-PHILANTHROPIC PARTNERSHIPS IN HAMILTON COUNTY NEEDS COOPERATION AND INVESTMENT FROM A NUMBER OF PARTNERS. Municipal partners will... Adopt attainable housing vision statement Agree to the need to formalize available tools and resources Agree to work in collaboration with private- and philanthropic-partners on solutions Adopt a formalized list of tools and resources for attainable housing development Adopt policies that tie attainable housing outcomes to public-sector investments Philanthropic partners will... Adopt attainable housing vision statement Provide time and expertise to document and evaluate solutions Agree to work in collaboration with private- and philanthropic-partners on solutions Agree to maximize local resources by co-investing alongside private- and public-partners Nonprofit and For-Profit Development partners will... Agree to attainable housing vision statement Provide time and expertise to document and evaluate solutions Agree to work in collaboration with private- and philanthropic-partners on solutions Agree to develop projects that advance local attainable housing objectives Identify existing funding and financing sources available to attainable housing developments. What can each be used for? What does it currently fund/provide? Are there limitations? lead: HCHC Explore case studies and best practices to identify tools and resources available outside Hamilton County. This process may be informed by discussions with local developers working outside Hamilton County. lead: HCHC POTENTIAL 18-MONTH TIMELINE Engage local residential development community (for- profit and nonprofit) to document tools and resources that are/would be beneficial to increase the feasibility of attainable housing development in Hamilton County. lead: HCHC Engage philanthropic organizations with attainable housing in their mission. Work with them to understand their funding priorities and how they may align with local attainable housing needs. lead: HCHC Greenstreet, Ltd. 2022 Document attainable housing goals and objectives for municipalities and philanthropic entities. Identify intersecting priorities to find common goals and objectives that may be suitable for creating strong public-private-philanthropic partnerships. lead: HCHC Develop a menu of public-sector tools and resources that can help solve financial or regulatory challenges. lead: Working Group, Municipal Staff Convene a working group of public- sector representatives, philanthropic leaders, and developers to make recommendations on how to improve the tools and resources to best suit the needs and challenges of local projects. lead: HCHC Identify gaps in funding or tools and identify organizations, entities, or public-sector groups that can help solve the gap. This may include advocating for changes to State legislation, creating new or augmenting existing funding sources, or aligning public-sector resources with attainable housing goals. lead: Working Group POTENTIAL 18-MONTH TIMELINE PROMEDICA HOUSING INVESTMENTS Toledo, Ohio ProMedica, based in Toledo, Ohio, is a health system with a strong focus on addressing the social determinants of health which led them to prioritize healthy housing as one way to improve overall health, education, and economic outcomes of the communities they serve. ProMedica says that “80 percent [of a person’s health and wellbeing] is affected by environmental, behavioral, social and economic factors. By taking direct action to remediate health and safety issues at home, they aim to make a positive impact on those environmental factors.” The system’s $1 billion Impact Fund allows the healthcare system to make investments that further their mission. One of those investments was $2.65 million support of Toledo’s subsidized housing stock. Through a public-private partnership, the system intends to preserve the affordability of the city’s housing that is funded through low-income housing tax credits reaching the end of their compliance periods. In addition to preserving existing affordable housing, the investment provided forgivable loans to support renters who desired to purchase their own home as well as the acquisition and stabilization of over 250 homes to stabilize at-risk neighborhoods. The system continues to invest in housing-related initiatives including down payment assistance for employees and a nation-wide healthy housing program. GLICK HOUSING FOUNDATION (Glick Philanthropies) Indianapolis, IN “As housing prices continue to rise, it is more important than ever that we strive to provide quality, affordable housing for individuals and families,” said David Barrett, president and GEO of the Glick Family Foundation. The Foundation understands the importance of affordable housing on family stability and has a separate arm to achieve just this. The Glick Housing Foundation is dedicated to the “acquisition, development, and preservation of quality affordable housing.” The Foundation provides housing across 11 states, offering 7,000 units of affordable housing – half of which are in Indiana. To create environments where residents can thrive, the Foundation deploys service coordinators at each of their 42 affordable housing sites. The coordinators partners with residents to identify needs and connect them with community resources – employment assistance, financial literacy education, and education. Many sites also contain resident success centers which focus on basic needs, youth development, workforce development, and community engagement. Centers offer specific programming based on residents’ needs and request. Some examples of the programming include gardening classes, fitness, clothing pantries, and much more. In 2018, the Foundation partnered with Hoosier Veterans Assistance Foundation (HVAF) and the City of Indianapolis to address a shortage of housing for veterans with HUD-VASH vouchers. Like Housing Choice Vouchers, a lack of units accepting the vouchers left many Indianapolis veterans homeless. The Glick Housing Foundation recognized the need and began accepting vouchers at a number of its Indianapolis sites, providing stable affordable housing for upwards of 80 homeless veterans at the time. Housing for All: Leveraging Housing for Economic Well-Being We believe that housing should be attainable for those who desire to call Hamilton County home – during every stage of their lives. We will prioritize diversity in product types and housing prices to uphold the economic well- being of Hamilton County. To ensure housing for all, we will... • work collaboratively with leadership to prioritize diversity in housing product types and prices (prioritizing households earning up to 120% AMI); • encourage and regulate for lower cost housing options near jobs and services; • explore public-private-philanthropic partnerships to expand resources and dollars aimed at removing barriers to attainable housing; and • communicate the importance of attainable housing the County’s economy today and in the future. #HOUSING4ALL VISION: The Hamilton County Housing Collaborative is a group of individuals and organizations committed to improving the inventory of housing in every category along the continuum of housing options. This collective impact initiative is staffed by HAND, Inc. Aspire, Family Promise of Hamilton County, Noblesville Housing Authority, and Westfield Washington Township are the other founding organizations. CREATE STRONG COMMUNITIES WITH #HOUSING4ALL. • Visit www.handincorporated.org to learn more and get digital copies of the 2022 Hamilton County Housing Report. • Be a knowledgeable YIMBY – “Yes in My Backyard” by advocating with your elected officials and following local zoning meetings. Support good projects that provide more workforce housing. Learn more at https://yimbyaction.org/2021/ • Volunteer with a nonprofit working in housing. Contact Kelley Romweber (kelley@handincorporated.org) to explore which nonprofit in Hamilton County would be a good fit for you. • Use your social media presence to advocate for #Housing4All. • Donate funds, land, or expertise for housing initiatives focused on low-income households. Kelley Romweber (kelley@handincorporated.org) can give you the latest information. TAKE ONE ACTION TODAY: