Last month, BDP Impact CEO David Foster participated in the Mission Investors Exchange national conference, which brought together more than 700 impact investors in Los Angeles. During the panel, “Investing in Housing Solutions: Innovative Impact Investing Models,” Foster and co-panelists Rodney Foxworth (moderator), Co-Founder, Worthmore; Deborah La Franchi, Founder & CEO, SDS Capital Group; Joanne Lee, Manager, Thriving Communities Fund, Kaiser Permanente; and Tim Ortez, Vice President and Chief Financial Officer, The Weingart Foundation discussed innovative real estate funds designed to create supportive housing or mixed-income properties for unhoused individuals.
Throughout the session, panelists explored the role of mission related investments in market-based solutions to address housing disparities. Foster shared BDP Impact Real Estate’s successful models and creative strategies for creating or preserving affordable housing units, such as its partnership with Community Solutions, Inc. Large Cities Housing Fund, an impact investor-backed fund to purchase and rehabilitate 2,500 units of housing for formerly homeless individuals in eight cities. Beyond the insights from the panelists’ case studies and direct experience, the audience Q&A demonstrated the philanthropic community’s eagerness to leverage impact investment dollars to solve homelessness and address the affordable housing crisis in the country.
Key takeaways from the conversation include:
1. The affordable housing gap and related challenge of homelessness cannot be solved exclusively through existing financing tools such as the federal Low Income Housing Tax Credit; other pools of impact capital are critical to solve this growing need.
2. Affordable housing is a good match for impact investing as it provides clear and measurable outcomes and is a relatively easy type of investment to understand.
3. The speed and predictability of a foundation’s impact investment process drive the amount of impact an investment can have. Long timelines and complex approval processes prevent capital from being useful in high-impact projects.
4. An increasing number of foundations, health systems, banks, family offices, and corporations are interested in expanding their impact investing. Models that allow for collaboration in areas such as shared underwriting and standard sets of impact metrics help to share the administrative burden and make an impact program more achievable for more potential investors.
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