$1B affordable housing fund launched to counter private equity buys
Three affordable housing organizations are teaming up to raise and invest $1 billion over five years to build, protect and preserve approximately 10,000 homes across the country.
"We are launching this partnership at a time of immense crisis for communities with lower incomes," said Andrea Ponsor, president and CEO of the Stewards of Affordable Housing for the Future, a collaborative of 13 affordable housing providers who own nearly 150,000 rental homes.
"The reality and scale of the current situation requires an immediate response to ensure that hundreds of thousands of homes remain affordable to people that need them," she said.
The nonprofit groups point to what happened in the years following the Great Recession, when private equity firms like Blackstone and Colony Capital Inc. purchased large amounts of distressed housing to use as single-family rental properties or to fix and flip to another buyer.
"We cannot let this happen again," said Lori Little, president and CEO of the National Affordable Housing Trust, a low-income housing tax credit syndicator with over $1 billion in assets under management. "We will proactively equip affordable housing developers with financing solutions that will allow them to be competitive. We will challenge the status quo to ensure an equitable recovery."
The third participant, the Low Income Investment Fund, has $900 million in assets under management and a portfolio of properties located in neighborhoods where over 70% of residents are people of color.
Affordable housing issues are one of the dividing lines in the 2020 presidential election. In its 2021 budget proposal, the Trump administration looked to make cutbacks on a number of affordable housing initiatives.
Even prior to the pandemic, there were several major metropolitan areas with serious affordable housing problems, such as Seattle and the Bay Area in California.
The fallout from the shelter-in-place orders has only exacerbated the issue nationwide.
The three groups previously partnered for affordable housing initiatives, including on the Fund to Preserve Affordable Communities, a $100 million collaborative between the LIIF, the NAHT and others, that provides acquisition financing to SAHF members.
"This joint venture will create bold solutions, from capital innovations to policy advocacy, in order to create, protect and preserve affordable housing," said Kimberly Latimer-Nelligan, the president of the LIIF.