What Can Philanthropy Possibly Do About Spiraling Housing Costs?

June 30, 2014

by David Wertheimer, Bill & Melinda Gates Foundation

David Landers, Philanthropy Northwest

As we were both thinking about a summary of Tuesday’s Philanthropy Northwest member briefing on the crisis in our region’s supply of affordable housing, The Seattle Times tweeted: “Seattle-area rents jumped 4.1 percent in the second quarter to an average $1,284 a month: http://seati.ms/1miV5BG”

This news (which is really confirmation of what you already know if you are a renter in Seattle) underscores the importance of how our members and community partners are addressing the complexity of affordable housing. Nationally, 1 in 4 renters pay more than half of their income on rent and 19 million families are on the edge, one paycheck or emergency away from losing their homes. During any given year, 1.6 million Americans will experience a period of homelessness.

Acknowledging that funding for affordable housing results from the complex interplay of large economic trends, regional economic and real estate markets, and government policies and policies at the federal, state and local levels, it’s sometimes hard to identify the roles the philanthropic sector can play in this arena. With per-unit development costs for new units now running as high as $250,000-$300,000, there are few if any foundations that have the resources to “build our way” out of this crisis.

Yet at our member briefing, we all agreed it’s critical for Philanthropy Northwest members to consider what we can offer to help address this important issue.

M.A. Leonard of Enterprise Community Partners provided an overview of trends in affordable housing across the country and Northwest. She highlighted how Enterprise Community Partners is using a land acquisition fund, traditional and catalytic capacity investments, making policy change, providing thought leadership and fostering innovation as strategies for increasing affordable housing.

Candy Solovjovs of Meyer Memorial Trust described the Trust’s renewed commitment to affordable housing in Oregon with an Affordable Housing Initiative with $11 million over 5 years. Its broad goals are:

Build on previous investments to strengthen the long-term health and sustainability of Oregon’s existing affordable housing stock
Catalyze innovative strategies to increase the availability of affordable housing and support residents’ stability and success
Develop resources and policies that will expand the availability of affordable housing into the future

Carol Gore of Cook Inlet Housing Authority shared what one innovative provider is doing to address affordable housing issues for families in Alaska, including its success in revitalizing the Mountain View Neighborhood of Anchorage. Congratulations to CIHA too for being awarded the 2014 HUD Secretary’s Opportunity and Empowerment Award from the American Planning Association.

The speakers also offered several key ideas to consider:

Affordable housing is the essential foundation for families and communities to succeed in schools, find and keep employment, foster healthy interpersonal relationships and more. A memorable quote was “Poverty exists in totality, not in silos.”
The effectiveness of affordable housing relies on the success of and connection to other systems.
While the housing industry does a great job in developing housing stock for high income earners, large deficiencies continue to exist for extremely low income, workforce entry-level and middle income families.
Public dollars (federal, state, local) have traditionally provided the bulk of funding for affordable housing, but due to political gridlock, the fragile economic recovery and shifting national priorities these sources of funding have been steadily shrinking, risking stagnation in affordable housing development.
In response, the affordable housing community is developing stronger relationships with private market landlords. Local building owners and landlords are being successfully recruited to provide affordable housing, especially when very modest incentives are provided to help bring them to the table.
Expanding partnerships with faith-based organizations are also resulting in increased access to affordable homes.

As we continue to better understand the nature of the current environment, key roles for the philanthropic sector are emerging. These include:

Supporting the preservation and expansion of existing affordable housing stock in local communities
Increasing linkages across systems that promote the best uses of affordable housing and ensure stability for tenants in existing units
Stimulating landlord interest in making private market units available to those individuals and families with the most critical housing needs
Funding and participating in advocacy efforts to shift will and public sector funding priorities to affordable housing development

Read the presenter PowerPoints and additional materials for more information. If you would like to be involved in future discussions about philanthropy’s role in affordable housing, please contact us at news@philanthropynw.org.