Place-based philanthropy can serve as a powerful tool to support housing production and affordability by catalyzing resources, convening key stakeholders across multiple sectors, and coordinating strategic efforts within specific geographic areas. In many cities, community foundations and other place-based philanthropies are activating and focusing efforts to address the unique challenges and opportunities within their local housing ecosystem, and leading initiatives to launch programs that boost housing supply and affordability. In some cases, they are also directing impact investments into housing production and preservation that generate positive, measurable social or environmental impact alongside financial return.
As a leader in housing production support, the Community Foundation for Greater Atlanta (CFGA) expects to leverage its investments to create or preserve 5,000 affordable units in a five-year period between 2022-2026. San Diego Foundation similarly aims to develop 1,000 units annually through 2034 through its San Diego Housing Fund. A national effort to launch and support similar programs and investment funds could catalyze the creation of at least tens of thousands of units annually.
The Challenge This Tool Solves
The affordable housing ecosystem at the local level is diffuse and often disorganized, making it difficult for stakeholders to broadly assess community needs and coordinate housing production and preservation efforts. Most regions lack a centralized process to match projects in need of additional capital with potential funders, forcing developers to take a piecemeal approach to assembling the capital stacks for worthwhile projects and leaving many opportunities unidentified or abandoned. Moreover, there is significant need for patient, flexible, and affordable capital for acquisition and predevelopment costs, as well as capacity-building for nonprofit and undercapitalized private developers, to build and maintain a strong project pipeline.
Community foundations and other place-based philanthropies can help address these challenges by forming the backbone of local coalitions that bring together policymakers, philanthropy, and the private sector. These coalitions can play key roles in evaluating data, engaging community voices, prioritizing critical needs, and developing or supporting comprehensive strategies to address local housing gaps. As aggregators of mission-driven capital, place-based philanthropies can significantly expand housing production and affordability through impact investment funds, traditional grant-making, and partnerships with the public sector. Community foundations in cities and regions across the country are uniquely positioned to leverage both their social and financial capital to meet the urgent needs of the current housing crisis.
Types of Communities That Could Use This Tool
More than 900 community foundations operate nationally, covering every state and both urban and rural areas. In almost every geography in the U.S., a place-based funder will be operating and could potentially play a supporting or lead role in addressing the housing crisis as a convener, pilot funder, capital aggregator, or organizer of local coalitions.
Expected Impacts of This Tool
Community foundations nationwide collectively manage more than $110 billion in assets and award more than $14 billion in grants annually. More broadly, U.S.-based philanthropic organizations manage over $1.1 trillion in assets, but only about 5% of those are devoted to impact investments. Increasing the percentage of assets that these organizations devote to housing production and deploy through impact investment funds could unlock billions of dollars to support the creation of tens of thousands of homes annually.