Affordable housing doesn’t build itself, and it doesn’t fund itself, either.
To help developers create more affordable housing, Housing Trust Fund Ventura County has raised $5 million, and it’s hoping to raise a lot more.
“Our mission is to fill this huge gap of a lack of affordable housing,” said Housing Trust Fund CEO Linda Braunschweiger.
The nonprofit doesn’t directly fund new affordable housing in the region. Instead, it works with developers to provide the first bit of funding they need, which helps projects get off the ground and attract more funding. Affordable housing, which rents below market rate, doesn’t make its money back as quickly as market-rate or luxury housing does, so it often needs multiple layers of funding.
By providing the early money, Housing Trust Fund Ventura County lets developers pay for architects, city filing fees and other early expenses. The investments also allow developers to attract other sources of money.
One of the developers the Housing Trust Fund works with is People’s Self-Help Housing Corporation, a non-profit based out of San Luis Obispo that builds throughout the Central Coast. Housing Trust Fund recently approved an $850,000 loan to help People’s Self-Help acquire property for a new project with 153 units for low-income and very low-income residents, including some housing designated for farmworkers.
Housing Trust Fund relies on donations from the county of Ventura, cities, local corporations and foundations, and right now Braunschweiger is especially focused on the corporate community. One of the biggest issues many companies have is bringing talent into the area, and one reason for that is the area’s housing situation.
“(Companies) are continuing to struggle to attract employees because of the high cost of housing—and, more importantly, because there’s not enough housing,” Braunschweiger said.
The situation is about to get even more critical. Braunschweiger is worried that COVID-19 will affect people’s finances to the point where people living in single-family homes and luxury multifamily units will downsize to more affordable rental units, and there’s already a scarcity of those units in Ventura County.
“We don’t know the impact COVID-19 is going to have,” Braunschweiger said. “We were already at crisis level.”
Even before the pandemic, the lack of housing was impacting the economy. Companies who can’t find workers or attact them to the area leave for lower-cost areas where they can get the workforce they need.
“Rebounding from this is going to be difficult if we don’t have affordable housing for workers to live in,” Braunschweiger said.
To encourage people to work with the organization, Housing Trust Fund can issue community impact notes, which are like bonds, but with lower interest than traditional bonds. That way, the donation earns the investor money, which can then be cashed out or re-invested.
Housing Trust Fund VC is also looking to make the donations it gets count for more. It participates in programs like Proposition 1, an initiative in which the state matches the amount of funds housing trust funds raise over five years. The state will match up to $5 million per year, and Housing Trust Fund Ventura County successfully raised the full $5 million this year.
“I’m so pleased that our community sees the value in supporting affordable housing,” Jennie Buckingham, who chairs the Housing Trust Fund’s board, said in a news release. “This $10 million will go a long way to creating more workforce housing throughout all of the cities in our county.”
The funding match isn’t automatic—Housing Trust Fund Ventura County qualified by getting the fifth-highest score on the state’s scorecard, out of 37 organizations that applied.
Moreover, if the state grants the matching funds, the organization still doesn’t get an automatic check. Instead, when Housing Trust Fund makes loans to developers, the state government provides half the money. When the developers pay back the loan, all of the money goes to Housing Trust Fund.
That money can then be re-invested into new affordable housing projects. Because Housing Trust Fund uses loans instead of grants, a single contribution can be used to help fund multiple projects over the years.
“We have to be creative,” Braunschweiger said. “There’s not enough government money to fill this gap. We need private industry and individuals to help.”
–Contact Amber Hair at [email protected]