Category Archive: Impact Investing

  1. Legislators’ Push for Affordable Housing Package Dominates News Cycle

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    Efforts to address California’s housing shortage took center stage in Sacramento last week as Gov. Jerry Brown and legislative leaders struck a deal on three key measures—Senate Bills 2, 3, and 35. The measures have been the subject of intense debate as leaders statewide seek to stimulate development and improve housing affordability.

    Senate Bill 3, authored by Sen. Jim Beall (D-San Jose) was amended August 28th to increase the bond to $4 billion and renamed. The amended bill would authorize $3 billion in bonds for the construction of new low-income housing, and add $1 billion to extend the Cal-Vet Farm and Home Loan Program, which provides homeownership subsidies to veterans. The Building Homes and Jobs Act (SB2), authored by Sen. Toni Atkins (D-San Diego), was also amended to provide for more local government control of the funds generated from real estate document fees. The third measure, Senate Bill 35 authored by Sen. Scott Wiener (D-San Francisco), would streamline local planning reviews for new construction. Both SB2 and SB3 require a two-thirds approval by the Legislature.

    The news and opinion pieces highlighted below offer a robust picture of the debate taking place statewide:

    Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

    For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO, at jennifer@lesardevelopment.com.

  2. Unlocking Land for High-Impact Development

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    Modern apartment buildingThe most recent forecast shows that California needs 1.8 million new homes by 2025 to keep pace with population growth, projected to reach 39 million to 50 million by 2050, yet annually produces fewer than half the homes necessary to meet those needs. As a result, cities and counties throughout the state now face an unprecedented affordable housing crisis that threatens economic growth.

    While new sources of housing financing are part of the solution, many jurisdictions are also taking steps to maximize the development potential of existing land. According to the widely circulated “A Blueprint for Addressing the Global Affordable Housing Challenge” and its California companion report “Closing California’s Housing Gap,” both published by the McKinsey Global Institute, efforts to “unlock land” are the most important measures jurisdictions can take to reduce the costs associated with housing production. This is especially true in California where the growing population and limited availability of buildable parcels makes it imperative to prioritize sites based on their capacity for high-impact development.

    In recent years, many jurisdictions have turned to transit-oriented development to unlock land with existing infrastructure near transit hubs and corridors. Since 1995, the Los Angeles County Metropolitan Transportation Authority has routinely sought opportunities to collaborate with developers to increase transit use by building pedestrian-friendly communities on Metro-owned properties. To date, the agency has completed more than 2,017 housing units, as well as nearly 1.5 million square feet of combined retail and office space, across 18 projects. In 2015, the agency updated its joint development policies to require that 35% of the total housing units be affordable to households earning no more than 60% of the area median income.

    San Diego has also taken steps to develop or repurpose government-owned land. In June 2017, San Diego County Supervisors Dianne Jacob and Ron Roberts announced an affordable housing initiative that included identifying 11 county-owned properties for evaluation to determine whether they can be redeveloped. County officials are currently evaluating these sites to determine the feasibility of different redevelopment options.

    Other jurisdictions are working with private landowners to spur development on underutilized or idle land. Last year, Alameda County passed a general obligation bond to provide $580 million in funding for affordable housing initiatives. One initiative capitalizes on the interest faith-based and community organizations expressed in developing their available land and buildings for affordable housing. To launch the Housing Development Capacity Building Program, the County Board of Supervisors has allocated $750,000 to provide qualifying organizations with the capacity development and training necessary to convert their assets into affordable housing. The County also seeks to leverage its contribution with other resources to expand its services.

    In addition, more communities—including Santa Monica—are adopting inclusionary zoning policies. In July, the Santa Monica City Council voted to require most new developments to set aside up to 30 percent of units for low-income households.

    As local governments seek to resolve the affordable housing crisis, they will need more innovative strategies to spur development by unlocking land. By analyzing how available land is currently used, local governments can determine which locations offer the greatest potential for lower-cost, high-impact housing development.

    To learn more about LDC’s policy services, contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

    LeSar-Artemis-4x5Artemis Spyridonidis covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California.

  3. San Diego Considering Pilot Program to Reduce ADU Fees

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    ArtemisSenior Associate Artemis Spyridonidis addressed the San Diego City Council on July 24th, before it approved amendments to the Land Development Code and the Local Coastal Program to modify the City’s accessory dwelling unit (ADU) regulations.

    Her comments focused on the Smart Growth and Land Use Committee’s recommendation that the City Council approve a two-year pilot program during which ADU fees would be reduced to a flat fee of $2,000 – down from the current fees of approximately $28,300. Although it wasn’t part of the resolution that day, the City Council may still have an opportunity to approve this program, and it’s our hope that the pilot program will be created, as it could create a great boost in ADU production.

    LDC studied San Diego’s ADU fees and compared them to the fees of several other major cities. We found that there is a direct correlation between fees and the number of units built; the lower the fees, the more units built.

    For example, Portland, Oregon, charges approximately $1,300 in fees and approximately 350 ADUs have been built there each year since 2015. Santa Cruz charges around $12,800 in fees and approximately 50 units have been built each year since 2015. Finally, in San Diego, fees are approximately $28,300, and the city estimates that only 10 ADUs are built here each year. A two-year pilot program establishing a flat fee of $2,000 is a much needed policy change to encourage ADU development.

    As naturally occurring affordable housing (NOAH), ADUs can help fight the displacement that typically occurs when neighborhoods gentrify and rents and housing prices climb, as they have in recent years in San Diego. This type of urban infill is also environmentally friendly, reducing commute times and urban sprawl. By allowing people to stay in their own communities, among their own neighbors, families, and friends, ADU development will help maintain networks that create wellbeing for all San Diegans.

    To learn more about LDC’s policy services, contact Artemis Spyridonidis, Senior Associate, at artemis@lesardevelopment.com.

    LeSar-Artemis-4x5Artemis Spyridonidis is covering housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California.

  4. Harvard Report Calls for Expanded Range of Housing Options

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    Harvard_2017_Housing_ReportNational home prices reached pre-recession peaks last year despite home prices exceeding previous highs in only 41 of the nation’s 100 largest metro areas, according to a recent report by Harvard University’s Joint Center for Housing Studies. High-income neighborhoods saw significantly greater gains than low-income neighborhoods, resulting in regional growth patterns that show price appreciation along the East and West Coasts and declines in the Midwest and South.

    The impacts of historically low construction on housing supply have disproportionately affected the entry-level housing market and tightened the rental market where prices have far outpaced inflation. While household growth rates have picked up largely due to gains among the millennial generation and immigrants, rates are expected to slow again as the baby-boom generation declines.

    To meet the demand for affordable housing, the report calls for national policies to address the diversity of housing markets nationwide, and for state and local governments to take the lead on developing policies and securing resources to meet the unique needs of their communities. Read more…

    For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

    Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

  5. Register Now for the 2017 California Economic Summit

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    CES logoRegister for the 2017 California Economic Summit taking place in San Diego on November 2-3, and save $100 on registration through August 31 using LeSar Development Consultants’ special code: LESAR17.

    Join the state’s largest existing coalition of public- and private-sector leaders, coming together for the sixth annual Summit to advance three ambitious goals:

    • Create a unifying triple-bottom-line vision for increasing economic security and upward mobility
    • Expand the strength and diversity of the Summit network to increase its influence on state and local policy decisions
    • Mature the Summit as a formal civic partner with government to advance triple-bottom-line policies

    The Summit highlights progress on The 2017 Roadmap to Shared Prosperity, which offers detailed action plans to improve the workforce pipeline, increase the supply of housing near jobs and transit, and expand regional water management of the state’s vital water supplies.

    register_now

    Jennifer LeSar, CEO of LeSar Development Consultants and Chair of the Summit Host Committee, was among the local leaders who collaborated to bring the Summit to the San Diego region.

    For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

    Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

  6. Promoting Housing Affordability: Collaboration Key to Improving Policy, Market Conditions

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    Two recent events—the Terner Center for Housing Innovation Conference and the release of the UCLA Anderson Forecast—examined the role of market conditions and public policy in the current housing crisis, and what can be done to improve housing affordability in high-cost regions.

    LA Aff HousingAt the Terner Center for Housing Innovation Conference, Enrico Moretti, Professor of Economics at the University of California – Berkeley, pointed to the weak housing supply as a “self-inflicted problem” related to zoning and land use restrictions, CEQA (California Environmental Quality Act), construction delays, and the proliferation of lawsuits. He also cited new research showing that underdevelopment limits access to jobs, which results in opportunity costs of $7,000 per year for the average Bay Area worker. It also contributes to rising inequality and depresses the State’s economy.

    The situation is similar in Los Angeles, where the growing number of rent-burdened households makes it difficult for people to escape poverty and increases the need for renter assistance, according to Stuart Gabriel, Professor of Finance and Arden Realty Chair at the University of California – Los Angeles Anderson School of Management.

    What can be done to address these issues? Solutions raised by the speakers and panelists include:

    • Updating zoning codes to allow for ADUs and multi-family development,
    • Implementing consequences for localities that fall short of RHNA goals, and
    • Revising parking requirements that restrict development, especially as transportation innovations transform commuting and travel.

    In addition, speakers at both events cited the need for greater regional and local collaboration. In a conversation with the Terner Center’s Carol Galante, Shaun Donovan, former Secretary of the U.S. Department of Housing and Urban Development, acknowledged Congress’s limited appetite for investing in infrastructure and the economy and encouraged regional and local leaders to come together to build the public will for local solutions. He also cited examples of successful interagency collaboration from the Partnership for Sustainable Communities, which brought together the U.S. Department of Housing and Urban Development, U.S. Department of Transportation, and the U.S. Environmental Protection Agency to help communities improve access to affordable housing, increase transportation options, and lower transportation costs while protecting the environment.

    Along similar lines, one of the panels at the UCLA Anderson Forecast discussed the need to help planning agencies and communities rethink the meaning and importance of “affordable” housing as part of the larger housing continuum. By building housing across every income level, communities will not only reduce inequality, they will also strengthen the economy.

    For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

    Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.

  7. San Diego Supervisors Approve $25 Million Investment to Address Homelessness, Affordable Housing

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    SD Investment in Addressing HomelessnessThe Board of Supervisors Tuesday approved a plan to invest $25 million from county reserves to increase the supply of low-cost housing in the region. The funds will cover costs associated with permits and regulatory fees, loan repayment, property purchases, equipment leasing, and other related expenses, and will be used to leverage funds from other federal, state and private resources to generate developments that include high-density projects near grocery stores, health services, mass transit lines and other conveniences.

    The Supervisors also designated 11 surplus county-owned properties to create more affordable homes. The targeted parcels range from undeveloped or minimally developed lots as well as aging buildings that could be redeveloped into new apartment complexes benefitting those at risk of homelessness. Nine of the properties are within the city of San Diego.

    In addition, the plan allows Supervisor Roberts to transfer $500,000 of the funds he gets annually under the county’s Neighborhood Reinvestment Program to the county’s Health and Human Services Agency to underwrite pre-development and planning activities.

  8. The Federal Reserve Bank of San Francisco – Invest in Results Because Outcomes Matter

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    Federal Reserve of SFSocial impact bonds and Pay for Success models offer the private sector a mechanism to invest in evidence-based programs that reduce long-term costs to society and yield significant social impacts. Outcomes investing has become the norm for foundations as well, offering opportunities for philanthropy to leverage funding with public and private sector financing.

    On June 13th, the Federal Reserve Bank of San Francisco and the Nonprofit Finance Corp. focused on the importance of “Investing in Results” at a one-day conference in the Bay Area. Featured presenters addressed the question “What does it take to measure and fund positive social change?” The event explored how service providers, government, philanthropy, and others are working together to address entrenched social issues in our communities and focus on long-term solutions. The presenters included leaders in the fields of philanthropy, public-private financing, affordable housing, healthcare, homelessness services, workforce development, and outcomes investing who discussed how funding systems can be changed to orient all stakeholders around outcomes, what outcomes-based funding models look like, and what is involved in developing them.

    Key speakers and topics included:

    • Antony Bugg-Levine, CEO, Nonprofit Finance Fund – “Introduction from Nonprofit Finance Fund”
    • Fred Ali, President and CEO, Weingart Foundation and Fred Blackwell, CEO, The San Francisco Foundation – “Funding an Outcomes World”
    • Sam Schaeffer, Executive Director and CEO, Center for Employment Opportunities – “Building a Culture of Continuous Improvement From Success to Failure”
    • Carrie McKellogg, Chief Program Officer, The Roberts Enterprise Development Fund – “Mind the Gap: Social Enterprise as Outcomes Driven Workforce Solution“
    • Tyler Norris, Chief Executive, Well Being Trust – “Creating a Market that Values Health”
    • Don Howard, President and CEO, The James Irvine Foundation – “Promise and Pitfalls of Prioritizing Outcomes in Foundation Strategy”

    Jennifer LeSar, LDC CEO, who attended the conference, said the presentations clearly underscored a common principle — “if the envisioned results can’t be credibly measured, even the most promising systems change will not be funded.” LDC staff are working with numerous clients to create organizational cultures, structures, and data-driven systems change that will improve outcomes for service providers and regional coalitions tasked with solving homelessness, affordable housing availability, and other major social problems.

  9. LDC at United Way of San Diego County’s Changing the Odds Community Breakfast

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    On May 10, 2017, LDC staff and guests attended the United Way of San Diego’s inaugural Changing the Odds Community Breakfast. The breakfast gathered community partners, businesses and friends together with one goal: “To change the odds for children.”

    Held at the San Diego Convention Center, the event’s Keynote Speaker, Liz Murray, was a highlight of the morning. Serving as an inspiration to all and especially to children, Liz Murray went from homeless to Harvard, and is the author of Breaking Night. As noted by the United Way of San Diego, “Liz Murray’s life is a triumph over adversity and a stunning example of the importance of dreaming big.”

  10. President’s Budget Maintains Proposed Cuts to HUD

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    The Trump Administration’s Proposed HUD Budget for 2018 was announced on May 23rd and, while providing a greater level of detail than the “skinny budget” released earlier this year, it pushes for severe cuts or modifications to existing programs. In a news release from the U.S. Department of Housing and Urban Development, the agency states: “The President’s 2018 Budget continues to provide rental assistance for 4.5 million households while recognizing a greater role for State and local governments, and the private sector, to address community and economic development needs.”

    HUD’s request includes $40.68 billion in gross discretionary funding with proposed reductions to be implemented primarily through rental assistance reforms and eliminating funding for programs. The Administration seeks to eliminate the Community Development Block Grant (CDBG) Program, on the basis that: “Since 1980, and most recently in 2013, HUD studies found that CDBG is increasingly not well targeted to the poorest communities and has not demonstrated a measurable impact on communities.” Similarly, the Budget proposes the elimination of HUD’s Choice Neighborhoods Initiative, HOME Investment Partnerships Program, and the Self-Help Homeownership Opportunity Program (SHOP), because “state and local governments are better-positioned to serve their communities’ needs.”

    On an upbeat note, the budget plan removes the statutory limit on the number of public housing units that can participate in HUD’s Rental Assistance Demonstration (RAD). It also requests that senior housing developments participating in HUD’s Section 202 Program become eligible to participate in RAD to help preserve housing for the elderly. In addition, the Budget seeks $2.25 billion to help local communities house and serve persons and families who are experiencing homelessness.

    In a reaction that differed forcefully from the response to the skinny budget, both Republican and Democratic lawmakers rejected President Donald Trump’s proposed budget blueprint even before it was formally released, saying that the cuts are too steep and the accounting is too unrealistic. Lawmakers said the document, which reflects the president’s broad vision, will go nowhere in Congress. Senator John Cornyn, the second ranking Republican in the Senate, called it “dead on arrival.”

    For more information about innovative approaches to policy and real estate development, contact Jennifer LeSar, President and CEO at Jennifer@lesardevelopment.com.

    Jennifer LeSarWith more than 25 years of experience in the real estate development and investment banking industries, Jennifer LeSar brings a diverse background to her work in community development and urban revitalization. Her technical expertise spans from policy and program development to the origination and underwriting of complex investments in equity funds, multi-family portfolios, and historic and low-income tax credit properties utilizing federal and state financing programs.