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Tackling the Workforce Housing Shortage Through Private Sector Collaboration

Urban Land Magazine Sep 11, 2019
This article is deemed a must-read by one or more of our expert collaborators.
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Tackling the Workforce Housing Shortage Through Private Sector Collaboration Giving Compass
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Giving Compass’ Take:

• The Washington Housing Initiative is partnering with the private sector to provide funding for more workforce housing in the Washington D.C., area.

• This collaboration will involve an impact pool which will give private equity financing to the housing organization that operates the units. How can donors become involved in collaboratives that incorporate private sector investment for social good?

• Read about how to eliminate silos among sectors to increase impact. 


The Washington Housing Initiative (WHI) wants to put capital to work to preserve a dwindling supply of workforce housing across the Washington, D.C., metropolitan area. Ultimately, though, the goal of the private/public initiative is much bigger.

The WHI has brought together a large group of public and private stakeholders—including experienced multifamily developers, owners, and operators—to create a strategic model addressing the workforce housing shortage that can be shared broadly with other communities battling the same problem.

“We want to show that there is a way to preserve workforce housing at scale and attract other institutional operators to replicate what we’re doing in the initiative,” says A.J. Jackson, executive vice president of social impact investing at JBG Smith, a publicly traded real estate investment trust based in Chevy Chase, Maryland.

JBG Smith founded the WHI with the Federal City Council, a nonprofit, nonpartisan organization dedicated to improvement of the District of Columbia. The initial target is to preserve 2,000 to 3,000 workforce units throughout the region by acquiring existing multifamily properties and keeping rents in a range of 30 to 80 percent of the area median income.

The WHI combines two key components. One piece is spearheaded by the Washington Housing Conservancy, an independent, not-for-profit housing provider that will buy, own, and operate the housing. The conservancy has set a goal of raising $30 million in seed money from charitable donations that it will use to acquire existing apartment communities, fund rent subsidies to low- and moderate-income residents, and help support neighborhood services, such as affordable child care and after-school programs.

The second component is the Impact Pool, an investment vehicle managed by JBG Smith that will provide private equity financing to the conservancy for acquisitions. Its goal is to raise $150 million that will be deployed as low-cost mezzanine loans.

Read the full article about workforce housing by Beth Mattson-Teig at Urban Land Magazine.

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Since you are interested in Impact Investing, have you read these selections from Giving Compass related to impact giving and Impact Investing?

  • This article is deemed a must-read by one or more of our expert collaborators.
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    First Social Impact Bond in South Africa Succeeds in Addressing Youth Unemployment

    Giving Compass' Take: • The first social impact bond in South Africa is successfully addressing the issue of youth unemployment throughout the country.  • The author notes that one of the crucial learnings was understanding the full scope of the problem before implementing the social impact bond. How can U.S. aid organizations learn from this insight? ` • Read about the good, the bad, and the ugly of social impact bonds.  In the nascent impact bonds market, employment is one of the most popular sectors, representing nearly a third of the deals contracted globally. After a year of implementation, the first social impact bond(SIB) in South Africa—the Inclusive Youth Employment Pay for Performance Platform—achieved its target outcomes early, placing 600 young people into jobs. One of the most interesting elements of this deal is the phased approach the project has taken: After a year of testing the SIB structure with a limited number of actors, the project will scale up for the next three years, expanding to multiple service providers, and bringing new investors and an additional outcome funder on board. This SIB combines outcome payments from government funders, as well as philanthropic donors, so while it’s called an SIB, the contract is more accurately a hybrid: It combines financing from domestic government outcome funders and third-party organizations, a format also used for the Colombia Workforce SIB—the first in a middle-income country. For the two government outcome funders, the structure offered a variety of potential benefits, such as innovation, increased efficiency, and the alignment of interests between different stakeholders. Within the employment sector, where it can be challenging for government to identify future labor market demands, the model also offered an opportunity to engage directly with the private sector, harnessing understanding of the market, as well as sharing the risk. The SIB offers some important lessons to the wider outcomes-based financing field. First, stakeholders need to clearly understand the problem they are trying to solve, and only then identify the most appropriate financial tool to pay for it. Second, working closely with experienced service providers can add clarity and direction throughout the process. Read the full article about social impact bond in South Africa by Izzy Boggild-Jones and Emily Gustafsson-Wright at Brookings.


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