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, that will give private equity financing to the housing organization that will operate the units. How can donors become involved in collaboratives that incorporate private sector investment for social good?
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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