Can Real Estate Crowdfunding Provide Affordable Housing for Our Everyday Heroes?

Teachers, nurses, fire fighters and law enforcement officials are often found in an affordable housing predicament. In Southern CA, there are very few of these everyday heroes who can afford to live in the same community that they provide services to. Often underpaid and overworked, our everyday heroes are often forced to spend much of their time and income on commuting costs. Teachers, for example, are largely responsible for raising our nation’s children, as more dual income families means less time to parent. Unfortunately, many teachers are underpaid and left with less time and resource to pass onto their own. Wouldn’t it be great if these type of unsung everyday heroes were given a chance to live in the communities they serve? Thankfully, there are a couple programs that have succeeded paving the way to this goal.


Teachers Lead the Need


It seems the Santa Clara Unified School District has expanded the three-R‘s of education: reading writing and arithmetic, to include Revitalization. In fact, Northern California’s Santa Clara Unified school District had such a lack of affordable housing it became an obstacle to hiring.

To help solve the problem, in the early 2000’s, a 40-unit apartment costing $6 million was financed and commissioned by the district to be developed by Thompson/Dorfman Partners. This property would be used to house more than 50 teachers, nurses, and counselors.  The tenants moved in paying $1,075 in rent, well below the $3,000 market rate. Hiring crisis – solved, as those thinking of teaching elsewhere suddenly thought twice now that their 60 minute commute was reduced down to 3 minutes. The situation was ideal since the district already owned the land upon which a closed school stood. The vacant building was then repurposed, resulting in a neighborhood retaining the services of the qualified teachers who also help raise their children.


Frustration Can Spear Change

Santa Clara Teacher now housed.

Addressing the wildly inflated Silicon Valley is just a start, as cities across the Nation share the same basic problem: Service providers cannot afford to live in the communities where they work. The workforce housing issue has spawned investigation to rectify these situations, but state and local programs relieve such a small number of everyday heroes that the frustration mounted, continues to rise.

“Define affordable housing.” An ER nurse friend of mine demanded. She makes enough to be disqualified for affordable housing, and not enough to qualify for others. Help is necessary. When you make just enough money to over-qualify for existing programs, and slip into a higher tax bracket, this can cost  enough to make the economic engine move in a direction opposite of your favor. It is clear that there is something wrong with the way we structure our values. Be careful not to make too much $, because if it isn’t quite enough to free you, it will cost you more to earn it. But, lets get back to the most basic issue & resolve: real estate’s effect on community revitalization for the teachers, nurses, fire and police officials.


Getting Incentivized

The Seattle School District and Northshore School District partnered with a local bank, a Seattle nonprofit counseling agency, and Fannie Mae to create the Hometown Home Loan Program. The program offers low-interest loans of up to $40,000 to help teachers. California’s Teacher Home Buyer Program of 2,000 offered interest-free loans up to $40,000 to help schoolteachers in the public sector purchase homes. 140 teachers received loans within the first few years of the program. Baltimore offered $5,000 home loans (yes, that was back in 1997) to all city employees. Repayment was reduced by 10% for each year that the homeowner remained a city employee. Nice gesture. What would the amount be today? According to the Housing Authority of Baltimore, the goal to increase the chances of City employees to become homeowners within the city limits is fueled by a $3,000 down payment incentive, which is creased by $750 when homes are purchased in Healthy Neighborhood Housing Blocks. Again, nice incentive. Yet, it has decreased by $2,000 in13 years, while the cost of living has risen. So, again, we discover an opportunity for online real estate investing to help a community develop properties that could be used to help propel the quality of life in their neighborhoods forward.


Rallying Around Each Other

When Santa Fe turned into a popular artist community the real estate prices skyrocketed. Teachers were forced to commute over 60 miles to work each day. When positions opened closer to home, they immediately left. A 50-unit apartment complex, along the lines of the Santa Cf1a13ce25d085b37e04771854fb47842lara project was proposed and went nowhere. San Francisco had the same idea, and moved forward on plans to build a 43-unit apartment complex for teachers on land owned by the district. It was met by such extreme traffic and parking concerns of neighbors that it too was abandoned. A project that could have rented apartments for as little as $700 per month (compared to the market rate of the early 2000’s, of $1,600 per month) just fizzled out. It could have expanded, providing homes to nurses and firefighters and peace keepers. Yet, with the depth of innovative minds & resources available now, we have few limits to possibility. In fact, we’ve seen how people will rally around the efforts of individuals like Lebron James in Akron, Ohio, and Theaster Gatesin Chicago, Illinois, as well as a multitude of other unsuspecting places. If those living within a society see an unmet need, what should stop them from fulfilling that need through methods such as real estate crowdfunding?

As Theaster Gates created an artist community & affordable housing complex out of a dilapidated, underused neighborhood block, in such a short time, surely we could create the same for our local service providers. While his efforts were collaboratively funded, imagine the expansion and timeliness afforded with a crowdfunded pool of resources gained. Now, my curiosity stretches to creating housing for our everyday heroes (service providers) whether it be on a small SFR, one-at-a-time scale, or a larger apartment complex scale.

And just to illustrate the Doing Well While Doing Good philosophy, a project exceeding most people’s expectations came to life in 2013 in New Jersey, Teachers Village.  This 6-building complex includes retail outlets and three charter schools. Overall this complex is used to accommodate 1,000 students and provides housing marketed towards Newark teachers. The project received almost $40 million in state tax credits, $60 million in federal New Markets tax credits, and further funding from numerous large institutional banks and investors such as Goldman Sachs, Prudential Financial, TD Bank, and billionaire investor Nicholas Berggruen.


The Solution

In many major population areas throughout America there are perfectly good patches of land that are being underutilized. We pay taxes to provide funding to teachers, firefighters and others. Could these funds not be similarly pooled together and dedicated to help provide affordable housing for those everyday heroes who provide our communities with education and protection. An abandoned building, vacant lot, or distressed building can all be renovated and provide something valuable for everyone both directly and indirectly.

There are some private non-profit organizations who are on the right track. The Everyday Hero Housing Assistance Fund, founded in 2011, and based in Denver Colorado, funds their mission to expand housing opportunities to teachers, nurses, fire, and law enforcement officials. So what do you think about the idea of creating affordable housing for those unsung heroes who live among us?  Leave a comment and let us know what real estate projects would make sense in your neighborhoods.

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