JACKSONVILLE, Florida (October 27, 2011) – The Jessie Ball duPont Fund is investing $2 million in efforts to develop and preserve affordable rental housing for low-income individuals and families in Duval County, Florida.
The investment, which will be manifested in the form of loans to developers, is intended not only to increase the inventory of affordable rental housing but also to grow the capacity of organizations — nonprofit and for-profit — that provide affordable rental housing in the county.
“Making loans is not the goal here,” said Sherry Magill, president of the Jessie Ball duPont Fund. “Making loans is a tactic. The goal is to build a system to ensure that folks can afford housing.”
The $2 million investment is being made not through grants, but through a Program Related Investment (PRI) to the Florida Community Loan Fund.
Program Related Investments are investments by a charitable foundation at below-market rates to support organizations that are addressing social or community concerns. PRIs often take the form of loans, promissory notes or equity investments. They are like grants in that they support organizations and activities that are in furtherance of the foundation’s mission. They are different from grants in that they must be repaid.
(For a primer on PRIs see “Deploying New Strategies In Pursuit of the Mission of the Jessie Ball duPont Fund” at www.dupontfund.org.)
The trustees decided to enter into Program Related Investments after extensive study and deliberation by trustees and staff, and a realization that investing a portion of the Jessie Ball duPont Fund’s endowment through PRIs will expand the Fund’s grantmaking.
“Communities today face enormous challenges and they need all of the resources available to serve their citizens, particularly those who are the most vulnerable,” said Magill. “We felt a responsibility to use all of the tools at our disposal — grants and PRIs — to help support those communities that Mrs. duPont cared deeply about.”
The Jessie Ball duPont Fund’s Program Related Investments will be made from the Fund’s endowment, and will not impact the Fund’s grantmaking allocation.
The Florida Community Loan Fund is a what is known as Community Development Financial Institution, that is, a lender that specializes in underserved communities. The Florida Community Loan Fund provides capital and technical assistance to nonprofits in Florida involved in affordable housing, economic development and essential social services in urban and rural low-income communities.
The Jessie Ball duPont Fund expects the Florida Community Loan Fund to identify development partners who can build new, or preserve existing, affordable rental properties in Duval County and invest the PRI funds in their efforts.
In recent years, the affordable housing conversation has focused less on new construction of single family homes and more on preservation of affordable rents. This shift is driven by current economic factors, notably the overbuilt Florida housing market, and concerns about the potential loss of a significant inventory of subsidized rental units in the near future.
In general, rental properties “lose” subsidies for one of two reasons: property owners find it more feasible to convert the units to market-rent (or non-subsidized) properties, or the properties fall into such disrepair that they no longer meet the standards necessary to receive subsidies.
The potential loss of affordable rental properties is of particular concern in Duval County, which has the largest share of “at-risk” units in the state.
Duval County currently has slightly more than 22,000 units of “assisted” rental housing — that is, the units carry income and rent restrictions associated with public subsidies. Duval County accounts for 9% of the state’s total inventory of assisted housing units. More than 10% of Duval County’s inventory – 2,746 units – is considered “at risk” of losing subsidies by 2020. This represents 25% of the at-risk inventory in the State of Florida, according to the University of Florida.
These affordable rental units are a critical piece of the housing stock in Duval County, where one in four households fall at or below 40% of the Area Median Income, according to the U.S. Census.($60,300 in 2009).
In Duval County, there are only 39 affordable and available rental units for every 100 extremely low-income households, according to an overview of Duval County housing needs and supply prepared by the Florida Housing Data Clearinghouse at the University of Florida’s Shimberg Center for Housing Studies in May 2011.
The loss of these units will have negative effects far beyond the individual tenants.
“When you lose the ability to house people, shelters get overrun, more people are on the streets — it’s not a formula for a healthy community,” said Wight Greger, former director of the Housing and Neighborhood Department, City of Jacksonville. “Children move from school to school, and school performance drops. When units go into disrepair, they become a drain on neighborhoods, providing a place for increased crime, damaging community pride and discouraging community investment.”
Under the terms of the PRI, the Florida Community Loan Fund may use up to 25 percent of the total PRI for “non-housing” community projects that serve low-income people, such as child-care centers or health clinics.
Historically, PRIs also help leverage additional investment capital from public and private sources. Research shows that CDFIs such as the Florida Community Loan Fund have leveraged an aggregate $3 of capital from other sources for every $1 of PRI capital deployed.
The Jessie Ball duPont Fund makes grants to more than 330 eligible organizations identified by Mrs. duPont in her will. The Fund has assets of more than $281 million and has awarded more than $303 million in grants since 1977.
Sherry Magill, president
904-353-0890 / email@example.com
Mary Kress Littlepage, KBT & Associates
904-384-8496 / firstname.lastname@example.org