March 2023

Bob Simpson, President, Multifamily Impact Council



The work of developing a framework for multifamily impact investors began before we even formed the Multifamily Impact Council. In fact, it’s discovering such a framework didn’t exist that helped lead to the creation of the Council. 


We’ve been meeting with our members, industry, housing, and ESG stakeholders for nearly a year. We’ve conducted surveys and spent many hours researching, all to understand the current multifamily impact investing landscape, and we’re now putting the final touches on the framework’s first version. 


We organize the framework around seven key impact principles, including Housing Stability — helping people stay in their homes. And housing stability is the focus of our newsletter this month.  


First, we have a powerful piece from Peggy Bailey, Vice President for Housing and Income Security at the Center on Budget and Policy Priorities. Peggy includes some eye-popping stats to highlight how housing affordability impacts low-income members of our communities and, most importantly, what we can do about it. 


And then, we speak with Andrea Ponsor, President and CEO of Stewards of Affordable Housing for the Future (SAHF). Andrea updates us on the tremendous work SAHF is doing to help its members and other owners/operators provide healthy, stable, and sustainable homes. 


Enjoy this newsletter and stay tuned for the release of Version 1.0 of our framework. I believe it can be a difference maker for multifamily impact investing, and look forward to working across the rental housing ecosystem to refine and improve our work

Thanks for reading,

Bob Simpson

President, Multifamily Impact Council

The Housing Affordability Crisis Is Most Acute for People With the Lowest Incomes

By Peggy Bailey

Vice President for Housing and Income Security, Center on Budget and Policy Priorities

Housing affordability for people with the lowest incomes is a long-standing problem that policymakers have inadequately addressed, but the moment has grown urgent. Between 2019 and 2021, rent increased by 12 percent for renters with incomes below $15,000 — about double the overall inflation rate during that period. Rents rose even more for Latine and Black renters in this income bracket: 16 percent and 15 percent, respectively. While rent increases have moderated in recent months, rents remain high, and, for many people, incomes aren’t keeping up.


When families with low incomes cannot find affordable housing and high housing costs eat into their budgets, they are forced to make tough choices between meeting everyday basic needs like food and health care and paying rent. Closing the housing affordability gap will require a comprehensive housing strategy, including expanding rental assistance, preserving existing affordable housing and developing new units.


People with the lowest incomes have long struggled with high housing costs that put them at risk for housing instability, evictions, and homelessness. In 2019, about 9.4 million households without rental assistance paid more than 50 percent of their income on rent or lived in severely inadequate housing. These counts don’t include the almost 600,000 people who experience homelessness on any given night, or the millions of people who are living doubled up or are unnecessarily institutionalized due in part to an inability to afford a place to live on their own.


Several communities of color are over-represented among people experiencing bad housing outcomes. For example, about 75 percent of people who experienced homelessness in 2020 were people of color: nearly 40 percent were Black (Black people comprise 13 percent of the total U.S. population), 23 percent were Latino (19 percent), 6 percent were multiracial (2 percent), 3 percent were Native American (.7 percent), and 1.5 percent were Pacific Islander (.2 percent).


The Solution: Rental Assistance, Affordable Housing Preservation, and Capital Funding


Often, the need to close the affordable housing gap is described as a supply problem with the sole solution being to build more units. This ignores two facts: most people who struggle to afford housing currently have a place to live and, without building more housing that is completely government-funded, housing can’t be built and properly maintained without charging minimum rents that are likely still unaffordable for people with little to no income.


As Jenny Schuetz points out in “Fixer-Upper: How to Repair America’s Broken Housing Systems,” even if landlords charged only what they’d need to cover their costs of ongoing operations, general maintenance, and debt payments owed on the development, the rents would exceed many people’s ability to afford their rent.


In 2019, the average income for a household designated as “extremely low income,” defined as 30 percent of area market income or below, was $11,318 per year, as Schuetz writes. That same year, the average monthly operating cost for a rental unit — the cost for a landlord or property owner to break even, not including any profit — was about $520 per month. The U.S Department of Housing and Urban Development (HUD) generally considers a unit affordable if rent and utilities do not exceed 30 percent of income. In this scenario, 30 percent of $11,318 is $283 per month, about half of the landlord’s minimum costs — and most housing costs more than this minimum calculation, especially when utilities are included. The gap between the cost of housing and what households can afford must be closed either by households using more of their income on rent — further straining their ability to pay for their basic needs — or with rental assistance.


At the same time, supply strategies are also needed. For example, resources are also needed to preserve existing affordable housing. The Low-Income Housing Tax Credit (LIHTC) program is 37 years old. Most LIHTC developments sign initial agreements that require them to maintain affordability to people with incomes at about 60 percent of Area Median Income (AMI) for 15 - 30 years. We have reached the point where each year thousands of units are no longer be considered “affordable housing” because these agreements have reached the end of their lifecycle and property owners can decide to transition the properties to market-rate housing. Policymakers need to do more to help owners easily access resources to continue to properly operate and maintain properties if the owner agrees to keep rent levels affordable and offer incentives to recapitalize properties if they need significant repairs or modernization.


We are also losing already scarce affordable housing due to age and disrepair. Federal resources haven’t kept up with operation and maintenance costs for thousands of multifamily units in the Public Housing and Project-Based Rental Assistance programs. An estimated $70 billion is needed to revitalize existing public housing alone; that doesn’t include addressing the lack of adequate ongoing maintenance costs or the creation of new units.


Finally, building new units, especially in high-cost areas, is an essential part of the solution. Building affordable housing often takes longer and is more expensive than building market-rate housing, but it shouldn’t be. Policymakers should expand and strengthen LIHTC, continue to support the National Housing Trust Fund, and create new, innovative federal programs that support capital investment. For example, Congress should work with the Biden Administration to support the $10 billion in local infrastructure and planning and housing capital grants included in President Biden’s last two budget proposals to Congress.


The housing affordability crisis isn’t due to a single issue or event. Multifaceted problems require multifaceted solutions. It will take attacking the affordable housing crisis swiftly and comprehensively to end homelessness and create a world where everyone can afford housing.  

Q&A: Andrea Ponsor, President and CEO, Stewards of Affordable Housing for the Future

Andrea Ponsor

In her role as President and CEO, Andrea Ponsor works to identify, develop and advocate for key strategic issues of concern to SAHF and its members, create a level playing field for effective, mission oriented nonprofit businesses and amplify SAHF’s impact to create more sustainable properties and communities and improve the lives of residents. Andrea joined SAHF in 2016 as Executive Vice President of Policy, bringing with her 15 years of experience in the field of housing and community development.

Prior to joining SAHF, Andrea served as the Federal Policy Director for Local Initiatives Support Corporation where she led housing policy efforts. Previously she was a principal at Hessel, Aluise and O’Leary, P.C., a boutique law firm with a national affordable housing practice, where she represented lenders, developers and management agents in affordable housing transactions and policy matters.

Andrea began her career as an attorney with the U.S. Department of Housing and Urban Development in Atlanta, Ga., where she focused on multifamily mortgage closings, property disposition, program enforcement and fair housing.

Andrea holds a Juris Doctor degree from the University of Florida College of Law and a bachelor's degree in Economics from Tulane University.

Can you tell us a little about SAHF and its mission?

We are a unique, mission-driven policy and practice collaborative. We're comprised of 12 of the country's largest nonprofit multifamily, affordable housing developers. Our members come together to realize a vision of a world where every person has a healthy home and a thriving community. And we do this work of policy and peer exchange, drawing on the real-world experience of our members to advance policy and practice that takes good ideas and implements them on the ground and in a resident-centered way.

What does the work SAHF around health look like?  

We understand our role in health and housing in three parts. One is going upstream to think about social determinants or systemic drivers of health and how those connect to housing. What are those relationships? The next is thinking about how then do we connect to those other drivers to health through housing, and that's where we think about the practice of residents services coordination. And then the third is thinking about how are we accountable for actually creating those improved outcomes.  

So it's a three-part strategy. And each one of those has had its policy or practice products. The resident services work began with a community of practice recognizing that many practitioners can point to a single community where they do resident services really well, but that sort of commitment and systemic investment needed to consistently provide and replicate high-quality, resident-centered services was more challenging and lacked a standard definition. That makes it challenging for policymakers and funding partners interested in supporting resident services to identify those actors that have that commitment and capacity to really deliver a quality services program. 

Out of that community of practice, we developed our Framework and Guidelines for a System of Resident Services Coordination. And eventually, that framework became the basis for our partnership with Fannie Mae around Healthy Housing Rewards- Enhanced Resident Services and the Certified Organization for Resident Engagement and Services (CORES) program. CORES recognizes organizations that have that capacity and commitment to providing resident services at the enterprise level. 

But we also, at the same time, think a lot about outcomes for the people we serve- both to ensure that homes and services we provide are impactful and as a tool for advocating for housing. Our members want to know that the services they coordinate are making a difference and they know that a big part of advocating for housing and for resources across sectors, in particular, is being able to demonstrate the value of a stable home on other life outcomes. So we are in year eight now of our Outcomes Initiative. We have developed 24 different resident outcomes measures, many of which are drawn from validated measures that have larger bases of comparison. And we collect those across our members. We are able to analyze outcomes for roughly 100,000 households on some measures. 

While this is real-world data and not rigorous academic research, we have some outcomes where we can begin to really understand the impact of a stable, affordable home with services. For instance, we know that our members are succeeding in creating great housing stability. Residents of SAHF member properties are only about half as like to experience housing stability as the rest of the population. We also see positive outcomes related to health such as higher rates of regular places of care and lower rates of emergency room use. 

Those two initiatives — a framework for resident services and the outcomes measures — together with this upstream work around social determinants of health have allowed us to forge a number of partnerships, not just with Fannie Mae. We are using these outcomes measurements in a partnership with the UnitedHealth Group (UHG), where our syndicator affiliate, National Affordable Housing Trust, is helping UHG make equity investments. And SAHF is helping UHG administer grant funding for health-supporting services in those properties and measure the outcomes for people living in these quality, stable homes with accompanying services. 

And as we’ve talked about this work, we've had impact investors and policymakers call and tell us that they’ve taken our outcomes framework and asked borrowers to use some or all of it. We’ve spent a good amount of time talking about why diving right into a full outcomes collection might not be the best place for every property to begin. The Outcomes Initiative framework was built in the context of affordable housing with some sort of onsite service coordination. Even with those things present, this is a lot to ask of residents and owners right out of the gate, and you need to really be thoughtful. 

After a year or two of those conversations with folks who were really trying to be thoughtful about implementing the resident services and outcomes framework, we realized it would be helpful to write these things down in a way that connects the dots between outcomes measurement and resident engagement and services. So we created a toolkit that provides questions and resources to let folks make their own decisions about how the framework might apply to the outcomes they're trying to drive and what systems they need to build to successfully track outcomes. 

Can you tell us about SAHF’s housing stability work?

Like all multifamily operators, our members saw their residents really struggling through COVID. We were very fortunate to have some philanthropic support that allowed us to help our members both augment resident services and reduce the rent that was owed to them- it was a sort of an innovative owner-side payment system. 

What we learned from that was there were a lot of good ideas and new things being tried, but what was really working was emergency rental assistance, and to some extent, eviction moratoria. And that sort of obscured really understanding what else works. And so we have formed an 18-month cohort around housing stability, bringing together resident services and property managers to really talk in a very tactical way about what they're undertaking to keep people’s housing stable and how their thinking is changing. That is part of a commitment we’ve made in the White House Resident-Centered Housing Challenge around housing stability. Our members have made commitments to continue to offer payment plans to residents that are in touch with management, and also some explicit stability measures that, as operators of largely regulated, affordable housing, are things that are expected of us and we think can be achieved. It looks different in other parts of the sector, and we understand that very well. But we're hoping we can identify some lessons around implementing these measures and share them with policymakers and the sector. 

The key to our success, the sort of fourth leg of the stool for us, is we have this partnership with the National Affordable Housing Trust (NAHT), where we're taking a lot of this work and thinking, “Okay, how do you pay for it? How do you build it into the capital structures?” Our partnership with United is one way of thinking about how you pay for resident services by understanding the impact they can have. We're talking with NAHT around implications of our work on housing stability and sustainability. We’re excited to see where all of this leads, which is hopefully to some changes within the system.

And what is SAHF doing around sustainability?

Our members are leaders in this space. Almost 15 years ago, they really understood that the built environment is a huge contributor to both energy consumption and pollution, and started down a path of trying to reduce their footprint. 

In 2013 we made a commitment to reduce our energy and water footprint by 20% by 2020- The Big Reach. And we achieved that handily, exceeded those savings in both categories, and are now thinking about how we build on that. 

A big part of that Big Reach success was how we think about ourselves as a collaborative. The members challenged and learned from one another and set a collective goal. SAHF did a lot of data collection. And we provided a lot of peer exchange opportunities for SAHF member staff to say, “I tried this, and it really worked. Here's what I'm running up against and here's the policy we've got to fix if we want to unlock this technology or this funding source.” And SAHF took that feedback and developed tools and advocated for policies to help members – and the field- advance towards the goal.

We want to build on that success and think about carbon emissions. And so our sustainability team has just launched a portfolio carbon calculator. There are some great tools to think, on a building-by-building basis, what your carbon emissions look like. As multi-state actors, like many multifamily actors, our members want to look at a whole portfolio to understand emissions and think about strategically, are there types of interventions I should be undertaking? And how should I think about prioritization if I have limited time and money? And so this does that taking into account fuel sources at the building, as well as your grid.  

This calculator is a first step and will feed into something we'll release later this year- a carbon roadmap. The roadmap will help portfolio owners thinking about, “Okay, if these are our emissions, what then are those interventions that would have the greatest impact and be feasible? What would it look like to build yourself a strategy and set a goal for carbon reduction?” 

We began building these tools because we see local carbon reduction and climate initiatives and federal actions, such as the Better Climate Challenge, that many owners of affordable rental housing may be interested in or subject to. We think there's will on the part of some owners, but there's been sort of an information gap. There are a lot of operators that don't know enough about their own emissions and how they might change them yet to be comfortable making a bold commitment. 

The calculator is on our website, available to anybody that wants to check it out. 

We're happy to hear from folks that are trying to use it. And the same will be true of the roadmap when it is released this summer. While we started this work before there was an Inflation Reduction Act, we are really glad there are now some resources to help reduce emissions and improve efficiency in affordable rental housing. We think these tools will be useful in thinking about what strategies to undertake and perhaps what funding sources to ultimately pursue.  

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