The Jessie Ball duPont Fund announced it will invest $2 million in efforts to develop and preserve affordable rental housing for low-income individuals and families in Duval County.
The investment, which will be made through loans to developers, is intended to increase the inventory of affordable rental housing and also to increase the ability of nonprofits and for-profit organizations to 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,” she said.
The $2 million investment is being made through a “Program Related Investment” to the Florida Community Loan Fund.
“Program Related Investments” are investments by a charitable foundation at below-market rates to support organizations that address social or community concerns.
The duPont fund said the investments often take the form of loans, promissory notes or equity investments.
They are like grants in that they support organizations and activities that reflect the foundation’s mission, but they differ from grants in that they must be repaid.
According to the duPont Fund, its trustees decided to enter into the program related investments after extensive study and deliberation by trustees and staff, and a realization that investing a portion of the fund’s endowment through the investments 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,” she said.
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.
According to the duPont Fund, the Florida Community Loan Fund is what is known as a Community Development Financial Institution, which 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 program related investments in their efforts.
In recent years, according to the fund, affordable housing 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,” said a news release.
In general, said the fund, 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 disrepair and 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,” said the fund.
Duval County currently has slightly more than 22,000 units of assisted rental housing, defined as units that carry income and rent restrictions associated with public subsidies.
Duval County accounts for 9 percent of the state’s total inventory of assisted housing units. More than 10 percent of Duval County’s inventory, or 2,746 units, is considered “at risk” of losing subsidies by 2020.
This represents 25 percent of the at-risk inventory in the state, said the fund.
“These affordable rental units are a critical piece of the housing stock in Duval County,” said the fund, adding that one in four households in the county fall at or below 40 percent of the area median income of $60,300 in 2009.
According to the fund, 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.
“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 Gregor, former director of the City Housing and Neighborhoods Department.
“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,” Gregor said in the news release.
Under the terms of the program related investment, the Florida Community Loan Fund can use up to 25 percent of the total investment for “non-housing” community projects that serve low-income people, such as child care centers or health clinics.
Historically, program related investments also help leverage additional investment capital from public and private sources, according to the duPont Fund.
The Jessie Ball duPont Fund makes grants to more than 330 eligible organizations identified in her will. The fund has assets of more than $281 million and has awarded more than $303 million in grants since 1977.