Foundations Are Making an Epic Push to Tackle Housing Affordability in the Bay Area

Foundations Are Making an Epic Push to Tackle Housing Affordability in the Bay Area

Nick Williams, Inside Philanthropy

Apartments rise in Mountain view, CA. Sundry Photography/Shutterstock


The high cost of housing in the Bay Area has become an indelible characteristic of one of the country’s most vibrant and diverse regions.

In October, the median purchase price for an existing, single-family home in the Bay Area was $1.1 million, nearly 20% higher than just a year prior, and far out of reach for most of the region’s residents. Prior to the pandemic, the median cost of a rental, the housing option for half of the region’s households, had reached a whopping $3,700/month.

While recent headlines suggest a mass exodus of “software engineers, CEOs and venture capitalists” fleeing the Bay for a more affordable place to live and work, low- and medium-income residents most affected by rising costs and exclusionary housing policies have far fewer choices.

The Partnership for the Bay’s Future, an initiative that launched in 2019 to grapple with the high cost of housing in the region, expresses the core problem this way: Two full-time, minimum wage workers who make a total of around $65,000 per year can only afford to live in 5% of the Bay Area’s neighborhoods. Carrying this forward to 2040, they say, would mean another 1.3 million Bay Area residents would face some form of housing instability.

The partnership is perhaps the most ambitious housing initiative ever undertaken by philanthropy. It has come together with support from an assortment of funders, including two community foundations (San Francisco Foundation and the Silicon Valley Community Foundation), several national stalwarts of housing (the Ford Foundation, Local Initiatives Support Corporation (LISC)), three large corporations (Facebook, Genentech, Kaiser Permanente), the most prominent LLC funder in the country (Chan Zuckerberg Initiative), and three foundations not ordinarily connected to housing (William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, the Stupski Foundation).

A daunting challenge

One significant reason for the Bay Area’s housing predicament is that housing development has simply not kept up with demand. From 2011-2015, the region added only about one housing unit for every eight jobs created.

But lackluster housing growth is not the only concern. Decades of zoning policies, mortgage lending practices and neighborhood covenants have explicitly or implicitly excluded Black people and other people of color, creating segregated neighborhoods and cities, and systematically denying opportunity to many of the region’s residents.

To tackle these issues, the partnership raised $500 million to “protect, preserve and produce” affordable housing in five counties: San Francisco, San Mateo, Santa Clara, Alameda and Contra Costa. The partnership’s goal is to “protect” 175,000 households over the next five years and preserve and produce another 8,000 affordable homes within the next decade.

“Protection,” in the partnership’s parlance, refers to “renters and displaced families who need stable housing and relief from rising and unsustainable rents,” while “preservation” focuses on keeping existing affordable homes in the community; “production” zeroes in on building new homes, guided by principles of “racial equity, belonging and affordability.”

“By coming together as funders, policymakers, advocates and service providers, we can change the story about housing in the Bay Area from one of exclusion to one of community, connection, and transformation,” says Khanh Russo, who directs the partnership. “The partnerships is really about working together across sectors to make sure everyone, whether Black, brown, Asian, or white, has a stable, affordable place that they can call home.”

What makes the partnership unique is not just the amount it’s raised, nor the diverse nature of funding partners, but its two-pronged approach, which focuses on both housing policy and investment. Russo says the partnership spent a year talking with community partners to identify critical gaps that could accelerate equitable and affordable housing for all.

The partnership is targeting local and state-level policy changes that protect renters and promote and accelerate affordable housing, working closely with the public agencies to enact needed reform. At the same time, it’s investing in affordable housing development and preservation, providing flexible funding that allows the partnership to unlock more funding for affordable housing.

Connecting the dots

The San Francisco Foundation provides the “backbone” support for the partnership, including the staffing, grantmaking and fundraising. In coordination with key partners, the foundation also guides the overall strategy, including managing the partnership’s policy and community engagement efforts. This includes overseeing the grantmaking program to advance racial equity and affordable housing policy in local governments and convening corporate, advocacy, research, development and service provider leaders to collaborate on developing and implementing affordable housing strategies at the regional and state levels. (SFF is also leading several other related housing efforts: Hope SF, Keep Oakland Housed and Bay Area Community Impact).

The Partnership for the Bay’s initiative Future Family Bay, administered by LISC, serves as the chief investment arm for the partnership’s development and preservation work, offering different financial products to mission-aligned developers and nonprofits. Interest rates on low-cost loans range from 4 to 5% for as much as $7.5 million each, as determined by area median income.

Different funds have been created for different housing-related needs. For example, one fund focuses on providing revolving lines of credit meant for small- to mid-sized development corporations. Another provides mixed-income “mezzanine” loans to support housing that blends market rate and affordable rental units to support the so-called “missing middle,” individuals who earn too much to qualify for government support but too little to afford market-rate units.

There are also very low-rate loans for supportive housing, intended mostly for persons experiencing homelessness. These include preservation loans, which focus on keeping low-income housing and HUD-funded affordable homes in the community, and affordability stabilization loans, which are provided to mission-aligned affordable housing developers to purchase properties before they are snatched up by speculative investors; low-interest loans for nonprofits and community-based groups fund affordable housing to serve their clients.

In 2019, the partnership awarded its first round of grants to local government entities and community organizations working to advance policy solutions to protect renters and preserve existing affordable housing. Grantees submitted coordinated applications between the local government and the community organization proposing a joint project they would work on together. The policies they are working on are an innovative collection of approaches to the region’s housing problems that center on racial equity and communities of color, including new systems to provide renters and communities with the right to purchase affordable homes before they are sold to outside investors, ensure county-wide protections for renters, and establish new approaches to building community wealth.

Key partners

As part of the Challenge Grant award, each grantee jurisdiction was matched with a mid-career fellow who is helping to provide needed capacity and expertise to accelerate solutions. The fellows also work with the grantee community organizations to ensure community involvement in the policy process.

“The fellows are an opportunity for us to really partner with cities to ensure they have the resources they need to draft policy, reach out to partners, and look at housing development issues through a racial equity lens,” Russo says. These resources are really critical, especially for local elected officials who might see the need for more affordable housing in the communities they represent but might be publicly unwilling to come forward due to NIMBYism, or who might waver in face of criticism. In addition, the fellows program is creating a sort of brain trust of all of these cities, who are experimenting and trying new tools, which allows the partnership to quickly identify what strategies are working and help to lift those up.

One recent policy win from the grantee cohort is San Jose’s new Anti-displacement Strategy.

“All Californians deserve a place they can call home, where they feel a sense of belonging in their community, and where they can build a better future for themselves and their families regardless of their race or zip code. The Partnership for the Bay’s Future enables Bay Area communities to help residents live in homes they can afford through its focus on local policy change and investment in building and preserving affordable homes, says San Francisco Foundation CEO Fred Blackwell.

With the financial stress wrought by the COVID pandemic pushing more households to the brink of homelessness, the need for complementary efforts that preserve, protect and produce affordable housing, like the partnership’s, are more important than ever. And, as more policy wins emerge from that work, we also hope to see more funders taking direct policy actions – like fellowships and funding for racial-equity-focused organizations and grassroots housing advocates.

Build a Stronger Future: Recommendations for local housing response to COVID-19

Today I find myself asking the same questions I last asked 12 years ago. It was May of 2008, and I was the Staff Director for thenCouncilmember Sam Liccardo for the City of San JoseThe economy was spiraling out of control and the housing market had crashed. The questions I was asking then are the same ones I find myself grappling with today: 

  1. How do we triage what needs to be addressed first and stop the bleeding? 
  2. How do we prevent homelessness due to this crisis? 
  3. How do we position ourselves to get state and federal resources? 
  4. What do we need to do to come out stronger than we are now? 

Since that time, I have worked in multiples sectors that showed me the power and importance of a cross-sector response, most recently as a Senior Policy Advisor for Sam Liccardo, now Mayor of the City San JoseWe need a response that envisions a future that is better for everyone, where each person has an affordable place to call home, and where everyone feels that they belong.    

Before the pandemic, we were already in a housing crisis. The housing shortage was caused by a variety of factors:  

  • Discriminatory policies of the past 
  • Laws that make it hard to build new homes, preserve existing homes, or protect tenants 
  • The increasingly high cost of building new homes.  

The structural problems we had before COVID-19 put safe, stable housing out of reach for so many people in the Bay Area — and that has put us all at risk. A stronger future means a Bay Area where everyone can afford to live. 

How do we seize the moment and build a stronger future? 

Cities need to hire more staff now!

In my experience leading response efforts for thEbola epidemic in West Africa and Liberia, Super Storm Sandy in the Northeast, and the wildfires of Northern California, I learned that State and Federal funding is limited and is often firstcome, firstserve. Although it might be counter intuitive to spend money to hire staff when cities are projecting significant budget shortfalls, our local governments need to be ready to make full use of all State and Federal resources. This means hiring the staff needed to apply for grants; document and provide proof of payment for labor, equipment , and supplies; and convening the community to ensure that equity is at the center of community plans. 

To put a finer point on the importance of equitycentered community convening, we know that the community will be better served if those most impacted are at the tableTheir voice is critical for deciding what they need and how best to respond. If the plan works for those with the most at stake, it will work for everyone and lead us to a stronger future together. 

Get projects shovel-ready

Cities can work smarter by investing in technology and innovations that accelerate the affordable housing development pipeline.  Cities have demonstrated how quickly they can adapt to an environment that does not allow for inperson meetings.  

Let’s not waste this opportunity to learn from the technology-driven adaptations we’ve made while sheltering in place for plan review and inspections. Critically evaluate old practices and traditions and institute new processes and policies that use technology for more efficient and effective inspections. Cities should also establish Development Action Teams that can quickly respond and explain services offered and fee structures; reviewing processes; discussing permits; providing access to financing, technical, employment and training resourcesand responding to specific questions. This will create a strong pipeline of shovelready projects that have completed pre-development activities and have the necessary approvals to jumpstart new project construction. 

Turn immediate short-term responses into long term assets

As the adage goes, we should never waste a crisis. We have a short period of time to be aggressive and to build or acquire emergency housing to both address the needs of the COVID19 pandemic and the housing and homeless crises that existed before the pandemic hitCities need to review how State and Federal changes in building and planning permits, procurement, and environmental review (CEQA) can accelerate affordable housing production. Solicit faith organizations, schools, hospitals, transportation agencies, and water districts for available land and buildings that can be used to meet the public health needs of our community. Use State and Federal funding to quickly renovate and build on that land in a way that will preserve it for long term affordable housing. 

Learn from the 2008 Great Recession and do not return to normal

The COVID-19 crisis has exposed how critical housing is for our communities. We should be looking forward to how we build a stronger Bay Area. A Bay Area that is just, affordable, and inclusive so we can recover and thrive — and be prepared for any future emergencies.  

We can’t afford to go back to the way things were — because the way things were included inequities in health, in economic opportunity, and in access to affordable housing. We must build a stronger community and ensure that recovery leaves no one behind. 

Lastly, in a nation and region that values our diversity, we must remain united as we face what lies ahead of us. Solving the challenges we face, at the scale that they have come to us, means using our diversity as a strength to put more power into creating the future we want. That means working to build a stronger Bay Area that moves all of us forward and where affordable housing is a reality for all. 

At the Partnership for the Bays Future, we believe that a stronger future requires investing in building affordable homes, sustaining affordability where it already exists, and supporting policy changes that will lead to more affordable homes and greater protections for renters. 

As we plan for our future, I hope that we will all hold the following reflections from the Great Recession to guide us: 

  1. Nothing should go back to normal 
  2. Normal wasn’t working 
  3. If we go back to the way things were, we will have lost the lesson 
  4. We can rise up and do better 

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Celebrating our first year

On Tuesday, February 4, 2020, we celebrated the first anniversary of the Partnership for the Bay’s Future and shared the achievements of our first year.

Hear from CZI Director of Housing Affordability Caitlyn Fox

At the event we announced the recipients of the Partnership’s first-ever “Challenge Grants” to seven Bay Area local governments and non-profit partner organizations that are developing innovative housing policies. As part of the Challenge Grant award, each grantee jurisdiction has been matched with a mid-career fellow. The fellows will provide needed capacity and expertise to accelerate solutions, and grantees will have access to technical assistance and expert consultants to help them implement policy changes identified in the grant proposals.

“To us, this initiative signifies a commitment to building community power across the Bay, where the voices, the experiences, and the leadership of the people who are most affected by the lack of affordable housing and displacement can advance policy solutions. Solutions that they know will have tangible impact on their lives.”
—Camille Llanes-Fontanilla, Executive Director, SOMOS Mayfair


Challenge Grant Recipients

  • Alameda County and Resources for Community Development
    Policy project: proactive enforcement of older rental housing stock and funding a local Community Land Trust
  • City of Berkeley and East Bay Community Law Center
    Policy project: giving tenants the opportunity to purchase their homes and a local housing preference policy
  • City of East Palo Alto and EPA CAN DO
    Policy project: giving tenants and community groups the opportunity to purchase currently affordable housing and develop a Community Land Trust
  • City of Oakland and the Bay Area for All Preservation Table
    Policy project: racial equity impact analysis of existing housing programs and policy improvements based on this analysis
  • City of Palo Alto and SV@Home
    Policy project: renter protection ordinance updates, relocation assistance for renters who are displaced, and strengthening enforcement measures
  • City of Redwood City and the Legal Aid Society of San Mateo County
    Policy project: evaluating newly enacted renter protection measures and working to preserve affordability in multi-unit buildings
  • City of San Jose and SOMOS Mayfair
    Policy project: create a local preservation ordinance, assess community housing ownership models, and develop tenant preference policies for affordable housing
Hear from San Jose Housing Director Jacky Morales-Ferrand

Bay’s Future Fund

We were also proud to announce at the event that the Partnership’s investment arm, the Bay’s Future Fund, has commitments in place that will allow it to reach its three-year investment goal of $500 million in just one year. The Bay’s Future Fund has garnered commitments from a spectrum of investors and partners who have pledged resources, including Facebook, Morgan Stanley, CZI, First Republic Bank, San Francisco Foundation, Genentech, Silicon Valley Community Foundation and others. LISC, serving as fund manager, is partnering with Capital Impact Partners and the Corporation for Supportive Housing to co-invest additional resources.

Hear from LISC CEO Maurice A. Jones

To date, the Bay’s Future Fund has closed seven loans totaling nearly $30 million that will produce or preserve more than 800 units of housing, 97 percent of which are affordable to households earning less than 80 percent of Area Median Income, and providing shelter for more than 1800 individuals. These investments leverage an additional $100 million in funding from other sources. The transactions are supporting a range of housing strategies, including permanent supportive housing, co-living spaces, senior housing and housing that is affordable by design. Projects include new construction, renovation, and preservation.

Rev. Michael Smith of the McGee Avenue Baptist Church spoke about the investment his church received from the Bay’s Future Fund to turn a vacant property owned by the church into eight new affordable homes.

“When we color the need for affordable housing, don’t color it as black or brown. Color it with pain. It’s not enough until we all come to the table. We will continue to make a difference as long as we believe we can.”
—Rev. Michael Smith, Pastor, McGee Avenue Baptist Church




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