How Affordable Housing Loan Funds Further Equity

We are proud to have preserved or produced over 3,200 units of housing in our first three years – across the two funds that make up the Partnership for the Bay’s Future’s family of loan funds – and we are incredibly excited about what we have learned.

Though the pandemic has dramatically changed the context around affordable housing since our launch, we were still able to identify conditions of the Bay Area’s ecosystem that make creating and maintaining affordable housing challenging. We see all of these learnings as opportunities for the Partnership and the field:

• Loan funds, like the Partnership’s, need more investor sources with no or very low return requirements, so that these sources can act as credit enhancement for investors with more traditional risk tolerance.
• Originators need more flexible underwriting guidelines, especially guidelines that allow for adjustments to the loan products at the fund level.
• Loan products that offer lower interest rates are the most successful at filling demand and the fastest to get out the door, leading to a greater number of affordable housing units.
• From Alameda’s low home and building costs and large ecosystem of emerging developers, to the more limited affordable housing funding programs in Contra Costa County, the range of local fundingcapacity and political will across the Bay Area is vast. This causes significant geographic differences in what is possible.
• We cannot underestimate the importance of committed city or county permanent support in providing financial and legislative support and in helping to bolster public engagement.
• A fund cannot compete on loan terms alone. Cultivating strong relationships, being transparent, and bringing a partnership approach to lending are crucial factors for supporting deals.

The Partnership for the Bay’s Future and its related funds are rooted in two beliefs above all: 1) there must be equitable access to housing, especially for communities of color; and 2) the need to listen to and be responsive to our community. Over the past three years, we have succeeded because we have been responsive: we have listened, we have adjusted when necessary, and we have continued to learn. We are committed to continuing this journey in the same way we started as we build on our accomplishments to increase the supply of housing affordable to lower- and middle-income households in the Bay Area and expand the region’s pipeline of equitable development capacity.

Read about what we have learned in these reports:

Lessons Learned: How Affordable Housing Loan Funds Further Equity

Advancing Economic and Racial Equity with the Family of Funds