A Foundation for More Housing
Millions of poor Americans need affordable housing, but financially strapped governments haven’t the funds to finance massive new construction or rehabilitation projects. Enter a newly formed private consortium funded by seven leading philanthropic foundations and a major insurance company: It promises substantial help for poor neighborhoods.
For starters, the National Community Development Initiative--the vision of Peter Goldmark, president of the Rockefeller Foundation--will provide $62.5 million in loans and grants to neighborhood-based housing developers in 20 cities, including Los Angeles and the Bay Area. The Local Initiatives Support Coalition and the Enterprise Foundation will administer the funds, provide technical advice and select the neighborhood nonprofit developers.
Goldmark corralled funds from the Lilly Endowment, the William and Flora Hewlett Foundation, Knight Foundation, The Pew Charitable Trusts, John D. and Catherine T. MacArthur Foundation and the Surdna Foundation. It is a bold use of foundation money. Part of the game plan is the hope that this unusual initiative will attract an additional $500 million from the government and private sector. The new money should also reinvigorate non-profit developers who, in recent years, have built so much of the nation’s new affordable housing.
The Federal Home Loan Mortgage Corp. has already committed $100 million to purchase long-term, fixed-rate mortgage loans on low-income rental-housing projects. Freddie Mac’s commitment helps a lot. Its financing will enable banks to market mortgages made on affordable housing projects in inner cities to the investment community. That will give banks a greater incentive to finance what some consider high-risk properties.
The Prudential Insurance Co., which has an impressive social investment program, pledged $15 million to the initiative. The firm’s participation is a challenge that should be accepted by other major corporations.
At least 8,000 poor Americans and their families can initially expect to benefit from this fine example of charity at home.