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The Impact Weekly – Episode 2

With 2020 in our rearview mirror, it’s time to get excited about innovative ideas and opportunities to create impact in the rental housing sector.   And there are plenty of ideas and opportunities to be excited about…

The U.S. Impact Investing Alliance (USIIA), a leader in impact investing advocacy, recently published their stance on how the incoming Biden administration, federal regulators, and legislators should position their policies on impact investing in 2021. Forbes spoke with Fran Seegul, Executive Director of the USIIA, who gave an overview of the 12 recommendations in the report.  The recommendations focus on the need to create stronger public private partnerships via Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), tax credit programs, updating the Community Reinvestment Act, and introducing regulatory legislation requiring corporations to issue ESG disclosures.

In their review of contenders for the Ivory Prize for Housing Affordability, the Stanford Social Innovation Review highlighted six pathways to addressing the housing affordability crisis. Included are solutions that respond to regulatory, productivity, and cost barriers for providers and tenants. The article also points to several companies that are investing in “crowdfunding” approaches, like HomeFundIt in Baltimore, Maryland, who operate a funding platform where family and friends can contribute to a down payment fund and Small Change, a real estate investment crowdfunding platform where anyone over the age of 18 can contribute to selected affordable housing, transit-oriented, or other community development projects.  

So, who’s walking the walk?  The end of the year saw some major financing and energy companies taking concrete action to creating impact by providing more affordable and energy efficient solutions.

In Q4, ConEdison started offering multi-family properties in the Bronx, NY the opportunity to replace their oil heating systems with leased mini-splits, a heating and cooling system that runs on electricity, without any upfront costs. Through their partnership with Brooklyn-based BlocPower, ConEdison ensures that BlocPower will cover all maintenance costs, with the property owner only required to pay fixed monthly lease payments to BlocPower. According to Donnel Baird, CEO and co-founder of BlocPower, owners that opt into this program can “reduce tenant complaints, lower operating costs, and increase the value of their buildings without paying and money upfront.”

With the support of 27 missioned-focused properties for low-income residents, Freddie Mac announced their first Social Impact M-Bond offering in December 2020. Wei Dai of the Multifamily Targeted Affordable Housing group at Freddie Mac says this new tool will allow Freddie Mac to meet the housing needs of 3,000 families across 15 states. 

Gen Z Rules!  While the new political environment won’t likely impact ESG investments, younger consumers will… 

Worthsuggests that ESG has made its name as a non-partisan opportunity, so investors should quell their anxiety over what a possible bi-partisan government may mean for ESG. Further, the article points out that ESG is becoming “the market,” with ESG funds growing 46 percent between 2018 and 2020, meaning that ESG attractiveness is likely not driven by politics. 

The Harvard Business Review reported on the findings of their national survey on consumer responses to ethical investments in social change entities. The study suggests that younger Americans (under the age of 45), especially wealthy younger Americans, are more willing to pressure entities into investing in justice deposits and are more willing to invest one percent of their own wealth in a justice deposit, when compared to older Americans. Author Eddie Yoon, founder of a think tank and advisory firm on growth strategy, warns that business, faith communities, or other organizations that do not shift investments towards conscious options run the risk of “losi[ing] out on the next generation of consumers and members, and so risk irrelevance.” 

We hope you all had a restful end to 2020.  Join us in taking a deep breath and we look forward to connecting with you all in 2021! 

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The Impact Weekly, is a weekend review of recent articles on impact investing that we think you’ll find interesting and relevant to the rental housing sector. If you have any ideas or suggestions, please let us know.

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