by Anne Segrest McCulloch, social impact investment CEO
I’ve worked for human rights and social justice all my life. The journey informs what I do now for a living: I run a social purpose real estate investment trust that creates better housing for underserved people. The need is staggering. Progress? Well, let’s say: steady. The need-progress ratio sometimes is a tough sell for the social impact investors who look to us as a way to put their money to work making a positive difference in the affordable housing crisis.
Recently I picked up a phrase that gave me a boost and helped me express what I’ve already learned over the years: better is good. In my heart, I wish for big, mountain-moving solutions to the big problems. Honestly, I wish the big problems would just go away. But they’re not going anywhere. So, along with many more people with similar intentions, I put my head down, get stuff done and follow my new, reality-based mantra.
I stole it from Barack Obama, by way of former U.N. ambassador, Samantha Powers. In her memoir, The Education of an Idealist, Powers talks about having spent years advocating for refugees, rape victims, persecuted LGBTQ populations, political prisoners and oppressed minorities. But once inside the diplomatic bureaucracy, she couldn’t always win the day. Seeing her disappointment, Obama reassured her: “Better is good,” he told Powers, “And better is actually a lot harder than worse.”
Likewise, in our business, progress is made literally brick by brick. We find apartment buildings in communities where lower income working people are being priced out. These are the properties that other investors aim to turn into higher end rentals or even condos.
But the impact investors with whom we work help us play a critical role toward stabilizing the fragile state of housing for tens of millions of households. Their investments enable us to compete for these properties so they can remain home for the folks who keep our cities and towns humming. The ones who are serving the rest of us, nursing us, protecting us, doing the work we don’t do, making our own lives better by being there every day when we need them.
We take these properties and not only do we keep them affordable; we improve them and make them healthier and more sustainable. We look to invest where residents can find jobs, childcare, transportation, schools, medical facilities, healthy food resources and other important features of any vital community. The things everyone needs in order to make a living, make their day-to-day life more manageable and raise their children in a safe, nurturing environment. Without them, low-income and disadvantaged households face negative effects on physical and emotional well-being, long-term opportunities and even life expectancy.
It’s rewarding work, for us and for our investors. Investment in affordable housing might be the single most holistic way to make a social impact in America. Because housing sits at the intersection of every aspect of society where equity lags, affecting economic opportunity and human potential.
But we don’t kid ourselves. We have to tackle the problem one building at a time. And the scale of the challenge is nearly overwhelming. For every 100 very low-income renter households in need of housing, there are only 58 affordable units available. Almost 20 percent of these households spend more than 50 percent of their paychecks on rent. If you move up the income spectrum and include households making more money the problem doesn’t sound quite as bad — there are 94 affordable and available units for every 100 households making up to 80 percent of area median income. But think about it — these are people with jobs and some resources and they are forced to play a game of musical chairs for a place to call home. It’s enough to make you wonder if it is intractable. No, it’s not. But at the same time, there is no magic bullet (there never is).
My daily dose of inspiration? That mantra. If that doesn’t work for you, there’s another, similar nugget, again stolen from Obama, who also said, “You make singles, you make doubles.” It must be that community organizer in the former President that had him sharing words that resonate with us community builders. Yep, singles and doubles which add up to runs are better than no score at all. Better is better than worse.
Anne Segrest McCulloch is President and CEO of Washington, DC-based Housing Partnership Equity Trust (HPET), a social-purpose real estate investment trust (REIT). HPET acquires and preserves affordable housing in partnership with leading nonprofit apartment owners. For more: www.hpequitytrust.com