When it comes to community investment, Atlanta suffers from the same crises as many major metropolitan cities: A lack of affordable housing and a lack of investment in the civic infrastructure that creates a thriving community.
What Atlanta does not lack are groups trying to solve these crises. Numerous community-based organizations, government agencies, financial institutions and impact investors have good intentions of making a difference. Unfortunately, too often they work in silos unable to independently enact true change, while the city’s demand for affordable housing continues to mushroom.
What is emerging in Atlanta is collaboration among these entities in strategic partnerships focused on resolving the issues that have created the shortages in affordable housing and community reinvestment. They must team up to address the biggest obstacle to more investment – a lack of capital.
Credit: contributed
Credit: contributed
This is where financial intermediaries, like Low Income Investment Fund (LIIF) and other CDFIs can play a critical role. We can connect capital with developers and others desiring to develop much-needed housing and other community improvements.
CDFIs – short for Community Development Financial Institutions – have as their core mission to create economic opportunity for the residents of historically excluded communities and small businesses. Yet we work in relative obscurity — behind the scenes and often forgotten by the various groups desperately in search of capital.
So, it may come as a surprise to Atlantans to learn that LIIF has been working nationally for more than 30 years, and in Atlanta and the southeast for the past five years. For affordable housing, we have invested $1.6 billion nationally, with $200 million of that in the southeast, all part of our broader strategic plan to drive $5 billion in investments over the next decade to advance racial equity.
We came to the southeast because we recognized the needs of disenfranchised Black and Latino communities, and some of the unique challenges they face compared to other regions of the U.S. According to the Federal Reserve Bank of Atlanta, systemic factors such as unemployment rates for Black workers nearly double that of their white peers, low-paying industry workers (which includes Latinos) facing higher unemployment during the pandemic, along with redlining, occupational segregation and higher fees and interest rates to borrowers of color serve to inhibit wealth-building and prosperity. LIIF and its partners work directly to address these challenges in order to effect change at a foundational level to ensure community prosperity endures for generations.
But LIIF and other CDFIs cannot work in a vacuum. We need to partner with Atlanta’s community organizations, nonprofit agencies, major banks and impact investors to finance projects in communities providing opportunity, equity and well-being. These types of communities provide residents with affordable housing, high-quality educational opportunities, the ability to live healthy and active lives and good jobs.
Our partnerships generate more affordable housing by, among other things, providing bridge financing to affordable housing developers grappling with liquidity issues, raising equity to create, protect and preserve thousands of affordable homes. Since launching in the southeast, LIIF has provided close to $45 million in financing to Black-owned and led affordable housing development companies.
We are trying to do our part by working closely with organizations like Purpose Built Communities and community-based organizations within SPARCC (Strong, Prosperous, And Resilient Communities Challenge) that are committed to communities historically excluded from enrichment opportunities. We have partnered with Invest Atlanta to build programs like the Transit-Oriented Development Fund, which supports community development by connecting residents to areas of opportunity by eliminating transit barriers. We have also cultivated relationships with the Georgia Social Impact Collaborative to find more opportunity to provide flexible capital solutions to pressing issues.
Our latest initiative could only be possible via partnerships. The October launch of the Keeping Homes Affordable Fund was developed in partnership with Calvert Impact Capital and Arnold Ventures, and will provide acquisition financing for nonprofit and mission-minded for-profit developers to acquire and preserve affordable multifamily projects. Together, we are committing $55 million in capital to help these developers compete with private market-rate buyers by offering them five-year, competitively priced interest rates.
Our hope is that others will see the power of partnerships. We understand that addressing these issues will never be easy, but through thoughtful and strategic partnerships, we can have a greater impact in Atlanta and the communities that need it most.
LaToya Kyle is Low Income Investment Fund‘s (LIIF) vice president of the southeast region and is based in Atlanta.
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