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• Investing in Equitable Communities: Affordable Housing in the Bay Area

October 13 2016
October 13 2016

Jonathan Rose and Kyle Rawlins

On September 23, Confluence Philanthropy convened a breakfast discussion meeting at The California Endowment with 21 representatives from local foundations, financial institutions, and real estate development  for a presentation and discussion about addressing gentrification in the Bay Area through innovative investment strategies. The conversation featured presentations from two unique practitioners, Jonathan Rose (philanthropist, real estate developer, and author - pictured at left) and Kyle Rawlins (Designing Justice + Designing Spaces, and Echoing Green fellow - pictured at right).


Rose shared findings from his new book, The Well-Tempered City, describing the obstacles and opportunities for better aligning human needs and the natural environment in modern cities. Global trends of rapid urbanization, a growing middle class (as well as increasing wealth inequality), climate change, refugee crises, and historic structural inequality pose challenges for the “adaptive capacity” of whole systems, including cities. So what can we do increase our adaptive capacity, and how can funders and investors play a role? These are certainly among the pressing questions we face in a time of gentrification. Rose’s answer is in his work, which is centered on the creation and support of “communities of opportunity.” If we shift our vision of the purpose of urban space and how it functions, we can begin to co-create these communities. His real estate development process, which includes an expanding portfolio of multifamily affordable housing, looks to more holistic indicators than just profit/loss. Vital to our communities are access to education, healthcare, open space, arts and culture, transit, spiritual expression and more.  These areas are where we should look in evaluating the health of our cities and neighborhoods, and Rose’s projects seek to ensure those elements for low-income people who would otherwise be more vulnerable to displacement.

Kyle Rawlins identified the same need for development projects that hold space and preserve accessible services for marginalized people, not only to combat gentrification, but also address the causes/effects of mass incarceration, poverty, and disinvestment from communities of color. As co-founder of Designing Justice + Designing Spaces, Rawlins’ similarly multi-dimensional approach to these issues suggested there are ways for funders to support innovation that reimagines how urban space is seen and used. Together with members of the communities who stand to benefit from his work, Rawlins is developing and prototyping concepts for housing that can also provide wraparound support services to transitional-aged youth leaving the foster care system. Another project that fascinated attendees is Rawlins’ ongoing work to retrofit decommissioned city buses to serve as mobile schools that can reach youth left behind by the system, and provide safe transitional spaces for women released from jail who need to get off their feet and reconnect with family.

The rich conversation that followed was wide-ranging and urgent; the issues facing many of our cities, including gentrification, are often viewed as heightened in the Bay Area where wealth inequality, demographic change, and housing shortages are more extreme and grow quicker than elsewhere. But just as the problems are layered and complex, the opportunities for intervention are equally broad and full of potential. Rose and Rawlins’ similar approaches to real estate development are proving it is possible to simultaneously improve affordable housing/property, preserve it, and deliver a return to investors. Impact investment in real assets is an especially critical strategy for funders interested in curbing the effects of gentrification; as property only gets more expensive and difficult to acquire, it is important that funders leverage their position to help preserve and sustain communities at risk. There are perhaps surprisingly high returns available for strategic investors (as Rose’s success demonstrates), and there is also the need for concessionary investment including PRIs to support innovators like Designing Justice + Designing Spaces. Like any other issue, solving gentrification is a “both/and” proposition, not an “either/or.” Thankfully, building bridges and collaborating from the philanthropic and impact investment sectors is possible…and necessary!

As the participants in our conversation agreed, there are many challenges to addressing gentrification in the Bay Area, among them: a complex ecosystem for real estate development, the incredibly high (and rising) cost of property, and questionably effective, outdated local policies that limit the incubation and scale of potential solutions. But by clarifying the issues in conversation with funders and project developers at the same table, we can begin to take more targeted, effective, and collaborative action in partnership with citizens who are contributing to a long local history of active, informed engagement. We are grateful to the California Endowment for their hospitality, Jonathan Rose and Kyle Rawlins for sharing their knowledge and experiences, and all of our participants for their insight, energy, and commitment to creating a more equitable Bay Area for us all.


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