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When asked how to solve local affordable housing shortages, LISC President and CEO Maurice Jones barely has to think before he answers.
Originally established by the Ford Foundation, the Local Initiatives Support Corp. focuses on connecting communities to the resources they need to narrow health, housing and other inequities. The nonprofit works in hundreds of communities across the country and pulls together millions of dollars of public and private funds.
LISC recently partnered with Sentara Healthcare to invest $100 million in Hampton Roads to improve health outcomes tied to housing, transportation and job development. LISC also has shown interest in becoming more involved in Charlottesville through new nonprofit New Hill Development Corp.’s efforts.
Jones himself has Virginia roots. He grew up with his grandparents in the town of Kenbridge, near Farmville, and studied at Hampden-Sydney College before becoming a Rhodes scholar and graduating from the University of Virginia School of Law.
He went on to become a publisher of The Virginian-Pilot and second-in-command of the U.S. Department of Housing and Urban Development under former President Barack Obama. He is currently a member of the UVa Board of Visitors.
Jones was the keynote speaker at the Center for Nonprofit Excellence’s Philanthropy Day on Tuesday. Charlottesville Tomorrow pulled him aside before his speech to ask him to weigh in on how to solve the affordable housing shortage in Charlottesville and Albemarle County.
Q: Are the solutions for solving Charlottesville’s affordable housing shortage and the legacy of race-based housing discrimination like racial covenants and urban renewal the same or different?
A: I wish I could tell you there was only one solution to the housing challenges in Charlottesville.
As in many other places, there is no question that you have a market where you have more demand for housing than you have a delivery system that can supply. Part of it is demand just completely outpacing our ability to supply and to supply housing for folks at incomes across the spectrum. That’s one piece of it.
A second piece of it is that the cost of housing in Charlottesville and this Piedmont region, like in other places, just has increased: supplies, labor, etc. It has increased so much that, again, going back to the market, it now is tougher to make the economics work, except for housing at the higher end of the spectrum. That’s just a pure economics challenge that we have to solve.
Meanwhile, we still need housing for our teachers and our firefighters and our first responders and our nurses, etc. So, the question is: How you help that market be better at supplying houses for folks across the economic spectrum? And I haven’t even mentioned race yet.
Now, there’s no question that a third component is the legacy that race has played in this place just like any other place, and we need to have a better understanding of that and we need to be open and honest about the role that race has played in the design of this place and that continues to play in access to capital and access to neighborhoods and access to credit, etc.
No question, all of those factors are at play, and a great place attacks all of them. That’s what we’re seeing. And I didn’t list all of them. That’s an illustrative list.
Q: What do you think is the most important investment Charlottesville could make to solve its affordable housing shortage?
A: So, here’s the deal. I want to make sure people don’t think that solving the affordable housing shortage solves all the problems. Affordable housing has to be attacked on several different areas.
One area is that you have to build more. You have to build more at prices that are affordable to people across the income spectrum, so supply. Increasing supply is one.
The second one – just as important – is preserving what you have. Preservation is a big piece of the affordable housing solution. There are some houses and units of housing that are affordable and what they call naturally-occurring. You’ve got to preserve them, which often means that you’ve got to make sure that housing is in the hands of folks who are committed to affordability. We do that in a lot of places. We help nonprofits, for example, acquire units of housing on the market that are at risk of becoming market-rate houses and not affordable.
So, preservation has to be a big piece of your solution toolbox and protection of people who are living in areas where gentrification is occurring and who have been there for a long time and who are at risk, because of the value escalation, of getting essentially booted out.
So you’ve got production, you’ve got preservation, you’ve got protection. But in addition to that and just as important as that, you’ve got to help people acquire the skills that they need to get higher wage jobs. Some argue that the best affordable housing policy is a job and a career making a livable wage. I’m not going to go that far, but it is a crucial part of the solution.
You’ve got to go at it from the housing and real estate side. You also have to go at it from the people side – helping people get on a viable pathway to a living wage career. You do both of those things, with vigor, with patience, with stamina, and you can make serious, serious progress on the affordable housing challenges in Charlottesville.
Q: How is the solution for a rural or semi-rural county like Albemarle a little bit different from a place like Charlottesville?
A: Solutions in rural and urban are a little different. For example, I have seen self-help housing work better in rural areas than in urban areas. What I mean by self-help is literally where families get together and they build 10 houses at a time. My family is building your house, your family is building my house, the neighbor is building, and so on, and you’ve got a nonprofit has acquired acres of land on which they’re building homes that are affordable to folks living in rural areas.
That’s a rural solution. They call it self-help housing, that has been around for years and that works. The land is cheaper to acquire, you’ve got sweat equity of families and you’ve got families building together.
That sort of thing works better in a rural setting than it does in an urban setting, but you still have to do some of the same things. You have to make sure you’ve got access to credit for developers and for people who need the credit to acquire housing. You have to find the labor that you need and the labor at the prices that you need. So, you still have a lot of the same themes, but you do have these additional strategies that are probably more effective in rural settings than they are in urban settings.
The challenge often in rural settings is that you’ve got housing that’s been there for quite some time that’s in bad shape. Home repair is probably, proportionately speaking, a larger opportunity in rural settings than in urban settings – though, I will tell you, we do a significant amount of home repair work in neighborhoods in some of our cities.
Infrastructure is also always an issue. It tends to be more of an issue in rural settings – water, sewage, broadband etc. – usually is a bigger challenge in a rural setting than it is in an urban setting. When you’re doing housing and development in rural settings, you’ve got to focus on those issues also in ways that you probably don’t have to do as much in urban settings.
Q: What is the most impactful policy change the state legislature could do to impact the local housing shortages?
A: One is they could dramatically increase the housing trust fund, so that there’s more capital to do more work at the affordability level.
I think a second piece of what state government could do is to invest in building the capacity of community-based organizations who are in the housing development business. One of the challenges you have when it comes to affordable housing is a lack of capacity at the local level to do affordable housing work.
I mentioned one of the strategies to deal with this issue of gentrification or people being priced out is to make sure that you can find a nonprofit that’s mission-based to actually acquire properties or the land. The issue is can you find a nonprofit with that kind of capacity. One of the things that a state government can do, in partnership with local government, is help to build the capacity of our nonprofit organizations.
So, housing trust fund dollars, which can help make deals work economically, and building the capacity of particularly the mission-based organizations in the affordable housing business would be two things that come to mind right away.
Q: Very briefly, when you saying building capacity, what does that mean?
A: Skills, training, access to information on how to bring the capital stack that they need – building capacity is all of the above.
With policy, here’s an example that we’re seeing, and I think the Bay Area in San Francisco is the latest one that just adopted this, but the District of Columbia has it, as well.
There’s a policy that basically says this: if you’re an owner of housing in an area that’s gentrifying and you want to sell to take advantage of escalation of value that you’re getting on your property, you have to first offer to sell to tenants. Tenants have right of first refusal.
What that allows, and where it’s really relevant, is where you have a gentrifying situation and you have tenants that have been living in these units for 25 years. It’s their home. The owner gets an offer, and guess what, the owner wants to cash in on that offer. In the District of Columbia, you have to first allow the tenants to make a counter-offer. We’re working with tenant associations to lend to them to help them acquire these properties.
That’s a policy requirement. It would not be the case if the district had not adopted that as a policy, and that was a policy to protect people in their homes. That’s something that from a policy perspective should be considered.
