OCF Investments Create New Hope and More Housing for Oregonians
Today in Oregon, innovative efforts by the Oregon Community Foundation and donors to alleviate the state’s affordable housing shortage and homelessness crisis are creating new hope and enduring assets for rural, urban, and Tribal communities. As some initiatives wind down, like the Legislature-funded Project Turnkey, others are poised for growth, including OCF's Oregon Impact Fund, through which donors are helping to create much-needed affordable housing throughout the state.
- In 18 counties and Tribes from the South Coast to the Idaho border, adults and families have greater access to a safe place to stay and more opportunity to stabilize their lives thanks to Project Turnkey, the state-funded grant program administered by OCF since 2020. The public-private partnership, which wrapped up in July, increased Oregon’s supply of emergency and transitional housing by 36%, by enabling local nonprofits and governments to transform vacant motels, apartment complexes and schools into 32 new shelters in 27 cities. Each is locally operated and designed to respond to specific community needs. They include centers to serve youth and families in Coos Bay, Klamath Tribal elders in Chiloquin, college students in Gresham and, in Malheur County, the area’s first year-round shelter, which serves chronically homeless and elderly adults, households with children, and people with disabilities.
- Thousands of apartments and other housing types for low-income and working Oregonians have been added throughout the state, thanks to crucial pre-development financing made possible by OCF’s Oregon Impact Fund. In 2022, borrowers who received loans from the fund had built or were in the process of developing 2,250 housing units in 17 counties from Clatsop to Jackson to Umatilla. Since the fund launched in 2018, it has helped to finance new multifamily apartment complexes, manufactured housing, single room occupancy housing, and affordable homeownership programs. With support from existing and new OCF donor-investors, the fund is well-positioned to further increase Oregon’s housing supply; provide greater stability and opportunity to adults, families and communities; and help ensure our state’s economic vitality.
- OCF is also at the table as momentum grows for Oregon to cultivate a new “mass timber” industry sector that could rapidly boost the state’s housing supply and help meet Gov. Tina Kotek’s goal of 36,000 new homes per year for the next decade. Mass timber panels are made from compressed layers of wood, harvested through the selective thinning of small-diameter trees. Proponents say using mass timber to build high-quality, quick-to-assemble modular housing could also improve the health of Oregon forests, reduce destructive mega-fires, and reawaken the flagging economies of former logging towns. OCF is supporting this movement by listening closely for opportunities for philanthropic support and convening leaders in spaces where they can identify a path forward.
Adding affordable housing through social impact investing
OCF and donors address the state’s housing challenges along a continuum, from support for shelter to affordable housing to equitable home ownership, and with a variety of tools that include research, grants, advocacy and low-interest loans.
News outlets statewide have covered the openings of 32 new facilities that local nonprofits and governments created with Project Turnkey grants, to help neighbors in need of shelter and support. OCF’s Oregon Impact Fund has attracted less publicity, but it also is generating powerful results.
“Without pre-development loans made possible by donors and the Oregon Impact Fund, there would be a lot fewer housing units in our communities today,” says Megan Loeb, OCF's senior program officer for economic vitality and housing.
The $30 million Oregon Impact Fund fund has provided a pool of catalytic growth capital for loans to Oregon-based organizations that support housing affordability, land conservation and small business lending. This type of investment is called social impact investing because the loans generate social and environmental benefits alongside financial returns.
So far, more than 60% of committed dollars in the fund have gone to nonprofit and for-profit organizations that work to bring new affordable and permanent supportive housing to communities throughout the state. Loans range from $500,000 to $2 million and often fuel multiple new affordable housing developments at the same time.
These loans are made through intermediaries, typically Community Development Financial Institutions (CDFIs), as well as directly to developers, including Community Development Corporations (CDCs), such as NeighborWorks Umpqua in Roseburg and REACH Community Development in Portland.
“The affordable housing industry needs more support like OCF's Oregon Impact Fund to innovate and accelerate affordable housing development in Central Oregon,” says Jackie Keogh, executive director of RootedHomes, which uses the community land trust model to provide environmentally sustainable and permanently affordable homeownership opportunities for people who contribute to the fabric of the Central Oregon economy and community. “Their investment gave us the accreditation to leverage $19 million more to develop 40 net-zero affordable homes for purchase on Bend's westside.”
Filling a financing gap
Loans from the fund remove a common barrier to the creation of affordable housing — the lack of financing available, especially to nonprofits and smaller developers, to pay for pre-development work they must complete before they can secure full project funding and break ground. This includes acquiring land, completing environmental and engineering studies, permitting, and early design work.
“The Oregon Impact Fund loan from OCF has been vitally important to the work we do with affordable housing developers to meet Oregon’s desperate need for more housing,” said Bill Van Vliet, executive director of Network for Oregon Affordable Housing, a Portland-based CDFI.
“OIF funding has provided us with hard-to-find flexible loan capital that has been essential to preserve existing affordable housing in Oregon communities, to acquire land for new developments, and to fill the final gaps in project budgets that must be filled in order to make new housing a reality,” Van Vliet said.
An apartment complex for very low-income families with children in Beaverton; a mobile home park of seniors in Ranier; and a new development in North Portland that will enable 64 households to return to a historically African American neighborhood they were priced out of — these are just a few examples of new affordable housing recently created or preserved by organizations that received loans from the Oregon Impact Fund.
Keeping the progress going
Borrowers repay the loans over 5 to 10 years at 3 to 5 percent interest; as those dollars return, they will be recycled into new loans to support affordable housing and the fund’s other mission areas. Today the $30 million Oregon Impact Fund is fully deployed. OCF plans to grow the Oregon Impact Fund and is talking with individuals and organizations interested in supporting investments that strengthen and invigorate Oregon communities.
“Oregon Community Foundation continues to invest in community partnerships that will create the housing that our neighbors and our state need to thrive,” Loeb says. “We don’t want to take our foot off the pedal. We want to keep this progress going, and we will need to deploy all the tools available to achieve that vision.”