Impact Investing Hits Home
A group of socially engaged investors try something new to answer Seattle’s affordable housing challenge
September 30, 2015
When the newly renovated Parker Apartments opened in Queen Anne in May 2015, you could almost hear the communal sigh of relief. Fifty families would be able to afford the rent for a comfortable apartment located in an accessible and amenity-rich central Seattle neighborhood. It was a watershed moment.
As Seattle booms, housing has moved out of reach for many. Skyrocketing rents are driving teachers, social workers, veterans, artists and many others out of their home neighborhoods and, in some cases, out of the city. When they go, they take an important piece of what makes Seattle vibrant and equitable with them.
So far, public funds, developer fees and charity have failed to bridge the housing gap. But a group of socially motivated investors, led by the Seattle Foundation, are demonstrating how Impact Investment can play a key role in tackling the critical challenge of affordable housing in the region.
In a strategic partnership with Bellwether Housing’s Seattle Futures Fund, Foundation investors raised $1.8 million to help fund the purchase and renovation of a 50-unit apartment building. Rents are geared to moderate-income earners and investors should see a 2 percent return.
“This offer caught fire because enough forward-thinking people here share a philosophy of ‘let’s invest locally and make a difference,’ says Bellwether Housing Deputy Director Tory Laughlin Taylor. “I learned that in Seattle there’s a strong network of committed impact investors who want to see their money at work here, addressing tangible needs in their own community.”
The response and results have been outstanding. Seattle Foundation met its goal for the number of investments well before the target date and hit the investment dollar goal with more investments on the horizon. Seattle Foundation’s partnership with Social Venture Partners (SVP) provided a key boost, with a series of informational sessions about Impact Investing that included information about the Bellwether Housing’s Impact Investment offering.
“When I expressed our appreciation to our impact investors for being a part of Bellwether’s first offering, it was heartwarming to have so many turn the tables and thank me for giving them the opportunity,” Laughlin Taylor says.
Seattle Foundation will monitor this project to ensure it continues to meet the long-term goal of addressing inequity in our community through the development and permanent ownership of residential apartment complexes.
According to news reports, the Parker Apartments may be the first time Impact Investment has been used to fund an affordable housing project. But based on its success for investors and tenants, it will not be the last.
The NW Impact Investing Ecosystem
In developing the Seattle Impact Investing program over an 18-month period, we’ve talked with every major impact investing stakeholder in the greater Puget Sound area and many operating throughout the Pacific Northwest. Learn more about our impact investing for philanthropists or download some resources and tools for philanthropists.
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