Californians have long been familiar with the stark realities of the homelessness crisis. According to the Public Policy Institute of California, by the end of 2023, there were more than 180,000 experiencing homelessness across the state—a 6% increase from the previous count. This figure accounts for nearly one-third of the nation’s homeless population.
Unfortunately, this crisis is a complex mix of economic, social, and policy issues that have developed over decades, presenting a formidable challenge with no easy solutions. However, recent legislative progress at both state and local levels are creating opportunities to address the issue, particularly through affordable housing development.
A prime example of such legislation is the recently enacted state Senate Bill 4, known as the Affordable Housing on Faith Lands Act. This groundbreaking measure permits the construction of affordable, multifamily homes on lands owned by faith-based institutions and nonprofit colleges—streamlining the permitting process and overriding local zoning restrictions.
Similarly, the City of Los Angeles has introduced Executive Directive 1, which expedites the processing, clearances, and approvals for shelters and 100 percent affordable housing projects within city limits.
These legislative efforts offer a promising avenue for forward-thinking investors to collaborate with churches and colleges, capitalizing on the “YIGBY” (Yes in God’s Backyard) movement by converting portions of their properties into much-needed affordable housing units.
Collaborative efforts that serve a greater good
The partnership between investors, religious institutions, and nonprofit colleges represents a powerful convergence of resources and expertise. Investors provide crucial capital and strategic insights, drawing on their extensive experience in development, while religious institutions and nonprofit colleges provide land and strong community ties, laying the groundwork for these initiatives to thrive.
This collaborative model goes beyond addressing immediate housing needs; it fosters a holistic approach to community development. By combining their resources, these partners create vibrant, inclusive communities that drive sustainable change.
As such, these legislative initiatives have bolstered our ability to collaborate with essential organizations throughout Orange County, exploring creative ways to use real estate to supplement charitable efforts while making a positive impact.
For example, in partnership with National Core, we identified a site for a 71-unit apartment complex in Lake Forest, California, turning an aging office building into quality residences for individuals and families. These apartments, comprised of one-, two-, and three-bedroom units, cater to households earning between 30% and 60% of the area median income (AMI).
The success of this venture has allowed us to pursue additional affordable housing projects in Lake Forest and beyond, aligning with our commitment to people, purpose, and passion in real estate.
Incentives that support continued progress
In addition to addressing the critical need for housing throughout Southern California, SB4 and Executive Directive 1 offer significant benefits:
- Corporations and private investors can achieve their Corporate Social Responsibility (CSR) goals, enhancing their brand image among socially conscious consumers.
- Religious institutions and nonprofit colleges can diversify their revenue streams by leasing or selling affordable housing units. This financial flexibility supports essential social programs, infrastructure improvements, and scholarships, ensuring sustainable growth and long-term success.
- Investors receive financial incentives, including tax credits, subsidies, grants, and increased access to the Low-Income Housing Tax Credit (LIHTC). The streamlined approval process reduces bureaucratic delays and associated costs, making affordable housing projects more attractive and financially viable.
Investing in affordable housing isn’t just a charitable act—it’s a strategic endeavor that promises substantial returns with a lasting positive impact. As purposeful investment gains importance, California’s approach to addressing homelessness is poised to tackle housing challenges while igniting social progress and economic prosperity.