In a vitally strong step to end homelessness, the SDS Supportive Housing Fund has raised an impressive $106 million to fight homelessness in California. SDS is a real estate impact fund managed by SDS Capital Group. It’s the first of its kind and will produce up to 1,800 financially stable permanent supportive housing units. Nearly half of that fundraising effort is thanks to Kaiser Permanente, which committed $50 million to the cause. As a result, urgently needed housing will be built for less than half the cost. Moreover, the housing will be built 3x as fast as the average cost and time required to build permanent supportive housing.
The Homelessness Problem in LA
The majority of the 1,800 PSH (permanent supportive housing) units built statewide will be created in the Los Angeles area. The construction will address a significant need for the city. The unfortunate reality is that LA has a homeless population that continues to increase. In fact, the current estimate for the City of Angels homeless population is above 41,000. Even worse, the Los Angeles Homelessness Services indicated 66,436 homeless people in LA County, as of January 2020.
Los Angeles Mayor Eric Garcetti commented on the fund and what it means for the city, “The SDS Supportive Housing Fund adds a vital financial tool to our City’s unprecedented efforts to build up our stock of supportive units swiftly and efficiently — and give our most vulnerable Angelenos a safe place to call home.” (PR Newswire)
However, the forecast of homelessness in California is not entirely rosy, as the city grapples with the crisis of the pandemic and new challenges surface. Specifically, the identification of those at risk and currently experiencing homelessness. As a result of the coronavirus, LA County received permission to cancel the 2021 homeless count, according to AP News. The federal government did so because of concerns that the count can’t occur safely or accurately during the pandemic. It’s an unprecedented move, to say the least. Congress requires these counts every two years and uses that information to distribute resources for homeless services.
The Development Specifics
The newly constructed developments will typically include 40-100 one-bedroom apartments averaging approximately 500 square feet. Each development is expected to provide holistic support and on-site amenities. Examples of included amenities include gyms, garden space for tenants, community health services, and case management services. A majority of those services will be provided by Homeless Health Care Los Angeles.
Kaiser to the Rescue
Kaiser Permanente showed up in a big way to transform this housing fund from a dream into a reality. Their $50 million pledge made them the lead, keystone investor to raise the fund’s capital above the century mark. The not-for-profit healthcare provider regularly spearheads numerous efforts to end homelessness and preserve affordable housing. Kaiser has previously made strategic impact investments, shaped policy, and formed innovative partnerships to that end.
Julie Miller-Phipps, president of Kaiser Permanente in Southern California and Hawaii, reflected on the deleterious effects COVID-19 has had on homelessness
“COVID-19 has greatly increased the need for permanent supportive housing beyond the crisis levels California was already seeing, and we expect it to get worse…we must double down on finding innovative ways to make significant strides to support people experiencing homelessness because only with a safe, stable place to live can people achieve good health and well-being.”-Julie Miller-Phipps, President of Kaiser Permanente in Southern California and Hawaii
Of note, Ally Bank, Synchrony Bank, East West Bank, and Western Alliance represented the early investments into the fund. Meanwhile, the Weingart Foundation and Hudson Pacific Properties were more recent investors to the SDS Fund.
The SDS fund is a welcome relief for those struggling in the fight against homelessness. But the great news is that this fund is not limited to just this one investment. That is to say, it has already funded two investments for RMG Housing to date, and a third and fourth are coming within the month.
It is currently unclear when the permanent supportive housing units will be built. But one thing is certain: that the SDS Supportive Housing Fund raised this $106 million is a tremendous achievement. It is a major, positive step on the road to ending homelessness in California.