Affordable housing projects underway with new investments by corporate, philanthropic foundations
Housing Trust Silicon Valley achieved a significant milestone in its goal to help build or preserve 10,000 affordable homes in the coming decade as its TECH Fund campaign reached $20 million in commitments.
The TECH (Technology + Equity + Community + Housing) Fund was announced in March with an initial investment of $2.5 million from the Cisco Foundation, which also promised to increase its commitment to as much as $10 million as other corporations and foundations followed its lead. Cisco honored that promise this month after the Sobrato Family Foundation and the David and Lucile Packard Foundation each invested $5 million in the Fund.
The Housing Trust is already putting the money to work, using it with other funding sources to make loans for three affordable housing projects – 100 new apartments in the Terra Bella neighborhood of Mountain View, 83 new apartments for Villas on the Park in downtown San Jose that will provide permanent supportive housing for extremely low income and chronically homeless individuals, and the purchase of an apartment building in Redwood City that was at risk of having its 55 homes be converted to market rate, displacing low income renters.
“We are excited about the early response to the concept of the TECH Fund campaign by local corporations and foundations,” said Kevin Zwick, CEO of the Housing Trust. “It confirms our belief that business and community leaders see the benefits of private investment in affordable housing – arguably our region’s most critical issue. It is a prudent fiscal decision as well as one that helps to improve the lives of low income individuals and families who struggle to find a place to live they can afford.”
“The Cisco Foundation is proud to be an initial investor in the TECH Fund campaign,” said Peter Tavernise, Executive Director, “and it is gratifying to see our funds being put to effective use so quickly. The TECH Fund met all the criteria we could have wished for in a program-related investment – a smart financial decision, a commitment to the economic sustainability of this region, and a socially responsible investment in the lives of people who need our help.”
The TECH Fund target is $50 million, which will be loaned out to projects and recouped three times in its lifespan, totaling $150 million into affordable homes in the Bay Area. Corporations can participate in the TECH Fund by investing in a community impact note. They can choose between a five-year note at 1.5% interest or a 10-year note at 2% interest. Foundations can make a program-related investment or invest in the community impact note. All investments will be repaid in full at the end of maturity, and investments in the TECH Fund are backed by the Housing Trust’s AA- Standard & Poor’s rating.
The TECH Fund is the most recent innovative program developed by the Housing Trust to increase lending capital for loans to affordable housing developers to help with acquisition, pre-development and construction financing of multi-family rental projects. Housing Trust Silicon Valley brings together resources and partners to meet housing needs in Silicon Valley and the Greater Bay Area, ranging from people experiencing homelessness to rent burdened working families to first-time buyers struggling to save for their down payment. Since 2000, the Housing Trust has invested $131 million to create and preserve 15,000 affordable homes.