Job Training, Healthcare and Affordable Rent to Share One Roof in D.C. – Next City
The Equity Factor

Job Training, Healthcare and Affordable Rent to Share One Roof in D.C.

Groundbreaking for the Conway Center in Washington, D.C. (Credit: SOME)

On a formerly vacant site in Washington, D.C., east of the Anacostia River, concrete has just begun pouring for a new building whose construction represents a breaking down of silos when it comes to serving the poor.

Under one roof, 300 adult students annually will receive job training, 30 homeless and low-income families will have affordable housing, an additional 172 homeless and low-income individuals will have affordable housing, and 10,000 women and children per year will have comprehensive medical and dental care. And there’s some retail and office space too.

“This will be the first facility in the District of Columbia to offer homeless and low-income women, children and men safe affordable housing, job training and healthcare, all in one place,” John Adams, president of So Others Might Eat (SOME), the 46-year-old D.C. nonprofit developing the $90 million project, has said. “It is a natural evolution of SOME’s holistic and comprehensive approach to serving homeless and low-income individuals and families.”

The breaking down of silos goes even deeper than what the building, known as the Conway Center, will eventually house. It is the first project under the Healthy Futures Fund to combine low-income housing tax credits (LIHTCs) and new markets tax credits (NMTCs).

“The financing behind these projects isn’t always that straightforward,” says Emily Chen, a LISC health care program director who’s part of the leadership team for the Healthy Futures Fund. “It often comes from different places, to aggregate them to make a multiuse project come together like this can be very difficult.”

The Healthy Futures Fund, created in late 2012, was designed to address that specific challenge. In partnership with Kresge Foundation and Morgan Stanley, LISC committed $50 million in LIHTCs and $50 million in NMTCs to the first round of the fund. Out of that, the Conway Center received $20 million in LIHTC financing and $14 million in NMTC financing.

The Healthy Futures Fund’s original intent was two-fold. On the LIHTC side, the fund hoped to connect affordable housing developers with healthcare providers that could serve as tenants in the same mixed-use developments. On the NMTC side, the fund hoped to connect healthcare providers seeking to expand or construct a new facility with a non-clinical provider of services that impact one or more social determinants of health. Non-clinical providers could include healthy food outlets and grocery stores, education or job training, fitness and wellness services, and of course, affordable housing.

“What we saw was two very much aligned service providers — housing providers and healthcare providers. They work in the same communities, they serve the same people, but the conversations about how to bring their projects together was very difficult,” Chen says.

The links between affordable housing and health are well-documented, and more so every year. The fact that SOME will also be moving its Center for Employment Training into the same facility sweetens the deal even further.

SOME’s Center for Employment Training reports placing 85 percent of its graduates into living wage jobs with benefits, and over 70 percent of those retaining those jobs for at least one year.

“A lot of what we do here is about job creation and stabilizing individuals finances,” Chen adds.

The first $100 million of the Healthy Futures Fund has already been committed. The partners announced another $100 million in late 2015, with the same setup: half in LIHTC financing, and half in NMTC financing.

“LISC has used both tools basically since the beginning,” Chen explains. The LISC family of organizations, which includes 31 offices around the country, also includes two national affiliates — the National Equity Fund (NEF), which manages its LIHTC financing, and the New Markets Support Company (NMSC), which manages its NMTC financing.

NEF has funneled $12.4 billion into affordable housing since 1987, supporting the creation of more than 149,000 affordable housing units in 47 states. In just 2015, NEF provided $969 million, supporting the creation of 9,082 affordable housing units.

Meanwhile, since 2002, NMSC has provided financing to create 17,000 temporary and permanent jobs in low-income communities.

“We want to be efficient in how we’re serving as a steward of these tools,” Chen says. “So we’re looking at efficiencies — coordinating with the parties, minimizing third-party transaction expenses, limiting the exposure of third-party costs to groups like SOME.”

Chen could not rule out the possibility that LISC has combined LIHTCs and NMTCs on a single project before, but affirms, “this is the first time we’ve brought both sets of resources to the table and set aside NMTCs and LIHTCs for projects combining their goals,” she says.

“A lot of times service providers have thin margins, but health centers are good candidates as tenants. If you have good tenants, that makes it a lot more possible for mixed-use projects to come together,” Chen adds.

Healthy Futures Fund has four projects already in the pipeline for its second round, including one in Houston. Smaller projects are also possibilities, not just large projects like the Conway Center.

“In the early days a lot of people were scratching our heads about what it means to put the two tools together. It’s becoming much easier to talk about. People are becoming much more aware of the benefits of this co-locating, co-programming model,” Chen says.

The Equity Factor is made possible with the support of the Surdna Foundation.

Oscar is a Next City 2015-2016 equitable cities fellow. A New York City-based journalist with a background in global development and social enterprise, he has written about impact investing, microfinance, fair trade, entrepreneurship and more for publications such as Fast Company and NextBillion.net. He has a B.A. in Economics from Villanova University.

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Tags: jobsaffordable housingwashington, d.c.income inequality