We must think differently
We must change the false narrative that investments in community redevelopment and social impact is not profitable.
Investments in community development has not evolved sufficiently in several years and therefore has not done enough to transform communities.
Concentrate on a holistic approach to investing in communities.
In addition to housing, equally invest in the overall needs of the community including retail, office and medical office, medical facilities and community centers.
Concentrate on the people in the communities and their needs within the community and invest through the real estate
Generate new jobs by helping create opportunities for the residents in the community, promoting entrepreneurial interests, supporting new local businesses
Think about how the investments will drive new economic growth
Encourage mixed-income and tiered affordability throughout the portfolio
Simplify the “capital stack”
The highest risk of successful execution is the pressure of the traditional capital stack of tiered instruments (especially short-term and high-cost financing).
Increasing the equity stake in the project by one party actually decreases the risk of success
Decreasing the higher cost financing instruments (debt /mezzanine) increases returns to equity owners
Eliminating the inefficiencies in the capital raising and simplifying the capital stack will minimize the ineffectiveness of development pressures and reduce overall execution risk
Decrease the pressures put on local developers
Allow local developers to focus on how to create what is best for the tenants long term and NOT on the need to repay short-term, higher cost financing.
