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Can Real Estate Crowdfunding Create Affordable Housing for Everyday Heroes?

Teachers, nurses, fire fighters and law enforcement officials are often found in an affordable housing predicament. In Southern CA, there are very few of these everyday heroes who can afford to live in the same community that they provide services to. Often underpaid and overworked, our everyday heroes are frequently forced to spend much of their time and income on commuting costs. Teachers, one type of everyday hero, are largely responsible for raising our nation's children.  More dual income families means less time to parent. Unfortunately, teachers are underpaid, face increasing time demands of their school districts & increasingly long commutes, thus leaving them with less time and resources to pass on to their own children. Wouldn't it be great if make sense for these unsung heroes to be given a realistic opportunity to live in the communities where they work? Thankfully, there are a couple programs that have succeeded paving the way to this goal.

Teachers Lead the Need

CasaDelMaestro_3 It seems the Santa Clara Unified School District has expanded the three-R's of education: reading writing and arithmetic, to include Revitalization. In fact, Northern California's Santa Clara Unified school District's lack of affordable housing became a dramatic obstacle to hiring. A creative solve to the problem incubated in the early 2000’s, until a $6million, 40-unit apartment building was financed and commissioned by the district, to be developed by Thompson/Dorfman Partners. This property was purposed to house more than 50 teachers, nurses, and counselors. After completion, the tenants moved in & paid approx. $1,075 in rent, well below the $3,000 market rate. Hiring crisis - solved! Those once forced by necessity to consider teaching elsewhere, suddenly thought twice now that a 60 minute commute was cut to 3 minutes. The situation was ideal, since the district already owned the land upon which a closed school stood. The vacant building was then repurposed, and resulted in a neighborhood retaining the services of the qualified teachers who also help raise their children.

Frustration Can Spear Change

Santa Clara Teacher now housed. Santa Clara Teacher now housed.

Addressing the wildly inflated Silicon Valley is just a start, as cities across the Nation share the same basic problem: Service providers cannot afford to live within the communities they serve. The workforce housing issue has spawned investigation to rectify these situations, but state and local programs relieve such a small number of everyday heroes that the mounting frustration, continues to rise. “Define affordable housing.” An ER nurse friend of mine demanded. She makes enough to be disqualified for affordable housing, and not enough to qualify for others. Help is necessary. When you make just enough money to over-qualify for existing programs, and slip into a higher tax bracket, this can cost enough to force the economic engine move in a direction opposite of your favor. There is clearly something wrong with the way we prioritize our values. ~Be careful not to make too much $, because if it isn’t quite enough to free you, it will cost you more to earn it. But, lets get back to the most basic issue & resolve: real estate’s effect on community revitalization for the teachers, nurses, fire and police officials.

Getting Incentivized

The Seattle School District and Northshore School District partnered with a local bank, a Seattle nonprofit counseling agency, and Fannie Mae to create the Hometown Home Loan Program. The program offers low-interest loans of up to $40,000 to help teachers. California’s Teacher Home Buyer Program of 2,000 offered interest-free loans up to $40,000 to help schoolteachers in the public sector purchase homes. 140 teachers received loans within the first few years of the program. Baltimore offered $5,000 home loans (yes, that was back in 1997) to all city employees. Repayment was reduced by 10% for each year that the homeowner remained a city employee. Nice gesture. What would the amount be today? According to the Housing Authority of Baltimore, the goal to increase the chances of City employees to become homeowners within the city limits is fueled by a $3,000 down payment incentive, which is creased by $750 when homes are purchased in Healthy Neighborhood Housing Blocks. Again, nice incentive. Yet, it has decreased by $2,000 in13 years, while the cost of living has risen. So, again, we discover an opportunity for online real estate investing to help a community develop properties that could be used to help propel the quality of life in their neighborhoods forward.

Not All First Attempts Succeed

Try Again

When Santa Fe turned into a popular artist community the real estate prices skyrocketed. Teachers were forced to commute over 60 miles to work each day. When positions opened closer to home, they immediately left. A 50-unit apartment complex, along the lines of the Santa Clara project was proposed and went nowhere. San Francisco had the same idea, f1a13ce25d085b37e04771854fb47842and moved forward on plans to build a 43-unit apartment complex for teachers on land owned by the district. It was met by such extreme traffic and parking concerns of neighbors that it too was abandoned. A project that could have rented apartments for as little as $700 per month (compared to the market rate of the early 2000’s, of $1,600 per month) just fizzled out. It could have expanded, providing homes to nurses and firefighters and peace keepers. Yet, with the depth of innovative minds & resources available now, we have few limits to possibility. In fact, we've seen how people will rally around the efforts of individuals like Lebron James in Akron, Ohio, and Theaster Gates in Chicago, Illinois, as well as a multitude of other unsuspecting places. If those living within a society see an unmet need, what should stop them from fulfilling that need through methods such as real estate crowdfunding? As Theaster Gates created an artist community & affordable housing complex out of a dilapidated, underused neighborhood block, in such a short time, surely we could create the same for our local service providers. While his efforts were collaboratively funded, imagine the expansion and timeliness afforded with a crowdfunded pool of resources gained. Now, my curiosity stretches to creating housing for our everyday heroes (service providers) whether it be on a small SFR, one-at-a-time scale, or a larger apartment complex scale. And just to illustrate the Doing Well While Doing Good philosophy, a project exceeding most people's expectations came to life in 2013 in New Jersey, Teachers Village.  This 6-building complex includes retail outlets and three charter schools. Overall this complex is used to accommodate 1,000 students and provides housing marketed towards Newark teachers. The project received almost $40 million in state tax credits, $60 million in federal New Markets tax credits, and further funding from numerous large institutional banks and investors such as Goldman Sachs, Prudential Financial, TD Bank, and billionaire investor Nicholas Berggruen.

The Solution

In many major population areas throughout America there are perfectly good patches of land that are being underutilized. We pay taxes to provide funding to teachers, firefighters and others. Could these funds not be similarly pooled together and dedicated to help provide affordable housing for those everyday heroes who provide our communities with education and protection. An abandoned building, vacant lot, or distressed building can all be renovated and provide something valuable for everyone both directly and indirectly. There are some private non-profit organizations who are on the right track. The Everyday Hero Housing Assistance Fund, founded in 2011, and based in Denver Colorado, funds their mission to expand housing opportunities to teachers, nurses, fire, and law enforcement officials.

So, what do you think about the idea of creating affordable housing for the everyday heroes working among us? Should they be afforded opportunities that others are not?  Leave a comment, while also letting us know what real estate projects would make sense in your neighborhood.

If you want to learn more, take a look at some of the most commonly asked questions we receive about real estate crowdfunding on a daily basis and find out why so many people are crowdfunding real estate projects across the country with Patch of Land.
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8 thoughts on “Can Real Estate Crowdfunding Create Affordable Housing for Everyday Heroes?”

  • Josie berkshire

    Josie berkshire commented April 27, 2015

    This touches

    Karen Perkins

    Karen Perkins reply April 27, 2015

    Thank you, Ms. Berkshire. How does it touch you?

  • Josie berkshire

    Josie berkshire commented April 27, 2015

    This affects me directly as I have had a catastrophic year with health issues and am basically living in poverty until I can go back to work which is estimated mid july. I cannot qualify for any sort of assistance even though I've been a productive member of society for over 30 yrs . It's very discouraging. Luckily I inherited my small house from my parents but have had to rely on friends and even fb friends via have never met to meet bills

  • Jim Groves

    Jim Groves commented May 1, 2015

    We completely agree. There are many communities that wouldn't function without the services provided by our police, fire, teachers, service employees, etc. In higher priced areas such as Aspen and Napa Valley, the lack of affordable housing impacts environmental, educational and health outcomes of the community. Being an exclusive community to the 1% is not sustainable.

    I'm excited about the opportunities that crowdfunding platforms can bring to address these concerns.

    Jim Groves-Founder
    Lihtec Funding
    222 W. Merchandise Mart Plaza, Suite 1212
    Chicago, IL 60654
    888-970-0935 ext 1
    [email protected]
    Twitter: @lihtec

    Karen Perkins

    Karen Perkins reply May 5, 2015

    Thank you, Jim, for your feedback.

  • george sahady

    george sahady commented February 21, 2016

    we are an american legion post in malden ma. Our post building is about 100 yrs old. we would like to tear it down and build 16-18 affordable condo units for veterans and their families. In addition we would like to build a new post on the same property. We would like to create a crowdfunding site to raise funds along those we can obtain from a bank through the federal home loan bank. Could you provide us with a concept on how to proceed.
    Thank You george sahady

    Marco Rivera

    Marco Rivera reply February 22, 2016

    Hello George, for more information on how we may be able to work together, please contact 888-959-1465 and ask to speak with our Commercial Division or submit your information to

    Thank you.

  • Terry Pratt

    Terry Pratt commented December 12, 2016

    Doesn't this merely exacerbate the affordable housing shortage faced by lower-wage workers? Will affordable housing ever trickle down to burger flippers?

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