By Anna Smukowski, Senior Director, Impact Investing, Enterprise Community Loan Fund
In the DC area, a shortage of rental homes that are affordable and available to extremely low-income households is leading to debilitating cost burdens: 75% of extremely low-income households are spending more than 50% of their incomes on rent.
High housing costs are known to create significant financial ripple effects. Cost-burdened residents are often forced to cut back on food and medical care, or even relocate in search of more affordable housing. Further housing instability can also follow when tenants are forced to move multiple times in search of ever cheaper rent, increasing the potential for health risks, particularly among children.
Crucially, lack of affordable housing also contributes to homelessness: A survey of city government officials found that a lack of affordable housing was the most frequently mentioned cause of homelessness.
To address the challenges of housing scarcity in DC, Enterprise Community Loan Fund, Inc. (ECLF) and the Greater Washington Community Foundation (The Community Foundation) through its Partnership to End Homelessness (The Partnership) have raised $15.2 million through the Enterprise Community Impact Note. Proceeds from sales of the Impact Note are used primarily as capital for loans to community-based, nonprofit, and mission-aligned for-profit, affordable housing, and community and commercial facilities borrowers.
The Partnership, co-launched in 2019 by The Community Foundation and the District of Columbia’s Interagency Council on Homelessness, is dedicated to making homelessness in Washington, DC rare, brief, and nonrecurring. This year, we celebrate the five-year anniversary of The Partnership and its investments in ECLF through the Impact Note that supports critical work in the DC market.
Since 2019, ECLF has provided financing to create or preserve 671 affordable homes in DC –including 359 units serving extremely low-income households, 112 units with supportive services, and 343 units serving senior residents – advancing The Partnership’s goal of addressing the affordable housing shortage and helping create more equitable, just, and thriving communities.
Standout projects include the ground-up construction of Edgewood V, a 151-unit senior housing project in Washington DC’s Ward 5, affordable to individuals up to 50% AMI. ECLF provided a $5.1 million bridge loan to Enterprise Community Development for the Edgewood V project. The design of Edgewood V incorporates features that will extend the time that elderly residents with varying levels of health needs can live independently via accessibility-focused design in all apartments. The project will also meet Enterprise’s Green Communities Standard and will include renewable energy sources onsite in the form of solar panels.
According to the U.S. Interagency Council on Homelessness, individuals over the age of 55 are the fastest growing group of people experiencing homelessness – many of them for the first time. While the reasons are complex, an increased risk of poverty is chief among them, as limited fixed incomes pay for less as housing costs skyrocket across the country. This is especially true in DC, where the D.C. Fiscal Policy Institute attributes the root cause of homelessness to high housing costs and the structural racism that has created disparities in housing, wealth, incarceration, and health. Further complicating affordable housing access is limited acceptance of permanent supportive housing vouchers at facilities that offer age-appropriate resident services to seniors. Properties like Edgewood V are key to preserving the housing stability of seniors in historically diverse and rapidly gentrifying areas of DC.
Disclaimer: This is not an offer to sell or a solicitation of an offer to buy any securities. Such an offer is made only by means of a current Prospectus (including any applicable Pricing Supplement) for each of the respective notes. Such offers may be directed only to investors in jurisdictions in which the notes are eligible for sale. Investors are urged to review the current Prospectus before making any investment decision. The securities are unsecured debt securities subject to terms, conditions and risks described in the Prospectus, including the possible loss of the amount invested. Payment is dependent on Enterprise Community Loan Fund’s financial condition at the time payment is due. No state or federal securities regulators have passed on or endorsed the merits of the offering of notes. Any representation to the contrary is unlawful. The notes will not be insured or guaranteed by the FDIC, SIPC, or other governmental agencies.
The Impact Note is currently not offered in Arkansas, Delaware, Florida, Kentucky, Nebraska, and Tennessee.