The Miami Coalition for the Homeless (MCH), an NLIHC member, has unveiled a new program designed to help address Miami-Dade County’s severe shortage of affordable housing for extremely low income (ELI) households, those earning 30% or less of the area median income (AMI).
MCH was founded in 1985 with the mission of promoting community collaboration to prevent and end homelessness. As an advocacy organization, MCH plays an instrumental role in the formation of policies regarding homelessness and affordable housing. Recently, MCH has also evolved into a philanthropic organization.
Miami-Dade County has 75,000 ELI renter households who spend more than half of their income for rent and utilities. The driving factor behind this statistic is the shortage of affordable housing. In Miami-Dade, there are only 33 affordable and available units for every 100 ELI households. Recognizing that this shortage is the primary cause of homelessness, MCH unveiled a new collaborative effort on May 14, called “Miami Homes for All” (MHFA).
MHFA will be a loan fund that MCH intends to capitalize with private and public investments. MCH has taken the bold step of seeding the fund with $1 million from its endowment. Once fully capitalized, MHFA will subsidize mixed-income rental housing that is affordable to ELI households. The loans will be provided to private developers to cover 10% of a development’s cost. In exchange, the developer must agree to set aside 20% of the units for ELI households. By offering $5-$10 million in loans to developers willing to participate in this set-aside strategy, MHFA has the potential to leverage $100-$160 million and create 1,000 units.
At the heart of the MHFA effort, is a cross-sector approach asking all stakeholders to explore how they can contribute. The fund is modeled on the Home Funders program in Boston, MA, which has brought together program-related investments (PRIs) from foundations and corporate investors to create a loan fund that offers low-interest (2%) loans to developers on the condition that 20% of the units be affordable to ELI households. Home Funders was launched in 2003 with an initial goal of creating 1,000 housing units affordable to ELI families over 10 years. By 2013, Home Funders had successfully financed 3,000 units, 1,000 of which were affordable to ELI households.
One obstacle that MCH has encountered in replicating the Home Funders model is the relatively low interest rates on loans offered by private financial institutions that come without the ELI set-aside requirement. According to Melissa Gallo of MCH, “MHFA will need to offer more than just low-interest loans. We are looking to give developers a deal that will be hard to turn down. We believe offering them public subsidies fulfills this. These subsidies will also allow government to play a role in our loan fund which is envisioned to allow every sector to contribute to addressing homelessness in our community.” To this end, MCH recently entered into an agreement with the Department of Public Housing to commit Project-Based Vouchers to the effort. Funding through MHFA could also be complemented by other public funding sources such as the Sadowski Act funds in Florida, or the National Housing Trust Fund.
For more information, please contact Bobbie Ibarra, MCH Executive Director, at email@example.com.