bay area ross program
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Bay Area Ross Program
A Student’s PerspectiveOne Year Later…
By: Ed DonaldsonBay Area Ross Graduate 2008
SF Housing Development Corp APD Solutions, LLC4439 Third St 201 Spear St. Ste 1150S.F., CA 94124 S.F., CA 94105415.822.1022 Ext 112 415.329.5437www.sfhdc.org [email protected] [email protected]
San Francisco Housing Development Corporation Affordable Housing Developer/Southeast S.F. Housing Counseling Director Certificate of Preference Legislation S.F. Fair Lending Working Group
APD Solutions Neighborhood Revitalization Firm Partnerships with NSP recipients
Real Estate Financing & Investing Residential & Commercial Loans Small property investing
Asset Based Financing Purchase accounts receivables Working capital needs of small/mid-sized businesses
PSE Options Broker Derivatives Market Market crash of 1987
Background Info
Win/win outcomes between developers, local gov’t & communities.
How to better interpret the real estate cycle.
Opportunities depending on stage of real estate cycle.
Capital investments and social enterprises.
What I Took Away From Program?
Hope SF
• City of SF Initiative to Rebuild Public Housing Uncertainty of Hope 6 federal funding. Limited local funding. Public/Private partnerships with developers. Great idea!!!!!
• Community Context Historically, neglected neighborhoods. Some of the worst public housing in the country. History of resident displacement: Urban Renewal. Somewhat paternalistic.
Win/Win Outcomes
Right to Remain Legislation• Protection residents from displacement• On-site relocation.• Recertification process.• Mayor Newsom & Supervisor Maxwell support idea.• African American Out-migration Taskforce report.• Discussions with MOH, SFRA, SFHA, & Supervisor Maxwell.
As Imagined…Some Challenges…• Must compliment Uniform Relocation Act.• 40% of all residents may not return anyway.• Parties speak different languages.• Community folks don’t fully understand development.• Philosophical differences.• Lack of trust.
Win/Win Outcomes
My Role in the HopeSF Discussions
• Help to bridge the language barrier.
• Help parties to remain focus on intended outcome.
• Educating activist about the development process.
• Creation of housing options for residents when/if off-site relocation is necessary.• SFRA , MOH & SFHA new/existing inventory of
housing.• Acquisition of some of the over 600 homes now
foreclosed in S.F.
Win/Win Outcomes
• “When money starts chasing deals vs. deals chasing money…We are at or near a top in the real state market”.
• Significance of “Rent Spike Box”.
• Opportunities with unwinding bad loans.◦ Residential & Commercial Loan Modifications◦ Bulk purchase of REO properties and Distressed loans
• Socially Responsible Investment funds focus on doing this work.
Real Estate Cycle & Opportunities
National Neighborhood Revitalization Firm
Partnership with Socially Responsible Investment Fund.
Partnership with NSP recipients to acquire REO properties. $6 billion to cities/nonprofits to buy foreclosures.
Direct access to the capital markets and trading desks.
Able to assist with challenges/needs specific to S.F.
Over 600 foreclosed homes with 2,200 of “shadow inventory”.
Assist with relocation for HopeSF.
• Mitigate projected property tax decrease of $129 million.
APD Solutions
HUD-Approved Counseling Agency Financial fitness, Homebuyer & Foreclosure Counseling 400 new clients and over1,000 counseling sessions Do more with less to meet increased needs of clients 10,000 new homes in the next 10 years Over 600 existing foreclosed home 2,200 homes within shadow inventory
NeighborWorks Member Agency NHSA/Freddie Mac secondary market partnership $100 million loan fund with banking partners Acquire/Rehab 120 homes per year for low/mod families Acquire distress loans and negotiate modifications Within 3yrs 50% of budget from earned revenue sources
SFHDC as a Social Enterprise
• City of San Francisco: $500 million deficit.
• State of California: $21 billion deficit.
• Private Capital: $ 173 billion on sidelines.
• The $64,000 Questions?
◦ Can we leverage private capital to help solve current housing crisis?
◦ Can we leverage political influence to support the use of private capital in solving housing crisis?
◦ Create public/private partnerships to solve housing crisis.
Capital Investments & Social Enterprises
State Assembly District 62: San Bernardino Area
Assemblywoman Amina Carter Assembly Speaker Karen Bass Over 7,000 existing foreclosed properties 21,000 homes in the shadow inventory Leveraged $300 million public/private capital $100 million in committed funds Local stimulus for community partners NPO’s identify buyers, renters and lease-to-own clients Model can be duplicate around California Partnership with APD Solutions to acquire properties
Example of Public/Private Partnership
• Being in the forefront of discussions on Socially Responsible Investing in Bay Area.
• Leverage our respective skills to create a Socially Responsible Investment Fund.
• Use of public/private partnerships to solve problems in underserved communities.
• Build a strong network among Bay Area Ross Graduates to rival other alumni groups.
Opportunities for Ross Graduates
Questions?
Thank You!!!