Every time the first of the month rolls around, millions of Americans must find a way to come up with the rent. But that expectation now comes at a time when a staggering 40 million people are newly jobless.
Housing insecurity, already an acute crisis for many, will only cut deeper into more people’s lives as the year goes on. At the start of May, the National Low Income Housing Coalition estimated that 13.3 million low-income renter households have been negatively impacted by job or income loss. Nearly 20 million low-income renters were already spending more than they could afford on housing before the pandemic hit.
To stem the vast toll, states and cities have placed temporary moratoria on evictions. The CARES Act included some resources to bolster affordable housing, as well as forbearance on federally backed mortgage loans and an eviction moratorium for most federally subsidized housing units. But again, that’s all temporary. Until more stimulus comes through, and even if it does, affordable housing providers and the residents they serve will be in dire straits.
“We know from the Great Recession that moments of economic downturn, let alone health pandemics, can have really significant implications for the owners and operators of affordable housing,” said Melinda Pollack, senior vice president of national initiatives at Enterprise Community Partners. Enterprise is one of several national nonprofits that have long served as lynchpins for local community development. Alongside peer organizations like NeighborWorks America, the Local Initiatives Support Corporation (LISC) and the Housing Partnership Network, Enterprise supports many of the frontline affordable housing nonprofits that are feeling the squeeze right now.
Though the resources involved are modest next to the need, Enterprise’s COVID-19 response program provides a good window into housing nonprofits that are drawing on philanthropy to weather the initial storm, and pushing for longer-term resilience.
“People Need Help Right Now”
Enterprise Community Partners covers a lot of ground in its work, but its core constituents have always been nonprofit owners and operators of affordable housing. The organization’s COVID-19 response effort, which it calls Emergency Action for Resident and Partner Stability, aims to help those operators keep people housed and to build organizational resilience across the network. The program has raised nearly $6 million so far—including from some high-profile philanthropies—and has moved roughly $1.3 million to 15 organizations since its May 15 launch. Enterprise has also dedicated $1.4 million of its own funds to the effort to meet high demand.
The most immediate benefit that Enterprise’s local partners receive are emergency grants of up to $150,000, which they can use to cover residents’ most pressing needs, like rent and utilities. “The short-term financial needs of these owners and operators are incredible, especially since it’s not clear when or if residents will pay their rent,” Pollack said. “We have the resources available to make 40 to 50 initial grants, and I believe resources will continue to come in this year.”
In addition to emergency infusions of cash, Enterprise is also providing grantees with technical assistance and strategic guidance around short- and long-term resilience. That includes help with accessing government relief. Pollack cited Enterprise’s experience with a wide variety of housing organizations as a valuable knowledge asset in times of crisis. She also emphasized that this process is collaborative rather than competitive, and that Enterprise’s national office is working with place-based partners to identify the organizations in greatest need.
Enterprise anticipates that its emergency relief grantmaking will be ongoing for the time being. “Governmental aid is critical over the long term, but people need help right now, and philanthropy is stepping up,” said Priscilla Almodovar, Enterprise’s CEO, in a news release.
Of the funders backing Enterprise’s response effort, only a few have been named so far. They’re an eclectic mix: Wells Fargo, the Ballmer Group and the Center for Disaster Philanthropy. “With all three, we have philanthropic partners who know Enterprise extremely well. We wanted to act fast and with folks who deeply understand the challenges we’re facing,” Pollack said, referencing past and ongoing projects Enterprise has implemented with their support.
The largest contribution is $2 million from Wells Fargo, which the bank is furnishing as part of a larger $175 million COVID-19 aid commitment. Housing relief is a major component of that, befitting Wells Fargo’s status as a top affordable housing funder and a key player in community development lending (along with the other big banks).
In mid-May, Wells Fargo provided some additional information on who’s getting its housing relief grants, which it says will “help more than 100,000 renters and homeowners stay in their homes.” That list includes Enterprise and other community development stalwarts like the Housing Partnership Network and NeighborWorks America, a frequent recipient of Wells Fargo’s housing philanthropy. Wells Fargo is also the sole funding partner for Enterprise’s ongoing Housing Affordability Breakthrough Challenge. The idea there is to cultivate “breakthrough ideas” on affordable housing and award six grants of $2 million apiece to the winning applicants. Winners will also receive technical assistance from Enterprise valued at a half-million dollars.
Like Wells Fargo, the Ballmer Group has an established relationship with Enterprise. It committed $1.5 million to the response program. In the past, Enterprise has received Ballmer support for work in two of the funder’s focus regions—southeast Michigan and Los Angeles—and relies on Ballmer support for several national initiatives. One is the Strong, Prosperous and Resilient Communities Challenge (SPARCC), a cross-sector initiative operating in six cities toward the goal of reducing racial disparities and boosting low-income communities’ health and climate resilience. The Ballmer Group also supports Enterprise’s work with StriveTogether in housing and education to decouple children’s future success from their zip code of origin.
Aside from Enterprise, Ballmer supports a few other housing-related COVID-19 responses. They include the Urban Institute’s Renters and Rental Market Crisis Working Group, as well as a California Community Foundation effort focused on emergency assistance for renters and a Liberty Hill Foundation project centered on tenants’ rights and legal services.
The final funder of Enterprise’s response, the Center for Disaster Philanthropy (CDP), has forged a place in the sector not only as a consultancy, but as a grantmaker in its own right. Its CDP COVID-19 Response Fund got off the ground in March to back organizations serving vulnerable communities’ most pressing needs. The fund awarded Enterprise $250,000 to provide cash grants to partners in hard-hit New Orleans, Miami and Georgia. According to Sally Ray, CDP’s director of strategic initiatives, access to affordable housing “is the issue that is most significantly exacerbated during disasters and crises like the COVID-19 pandemic.”
CDP previously supported Enterprise through its Hurricane Harvey Recovery Fund. With a focus on rural areas of Texas severely affected by the storm, Enterprise worked with state authorities to fund and guide local housing organizations. Ray calls Enterprise “a leader in the U.S. in multiplying the impact of investment in affordable housing in the communities where they work.”
A Preexisting Crisis
It’s always an open question whether philanthropy’s attempts to step up in times of crisis really meet the scale of need or target the right leverage points. Many were already calling housing insecurity a crisis in the years leading up to COVID-19. During that time, financial innovation around affordable housing was on the rise as more foundations, banks and impact investors arrived on the scene. But as we often note, the sheer cost and complexity of housing development limits what philanthropy can do directly, and may make some funders shy away.
Both Pollack at Enterprise and Ray at CDP emphasized the fact that none of the challenges affordable housing faces are new, and that disasters tend to exacerbate problems that already exist. So while it makes sense that advocacy efforts at Enterprise and elsewhere are focused on upcoming federal stimulus packages, bigger questions need to be asked about the structural failings of housing policy.
One area of promise is the growing conversation around racial equity in the community development world. Pollack said Enterprise’s work reflects “a commitment to racial equity as a process and outcome,” and that “we’re watching the disparity of impact, which deeply aligns with racial disparities.” The big banks have made overtures to racial equity in their community development philanthropy, JPMorgan Chase being a notable example, and longtime funding intermediaries like Living Cities are pivoting to race.
Still, many housing funders aren’t very forthcoming about the American economy’s obvious failure to lift all boats, and capital’s role in the perpetuation of that inequality. For major institutions like Wells Fargo, that’s because the finance sector’s dominant business models are often exactly what make it so difficult for low-income communities to access capital. And for many billionaires and their foundations, directly critiquing the system that treated them so well isn’t easy.
That’s not to say COVID-19 response funding from the nation’s richest, like the Ballmers, isn’t laudable for what it is. But as Inside Philanthropy’s Mike Scutari recently discussed in detail, the super-rich have seen their already unimaginable wealth skyrocket this spring, even as the shutters went up on Main Street and tens of millions lost their livelihoods. During a historic crisis, philanthropy’s emergency aid to nonprofit landlords, community land trusts and CDFIs should be higher.