Awareness of the affordable housing crisis grows as more people confront the rise in home and rental prices, which have escalated over the past year. The gap between those in need of affordable properties and the number of available units continues to widen. According to the latest report from Harvard University’s Joint Center for Housing Studies, approximately 17% of all renter householders were behind on their rent at some point in 2021, a number that is far higher for lower-income populations.
Issues of homelessness, poverty and inequality are present in nearly every community. Large investors increasingly understand that through impact investing, there is an opportunity to make good investments that also work to address these issues. I recently participated on a panel hosted by the American Council of Life Insurers (ACLI) on impact investing. The panel included asset owners who cited two primary goals of their impact investment programs: first, to address the wealth gap that disproportionately affects marginalized people and communities and, second, to generate market-rate returns to ensure these investments are sustainable and can grow over time.
One significant hurdle to this challenge is that socially oriented impact strategies don’t typically lend themselves to the scale required for most institutional investors. Over time, we’ve learned that lasting change results from solutions occurring at the local level, so IMPACT’s investing platform has been built to allow us to act as a conduit between large asset owners seeking scale and local organizations seeking capital to build more affordable housing.