Seattle’s largest nonprofit provider of affordable housing became the first such group in the country to raise money through federal crowdfunding regulations for affordable housing when it unveiled its Building Opportunity Fund last month. Bellwether Housing’s effort, launched in collaboration with Tech 4 Housing, aims to raise $4.5 million in investments to build 750 affordable homes in the Seattle area.
“Regular people with a little bit of money to invest will be able to see their money at work, helping to build affordable homes in their own community, while earning a modest return on their investment,” Tech 4 Housing Director Ethan Goodman told GeekWire. “We hope that tech workers will be a large part of this campaign, and that investing can serve as one path towards deeper engagement on housing issues.”
Backers of the Building Opportunity Fund say it will provide the nonprofit with a stable, low-cost source of capital that Bellwether can use to accelerate its work at a time when demand for affordable housing far outstrips supply. Investors can expect a modest annual return on loans, which will have 15-year terms with opt-outs every five years. Amazon is matching employee investments in the Fund dollar-for-dollar until September.
“This fund is not just about raising money. It’s about engaging an entire community directly and powerfully in the creation of a more affordable and inclusive region,” said Susan Boyd, CEO, Bellwether Housing. She noted they reached half their goal within a day of opening the fund, adding “We know this is resonating. If we can raise more than $4.5 million and create even more housing, we will.”
Boyd said Bellwether has raised investment funds for affordable housing in two previous offerings, but these investments were available only to “accredited” or high income/high net-worth individuals.
Tech 4 Housing, an advocacy group, approached Bellwether with the idea for this crowd-funded initiative about 18 months ago after the SEC relaxed rules governing non-accredited investors. Both organizations say they saw it as an opportunity to engage young professions in the effort to build affordable housing.
“You can put your money in stocks, you can put your money in startups, or even in real estate–and now, for the first time ever, you can put your money in building affordable housing in our own backyard,” said Cameron Keegan, an employee of a tech start up and an investor in the Building Opportunity Fund. “This investment will build homes for seniors and veterans; for families who need stable affordable housing for their children to thrive; and for people who serve this community everyday but cannot afford to live here. These are people that keep our city’s ecosystem thriving and they deserve to have a place here.”
These 750 apartments will house an anticipated 2400 people, including children, seniors, young people starting out, teachers, service workers, and community members we cherish and rely on. Thirty-five percent (35%) of these homes will have 2-4 bedrooms to support families of all shapes and sizes. Every apartment will be located near public transit, providing easy access to opportunities like great schools, good jobs, and strong community resources.
The offering is presented by Wefunder, which describes itself as “Kickstarter for investing.” Instead of buying a product or donating to an artist, Wefunder helps “everyday people” invest as little as $100 in the startups they love. Like other investments, there is a hope (but no guarantee) of earning a return.
The Building Opportunity Fund is the latest in a series of announcements that show the tech industry taking a more active role in housing issues.