Manufactured home repairs make a real difference in rural Oregon

Turns out, Fred Meyer was right. When he established what would become the Meyer Memorial Trust, Mr. Meyer offered this insight: "With thoughtful giving, even small sums may accomplish great purposes."

So it might not come as a surprise that just a few thousand dollars can sometimes make a huge difference for people facing unsafe housing conditions, shockingly high utility costs or even homelessness.

That's one takeaway from the Year One (interim) report recently delivered by an independent evaluator Meyer engaged to analyze the impact of grants we made in 2017 to nine organizations helping to make crucial repairs and other important upgrades to manufactured homes in rural Oregon.

Why Manufactured Housing?

Meyer has been actively engaged in issues around manufactured housing for about a decade. We've supported creative and impactful work to convert investor-owned parks to resident-owned cooperatives; funded efforts to pilot affordable replacement of older, substandard homes; and more than once wrestled with issues around repairing homes. We have been fortunate to work with a wide array of partners committed to improving conditions for people in manufactured homes, including CASA of Oregon, NeighborWorks Umpqua, St. Vincent de Paul of Lane County, Network for Oregon Affordable Housing, the state of Oregon, Energy Trust of Oregon, Craft3, and USDA Rural Development, among others.

All this work is driven by the realization that manufactured homes are a crucial slice of currently affordable housing in Oregon and often the only affordable homeownership option for many people, especially in rural Oregon. About 140,000 households across the state live in manufactured homes, and nearly half those homes are at least 40 years old. Not every older manufactured home is in dire shape, but many older homes are well past their best days (particularly those built before the federal code updates of 1976 raised the bar for the initial quality and durability of new homes). Residents sometimes are living with structural defects, health hazards, terrible energy efficiency and even major safety issues.

Ideally, many of these homes would be retired and replaced by new, energy-efficient homes, but not everyone is in a position to afford such an upgrade, even with new layered subsidies some of our partners are piloting.

This urgent and ongoing need motivated our Request for Proposals in late 2016 focused on crucial repairs (including energy- and accessibility-related upgrades). We directed this funding to programs serving rural Oregon, both because we felt much of the state's need was outside urban areas and because smaller communities typically lack the local resources that could fund these repairs.

Evaluating Impact

Looking beyond the two-year grants Meyer funded, we wanted to be able to show other funders (public and private) that continuing and expanding this work was impactful and a prudent use of scarce housing resources. To that end, we hired an independent evaluator (Chari Smith of Evaluation Into Action) to help us design and carry out a cross-site evaluation that could analyze and summarize what we learned from the nine projects we funded. We recently received the Year One report, which summarizes early results.

Highlights from the Year One Report

Evidence the evaluator collected from the program staff and from the people who were helped validated Meyer's sense that this work addresses important housing issues and made a material difference in the lives of people served. A total of 107 home repairs were completed by the nine grantees. Roughly half of those served completed and returned detailed surveys about their experience with the repairs done. Of these:

  • 72 percent reported the repairs will help them continue to live in their home longer (by addressing potentially serious issues that could jeopardize their ability to stay there); 90 percent felt that the general comfort level of their home was improved.
  • 70 percent felt their home was made safer by the repairs.
  • 64 percent reported the repairs would help improve their health.
  • 74 percent saw increased energy efficiency as a result of the repairs.

The improvements were targeted to people who had few other options for making these kinds of repairs. Nearly all the people helped live on an annual income of less than $30,000, two-thirds are seniors, and more than half the households have one or more members with a disability.

"For me, this process was lifesaving. Without your help, I can't imagine how things would be. I feel much safer and am so thankful you have programs like this for me."

 

"I was able to wash dishes, do my laundry, take a shower or bath. I can say that I never realized how much having hot water means in everyday living. … I live on a fixed income, and I could not have afforded to get a new hot water heater without this program."

 

Looking Ahead

The nine projects will wrap up their two years of Meyer funding in early 2019, and next fall we'll share the final report summarizing what we learned and what other funders might take away from this work. Some early thoughts on next steps we would highlight for our partners:

  • There is a real need for more data, specifically on the health impacts of improvements to homes with serious health and safety hazards. This is an area where health partners such as coordinated care organizations could target some research connecting longer-term results of repairs with health outcomes and could lead to a strong evidence-based argument for funding repairs like this. Preventing falls, addressing respiratory issues such as mold, and generally supporting the ability of people to age in place (often in tight-knit and nurturing communities) seems likely to be well worth the relatively modest cost.
  • Flexibility is an important consideration for other funders. All of the projects funded used some federal and/or state funding to help with these repairs, but those sources come with restrictions that can exclude homes (or particular issues) that urgently need attention. We heard loud and clear from our partners that the flexibility of Meyer funding was helpful in both leveraging other funds and filling gaps some programs can't.
  • Organizational capacity can be a big issue for those delivering these repairs. Stable, multi-year funding is really essential to allowing organizations to make the investments in personnel, training and other resources to consistently serve this niche, and we all should be alert for opportunities to scale up and increase this capacity. Every grantee spoke of long waiting lists and unmet needs they could address with more funding. Steady and reliable funding could also help with building a cadre of reliable contractors ready and able to do repairs, which was an issue in some parts of the state.

We look forward to sharing this work and continuing to partner with the determined and dedicated partners around the state committed to sustaining and improving this affordable housing option.

Michael

Affordable Housing Initiative: Manufactured Home Repair Impact Summary Report - Year One 2018
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Funding statewide stability: Housing Opportunities portfolio awards $5.86 million in grants

Through our Annual Funding Opportunity, this year the Housing Opportunities portfolio saw many of our partners propose innovative solutions to address some of the most complex housing challenges in Oregon. In surveying the awards, grit and creativity rise to the top as two of the most prominent themes of the efforts of this year's 33 grant recipients — taken from 78 applicants — receiving awards totaling $5.86 million.

And, yes, like previous years, projects funded in 2018 span the entirety of our state, from urban to rural regions and include large and small organizations focusing on single efforts and group collaborations. And a few organizations were funded by Meyer for the first time.

Each year, we seek grant proposals that will move us closer to our vision of safe, affordable, long-term housing for all Oregonians. Knowing that our funds are limited, we look for strategic investments that reflect an understanding of racist and discriminatory housing practices that have created disparities and work to eliminate those imbalances through collaboration, systems-level change and resource alignment. That's the joy and challenge of working within this portfolio. Needs make themselves known and we respond. It's our job to find them.

Thankfully, our partners make that easy.

We'll take a closer look at two topics that gained traction in this year's batch: replacement of substandard manufactured housing and providing housing for formerly incarcerated people.

When Meyer established its initial housing goals five years ago, preservation of rural manufactured housing was one of our key strategies. We knew that manufactured housing is a primary source of affordable housing in many rural Oregon communities. A significant percentage of those homes were built before 1980, and many are in significant disrepair, forcing families to live in unstable and unhealthy environments and pay a significant portion of their limited incomes on utility costs. Our partners labored for years to piece together the puzzle of resources needed to replace these substandard homes at a price families could afford.

Four proposals funded in this batch focus on replacing dilapidated mobile homes. Each proposal comes at it from a unique angle, bringing expertise and connections to address part of the issue. For example, we've been working with Community and Shelter Assistance of Oregon on housing issues for a number of years. This year, CASA of Oregon received a two-year grant to fund a replacement strategy manager position that will both manage and document the ambitious collaboration happening at a resident-owned cooperative park in southern Oregon.

There, ten organizations have been working together to replace aging, substandard manufactured housing units, including CASA of Oregon, Energy Trust of Oregon, Craft3, USDA Rural Development, Oregon Housing and Community Services, Network for Oregon Affordable Housing, NeighborWorks Umpqua, United Community Action Network, Small Business Legal Clinic and Umpqua Ranch Cooperative. Their collaborative effort is the breakthrough culmination of past ideas and efforts — dating back at least five years — to produce a successful program model that will allow home replacement with new, energy-efficient manufactured housing at little increase in monthly cost.

That means fewer repairs, lower energy bills and healthier homes. Better homes allow families to focus more energy on career, education and family goals. Families will also feel empowered because they'll be living in new homes that can be preserved for the next generation.

We at Meyer are even more buoyed by the long-term ripple effect this model may one day achieve.

A critical component of the newly funded position at CASA of Oregon is to memorialize every phase of the process so that other organizations throughout the state can reproduce and adapt its processes to fit their needs and unique circumstances. It's thrilling to imagine the number of new homes for low-income individuals and families, immigrants and elderly people that may emerge from this project.

Three other proposals in this batch are also immersed in manufactured housing. When viewed together, the collective work is poised to make big strides that can address the thorny issues around manufactured housing replacement.

  • Neighborhood Economic Development Corporation has engaged in a range of homeownership counseling services, such as financial capacity building, matched savings accounts, reverse mortgages and foreclosure counseling. Increasingly, it was seeing owners of manufactured housing coming in with requests but found it was ill-equipped to serve them because of distinct differences inherent in manufactured housing. Meyer's grant will support NEDCO staff focused on manufactured housing education and counseling services over two years.
  • Craft3 received a two-year grant to pilot a funding model with the Energy Trust of Oregon to replace aging and unsafe manufactured homes in southern Oregon with healthy, energy-efficient models, helping low- and moderate-income homeowners with long-term housing stability.
  • Meyer supported St. Vincent de Paul Society of Lane County to preserve needed affordable housing at Saginaw Mobile Home Park. With many park homes deemed unlivable, the grant will help to replace existing single-wide manufactured homes with new, energy-efficient models and improve the health, safety and long-term viability of the park.

We also saw breakthrough work this year from Sponsors, which provides transitional and long-term housing services to previously incarcerated individuals, for whom firm grounding in the housing market has always proven elusive. The Sponsors grant will staff and support a multi-sector collaborative integrating comprehensive case management and parole and probation supervision support with permanent supportive housing for the prison re-entry population in the Lane county area.

This level of assistance is essential. Individuals released from prison often can't compete for housing in the marketplace for numerous reasons: a prison record, inadequate rental history, lack of funds, the absence of a job and so on. Yet housing is the most stabilizing factor in a person's life and provides a crucial platform for employment, education and health.

Sponsors works directly with Homes for Good, which is familiar with supporting high needs populations, to ensure a holistic approach to property management and solving housing disputes in an equitable way before resorting to evictions. The pilot was extremely successful, achieving a one-year housing stability rate of 87 percent and a one-year incarceration recidivism rate of only 2.4 percent. Recent analysis conducted by the Oregon Criminal Justice Commission found that the one-year felony re-conviction rate among residents at one of the Homes for Good sites with Sponsors was 60 percent lower than the Oregon state baseline.

Sponsors has been working for years to make housing less daunting to this vulnerable population. The rest of us are just catching up to their good work.

We applaud our partners in the field — including Sponsors, CASA of Oregon and dozens of others — that remain committed to solving some of the hardest issues in affordable housing and breaking down barriers to equity that have likely been in place for decades, possibly generations. It is only through our partners' work that Meyer will see strides toward our mission of an equitable and flourishing Oregon.

A full list of the grants in this year's Annual Funding Opportunity batch can be found here.

— Theresa

2018 PORTFOLIO GRANT AWARDS

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Funding statewide stability: Housing Opportunities portfolio awards $5.86 million in grants
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1 Million Months Challenge update

This summer Meyer challenged Oregon experts on innovative housing design, construction and finance to think big: Bring us your best ideas to create 1 million months of affordable housing for as little public subsidy as possible.

Our 1 Million Months Challenge RFP elicited 18 proposals from teams around the state that brought fresh thinking to the basic thrust of our question: How can communities help many more people into housing that's suitable and affordable, given current levels of funding?

We are glad to report that a first look through the proposals validates our hope that there are promising, untested approaches that might well be worth trying. Those who submitted concepts in that first round that seem most impactful and innovative will be invited to submit more detailed full proposals this fall, with funding decisions announced in January 2019.

We look forward to sharing what emerges from this work with you and getting your thoughts on how to channel and support the creativity people have brought to it!

–– Michael

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1 Million Month Challenge

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Updates on Meyer's 1 Million Months Challenge
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Affordable Housing Initiative: Changing the statewide conversation around housing issues

Meyer's efforts to help better inform and align work around affordable housing in Oregon are a good example of how philanthropic funders can deepen their impact. A recently completed evaluation of 2017 efforts under our Affordable Housing Initiative (AHI) describes the effectiveness, results, limitations and lessons learned from AHI grants related to advocacy, policy and systems change.

Kristina Smock Consulting prepared the evaluation based on a review of grantees' report documents, interviews with key partners involved in affordable housing and related work, and discussions with Meyer staff.

Meyer began the Affordable Housing Initiative in 2008 in part because we recognized that housing is an essential foundation for thriving families and equitable communities, and we wanted to engage in a more focused and systems-based way with partners working on housing issues. In recent years the statewide shortage of affordable housing (even for people working full time), the vulnerability of low-income households to eviction and a rise in homelessness have become front-page issues.

Meyer always understood that dollar-wise we are a small part of the puzzle when it comes to addressing those issues and that helping inform and influence public policy and larger systems issues are where we can make the most difference.

So how did that work out last year? The full report is worth reading, but we think key takeaways include:

  • Foundations and philanthropic funders clearly can support important policy and advocacy efforts without running afoul of legal constraints on lobbying.
  • Targeted grants have successfully elevated and amplified the voices of low-income Oregonians most affected by housing issues, including people of color and culturally specific organizations.
  • There are longer-term and more immediate and tangible targets in the area of policy and systems-change and it's important to work on both tracks.

Meyer-supported housing advocacy saw real wins in 2017, including a commitment from the state of Oregon of an additional $150 million for affordable housing and new policy initiatives from the state around preservation and manufactured housing. At the local level, several Oregon cities adopted construction excise taxes to support affordable housing and are engaged in lively debates about reducing unnecessary land use and zoning barriers to housing development. Stronger tenant protections and reform of the mortgage interest deduction fell just short in the Legislature, but both of those issues (and the advocates urging positive change) will surely be back.

Meyer also funded several collaborative projects across the state attempting to better align and coordinate housing and services, including areas such as health care, diverting families from foster care and early learning.

The report also highlights some of the grass-roots work Meyer has supported to help mobilize, organize and connect specific communities suffering most from the state's lack of affordable housing, such as Community Alliance of Tenants, Immigrant and Refugee Community Organization, Unite Oregon and the Urban League of Portland.

Looking forward, we take to heart some of the lessons and challenges you'll see in the report:

  • Strengthening advocacy is a long-term project: doing it right requires a sustained, multi-year commitment and reasonable expectations about the pace of change and what "outcomes" can be easily documented. What we're really trying to build is a durable and effective constituency around the state to support affordable housing issues emerging from different communities.
  • Aligning systems is easier said than done, and we're still in a learning mode about the best ways to support collaboration across silos, re-structure incentives and overcome barriers to sharing data, resources and power.
  • External/environmental conditions matter: despite our efforts, the steep rise in housing costs and changes in federal policy make this work (and opportunities for leverage and collaboration) even more urgent.
  • Research and evaluation are important in this work: understanding what kind of data and evidence motivates decision-makers and funding it is essential to effective advocacy!
  • Meyer should be alert to opportunities to collaborate more with other funders; while advocacy can be a touchy or intimidating area for some organizations, more funders are hearing urgent messages around housing issues from their own stakeholders and we can do more to find areas where our priorities overlap with others.

As the Affordable Housing Initiative's current iteration wraps up in 2019, we expect to share more evaluation and reflection on the past five years and how that shapes Meyer housing efforts going forward. As always, we welcome your thoughts and suggestions on how we can be more effective and responsive partners!

–– Michael

Photo caption: Oregon State Representative for District 47 Diego Hernandez responds to questions posed from immigrant community leaders at Elders in Action’s Housing Alliance forum

Oregon State Representative for District 47 Diego Hernandez responds to questions posed from immigrant community leaders at Elders in Action’s Housing Alliance forum.

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Building relationships with Oregon Tribes

Last year, Oregon's Point in Time Count recorded that Native Americans are significantly overrepresented in Oregon's homeless population and the least likely to be sheltered of any community counted. Indigenous communities are facing substantial housing disparities in our state and we need to do more. As Meyer continues to work toward our mission of a flourishing and equitable Oregon, the Housing Opportunities portfolio seeks to understand the unique challenges that face our indigenous communities and what we can do to better serve them.

Although Meyer has funded Native organizations that work on affordable housing, such as the Native American Youth and Family Center (NAYA), until recently we had never funded the efforts of Tribal Nations to house their members. Meyer's housing portfolio is committed to building lasting relationships with tribes in order to partner with them in their housing priorities, educate ourselves about Native housing issues and advocacy priorities, and understand the challenges of housing development and homeownership that many tribes face.

Earlier this summer, Meyer collaborated with the Cow Creek Band of Umpqua Tribe of Indians to convene a group of foundations and tribal housing representatives from across Oregon for a roundtable discussion about how philanthropy can support the ongoing housing work of tribes across the state. As a newcomer to the sector, it was intriguing to hear how disconnected many tribes felt from philanthropy as a whole. One person stated the impression that tribes were not eligible to apply for philanthropic support. It was clear that foundations must do more than just harbor the idea of engaging with tribal entities: we must actively work to earn a relationship of trust, respect and partnership.

The Housing Opportunities portfolio is making strides in our journey to support our Native communities, and the convening was just a start. In 2017, we joined the Northwest Indian Housing Association as an affiliate member and have attended several quarterly meetings around the Pacific Northwest. We continue to visit directly with tribal governments and housing departments to build relationships and understand their specific priorities. As a result of this focus, we have developed deeper connections and pathways of communications with tribes and began making grants to tribal housing entities: The Klamath Tribes through our Affordable Housing Initiative Systems Alignment RFP in 2017 and capital funding to the Confederated Tribes of Siletz Indians in 2018. We are so honored to have supported these projects, but we still have a long way to go to strengthen our relationships with tribes across the region and we are ready to learn.

–– Lauren

The Cow Creek Band of Umpqua Tribe of Indians welcomes the Oregon Funders Panel
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ICYMI: A PRI Primer

This article was originally included in the Spring 2018 NOLS Newsletter, Published by the Nonprofit Organizations Law Section of the Oregon State Bar. It has been updated slightly for reprint here.


Most nonprofit organizations see foundations as only a source of grants. But foundations have another important, and lesser known, tool for helping organizations with a charitable purpose: Program-Related Investments (PRIs).

Defined in the U.S. tax code, PRIs are investments — including below market-rate loans, guarantees, linked deposits or equity investments — made primarily for an exempt or charitable purpose and not for investment return. They were initiated by the Ford Foundation and MacArthur Foundation in the 1960s, as an alternative way to invest in social change while earning a modest return. Like grants, PRIs count as qualifying distributions toward the 5 percent payout a private foundation is required to make to maintain its tax-exempt status.

What role do PRIs play for nonprofits and for foundations? After spending some time to identify the characteristics that distinguish PRIs from other impact investment tools, I'll explore the reasons why PRIs continue to be a useful tool supporting social change.

The Investment Continuum

Potential for return is a key characteristic often used to distinguish the range of investments a foundation or social investor may make. At the low end of the return continuum are those investments that have no expected return — grants, in other words. In the middle are a range of PRI options earning below-market returns, and at the high end are more traditional investments earning market rates, such as public and private equity. All come under the heading of mission-related investments because they are made by mission-based organizations, such as foundations.

The Mission-Related Investment Continuum

"Impact investments," another common term, tends to be used to describe a range of investment in companies, organizations and funds while seeking social or environmental impacts alongside financial return. Impact investors are generally seen as broader than foundations and may include wealthy individuals and institutional investors.

As the field of impact investing has evolved in recent years, the push for greater financial return has often overshadowed social and environmental returns. "Too many impact investors have predefined expectations of financial return that are both too high and too short term," wrote the authors of Marginalized Returns, a Fall 2017 article in the Stanford Social Innovation Review, called for a "shift from the false binary of grants with no financial-return expectations, on the one hand, and investments seeking net-15-percent-or-greater return, on the other." The solution? A call for philanthropists and donors to deploy more long-term funding in the form of program-related investments — in essence, refocusing on social impact with lower financial returns.

Meyer's PRI practice

Over the years, Meyer Memorial Trust has completed more than fifty PRIs, and almost all were below-market loans, sometimes coupled with a grant. We've completed both direct PRIs to specific nonprofits and projects and PRIs to intermediaries, such as Community Development FInancial Institutions, that will re-lend to customers. Some examples of PRI loans from Meyer's Award Database are:

  • Portland Housing Center - $400,000 (2015) - To increase outreach to underserved homebuyers and to invest in a revolving loan fund for downpayment assistance.
  • Cascadia Behavioral Health - $500,000 - To support a project with affordable housing and an integrated health clinic offering mental health, addiction services and primary care
  • Craft3 - $4,000,000 (2011) - To establish a loan fund for land trusts to acquire land and secure conservation easements.

In our PRI work, Meyer has used the same program staff to process PRIs and grants, and Meyer typically counts PRIs under its payout budget. By contrast, the market-rate investments are more typically made using foundation corpus funds and lead by investment staff.

Select foundations, including The Heron Foundation, have chosen to remove the division between the investing and the grantmaking sides of the business. In 2011, Heron went "all in" to deploy all of its capital — financial, human knowledge and social — on its mission. One team with wide-ranging skills of financial analysis, investing, research and community-building work in concert to make all investments.

Meyer's functions are not this integrated. We continue to explore intersections of program and investment, and we added a full-time Director of Mission Related Investing to our investment team in 2017. Through our investment team, we are exploring mission-related investments that are expected to earn a market-rate return. Some of these directly connect with and complement Meyer's programmatic priorities, and program staff are engaging in those nexus points.

As of the end of August, 2018, Meyer has $15.6 million invested in PRIs, as well as an active loan guarantee. Although we have paused in making new PRI investments through our recently restructured grant programs, we continue to have a hands-on approach with our 15 outstanding PRIs. Specifically, we have been increasing the duration, flexibility and impact of some of our investments in intermediaries, allowing us to continue to keep dollars circulating in support of mission-aligned organizations and work without impacting our payout. In addition, we are contributing dollars to a pooled philanthropic investment fund alongside other funders, providing opportunities for leverage and efficiencies for both recipients and funders.

Why take on a "Mean Grant"?

Because PRI loans are expected to be repaid, some in the nonprofit field have labeled them "mean grants." That name belies some challenging truths behind PRIs. First, they require a different relationship between the foundation and the PRI recipient. Financial analysis and underwriting can feel awkward when the organization is used to having a grant relationship with a foundation. The organization's board of directors may struggle to understand the different relationship that is being established in a PRI versus a grant and feel intimidated by the PRI documents. There is also pressure to perform, typically reflected in financial covenants.

Structurally, PRIs don't fit every capital need an organization may have. Some projects need a line of credit structure, allowing funds to be drawn down as needed. Many foundations, including Meyer, don't have the bandwidth to manage a letter of credit structure and instead have all the PRI paid out at once. Additionally, foundations tend to invest in shorter projects (1-5 or 7 years) and are not well structured to tie up assets for a 20- or 30-year mortgage in the way a traditional bank lender might. Foundations can also be notoriously slow in processing PRI and grant applications. In a quickly changing market where capital is needed quickly, PRIs are not a great fit.

Despite these challenges, PRIs can still be useful tools for many organizations working for social change. Most foundations make PRIs at higher amounts than grants, so they can play a meaningful part in project financing. As below-market investments, PRIs often have an attractive interest rate (1.5 percent- 3 percent). When coupled with more traditional commercial loans, PRIs can create a lower blended interest rate and significantly lower the costs of capital. Often, they also serve as critical bridge funding in early stages of a project, before an entity may meet the underwriting standards for commercial financing. PRIs can help an organization build a credit history or entice traditional lenders with a guarantee.

From the perspective of the foundation, PRIs also serve many purposes:

  • PRIs can complement grantmaking. If a project has a revenue stream that can be used for debt service, a PRI can make sense and be another tool for supporting social impact work.
  • By earning a below-market return, PRIs stretch the foundation's corpus to allow for more resources toward mission and social change. By our calculations, PRIs have allowed Meyer to grow the corpus by $25 million in the last few decades.
  • PRIs can buffer the foundation's market-rate investments. During the Great Recession of 2008-14, PRIs were, for some quarters, the second best performing asset class for Meyer Memorial Trust.
  • PRIs allow an easier way to invest in a broader range of entities, including for-profit corporations that advance its social goals. Meyer made its first PRI to a for-profit entity that developed a biomass system using waste wood to heat public buildings in Harney County.
  • When done in larger amounts, PRIs serve as an efficient way to meet a foundation's payout.

Despite some challenges posed by PRIs, they serve an important role by being a flexible, capacity-building tool for mission-related investments for social change. Many private and public foundations are wading into the PRI space, either by experimenting with a few solid PRI candidates or launching more robust programs. It's safe to say that PRIs will continue to be a critical tool for philanthropy and social impact well into the future.

–– Theresa

Cascadia Behavioral Health's Garlington Campus in North Portland is home to the Garlington Health Center, an integrated health clinic offering primary care, mental health and addiction services; and Garlington Place, a 52-unit affordable housing complex.

Cascadia Behavioral Healthcare's Garlington Campus in NE Portland is home to the Garlington Health Center, an integrated health clinic offering primary care, mental health and addiction services; and Garlington Place, a 52-unit affordable housing complex.

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Meyer sets lofty housing target: the “1 Million Month Challenge”

Meyer will select a small number of projects to develop innovative approaches to housing affordability in Oregon, with initial grants of up to $125,000 available early in 2019 and potential follow-on grants in 2020 to further develop the pilots and broadly share results of the work.

Defining the problem

Meyer prioritizes stable, safe and affordable housing as one foundation of a more equitable Oregon. A shortage of housing generally has driven up rents and home prices across the state, and for those unable to earn enough to pay for even very basic housing without help, the consequences can be life-altering. A growing body of research shows that housing instability contributes directly to poor performance in school, difficulties getting and keeping a good job, and poor health outcomes.

Our tax code and social policies invest billions into housing in the form of property tax deductions (for mortgage interest and property taxes) that mostly benefit affluent households. For poor people, people with disabilities and chronic illnesses, and people of color, public investment (outside of prisons and jails) has been rather less lavish.

Even at that, publicly subsidized affordable housing has long been under intense scrutiny around cost. Hardly a week passes without a new article or news segment challenging the ostensibly high cost of new affordable housing. The urgency behind that concern is understandable, as the gap continues to grow between the demand for affordable housing and the public investment necessary to meet the need. There's no doubt we must look for ways to get more from every public dollar going into affordable housing.

Beginning in 2015, Meyer has sought to play a constructive role in this conversation, convening 16 experts as the "Cost Efficiency Work Group" and producing a report aiming to clearly articulate the factors that tend to drive up costs in affordable development and to focus on real opportunities to bring down costs.

Part of this work is a communications challenge. Subsidized affordable housing is different in significant ways from market-driven real estate development, and there are constraints that are beyond developers' control that make it easy to put affordable developments in an unflattering light for those unfamiliar with the special nature of this work. There's also an important conversation about tradeoffs between long-term lifecycle costs and upfront construction costs -- building smart for the long term is not necessarily "inexpensive."

Still, in the face of urgent unmet need and a widespread skepticism about government's ability to respond effectively, it's critical to achieve as much as possible with the limited amount of public subsidy available. Although it's unlikely there's a completely novel "silver bullet" approach to creating affordable housing no one has ever thought about or tried before, it does seem worthwhile to support exploring new ways of looking at these perennial issues.

Changing the frame: focusing on the big-picture outcome

In mid-July 2018, Meyer will release a Request for Proposals that builds on our recent efforts to support innovative work around how to provide more affordable housing by lowering costs. In 2015-16, we awarded funding to five projects looking at different approaches to bringing more housing online at a lower cost, and we continue to follow that work with keen interest.

For this RFP, we wanted to open the doors even wider to innovative ideas and approaches and to focus more clearly on the end goal: creating as much access as possible to affordable housing for as little public subsidy as possible. To that end, we are defining a "moonshot"-style challenge, focusing creativity and energy around a specific, lofty goal.

The 1 Million Months Challenge ("1MM"):

Bring us your best ideas for guaranteeing 1 million months of affordability, using as little public subsidy as possible.

This takes a bit of unpacking. There are many possible paths to 1 million months; here are some potential examples to illustrate the kinds of ideas this could include:

  • Piloting an approach to build, site and deliver new factory-built units meant to be affordable for 20 years that would aim for just under 4,200 units (240 months x 4,167 units = just over 1,000,000 months of affordability)
  • Creating affordable units for 60 years with lower rents through cross-subsidy from other income-producing uses in the same properties, aiming to scale up to about 1,400 total units (720 months x 1,389 units = over 1,000,000 months)
  • Maybe your best idea doesn't involve building any new housing? Exploring a sustainable approach to master-leasing new units in the private-market for five-year increments, staggered over time, to assist nearly 17,000 households five years at a time (60 x 16,667 = over 1,000,000)

The key point is that we are leaving it up to people who know the most about these challenges to define how to reach the goal. We're framing the goal this way to emphasize flexibility and focus on the outcomes:

  • Flexibility: This is less about developing "projects" than creating a viable model or path; we are explicitly open to purely financial strategies that deliver on the outcome of creating more access to affordable housing.
  • Outcomes: We are not necessarily focused on production of units (although more housing is important, and some strategies will rightly focus on that), but rather on the end-goal of housing large numbers of people for an extended period of time.

Finally, it's worth highlighting that we're pulling the focus away from the raw total development cost to focus on what really matters most: the amount of public subsidy required to achieve the goal.

Unlike a typical Meyer RFP, we're not looking for affordable housing projects per se, but a model or path that changes the game. You could say we're trying to "get out of the way" of solving these problems, by putting as few limitations as possible on what counts as a solution. We're calling the question for those who insist that the current system doesn't deliver bang-for-the-buck and there are better ways to do things. Ultimately, the point of this RFP is to give you an opportunity (and some resources) to take an idea or a notion or intuition that you've been thinking about and build it out to a full-fledged plan, test it, improve it and share it.

Sharing ideas, results and lessons learned will be a central part of participating in this experiment. Project teams funded under this RFP will be expected to participate in a learning cohort with each other, sharing and critiquing ideas, and helping each other refine and improve each model. Additionally, Meyer will create a variety of platforms and public events to highlight this work, to broaden the circle of folks around the state trying to think about these challenges in a different way and improve upon the ways we help people into housing they can afford, and ultimately to help public funders and other partners identify new models and approaches worth their support.

About the RFP 

The strongest proposals will be invited to submit more detailed proposals in the fall, with decisions and grant funding in early 2019. Grantees receiving funding under this RFP will be eligible to request follow-on implementation grants to be awarded in early 2020.

Finally, because it matters who is being helped and how much rent they are able to pay, and because there are distinct challenges in this larger context of cost and efficient use of subsidy, Meyer has defined three categories under the RFP and hopes to make awards in each:

  1. Hard-to-House or Extremely Low Income: Housing solutions affordable to people/households between 0-30% Area Median Income (AMI), and/or designed and specifically intended to assist populations with significant challenges around access to affordable housing:
    • Transition Age Youth exiting foster care
    • Immigrants and/or refugees
    • People of color
    • Indigenous communities and tribes
    • People with disabilities (including severe and persistent mental illness)
    • Domestic violence survivors
    • People released from incarceration or people with a criminal record
  2. Rural Workforce Housing: Housing solutions intended to serve residents of rural communities up to 100% of the local AMI. "Rural" in this context means any community not located within one of the federally defined "Metropolitan Statistical Areas": Portland-Vancouver-Hillsboro, Salem, Eugene-Springfield, Medford, Corvallis, and Bend.
  3. The Open Challenge: Housing solutions affordable to households at or below 60% AMI that do not fit in the other two categories.

Applicants will be asked to specify one of the above categories when they apply. Meyer's intent is to make at least one award in each category, depending on the quality of proposals received.

For more answers, check out this recording from our 1 Million Month Challenge Information Sessions or contact me directly at michael [at] mmt.org or (503) 228-5512.

–– Michael

The application deadline for this RFP was 5 p.m., on Tuesday, August 13, 2018.

Preview this RFP

Cost Efficiencies: 1 Million Month Challenge RFP details

  1. Information sessions
  • Funds will be awarded in two stages: 

    • Concept Development (early 2019)

    • Implementation (late 2019 or early 2020)

  • For Concept Development, Meyer expects to award grants ranging from $75,000 to $125,000 (up to $550,000 in funding will be available in this stage.)

  • Grantees awarded Concept Development funds under this RFP will be eligible to for Implementation grants (up to $1.2 million in funding will be available.)

  • Final award decisions are expected in January 2019, with first-year payments released in February 2019.

Meyer staff will present an overview of the RFP and be available to answer questions at two information sessions:

  • Tuesday, July 24, 9:30-11 a.m.
  • Monday, July 30, 3:20-5 p.m.

Both information sessions will be held in Portland at Meyer’s office (425 NW 10th Avenue, 4th floor); interested parties may also participate by telephone conference. Visit our official event page to RSVP.
 

Funding Timeline

Oregon needs new, bold ideas to solver our affordable housing problem.

 

1 Million Month Challenge

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Whats your idea for more cost efficient affordable housing?

Oregon needs new, bold and innovative ideas to solve our affordable housing problem. What's your idea?

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Building greater equity in contracting

Building and preserving affordable housing is a key goal at Meyer, and for the past two years, the Housing Opportunities portfolio has invested about $2 million in affordable multifamily projects around the state. As part of that process, we ask all applicants: What is your goal on this project for minority-owned, women-owned or emerging small business participation? This has become increasingly important as housing organizations grow capacity and strategically align to meet local, city, state and regional goals around equity in contracting contributing to equitable outcomes for contractors and subcontractors.

Why is equity in contracting important to Meyer?

  • Our mission is to contribute to an equitable and flourishing Oregon, and we see equity in contracting as an important prong in that mission.
  • As a community we have not collectively been successful in establishing and meeting goals that lead to long-term impacts for the success of all contractors.
  • Meyer and its nonprofit partners have struggled to identify and find resources that help organizations to connect with contractors and subcontractors in all parts of the state.
  • Meyer recognizes there are barriers at the systems level that our nonprofit partners could address head-on as a part of operationalizing equity in their work.

What is Meyer looking for in question responses? We are looking to see:

  • How the applicant views equity in contracting and what its connection is internally within organizational strategies and practices. Does the organization generally approach equity in contracting for its projects or just for the project in the grant proposal?
  • How the organization and their business partners identify real strategies that impact aspects of bidding and working with contractors and subcontractors.
  • Clear goals with outcomes that address a clear strategy.
    • What is your goal, what are the details, and what is driving it?
    • Does your goal relate to any other equity strategies in your organization?
    • What is the diversity of the overall workforce (i.e., all people involved in the project)? Are there training and workforce development opportunities for communities facing disparities in this project?

In this construction market, we understand that many developers have challenges to secure any contractors or subs, let alone those contractors that are less represented in the trades by gender, race or other factors. At the same time, we want to partner with organizations that are continuing to push themselves to develop the relationships, expertise and structures that move toward greater equity in contracting.

Because Meyer is a statewide funder, we also understand that the contractor base may look very different in Ontario and Albany. Although COBID (Certification Office for Business Inclusion and Diversity) or SDVBE (Service-Disabled Veteran Business Enterprise) and other certifications can increase capacity to compete for public projects, Meyer takes a more flexible view around equity certifications.

If you are planning to submit a capital grant request in the Annual Funding Opportunity and want to discuss equity in contracting issues, feel free to reach out to housing staff by emailing questions [at] mmt.org

Need more information on MWESB, COBID and SDVBE Certification? Visit these resources:

Jody

Photo caption: Two contractions applying ceramic roofing atop a roof.
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Developing a strategic project budget

Preparing a project budget begins with capturing the correct numbers. Simpler, straightforward projects are typically fine just focusing on creating a clear and accurate budget.

For organizations with large, complex or multiyear projects, more advanced budgeting techniques can be helpful. Numbers have meaning in themselves, but the budget framing tell a larger story about the organization's values and how it is approaching the project. It requires strategic thinking. Without some strategy, the budget for a complex project may fall flat or raise more questions than it answers.

Here are some practical considerations as you prepare budgets for larger, complicated projects.

Understand the funder's guidelines

The crucial and often overlooked first step in the grant process is to orient to the funders' requirements. Is it willing to be the only funder on a project? Does it require matching funds from other sources? Is it only willing to fund a certain percentage of the project budget or the organization's operating budget? Does it like to see an organization's own investment in a new project before seeking outside support? Getting that clarity up front will guide both your thinking about fit with the funder and also strategy about how to frame the budget.

At Meyer, we are rarely the first or the only funder of a project. Beyond that, there are few generalizations. We look at proposals differently based on the type and size of the project and the type of funding requested. More nuanced explanations can be found in funding guidelines for each portfolio.

Locate your proposal on the project timeline

Timing is a crucial aspect of a proposal, and capturing timing in a budget can be a little tricky. It may be helpful to think about the larger project and the steps that build on each other for a larger vision. We often see projects that build on some prior work or pilot effort and want to bring to bear the data, understanding, connections and vision to scale up the project or new business line. In these types of proposals, the narrative sections of the application will describe this pilot step and how it informed the larger vision.

The budget can mirror that progression by reflecting the work that has gone on up to the point an applicant applies and capturing it in the budget. Put another way, your project budget doesn't need to start at the time of application. Your project may be a four-year effort, starting with the year before the application, including a two-year grant period and also a year after the grant ends. Being clear about how the proposed grant period fits into the larger project timeline helps to ground your efforts and orient the reader.

If you are using Meyer's sample budget templates to describe a multi-year project, the project or capacity-building formats can be adjusted to show multiple years.

Consider your framing – wide-angle or close-up?

Related to timing, we often see that a project is defined discretely, as a finite piece of a larger effort. With this kind of close-up framing, it often appears that Meyer is being asked to fund 100 percent of the project, and this bumps up against the notion that Meyer is rarely a first or only funder of a project. To get around that issue, you might consider putting a wider angle on the project framing by showing the work that has come before it or the work expected after the grant, as long as it is reasonably connected. This wider angle can show a more diverse range of financial support for the proposal, and consequently, it does not appear that Meyer is being asked for 100 percent of the project budget. Panning out so far that the project is framed as a 10-year effort, however, loses a lot of detail and punch. Balance is prudent.

Describe the role that Meyer funding can play

We understand that, for many projects, any funding will help. For others, a Meyer grant represents something different, and it is often larger or more flexible than many other sources of grants or revenue. If the Meyer funds can play a certain role in the support of your project, describe that in your project budget and narrative. Some examples of the roles we are often asked to play:

  • Experiment with new approach or prototype.
  • Evaluate a demonstration project.
  • Support efforts to build diversity, equity and inclusion in your work.
  • Leverage or matching grant for public funders.
  • Fill a key funding gap.
  • Complement more restricted grants and contracts.
  • Share funds with partners in a collaborative effort.
  • Provide support during a critical transition.
  • Augment advocacy and systems change efforts.
  • Build a new or strengthen an existing skill base in the organization.
  • Achieve a level of work that unlocks funding from other, larger sources.

Describing the role of Meyer funds, if appropriate for your project, can build a more compelling case for your grant proposal.

Reflect your organization's commitment to equity, diversity and inclusion

Every organization Meyer partners with is expected to share our commitment to diversity, equity and inclusion (DEI). As such, project budgets can also be a good place to reflect your organization's commitment to DEI in your external or program delivery as well as in internal work of the organization. When DEI is centered in a proposal, it can raise some additional costs for the organization, such as training consultation, compensating community partners, collaboratively sharing grant funds, or data management and evaluation to track DEI outcomes, to name just a few. You are encouraged to include these important costs in the project budget.

The bottom line? For complex or multiyear projects, don't overlook budgets as an opportunity to amplify the application narrative, strategically frame the project, build the case for Meyer funding and reflect your organizational values. Budgets are an integral part of the application and more than a mechanical exercise.

Theresa

Photo caption: A pile of financial documents, a pen and calculator sitting atop a table.
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A door opens: 2018 Annual Funding Opportunity

We're open! The Housing Opportunities portfolio is pleased to begin accepting applications for a third cycle of our Annual Funding Opportunity. In 2018, we will be deploying about $3.9 million to open doors to opportunity and strengthen communities through safe, affordable housing.

The application process kicks off March 15, 2018, and will continue for almost five weeks, closing at 5 p.m. April 18, 2018. In that time, Meyer will be hosting information sessions at seven sites around the state. Two additional virtual information sessions, March 20 and April 4, will focus on the Housing Opportunities portfolio. Attending a live or virtual session will give you the most up-to-date information on our process and the details of the Annual Funding Opportunity.

Initial Applications should advance one of our overarching Housing Opportunities funding goals:

  1. Preserve + increase the number of affordable housing rental units.
  2. Support the housing stability + success of Oregonians living on low incomes.
  3. Strengthen the housing sector by building capacity, diversity, equity and inclusion + collaboration.

Each of these goals has intended outcomes, and you are encouraged to review the funding goals, strategies and outcomes as you consider how your work aligns with the vision for this portfolio. Click here to find a visual representation of Meyer's goals, outcomes, funding ranges and types to help you assess the best fit. Equally important is the shorter list of what doesn't fit well with the portfolio.

In 2017, the Housing Opportunities portfolio received 78 applications in the Annual Funding Opportunity and ultimately awarded 39 grants in a competitive process (a 50 percent funding rate). These grants reflected a range of approaches, united by a common understanding that housing is key to flourishing and equitable communities and a vision that every Oregonian has a stable, safe and affordable place to call home. More information on the 2017 housing grant slate can be found here, and all of last year's Annual Funding Opportunity grants are listed here.

What we've learned

With two annual funding cycles under our belt, we can share a few observations about the process.

  • Showing an equity commitment. Meyer's grantmaking centers around equity principles, such as understanding and working to address the disparate housing outcomes experienced by seniors, people with disabilities, people of color and other marginalized populations. All applicants must demonstrate a commitment to ongoing growth through the integration of diversity, equity and inclusion (DEI) principles into both their external programming or services and internal structures and operations.

Although we don't expect perfection from our partners (nor do we have it ourselves!), we do expect to see commitment to advancing DEI principles in your work. Conversely, a proposal that mentions no specific efforts to advance your organizational commitment to DEI will be challenged to succeed in the competitive batch.

  • Timing for capital proposals can be tricky. The Initial Applications we see can be at all stages of the development process, from firm concept to nearly completing the fundraising process or breaking ground. If your project is on the more nascent side — indicated perhaps by a lack of site control, the design is far from ready and the financing plan is still unclear — it is hard to be competitive against projects farther along the development path.

Think about when these pieces might be coming into place. If you expect important legal decisions, site control or design features finalized soon, and major funding decisions determined by late summer, it probably makes sense to apply in this year's cycle. If many of these pieces are not expected until late 2018 or beyond, we'd likely counsel you to consider waiting. At a minimum, you should feel free to consult with housing staff by emailing questions [at] mmt.org.

  • General operating support has a high bar. As noted in our funding guidelines, we have heightened expectations from organizations that are awarded unrestricted operating support. First and foremost, they should be housing organizations (do a majority of their work in affordable housing) and strongly advance the core funding goals in our Housing Opportunities portfolio. Additionally, they should play a unique and/or important role in the field and have wider impact for the sector (e.g., as an intermediary, is seen as a field leader in Oregon or nationally); demonstrate leadership for diversity, equity and inclusion (DEI) in the context of the communities where they work; and have DEI strategies as a meaningful part of their work plan for the grant period. Reach out if you have questions about whether to apply for this funding type.
  • Multiple grants and organizational capacity. Two rounds of annual funding opportunities and multiple Requests for Proposals over the past four years mean that some organizations are managing multiple Meyer grants, in either the housing portfolio and/or other portfolios.

We allow these multiple grants and encourage them if the organization has sufficient capacity to advance multiple projects and collaborative efforts at the same time. During the review process, we look at capacity concerns and also consider how much of an organization's overall financial support may be coming from various Meyer grants, including collaborative grants. We wouldn't want an organization to inadvertently bump up against the "tipping" rules of the Internal Revenue Service (which seek to ensure nonprofits have a diversified funding base and do not "tip" over to be treated as private foundations).

As a reminder, if you received a multiyear grant from a previous annual funding opportunity and that grant is ending this year, you can apply again in the 2018 round. If you are in doubt, reach out and we'll confirm your eligibility.

Other funding opportunities this year

In addition to the 2018 Annual Funding Opportunity, the Housing portfolio expects to release two Requests for Proposals (RFPs) that tie to the Affordable Housing Initiative, Meyer's focused five-year effort to catalyze outcome-oriented, transformational strategies that will move the dial on affordable housing in Oregon.

These RFPs will be tied to the Cost Efficiencies Strategy (an effort to develop models for creating and preserving affordable units as cost effectively as possible over the units' lifespan) and the Private Market Strategy (efforts to expand low-income renters' access to safe, decent, affordable housing through existing private market units). Both of these RFPs are expected to be released around July 2018, and organizations that apply to the 2018 Annual Funding Opportunity are not precluded from applying to a targeted RFP (assuming it has sufficient capacity, as described above). Sign up for the Meyer newsletter to make sure you hear about any RFP releases.

Additional resources

Want more information about what we look for? We've gathered a set of Applicant Resources, with everything from building a budget to understanding our definition of collaborations and learning more about diversity, equity and inclusion. You are encouraged to review those resources at any time.

Final thoughts

One of the best parts of our year is seeing all the amazing work across the state to bring affordable housing to our neighbors. Your work is deeply impressive and energizing. We're excited to see what you're working on and connecting in the 2018 Annual Funding Opportunity and the coming year!

— Theresa

A group of nonprofit partners talks with Meyer staffer Michael Parkhurst
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