It Takes More than Money: Building Capacity to Attract and Deploy - PowerPoint PPT Presentation

It Takes More than Money: Building Capacity to Attract and Deploy Private Capital R O B I N H A C K E , L I V I N G C I T I E S D A V I D W O O D , H A R V A R D I N I T I A T I V E F O R R E S P O N S I B L E I N V E S T M E N T M A R Y K A Y B A I L E Y , M N P H I L A N T H R O P Y P A R T N E R S

What’s Capital Absorption? • Capacity as the landing strip for community investment

Capital Absorption Framework 3 ¡  Living Cities’ response to observed gaps in capital absorption capacity:  “the ability…to make effective use of different forms of capital to provide needed goods and services to underserved communities”  Community development investment (CDI) includes many sectors: housing, health, education, arts & culture, economic development, financial services, etc.  Five functions seen as critical to effective CDI

Functions: Vision 4 ¡  Ensure that investment meets recognized community needs and is done with support of community actors  Define needs  Engage with community  Convene stakeholders  Determine priorities

5 ¡  Very strong in terms of engaging community and convening stakeholders  Many area plans for granular detail  But, priorities not always clearly articulated and agreed upon  No consensus across stakeholders on the definition of TOD  Focus on housing and mixed use with more limited attention to job intensive development  Development vision often not aligned with realities of market and available public subsidies  Lack of shared prioritization of key sites or station areas along the corridors

Functions: Enabling Environment 6 ¡  Build the policy and support tools that allow community investment to take place  Set and influence policy and regulatory environment  Apply and enforce policies and regulations  Generate and provide data  Provide subsidy, first loss money, and training  Ensure availability of diverse and capable actors

7 ¡  Many strengths  Very strong support system for affordable housing – particularly preservation and supportive  Political environment pro-housing and leadership is strong  Innovative funding specifically targeted to TOD  Presence of several national and community banks that recovered relatively quickly from financial crisis  Limitations in certain subsidies  TIF capacity in St. Paul  Limited number of LIHTCs  Transitways (with different definitions) are one of a number of priorities for targeting affordable housing

Functions: Pipeline 8 ¡  Generate deals and projects that contribute to defined community goals  Spot opportunities  Pull together projects and deals  Predevelopment and development  Leverage public resources  Assemble capital  Structure and underwrite investments  Align deals with vision and goals

9 ¡  TOD Market and Development Challenges  Rail access alone is unlikely to drive a project, particularly in early stages with only 1 line built and another in construction  Type of infill redevelopment along Central Corridor is complex and costly  Takes time for market to recognize benefits of TOD  Current rental rates limit feasibility of housing in some station areas  Any affordable or mixed-use TOD project requires substantial subsidy and availability, particularly for affordable housing, is a major barrier

Functions: Execution 10 ¡  Manage portfolio to ensure financial and social performance  Loan servicing  Portfolio management  Workouts and problem solving  Data collection and evaluation  Social impact monitoring  Organizational capacity building

11 ¡  Data to track results related to development and public subsidy difficult to assemble  Social impact for Corridors of Opportunity primarily defined around affordable housing and small business retention

Functions: Innovation 12 ¡  Learn and apply lessons of CI to create durable networks that can strengthen practices  Identify and explore emerging needs/fields  Create new products  Build platforms for ongoing collaboration  Identify and attack barriers

13 ¡  A lot of innovative aspects of system  City-level sub-allocation of LIHTC  Super RFP  Collective responsibility for troubled projects through ISG  Predevelopment funders roundtable  Commitment to preservation (MPPI)  Learning from TOD experience elsewhere  Complexity of system and collaborative decision- making may be a challenge to more innovation