How a "Small Ball" Approach to Affordable Housing Hits a Home Run
Image credit: Acts Housing (Facebook)
Affordable housing is an issue all communities struggle with. Many times, solutions are big federal government projects. Not only are these programs expensive, they typically focus on renting rather than homeownership. And at a time when the government is strapped for money, they may not come to fruition anyway. So…what is the solution?
After meeting with Michael Gosman, president & CEO of Acts Housing, I’m more convinced than ever of the power of the ”small ball” approach to community-building. Michael is doing incredible work in the affordable housing space. He proves that small actions taken on the local level can have a huge financial and social impact on a community. (This is a great example of the kinds of “small bets” Strong Towns is always encouraging us to make.)
I was really struck by how efficient his non-profit organization has been. In the last year, on an operating budget of only $2.5 million, they put 175 Milwaukee families in homes. (This is an amazing ROI!) Now, they’re looking to expand their model to other cities.
I first heard of Acts Housing as part of an affordable housing initiative in Beloit, Wisconsin. Several organization in the community came together to fund it, including the Hendricks Family Foundation, Beloit 200, the Lynde and Harry Bradley Foundation, and Stand Together. They were attracted to the “hands up” model, offering coaching, skill-building and financing to help Beloit families become proud homeowners. The goal there is to have supported 150 families into home ownership in the next five years.
Here is a quick video that shows the incredible impact Acts Housing has on families who want to become homeowners, but have barriers (poor credit or no credit, lack of savings, language, cultural, etc.) standing in their way. The organization takes a cohesive approach that not only helps these families achieve their dream of homeownership, but does it in a way that empowers them and helps them flourish.
A quick overview of the Acts approach:
They partner with other non-profits in the community to identify who needs help.
Then, counselors help families assess their readiness to purchase and work with them to create a financial action plan. They coach and advise them every step of the way. They help them navigate the process of working with real estate agents, banks/financial institutions, and contractors.
Real estate professionals help these families find the perfect home. Sometimes it’s a private market property. Other times it’s a fixer-upper that has a very low initial price tag but needs substantial rehab work.
Acts Lending may offer qualified families a loan of up to $50,000 for purchase and repair of distressed homes.
If they’re buying a distressed property, a rehab counselor walks them through what needs to be done to make the home safe, sanitary, and code compliant. They prepare a comprehensive “scope of work” to help the family determine which projects they can complete themselves. They also coach and support them in working with contractors.
This method of helping people become homeowners has many benefits. For example:
It’s an incredibly efficient, cost-effective way to stabilize a community. Acts was originally founded by a priest to help stabilize the neighborhood around a church. Helping families become homeowners made more financial sense than the church buying up all the property themselves.
It creates a “spillover effect” in social benefits. Homeownership is far better for the community than renting. It provides a more substantial tax base. People are more likely to take care of their homes, which boosts property values. Children who live in an “owned” home have better educational and behavioral outcomes. Homeownership creates more engaged citizens who are more likely to vote, volunteer, and so forth. They truly feel like part of the community.
It improves blocks and neighborhoods by providing a solution for dealing with vacant and vandalized properties. Empty and distressed houses can undermine a neighborhood’s safety, appearance, and property values. It’s people (especially those who are personally invested in turning challenged properties into stable homes) who make communities great.
It lowers housing costs for families. Families who purchase homes through Acts often save $100 to $200 a month compared to what they used to pay in rent. This is a significant amount of money they can use to improve their lives in other ways.
Image credit: Acts Housing (Facebook)
It creates a sense of ownership. The financial responsibility is on the homeowner; Acts simply loans, guides, and coaches. This may be a family’s first experience investing in themselves and their future. Also, the “sweat equity” that sometimes goes into fixing up these homes generates an enormous sense of pride.
The process teaches valuable life skills to the entire family. Even if they don’t get involved in the actual cleaning, painting, and home rehab, they learn how to better manage finances, establish bank accounts, navigate the real estate process, work with contractors, etc.
Michael Gosman sees it every day: When they have the right support, families are capable of doing extraordinary things. Helping people become the best they can be is one of the highest functions of a community.
Here’s what I like most about the Acts approach: It doesn’t just solve a big problem for communities (affordable housing), it creates the kinds of empowered, engaged citizens we all need. I have found that most problems are best solved locally, by the people who live there. And nothing gets people engaged and invested in a community quite like homeownership.
In the end, everybody wins. Families get stable, affordable homes and gain life-changing skills. Neighborhoods improve in a sustainable way, one small, incremental change at a time. And we all get more citizens who care deeply about the community—and who are more willing to work to create a better future for everyone.
Cover image via the Acts Housing website.
Many cities in the United States are experiencing a housing crisis, with pressure growing for someone to find a solution. But is an official solution even possible? With dysfunctional institutions and a divided culture, the “solution” might come down to individuals doing what they can in the moment.