DENVER—Mercy Housing announced an ambitious five-year plan that will guide the nonprofit toward developing, preserving, and financing 60,000 affordable multifamily rental homes.
The plan aims to help close the nation’s affordable housing gap of 12 million renters in need of housing, according to Sister Lillian Murphy, Mercy’s CEO.
“We need to fill this gap,” she said, explaining that as the gulf widens, the organization needs to look for new ways to build more housing and to develop it faster.
Mercy Housing has participated in the building or financing of about 38,000 affordable units over its history, so the new goal would more than double what the nonprofit has already done.
The plan, with six key initiatives, is being launched this year, with much of the growth coming in years three, four, and five.
In one change, Mercy Housing will likely become more active in portfolio acquisitions in the next several years, according to Murphy.
The plan calls for Mercy Housing to create new investment opportunities and establish new sources of risk capital.
Low-income housing tax credits have been the main source of financing affordable housing developments for the last 20 years. Mercy Housing and others have become adept at using the credits, but it takes a long time, with multiple layers of financing, said Murphy.
Mercy leaders hope to bring about more efficiencies in financing their deals.
The plan comes after about a year working with Mercy’s field offices. “We have a strong commitment throughout the organization to make this work,” said Murphy.
Highlights of the six initiatives are:
- Health Care and Housing Partnerships: Nearly one-third of people who are homeless have a chronic health condition. Mercy Housing in collaboration with its Strategic Health Care Partners will increase access to care for those in need of better health services.
- Resident Services: Recognizing that shelter alone is not sufficient for long-term success and well-being, Mercy Housing offers programs at its properties that serve the needs of residents. Priority programs include health and wellness, education including after-school programming, and financial literacy and planning, among others.
- Operating Excellence and Long-Term Stability: The organization will continue to focus on community impact (social, environmental and economic) as well as its business fundamentals to ensure long-term financial stability.
- Stewardship of Property Portfolio: Mercy Housing will continue to deliver high-quality affordable homes through effective and environmentally sustainable practices.
- Growth: In an effort to develop, preserve, and/or finance 60,000 affordable multifamily homes, the company will create new investment opportunities and develop new sources of risk capital.
- Public Policy Education and Advocacy: Mercy Housing will collaborate with others to promote policies and regulation related to the production, preservation, and operation of multifamily rental housing and sufficient funding for resident program and services. Priorities to be supported include:
- Support tax incentives for investments in affordable housing and community development.
- Advocate for regulatory and legislative changes to HUD’s multifamily affordable housing and community development programs.
- Expand environmental sustainability in affordable housing production and preservation.
- Explore alliances and resources needed between health care and housing, especially for seniors.
- Stabilize communities severely impacted by the foreclosure crisis.