February 10, 2022
Innovative Partnership between SDS Supportive Housing Fund – SDS Capital Group’s private-equity impact fund – RMG Housing and Southside Bethel Baptist Church to provide 47 Units of Permanent Supportive Housing in South LA
Los Angeles – February 10, 2022 – The $150 million SDS Supportive Housing Fund (SHF or Fund)— a first-of-its-kind private-equity impact fund that finances new and financially-sustainable permanent supportive housing (PSH) for individuals experiencing homelessness – has closed $8 million in funding to develop new housing in South Los Angeles. The project site, located at 10400 S. San Pedro Street, currently home to the Southside Bethel Baptist Church, will soon be transformed into 47 one-bedroom residential units.
The Fund, managed by Los Angeles-based SDS Capital Group, is providing 95% of the capital for the PSH projects developed by RMG Housing; RMG partners are providing the remaining capital co-investment. The project will not require any other source of financing. The Fund’s “one-stop” financing approach significantly reduces the usual time required to underwrite and close funding on such PSH projects from an average of 5-7 years for most similar projects to approximately 24 months—from underwriting to tenant occupancy.
“This is our seventh PSH investment with RMG and our third project we have financed with a local church partner. We are thrilled to be supporting Bethel Baptist Church’s mission to provide for members of their surrounding community who are most in need. We’re laser-focused on expediting this project so that local residents will have potential access to a home in approximately 24 months,” said Deborah La Franchi, Founder & CEO, SDS Capital Group. “SDS developed and raised the SHF Fund’s $150 million for the singular purpose of creating quality homes for those who are experiencing homelessness. A home is a basic necessity that each of us deserves.”
The Fund’s quick turnaround and efficiency to finance a project are atypical in an industry characterized by the need for a multitude of funding sources that can take years to aggregate. Another key point of distinction for the SHF Fund is a focus on investing exclusively in projects that are financially sustainable over the long term. This requires that PSH per-unit development costs not exceed $200,000, compared to the $500,000 average costs currently seen in the market.
“With the creation of the SHF Fund, we offer a model in which the nimbleness of private equity plays a central role in providing a more cost-effective approach to housing residents currently living on the streets of Los Angeles,” La Franchi added.
Financing issues and per-unit costs are often cited as the primary obstacles to developing much-needed housing for Los Angeles County’s homeless population, which currently exceeds 66,000.
The SDS Supportive Housing Fund is on track to finance a total of 1,800 units of PSH, mostly in the Los Angeles area. To date, the Fund has financed seven projects expected to equal a total of 310 newly constructed units of PSH.
The site, located at the corner of 104th and San Pedro, has been owned by Southside Bethel Baptist Church for over 64 years. Although the current sanctuary of the church will be demolished to build the project’s PSH units, the new building will feature an approximately 1,700 square foot community room that will serve as a new sanctuary for services and other church events.
“Our partnership with Southside Bethel Baptist Church is a great example of the private-sector and the faith-based community working together to serve the community with an even greater impact,” said RMG Housing Founder Tim Roth.
“The Church is proud to be a partner in this very innovative approach to providing Permanent Supportive Housing. RMG and the SDS Supportive Housing Fund are enabling us to make real and positive change right here in our community,” said Pastor Fred Howard, Southside Bethel Baptist Church.
A crucial element of the project is the case management services that will be provided to each tenant. Homeless Health Care Los Angeles (HHCLA) will provide on-site assistance to connect tenants with the social services and resources they need to thrive.
“We’re grateful for our partnership with the SDS Supportive Housing Fund and RMG,” said HHCLA Executive Director Mark Casanova. “Permanent supportive housing that incorporates case management is critical for helping individuals experiencing homelessness rebuild their lives.” Construction is scheduled to break ground in March 2022 with anticipated completion in November 2023. In addition to the Community Room, building amenities will include office space for HHCLA caseworkers, a rooftop terrace, vertical aeroponic rooftop gardens for tenants to grow fresh food, a fitness center, and an open-air courtyard for tenant and community area use.
Los Angeles-based SDS Capital Group serves as manager of the SDS Supportive Housing Fund. Founded in 2001 by Deborah La Franchi, SDS Capital Group manages a platform of impact investment funds – each with a distinct geography and investment strategy. SDS has been recognized for the past four years by ‘ImpactAssets 50’ as one of the top impact managers globally. With six funds and finance products on its platform, SDS currently manages over $1 billion in impact assets. The SDS Supportive Housing Fund is the company’s newest fund. It focuses solely on financing permanent supportive housing (PSH) developments in California that are financially sustainable and provide case management support services. Investors in the Fund include: Kaiser Permanente, Ally Bank, Synchrony Bank, Pacific Premiere Bank, East West Bank, Charles Schwab Bank, CIT Bank, the Weingart Foundation, First Republic Bank, Western Alliance Bank, Hudson Pacific Properties, California Community Foundation, and the Annenberg Foundation.
RMG Housing, based in Los Angeles, is a developer of permanent supportive housing (PSH) for individuals and families experiencing homelessness. Each property RMG develops offers on-site intensive case management services for residents. RMG’s core mission is to develop high-quality PSH units that are both cost-effective and financially sustainable. For more information, visit www.rmghousing.com
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Contact Sybil MacDonald,
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Tel: 323.376.8961
For more information on the SDS Supportive Housing Fund, click here.
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