December 10, 2019
First-of-its-Kind Privately-Backed Fund Closes Initial $20 Million to Fight State’s Homelessness Crisis
Market-Based Solution Will Finance Housing with Per-Unit Cost Far Below Current Models Relying on Significant Taxpayer Subsidy for Acquisition and Construction
Los Angeles – December 10, 2019 – Impact investment manager SDS Capital Group (“SDS Capital”) today announced the $20 million close of initial funding to support their launch of the SDS Supportive Housing Fund (“SHF”), a first-of-its-kind community impact fund designed to address California’s homelessness crisis.
The SHF will finance the construction of permanent supportive housing for homeless individuals and families. The Fund offers a novel market-based solution for building housing at a lower average per-unit cost in substantially less time. So far, ten sites are under site control – nine in Los Angeles and one in Oakland.
SDS aims to finance the construction of an estimated 1,200 apartment units of new permanent supportive housing. The Fund’s first close of $20 million includes the participation of three institutional bank investors. The aggregate investment level for the three banks is $45 million, increasing from $20 million at this first close and growing as capital is secured from additional investors over the next 12 months.
“We are very grateful to our initial investors for supporting this new and innovative financing approach aimed at transforming the lives of Californians suffering from homelessness,” said SDS Capital Group CEO Deborah La Franchi. “We look forward to putting this capital to work on behalf of our generous investors. The goal of the SDS Supportive Housing Fund is to provide quality housing that will help transform the lives of hundreds of Californians in desperate need of a home. We believe that this can be accomplished in a responsible and affordable manner.”
The SDS Supportive Housing Fund will finance multi-family developments built by RMG Housing. Plans are underway to invest in the first project for 60 units of permanent supportive housing before the end of the year.
”The SDS Supportive Housing Fund allows us to scale our model in a manner that wouldn’t be possible if we financed each project independently,” said RMG Housing CEO Tim Roth. “This new financing model – with just one source of capital to finance construction costs – enables RMG to substantially increase our volume of developments over the next few years, which will result in moving more people off the streets and into a quality home, sooner rather than later.”
According to the 2018 Annual Homeless Assessment Report to Congress, California has more homeless individuals (134,000) than any other state in the nation. The state is home to more than 47 percent of the nation’s unsheltered homeless population. The Los Angeles Homeless Services Authority (LAHSA) reports that homelessness increased by 30% to 57,800 in Los Angeles County from 2015-2017.
Individuals who reside in the new housing units will receive on-site case management services from Homeless Health Care Los Angeles (HHCLA), including access to a live-in caseworker. Since 1985, HHCLA has provided more than 190,000 of LA’s most marginalized individuals and families with behavioral healthcare, medical, and quality of life services. “As the state’s housing crisis has worsened, HHCLA has struggled to place our clients in quality permanent supportive housing,” said HHCLA CEO Mark Casanova. “The SDS Supportive Housing Fund will help create the supply of housing necessary for our clients to transform their lives.”
About SDS Capital Group
SDS Capital Group of Los Angeles is the manager of the SDS Supportive Housing Fund. Founded in 2001 by Deborah La Franchi, SDS Capital manages a platform of investment funds – each with a distinct geography and investment strategy. SDS has twice been recognized by ‘ImpactAssets 50’ as one of the top impact managers in the US.
FOR INQUIRES PLEASE CONTACT
Jana Sims / js@sdsgroup.com or (213) 342-6647
