LOS ANGELES, CA - To help address the growing shortage of affordable workforce rental housing across the United States, Turner Impact Capital (TIC) has launched the Turner Multifamily Impact Fund with plans to acquire and manage up to $1 billion in apartment communities in urban markets throughout the United States.
Beginning immediately, the Fund’s leadership team will identify and evaluate potential investment opportunities in densely-populated, ethnically diverse urban communities, with a focus on acquiring, improving and preserving critically-needed workforce housing for those earning up to 80% of area median income. Residents will include community serving professionals such as teachers, police officers, health care workers, service workers and others who earn too much to qualify for subsidized housing, but not enough to afford higher cost apartments or home ownership in the communities proximate to where they work.
The demand for quality, affordable workforce rental housing in the most populated areas of the country is expanding, but new development of affordable workforce apartments is limited due to the prohibitively high cost of land and construction. As a result, rents are reaching historic highs. Nearly half of all renters spend more than 30% of their income on rent and one quarter of all renters spend more than 50% of their income on rent. The growing disparity in workers’ income and their rent is untenable.
The Turner Multifamily Impact Fund will seek to address the housing affordability crisis by preserving the workforce-housing status of the properties it acquires and implementing targeted physical upgrades and property management improvements that enhance day-to-day operations and the quality of life for its residents. The TIC team will also implement select education, healthcare and security programs to benefit both property residents and their surrounding communities. These on-site programs may include afterschool tutoring, employment assistance, community health and well-being services and neighborhood watch programs.
“Workforce housing is an overlooked segment of the real estate market with a significant mismatch in supply and demand that we believe offers a compelling investment opportunity,” said Bobby Turner, Principal and CEO of Turner Impact Capital. “For nearly 20 years, we’ve proven that investing in ethnically diverse communities with a mismatch in supply and demand for local services can generate strong financial returns, while benefitting local communities and facilitating positive social impact.”
“We are also encouraged by the increased appetite for social impact investments from institutional investors who have recognized that achieving strong risk-adjusted financial returns and making societal change are not mutually exclusive. We look forward to making change – both financial and societal – by acquiring and improving well-positioned properties that will offer a broader range of housing options for renters.”
Investors in the fund include Citi Community Capital, the University of Michigan endowment and Rockefeller Brothers Fund.
“We are deeply committed to making a positive difference in communities around the country,” said Richard Gerwitz, co-head of Citi Community Capital. “Helping our partners preserve and enhance workforce housing in this manner, especially in urban areas where affordability has hit crisis levels, is one of the ways Citi is supporting innovative solutions to address our neighborhoods' challenges.”
“Rockefeller Brothers Fund is pleased to play a key role in this high-impact opportunity, and to be aligned with a team whose experience in social impact investing is exceptional,” said Stephen Heintz, President of the Rockefeller Brothers Fund. “This new fund offers a valuable opportunity for us to invest with a purpose, creating a real, sustainable impact on an important social issue that affects urban areas across the United States, while also delivering a competitive market rate investment return.”
TIC has now surpassed $1.5 billion in investment potential to help address some of the country’s most pervasive social issues through real estate and infrastructure-related solutions, making it one of the nation’s largest social impact investment firms. In addition to the Turner Multifamily Impact Fund, Turner Impact Capital manages the Turner-Agassi Charter School Facilities Funds in partnership with Andre Agassi, to facilitate the development of best-in-class charter schools in underserved communities across the United States. To date, the Turner-Agassi fund has built 39 schools with 17,500 school seats and are developing an additional 20 schools with 14,000 school seats for the 2015 and 2016 school years.
The principals at TIC have overseen commercial real estate and mortgage asset portfolios totaling $12 billion and have launched several groundbreaking funds over the past two decades that helped define the social impact investment movement. In addition to the Turner Impact Capital initiatives, the team also created a series of urban funds focused on the development of community serving retail, housing and mixed use projects in densely populated ethnically diverse urban markets.
“With housing costs continuing to rise, there is a critical need for affordable rental options in densely populated areas across the entire country,” said Dan Millman, Principal and Chief Operating Officer of Turner Impact Capital. “Providing housing options close to employment centers, education and healthcare resources boosts quality of life for workforce families, but also extends to productivity, the environment and the well-being of the greater community. With more than four million new renter households coming online over the next ten years, we see this new fund as an opportunity to make change on a significant scale.”
“The Turner Multifamily Impact Fund offers a unique approach to real estate investment by increasing the availability of housing for a larger subset of the rental market,” said Gee Kim, Principal at Turner Impact Capital. “Our aim is to boost occupancy and reduce overall costs by implementing resident-focused services related to education, healthcare and security, and adopting environmentally sustainable practices that will improve lives and the broader community in a meaningful way.”