what are you thoughts on starting affordable housing nonprofit?
Renter · Las Vegas, NV · Member since 2018 · 278 posts · 71 votes
what are you thoughts on starting affordable housing nonprofit?
we would like to work in Oregon and Sonoma County, CA
to provide equity in small homes, townhomes, plexes
developed as low cost as possible to help buyers :)
I have been throwing around the idea of a non-profit housing organization for years. I believe in better lives through better houses unfortunately I have never had enough dedication to following through. My thought was to rehab the "war zones" and offer houses at affordable rates for Section 8, Heroes (police, teachers, first responders, etc) and every day working class people. I don't believe in low income housing developments per se, but I do believe everyone deserves a good quality home they can be proud of.
There are some great programs out there doing good work, my advice would be to find an organization that is doing what you want to do and follow them. A lot of those organizations have written books or blogs about exactly how they got started. Also, there is a lot of government assistance out there for affordable housing so learning to write a grant or finding a grant writer is important, finally every state has developed opportunity zones to encourage economic development that have huge tax advantages - you need to purchase by the end of the year to get the full benefits but the program continues for the next ten years.
My biggest limiting factor is I try and do everything myself. I would love to talk with you and find out what your plans are and see if we can help each other get started and push through the analysis phase. I'm concentrating on central Texas.
@John Acheson I love this idea soooo much. I live in Newberg so not far from you. A few years ago I tried to find some land to put a tiny house park on. My plan was to start small but keep the costs low - just charge enough to self fund the project and ongoing maintenance and repairs. I really came to the conclusion in Oregon that I needed to buy a mobile home park or RV park. In our area those are in the millions so I stalled out. I am probably not well enough connected to pull it off but it's still rolling around in the back of my mind.
RE Heroes (police, teachers, first responders, etc)
Tamara, we just came across $4.5B by Apple/Google/Facebook and here's the link to Facebook's one million dollar commitment "to help essential workers such as teachers, nurses and first responders live closer to the communities that rely on them."
This confirms that you have identified a powerful niche in the 100 million renter market that needs affordable housing in the USA and the most successful plan solves the biggest problem!
I suggest researching the biggest affordable housing problems you can solve locally, build a team, find solutions and startup your nonprofit!
RE I love this idea soooo much.
Lisa, thanks for the enthusiasm. Let's share ideas and see what develops.
You say that you're interested in communities of low cost housing
and we've come across 3D printing that can frame small homes for $2,500
so we need to figure out where in Oregon this solution fits.
Is it tiny $5,000 homes for the homeless? Is it parks of cottage sized homes?
Is it small duplex, triplex, quadplexes following the change in state laws coming to cities of 10K or more starting in a few months through the next two years?
Or is it working with big cities like Portland to see if the printer can make apartments?
So far, Oregon is leading the country in upzoning, so the first step is to contact Newberg's planning department and see when they will be adopting the new state laws. Then ask for affordable housing (if that exists) and see if there's any grant monies available.
That should be enough food for thought to help you take action!
@John Acheson I love all of these ideas and have kicked them all around. Yes and yes. I need to pick a strategy and start down the road.
Lisa, if you want to start a real estate nonprofit a lawyer from Anderson Business Advisors told me today that it's considered a HUD nonprofit and Anderson charges double to set them up incl. hand holding along the way for $9K!!!
It's so easy to start a for profit entity for less than a thousand alone but nonprofit requires at least three directors (of which one could be the president, secretary and treasurer) but many start with let's say 5-10 people.
So the next step if you want to start your own nonprofit would be $10K and maybe five people interested in your mission. Our mission is to connect people to the American Dream through affordable housing resources so if you decide not to start your own, we would love your enthusiasm :)
Oh good info! I’ve been interested in doing something like this for awhile!
Kalyanii, thank you for your positive comments! We've just posted dozens of govt. programs and interesting YouTube affordable housing videos online so let me know if there's anything I can help you understand. What kind of impact would you like to make?
who is the number one affordable housing non-profit in the country and how are they setup?
Jared, GREAT Q!!!
who is the number one affordable housing non-profit in the country and how are they setup?
most all nonprofits in this space are setup as state filed C Corporations that take the federal IRS Tax Exempt status later and make 1,000 copies of the determination letter to show to donors, states, cities, etc. to pay
NO property taxes, NO income taxes (IRS/states), NO sales taxes (states), etc. keeping costs down
while providing deductions through donations that come from foundations, tax payers, corporations, etc. and there's a lot of collaboration with your tax payer dollars from govt.
the biggest builder is probably Habitat for Humanity (Christian volunteer model), Proud Ground uses the Land Trust model and we like First Story's model based on working with for profit companies that donate materials and labor.
The pieces of the affordable housing model that we DON'T WANT to use are "equity caps" and dependency on subsidies.
Generally, the model has been to feed people fish.
We want to teach them how to fish.
So connecting renters to affordable home ownership opportunities/resources WITHOUT equity caps through small homes and free financial education can help some of the 100M Americans paying rent to many BiggerPockets millionaires
so that renters can start their American Dream.
We want our customers to be able to sell their small starter homes for a profit TAX-FREE under the primary home $250K/500K exclusion to be able to move up towards their American Dream. We think it now takes 2 or 3 houses to get to the American Dream and that the first starter home is the big problem.
Habitat is selling the American Dream right off the bat so equity caps trap people in place.
Every model we've seen so far wants to feed people fish and trap them in a community.
We are trying to create a new model based on freedom to chase the American Dream
and believe that working renters who have fed the Rich Dad Poor Dad millionaire landlords
for decades deserve to reach for the same American Dream
and believe that all they need is a small starter home
with a bit of free financial education.
All the resources and knowledge are available
thanks to the internet and mobile computing.
The problem is renters' rights under capitalism.
So we want to build small cheap plexes via traditional primary home bank/lender financing
with no hoops and catches, and provide free down payment, credit, income financial education to help :)
@John Acheson this is so exciting. I work in a nonprofit (fundraising) and have worked in affordable housing in and around the Bay Area for years. Huge need, good for you. I would love to hear more as you progress!
Jennifer, welcome to our affordable housing thread :) We could really use your help...
How does fundraising differ from providing affordable housing projects (rentals)
vs. affordable home projects (small starter homes) without "equity caps?"
How could we go about asking for single family home lot donations from potential donors?
As per a TED video I watched last night, it's all about telling the story of a family's transformation
and NOT talking about all our ideas, programs, mission, problem, etc.
But in a startup, we don't have any stories yet, so I'm thinking 2-3 years of shoestring mode...
Hello Lisa, I like what your are cooking! I have been looking for ways to give back to the community and have really looked at housing as a great measure and impact. I think there is a large spectrum of help that can be generated. We are currently building smaller apartment complexes and I have some connections with affordable housing. Providing fordable housing to heroes (teachers, social workers, volunteers, veterans) is a great way to support those giving back to the community. I also see temp housing villages with common kitchens and bathrooms with a stepping stone to get to units with their own bathrooms and kitchens if they stay clean or get jobs. (These facilities would be in/near industrial the industrial area that would then go to build more of these modular huts- hiring and training from the pool of people). https://komonews.com/news/local/huts-for-the-homeless-catching-on-in-the-northwest We currently have a 250 unit homeless shelter being built in N. Downtown Salem- Male only- no pets, no stuff, no children, no women. This seems like economic suicide for this part of town as now they have to deal with 250 homeless hanging around the area. The cost of the project is $15,000,000 at $2500 a "hut" this would provide 6000 shelters with closing doors. (not the land, mental counseling, drug counseling bathrooms, kitchens, staff) We would have no homeless- The City of Salem Has the land. If I was not working 60+ hours a week- I could solve some of this problem. I am looking at factory built modular housing and have several books with this being the best summary/overview that I have seen. Prefab Housing and the Future of Building: Product to Process Mathew AitchisonModular would be a great way to build small affordable apartments to scale.Modular always looks like a unicorn- but the financial reality always seems to be different. Currently housing/apartments is like hand building a Ferrari at each building site. Simple, small, same buildings built in a factory would have to scale to be cheaper, faster, and better quaility. Build the same plan over and over and over- Always on flat ground, always the same config. Same with the Conestoga Huts. The solution is getting the business, the indivuals, the volunteers, the churches and the governement working together for a solution. If I can have a few more wins on my projects- I may look at building both a village and real apartments to support our community. The paperwork alone is a full time job that I currently do not have the staff to allocate. If I can work with smart people to come up with transitional plan and a hero apartment plan- Build it- share all the docs and processes and plans with anyone who can use them and start a blueprint for others to improve on and follow. I have a great mixed used location that is isolated by 2 train tracks on either side, has amazing water views and could support both affordable and transitional housing. Maybe I will make a call.
Chris, thank you very much for connecting your expertise here! There are so many ideas to pursue in affordable housing and I'm still in the first month of research so your post is very helpful from boots on the ground experience. I'm sensing that building affordable rentals doesn't seem to be working very well under the current system as you mention so many other great ideas that many Americans love incl. tiny houses, huts, temporary shelters, etc. Are those type of projects legally zoned in and is there financing avail. for buyers if they wanted to buy a tiny home, hut, etc?
The problem I have with "affordable housing" is that it usually refers to subsidized rentals which trap people out of the American Dream. Is there a way we can help people with shelter AND provide stepping stones towards equity into the American Dream?
It seems like Habitat and First Story for example either have equity caps and/or residence rules that trap buyers into a long term situation.
Shouldn't homeless, poverty, low income, etc. Americans have the same chance at the American Dream as middle income and up?
I think so and am researching how to spark the American Dream with the lowest possible financeable home ownership model.
With the new Oregon plex laws I'm thinking a small group of four townhomes on a donated lot that could sell to a family making minimum wage without any equity caps. is a business model I'm researching.
I just don't like the idea of trapping renters/home owners with subsidies/equity caps.
With that said, the small homes First Story is doing with $0 down 0% mortgages is a VERY INTERSTING strategy from a size and financing angle.
Thank you again for sharing the realities of affordable rentals.
Laura, thank you so much for your comments and mentioning some business models to take a look at. As per the post above, I'm trying to figure out a way to connect homeless, poverty, low-income families to the American Dream and am frustrated by affordable housing trapping Americans out of the possibility of building equity towards a dream.
Do you know if the two nonprofits you mentioned offer traditional financeable legally zoned homes that can build equity over and over for many families over the years?
I really like the idea of owning tiny homes but most of the ones I've researched on YouTube are rural and probably not legally zoned, insurable and therefore NO financing.
Do you have any ideas for let's say a family making minimum wage to be able to get financed, into a home, build equity, to start the American Dream.
I don't like the idea of affordable housing trapping people
and believe that equity and the ability to sell your home
for a PROFIT is a really important part of the American Dream
that most all nonprofits are NOT allowing or capping/restricting.
Do you know of any stories like this: family buys tiny home, lives there 2-3 years, sells for a small profit for a down payment on a starter home, moved into 2nd home and builds equity again, and starts dreaming of their American Dream.
That's how it works with middle income and up,
so why can't we make a model for low income?
I was just discussing this idea with a few friends here in Sonoma county. I'd be interested in seeing where you go with this. Let me know if you need any help.
The CHN homes are typical single-family homes and can be conventionally financed. I’m not sure about CCSS. Tiny homes can be difficult to finance, but residents have equity in the paid off asset. Both programs allow tenants to become owners of the properties after a set # of years (for CHN it’s year 16 and for CCSS it’s year 8).
I don’t exactly follow the references in tenants getting trapped into affordable housing or starting the American Dream, but under both programs tenants receive years of classes, training and other services before taking possession of the home. If you’re looking for government financing (grants, tax credits, etc.) the process is likely competitive and may require that you offer some type of services for residents.
However, if you are looking for a solution that does not include government financing, there are lease to own programs and tiny home communities.
Lease to own programs are where the property owner enters into a lease with a tenant with the agreement that after certain conditions are met, the tenant may exercise an option to buy the property. The resident may be able to capture the equity from the rent being paid to date serving as a down payment and appreciation. https://www.zillow.com/mortgage-learning/rent-to-own/.
Tiny home communities are much cheaper and typically more ecofriendly/sustainable than a typical home, which reduces costs associated with homeownership. However, it often means less equity as well and may be more difficult to finance due to the low purchase price and the type of asset. https://www.thetinyhouse.net/how-to-finance-a-tiny-house/
This is pretty broad. Feel free to ask follow up questions.