Smart Growth Fund
San Diego is one of the least affordable housing markets in the country, with only 26% of households able to purchase a median-priced house in the county (California Association of Realtors, August 9, 2017).
To address this disparity, the Economic Growth and Neighborhood Investment Fund is establishing a $30-50 million double bottom line private capital real estate equity fund. The Smart Growth Fund will leverage bank capital and philanthropic investment to make equity, debt, and/or mezzanine investments in urban infill residential and select mixed income and mixed use projects throughout San Diego County. The Fund will be managed by a professional fund manager with favorable return on investment.
Emphasis will be placed on development projects that:
- Produce affordable housing opportunities for middle income families within San Diego County.
- Offer investors the best opportunities for market rate risk adjusted returns consistent with Fund investment objectives.
- Typical projects will include for-sale or rental housing for middle income families and may be new construction, acquisition and rehabilitation of existing building or some combination thereof. In appropriate circumstances projects may include mixed-use or mixed income projects.
- Priority will be given to projects which are located within or adjacent to low and moderate income communities within San Diego County. These neighborhoods are defined as neighborhoods within census tracts that are low to moderate income as defined by HUD. Projects must be consistent with the smart growth and reinvestment policies of the applicable community development plans for the targeted neighborhoods.
- Eligible projects will be sourced through established linkages and networks with community groups, public agencies and the brokerage and development industry.
- The Fund will have the flexibility to make any appropriate investments involving equity or debt, including mezzanine capital with equity components.
- Typical projects will have an average size of development costs from $7,000,000 to $30,000,000 with the Fund making an investment of $2,000,000 to $5,000,000 in each such project. Potential projects may include joint ventures with developers with a demonstrated capacity to develop and manage complex urban infill developments consisting of 20-60 units or more. Special consideration may be given to developers indigenous to the San Diego community who are capable of producing the risk adjusted returns expected of the Fund.
Social and Environmental Investment Criteria:
- Urban infill housing within underserved communities in San Diego County.
- Projects which encourage the integration of mixed income and mixed use neighborhoods.
- Projects which encourage the reuse and redevelopment of underutilized urban infill properties.
- Projects which are consistent with the smart growth and reinvestment policies of the applicable community development plans for the targeted neighborhoods.
- Projects which are consistent with the City of San Diego’s Climate Action Plan.
Formal Fund launch is targeted for mid-2018. For more information about the Smart Growth Fund, including investment opportunities, please contact Michael Lengyel, Assistant Vice President for Economic Development at email@example.com or (619) 533-7158.
Civic San Diego Staff Report (3.5MB PDF)