One of our largest Foundation investments in recent years is a $5 million grant to the Black Hills Area Community Foundation for the Strategic Housing Trust Fund. But what does that actually mean for Rapid City affordable housing? Let us explain.
The Rapid City Strategic Housing Trust Fund was created in 2020 to address the affordable housing shortfall in Rapid City. Housed at the Black Hills Area Community Foundation, the Strategic Housing Trust Fund takes a long-term approach to the strategic housing issues faced by our community through low interest revolving loan funds for housing development. Since 2020, the fund has grown to $15 million with the help of:
- $5 million matching grant from the John T. Vucurevich Foundation to challenge the city to contribute
- $5 million in Vision Funds from Rapid City to fulfil the match
- $2 million from the Bush Foundation
- $150,000 from Elevate Rapid City
- Other funding from private foundations, businesses, and individual donors
What’s a revolving loan fund?
It is a self-replenishing pool of money, utilizing interest and principal payments on old loans to issue new ones. It’s a way to both invest in immediate projects but have them invest in future work.
How does it work?
The Strategic Housing Trust Fund issues low-interest loans to developers building multi or single-family new construction, acquisition, or rehab projects, all of which must include a guarantee of affordability. Funding is intended to be the top of a capital stack: the layers of capital (cash and debt) that go into financing the acquisition, development, or improvement of a property.
The Strategic Housing Trust fund also allows for charitable program related investments to fund projects. And, because it is held outside of the government, it can be flexible and responsive to development opportunities as they emerge.
What’s the fund accomplished so far?
Since 2020 the fund had raised $15 million dollars and approved 5 loans that will create or retain over 400 rental units that low-income families can afford.
- CommonBond’s the Radiant: 42 unit complex with 30 below market rent units. Opening September 2023.
- Lloyd’s Springs Edge: 41 unit complex. Opening in 2024
- Blueline’s Sagebrush Flats: 180 unit complex, all below market rate rents. Opening in 2024
- Black Hills Works Residential Services: Two, 4-bedroom townhouses. Opening 2024
- CommonBond also purchased two existing properties totaling 156 units. This purchase ensures both properties remain affordable instead of moving to market rents.
Who makes the decisions?
The Strategic Housing Trust Fund has an Advisory Board comprised of experts in the nonprofit community, finance, economic development, city planning, and developers. The Advisory Board vets applications and strategizes how to catalyze affordable housing development or retention in Rapid City. The Board can also advocate for community policy change and funding requests.
