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Hetal Sheth 4/5/22 2:41 AM 4 min read

New approaches to report social impact in real estate projects

The COVID-19 crisis has highlighted the importance of affordable housing policy. We see more than ever how responsive housing is to social and environmental changes. In 2021 governments scrambled to initiate eviction moratoria, caps on rent increases, and increased housing allowances. In California, the rising cost of rent and property has made affordable housing nearly impossible. But it doesn’t have to be that way. 

A social impact real estate project is an affordable housing development or investment that serves the community and the environment more than financial returns. An affordable housing project is to serve a community or a population group by solving a systemic problem being faced by them.

Impact management and measurement (IMM) offers housing organizations powerful data for a policy that goes beyond standard indicators. In this article, we’ll talk about the challenges of affordable housing initiatives and how IMM can drive transformative impact.

  • What is affordable housing?

  • Affordable housing policy

  • Impact measurement and affordable housing policy

  • IMM data and bipartisanship

What is affordable housing?

The notion of housing affordability is highly subjective. In the United States, affordable housing is defined as housing where the occupant is spending 30% or less of their gross income on housing costs and utilities. In the UK there is no standard definition of affordable housing. 

Most people have heard of housing projects in New York City or council estates in the UK. Generally speaking, the two most common characteristics of affordable housing are:

  • Controlled, sub-market prices
  • Regulated access for people who meet certain qualifications (usually economic)

Social Impact of Affordable Housing

social impact of affordable housing

Affordable housing efforts focus on specific groups such as low-income people, seniors, people with disabilities, families with children, unhoused people, certain ethnic groups, and more.

Read More: Impact Accelerators For Social Enterprises

Barriers to affordable housing

Major obstacles to affordable housing include poor housing quality, limited land access, insufficient affordable or social housing supply, too much of people’s income going toward rent, and increased income inequality.

The “housing crisis” in the state of California highlights some of these barriers. There is an estimated shortage of nearly 1 million affordable homes in California. 42% of all state renters and homeowners are cost-burdened or pay more than 30% of their gross income towards rent and utilities.

 

Read More: 5 Ways Economic Development Organizations Should Enrich Impact Data

Affordable housing policy

Affordable housing policy seeks to reduce these barriers to residents. Governments and other agencies have various tools to do this:

  • Subsidized mortgages
  • Tax relief for homeowners/renters 
  • Financial support to housing developers
  • Social rental housing
  • Regulations for quality dwellings
  • Rent control

Read More: Case study: Transforming Families with Affordable Housing

Impact measurement and affordable housing policy

To advocate for good policy, it’s a show me the data situation. The first step of policymaking is clearly defining the problem. Researched data helps to delineate the issues precisely. With high competition for limited resources, governments and funders look to data to make the most bang-for-your-buck impact.

The traditional indicators in housing policy include:

  • price-to-income ratios
  • housing expenditure-to-income ratio
  • number of social housing units 

While these are important, the true value of affordable housing goes further. What do people get from a quality, affordable place to live? How does that strengthen communities? Now we are talking about social impact

Read More: Can impact work without diversity be racist?

 IMM data and bipartisanship

Data-as-usual doesn’t capture the profound social impact of affordable housing. The right approach to impact measurement and management provides big data to break through partisan housing politics and see progress by working smarter, not merely spending more resources.

Stakeholder-centric approach. At the core of IMM are the people we are trying to serve. It is critical that impact measurement not only includes stakeholder voices but centers on their feedback. Through the stakeholder, we can understand the positive - or negative - effects of housing policy in the community. As decision-makers and implementers, we cannot assume the needs of the community nor the benefits they are perceiving. 

Focus on impact. IMM goes beyond program outputs as affordable houses are built, funds are distributed, or increased income. Through a holistic approach, IMM tackles tough measurements like reduced poverty, increased well-being, and reduced inequality in the community.

Read More: Accelerating Change for Social Enterprises: The Miller Center

Strategic and foundational. IMM isn’t another department of your organization. It is foundational to your organization’s growth model. IMM is grounded in a logic model like the Theory of Change and provides a strategic path to achieving impact goals. It’s not a one-and-done, either. It’s a regular, iterative process that keeps your organization dynamic, lean, and learning.

Real-time. With the right technology, your impact data is comprehensive and compiled from multiple sources. Convenient dashboards offer impact data in real time. There’s no laborious end-of-year reporting. Your data is ready when the policy window is open and funding is available. The efficiency that IMM provides is attractive to funders across the political spectrum.

Read More: Demystifying Impact Management

A deeper understanding of affordable housing
We all understand that a home is made of more than four walls. IMM is the key to understanding the stakeholder benefits of affordable housing initiatives. The complexity of the challenges around affordable housing demands strong data that goes beyond traditional indicators to demonstrate transformative social change. 

Measuring Social Impact of Real Estate Initiative

Learn More: Impact Measurement

Photo: Pexels

 

 

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Hetal Sheth

The founder of Ektta, and co-founder of SoPact, Hetal holds a deep passion for establishing enduring impact management practices in the social sector to have built-in learning and accountability.