While there are affordable housing programs for people, there are very few programs that build permanent affordable commercial space for nonprofit social service providers.
Common Ground Urban Development has partnered with teams that want to change this dynamic by making socially responsible real estate development decisions from the very beginning.
Community development finance partnerships
1850 Bryant Street Best PRACTICES At Work: RESEARCH
The report outlined immediate, mid-term and long-term solutions. Although the immediate and mid-term recommendations have been fulfilled, the long term solution for permanent space through nonprofit ownership has yet to be realized. The report determined the highest priority as working with developers to build multi-tenant centers owned by nonprofits:
· The possibility of identifying significant spaces for multi-tenant co-location should be examined, especially in neighborhoods with high concentrations of San Francisco residents who currently access services.
· The specific details of the rental status should be reviewed with the underlying goal of determining possible co-location and the ability of the City to provide strategic support for permanently affordable space.
· Given that over half of the nonprofit organizations surveyed indicated an interest in sharing space, buildings that could provide this opportunity should be specifically investigated.
· Maximizing the long-term sustainability of nonprofits may require strategic acquisition of larger spaces by a nonprofit with the capacity to maintain such a space and manage the real estate financing required.
The report cites the Community Arts Stabilization Trust (CAST) as a best practice, with which the 1850 Bryant project team has significant experience.
· The City can also examine the CAST model to determine the utility of creating an entity specifically to deal with the real estate acquisition so that the nonprofits focus on providing services instead of having to learn how to deal with a potentially complicated real estate transaction.
The study received surveys back from nearly 500 nonprofits in the Bay Area. There was an overwhelming concern about space needs for nonprofits, specifically those who serve low-income communities. See below.
The vast majority of respondents have serious concerns about how the real estate market will affect their futures.
Most respondents (82%) are concerned about the negative impact of the real estate market on their long-term financial sustainability. Affordability appears to be affecting nonprofits similarly across areas of focus, size, and geography.
But nonprofits serving communities of color and low-income communities show an especially high level of concern for the future.
More than a third of respondents (38%) have already moved at least once in the last five years.
Of these, two-thirds (67%) say cost was a factor in their reason for moving. A notable proportion reported decreases in the quality of their space (30%) and a negative effect on their mission (20%).
Respondents identified ownership of their spaces and working in spaces designated for nonprofits as crucial options for weathering a challenging real estate market.
The report concluded that the “respondents have identified ownership of their spaces and working in spaces specially dedicated to nonprofits as crucial to weathering the challenges of the Bay Area real estate market.”