How Community Foundations Can Impact Affordable Housing

Affordable housing is a critical issue facing communities across the United States, with impact felt macroeconomically, and for individuals and families seeking a place to call home. To confront the issue head on, many civic and governmental entities are addressing the full housing continuum, from keeping people in their homes to addressing homelessness. This comprehensive approach involves multiple strategies to ensure that everyone has access to safe, affordable and attainable housing.

A Perfect Storm

Before exploring solutions, it’s critical to unpack the unprecedented challenges:

• Rising Housing Costs: The cost of renting or buying a home in Northern Arizona has increased sharply in recent years. In Flagstaff, the median home price in June 2024 was 6.8% higher than the previous year, making Flagstaff’s housing costs 34.8% above the national average, beyond the reach of working families in the community.
• Elderly: Homelessness in aging populations is a growing and often overlooked facet of the housing crisis. A 2022 report from the Arizona Department of Economic Security indicated that more than 4,500 individuals 55 and older received homelessness assistance, more than any other age group in that year. Many seniors live on fixed incomes, such as Social Security or retirement savings, and face rising living costs, including health care and medication. These financial strains leave them with insufficient funds for essential home repairs or property taxes.
• Income Disparity:  Many Arizonans, particularly those with low or fixed incomes, struggle to keep up with the increasing cost of housing. A survey in December 2023 by Housing Solutions of Northern Arizona found that the average monthly rent for a two-bedroom apartment in Flagstaff was $1,971/month, with 38.9% of households paying more than 30% of their incomes for housing.
• Limited Affordable Housing Supply: There is a shortage of affordable housing units, particularly in urban areas like Northern Arizona where demand is high. Flagstaff has a rental vacancy rate of less than 2%, indicating a tight housing market and contributing to higher rents.

Working with Community Funds

Community foundations play a pivotal role in addressing the housing crisis by mobilizing resources, fostering collaborative partnerships and supporting innovative solutions. Community foundations are working to ensure that affordable housing is not just a goal but a reality for families and individuals in need. In Arizona, these funds are managed by community foundations that are involved in their local areas by partnering with local real estate professionals and title companies to secure funding and support housing initiatives. Community foundations secure funding for housing projects through a variety of sources:

• Individual and Corporate Donations: Many housing funds start with unrestricted gifts from individuals or corporations, these provide the initial capital to launch housing initiatives.
• Partnerships: Alliances can provide a steady stream of funding from nontraditional sources and create sustainability for housing projects.
• Local Giving: Localized philanthropy can help garner support from residents and businesses within the community.

How it Works

Community foundations often collaborate with real estate agents and title companies to address the housing crisis. Here is how these collaborations typically work:   

• Commission Donations: Real estate agents can write into their closing paperwork a specified percentage of their commission to be donated to the housing fund.
• Proceeds from Sales: Sellers have the option to donate a portion of their proceeds from the sale of their home to the housing fund.
• Close of Escrow: At the close of escrow, all parties involved in the transaction can donate to the housing fund.
• Advocate for Policies: Community foundations and real estate professionals can join forces to support affordable housing to influence local zoning laws, support housing subsidies, or promote other legislative changes that benefit housing affordability.

Housing is one of the most fundamental priorities we face in Arizona, but thankfully community foundations, through innovative partnerships and dedicated funding, are making significant strides in addressing this issue. By working with real estate professionals, encouraging local giving, and focusing on field of interest funds, these foundations are providing safe, affordable and attainable housing for all residents. While the challenge is overwhelming, the collaborative efforts of community foundations offer hope to those in need. QCBN

By Lisa Sahady

For more information on corporate giving, visit azfoundation.org/corporatephilanthropy, or call one of our offices serving northern Arizona: ACF of Yavapai County at 928-583-7815, ACF of Sedona at 928-399-7218, or ACF of Flagstaff at 928-526-1956.