05 Recommendations
Organizational Support Strategies
We recommend the following organizational support solutions for philanthropic foundations to help the region’s housing providers stay healthy, meet increasing demand, and become resilient in a post-pandemic world:
- The flexibility and responsiveness exhibited within the non-profit housing sector necessitates an equal response from the philanthropic community. The demands placed upon the non-profit housing community over the past year have been significant and varied. The challenges of the coming years will be largely in expanding organizational capacity to meet the needs of the region. Flexible, multiyear operational support from the philanthropic community will be required to allow organizations to individually address their internal needs to scale up in response to their client and staff needs.
- Ensure that provider capacity is restored, then increased. With resources for housing growing faster than at any time in decades, there is an acute risk that the capacity of providers will not be sufficient to effectively put these new resources to work. If that happens, it puts future program support at risk. Funders should give special attention to supporting provider staff and organizational health to ensure that the sector’s capacity is not degraded. This can be done by addressing staff burnout, mental health, competitive salaries and benefits, training and professional development as well as employee recognition programs and events.
- Provide cash assistance to support organizations reliant upon reimbursement based funding. The demands of pivoting the homelessness system from a congregant to non-congregant network of shelters placed undue financial strain on service providers as the financial assistance they rely upon is largely reimbursement based. Highly flexible funding will continue to be needed to ensure that organizations are able to meet expenses for the foreseeable future. Funders should consider short-term repayable grants or establishing a revolving loan fund to be used to maintain positive cash flow.
- Assist with long term access to PPE, assist with enhanced technology to facilitate virtual interaction, and assist in developing new workplace protocols. It’s clear that there will be long lasting impacts from the pandemic in terms of public health measures and the rules of social and business interaction. It’s important that providers have support for access to personal protective equipment as well as physical equipment, barriers, dividers and other office design features that support public health and make clients and staff feel more comfortable.
New office protocols will also need to be established for how work gets done and how communication can be improved when more is happening virtually. Providers that utilize volunteers have been especially hard hit. New training and workplace rules will need to be established to bring volunteers back in large numbers. Communications and recruitment strategies for volunteers will need to be reimagined.
- Explore a permanent contingency fund for unrestricted payroll assistance to be used in future emergencies. Our research revealed just how critical PPP was for keeping housing providers afloat during 2020. Without these unrestricted dollars, the fates of many organizations would look very different than today. Unfortunately, we know that COVID-19 likely won’t be the last major challenge our region will face in our lifetimes, and a federally-supported lifeline like PPP may not always get created.
Therefore, funders should pursue the creation of a permanent contingency fund to help nonprofits meet payroll and other necessary expenses during a crisis. Proactive rainy-day set asides would allow housing providers to rapidly and effectively respond to the beginning of emergencies, rather than spend valuable time trying to maintain organizational solvency.
- Training/support for workers that now engage in more social service provision. Another consequence of the pandemic is that front line housing providers are now finding themselves providing “social service” type support to clients—often in the form of “light” counseling that responds to immediate needs or concerns that are expressed. The social isolation, fears and often contradictory news and information have created anxiety and emotional support needs that are new. Some basic education and training for staff in client interaction and referrals would be helpful to both staff and clients.
Operational and Program Support Strategies
We recommend the following operational and program support solutions for philanthropic foundations to help the region’s housing providers maintain and expand their missions to bring greater housing opportunities to communities, especially persons and families with the greatest hardships:
- Provide the Greater Richmond Continuum of Care providers with strategic investments to increase shelter capacity in the near term while maintaining a committed focus on scaling up permanent supportive housing and permanent, deeply affordable housing in the region. With the significant increase of unsheltered individuals in the region between 2020 and 2021, the need for temporary shelter is more pronounced than ever. Due to chronic underfunding, the shelter system has been unable to adequately scale to meet demand. This issue is further compounded by the fact that the inventory of permanent supportive and permanent, deeply affordable housing in the region is severely deficient to meet demand.
In short, people exiting the shelter system have incredibly limited housing options. In March, Richmond City Council approved changes to the City’s zoning that will allow for the by-right development of shelter, transitional, and permanent supportive housing in a number of non-residentially zoned areas of the city. With the potential for significant federal resources in the near future, now is the time to leverage investments in the region’s homelessness system to expand provider capacity and increase shelter and housing inventory.
- Help organizations mitigate cost increases. The COVID-19 pandemic has had major impacts on the development pipeline. Lumber prices have reached an all-time high, while significant labor shortages have stifled development and increased labor costs. While some experts expect lumber prices to fall by the year’s end, labor shortages have been an issue pre-pandemic and are expected to remain a major obstacle.
Richmond area organizations would benefit from assistance to mitigate these increased costs, whether through additional funding to meet those costs or through the proactive support of innovative methods to reduce costs (e.g. use of newly developed, lower cost materials, substitution of metal for lumber framing, innovative design that can reduce square footage).
- Support low-income first-time homebuyers overcome an extremely difficult market. At the beginning of the pandemic, many thought an already hot homeownership market would cool down for an extended period of economic recovery. The first several months of sheltering-in-place seemed to affirm this theory as sales and listings declined significantly. However, when safe protocols allowed for showings and closings, buyers and sellers resumed their plans.
As we now know, lower-wage workers in the retail and service industries were hardest hit by COVID-19’s economic fallout. The downturn did not significantly impact higher-income earners with much higher chances of buying their first or next home. At the same time, historically low inventory levels were worsened by delays in new home production. There is now a perfect storm of market conditions preventing first-time homebuyers from competing.
Therefore, funders should work directly with providers who have portfolios of first-time buyers (e.g., HOME of Virginia, project:HOMES, etc.) and determine what additional resources are needed to dramatically increase these buyers’ ability to achieve homeownership. These strategies may include unrestricted grants for down payment assistance and closing costs, flexible funds to pay down other household debts, and dollars to support land acquisition by nonprofit developers.
- Pay attention to homeowners experiencing financial hardship in the second half of 2021. The federal foreclosure moratorium was extended through June 2021 and an additional three months was added to the COVID-19 forbearance program allowing borrowers to be in forbearance for a total of 18 months. This has provided homeowners with federally-backed mortgages with a temporary pause on mortgage payments, but has not provided them with financial relief when payments are reinstated.
Attention should be paid to the needs of homeowners who have experienced financial hardships due to loss of income and/or other negative COVID-19 impacts, especially those who have entered into forbearance. The financial needs of these households may come to the forefront in the latter half of this year if the moratorium and programs are not adjusted.
- Explore creative approaches to protect persons whose homes are undergoing repairs and weatherization. Programs that provide critical home repairs, weatherization and similar services have been severely impacted as clients, especially seniors, are wary of having workers inside their homes. Providers could use help to explore creative ways to address the concerns of homeowners including temporary housing or respite housing perhaps provided in conjunction with another senior services provider. As with other programs, there is about to be a surge in funding support for energy efficiency so it will be important that COVID “hangover” doesn’t reduce demand.
- Address increased demand for services among special needs populations in rental housing. Special needs populations residing in rental housing, such as seniors and persons with disabilities, have had their needs exacerbated by the pandemic. The pandemic has not only increased their need for services, but the need for services in a virtual setting. This increased demand has put pressure on staff to provide additional services, one of which includes helping residents get online. While some services will return to an in-person setting, others may remain virtual. Organizations need additional resources to meet these increased demands. This includes financial support to provide residents with technology, training to enhance service delivery in a virtual environment, and potential expansion in services.
- Land use and inclusionary housing policy will become paramount in the next several years. There is a shift underway that will radically change affordable housing policy priorities in the next several years. As resources for affordable housing grow, the challenges will be in organizational capacity and favorable land use policies at the local level. Providers will no longer view access to loans and grants as the chief barrier to housing development but rather it will be access to building sites and rehabable structures.
Inclusionary housing policies that include more development by right, higher density and that lessen the influence of NIMBY opponents will be critical to making progress. The City of Richmond’s recent move to expand the zoning classifications where permanent supportive housing and shelters are permitted by right is a good example. Chesterfield County has also recently launched an initiative to re-use obsolete commercial sites on Route 1 for multifamily housing—especially housing that is affordable. Henrico County is exploring an affordable dwelling unit ordinance. Funders should support the educational and grassroots/grasstops advocacy work needed to expand inclusionary land use and housing policies for all jurisdictions in the region.