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SDS Supportive Housing Fund

A Trailblazing Investment Approach to Housing those Suffering from Homelessness in California

Mission & Investment Focus

The SDS Supportive Housing Fund (SHF or Fund) creates a new path to finance high-quality and cost-effective housing for Californians suffering from homelessness. This new path centers on financing permanent supportive housing (PSH) using an innovative, scalable financial model. The Fund is only possible due to our investors who share our goal of supporting a cost-effective solution to reducing homelessness. The SDS SHF complements the wide range of existing public, nonprofit, and private-sector efforts all striving to achieve that goal of reducing homelessness.

There are four key tenets that drive the Fund’s mission:

PERMANENT
SUPPORTIVE HOUSING

To provide each of the
projected future
tenants with on-site case
management support to
rebuild their lives.

SINGLE SOURCE
PRIVATE-SECTOR CAPITAL

To rely on the Fund’s private-sector equity as the sole source of capital (beyond developer equity) for each apartment community. This single-source approach creates substantial efficiencies, saving a great deal of time and expense.

HIGH-QUALITY UNSUBSIDIZED PSH UNITS

To finance the construction of high-quality one-bedroom apartments at a per-unit cost low enough to eliminate the need to use taxpayer dollars for land acquisition or construction costs.

EMPOWERED
LOCAL COMMUNITIES

To serve as a catalyst for community revitalization. The aesthetically appealing, community-centric buildings will benefit the surrounding communities and, in many cases, provide ground-level healthy food options or health services to the community.

Deborah La Franchi,

President & CEO, SDS Capital Group

“Reversing homelessness requires an aggressive campaign by the public-, private-, and nonprofit-sectors. The SDS Supportive Housing Fund is a new ‘tool’ in the growing ‘toolbox’ of approaches. The future tenants will have a dignified home – the type of home we each deserve – along with critical support services to rebuild their lives.”

The Challenge

 
 
 
  • 161,548Californians experiencing homelessness1
  • 51%Percentage of nation’s unsheltered homeless population who live in CA2
  • 70%CA’s homeless population who are unsheltered3
  • 56%Increase in homelessness in LA County since 20154
  • 69,000+Angelenos experiencing homelessness in LA County5

The Solution: A Holistic Model

The SDS Supportive Housing Fund seeks to finance safe, high-quality
housing for individuals experiencing homelessness.

permanent supportive housing
  • 2,500 PSH Units
    are anticipated to be financed by the Fund’s $150 million of capital.
  • 100% Percentage of Project Cost
    Beyond the developer’s equity in each investment, the Fund provides 100% of the remaining financing needed for the land, development, and construction costs
  • ZERO Amount of Taxpayer Subsidy
    There are no taxpayer subsidies or grants used for acquisition or construction costs

SDS SUPPORTIVE HOUSING FUND (SHF)
KEY COMPONENTS

SDS SHF FINANCING

The Fund is the sole source of financing needed by the developer – beyond the developer’s own equity. No other capital sources – including tax credits or other subsidies – are needed to fund the construction of these apartment communities. This single-source capital approach requires only one standard
pre-negotiated agreement that is used
for every investment. This eliminates years of securing, negotiating, and documenting the 7-12 capital sources typically needed to finance PSH developments.

RMG HOUSING

As the hub of this PSH model, RMG serves as the developer and long-term owner of each apartment community. Some sites are purchased outright by RMG, while others have community-based churches or other land partners.
RMG drew upon $2 billion of real estate
development experience to develop
this PSH model. Their efficient and
effective process allows for construction
of high-quality PSH units in significantly
less time at a substantially lower cost.
The SDS Supportive Housing Fund is helping RMG scale this innovative model.

SUPPORTIVE SERVICES

Each apartment community will have full-time case managers with on-site office space. Each case manager will be responsible for supporting 20 tenants and one will also live on-site rent-free. At projects located in Los Angeles, Homeless Health Care LA will be the service provider. For projects located outside Los Angeles, RMG will secure other suitable service providers to fulfill this role.

SDS SHF FINANCING

The Fund is the sole source of financing needed by the developer – beyond the developer’s own equity. No other capital sources – including taxpayer subsidies – are needed to fund these apartment communities. This single-source capital approach requires only one standard pre-negotiated agreement that is used for all 20 investments. This eliminates years of searching, securing, negotiating, and documenting the typical 7-12 capital sources typically needed for PSH developments.

RMG HOUSING

As the hub of this PSH model, RMG serves as the developer and long-term owner of each apartment community. Some sites are purchased outright by RMG, while others have community-based church, nonprofit, or for-profit land partners. RMG drew upon $2 billion of real estate development experience to develop this PSH model. Their efficient and effective process allows for construction of high-quality PSH units in significantly less time with a substantially lower cost. The SDS Supportive Housing Fund benefits the overall model by making RMG’s approach scalable.

SUPPORTIVE SERVICES

Apartment communities will have full-time case managers with on-site office space. Each will be responsible for supporting 20 tenants. One case manager will also live on-site rent-free. At projects located in Los Angeles, Homeless Health Care LA will be the service provider. For projects located outside Los Angeles, RMG will secure other suitable service providers to fulfill this role.

“

“HHCLA has struggled to place clients in quality permanent and supportive housing. The SDS Supportive Housing Fund’s investments with RMG Housing are the breakthrough we have been waiting for to help accelerate the supply of housing necessary for our clients to build better lives.”

- Mark Casanova, HHCLA Executive Director
“

“The SDS Fund creates tremendous efficiencies for us. RMG and the Fund have one pre-negotiated investment agreement that we will reuse for more than a few dozen transactions. We spend zero time raising capital or negotiating terms. This will allow us to stay laser-focused on finding new sites, identifying cost savings, and overseeing construction and operations.”

- Tim Roth, RMG Housing Founder and CEO
“

“More investments in affordable housing means more hope, health, and possibility for our unhoused neighbors. The SDS Supportive Housing Fund adds a vital financial tool to our City’s unprecedented efforts to build up our stock of supportive units swiftly and efficiently — and give our most vulnerable Angelenos a safe place to call home.”

- Mayor Eric Garcetti, City of Los Angeles

For Fund Inquiries:

Contact Jerson Asimbaya
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