Socially responsible investing is a hot topic among sophisticated investors. An investment team led by life insurers – IMPACT Community Capital (IMPACT) – is tackling one of the toughest social challenges in our country: the shortage of affordable housing for low-income workers and families.
IMPACT was founded in 1998 by leading insurance companies for the sole purpose of sourcing and managing purpose-driven investments. IMPACT’s current owners and investors include Nuveen (a TIAA company), Farmers Insurance, Nationwide, Allstate, and Pacific Life. These insurers believe that access to affordable housing connects workers to opportunities and families to schools, childcare and healthcare. Like other infrastructure, affordable housing is a long-term asset promoting economic stability and community health.
In the 20-plus years since its first investment, IMPACT has strived to deliver consistent, risk-adjusted returns while lifting up America’s communities. IMPACT has now helped originate approximately $2 billion in institutional-quality investments to finance community developments in 40 states, plus the District of Columbia. These investments have created more than 45,000 affordable housing units and funded healthcare and childcare facilities that assist over 400,000 people.
IMPACT has a long history of innovation as well. In 2003, IMPACT’s Community Impact Loan (CIL) Fund was created to acquire loans and provide an evergreen pool of capital to fund permanent mortgages on affordable multifamily properties. The fund has made nearly 600 loans worth more than $1 billion. By initiating five separate securitizations totaling $788 million, IMPACT has created considerable liquidity for its investors.
Through the CIL Fund, insurance company investors have financed affordable multifamily properties predominantly for individuals and families with incomes below 60% of the Area Median Income (AMI). One such development is the Rockwood Apartments in Anaheim, CA, which provides a diverse population including previously homeless families with access to quality affordable housing and amenities that allow them to live in dignity and work to better their circumstances.
As our cities and states struggle to create affordable housing, more private and public resources are needed to address the challenge. Life insurers will continue to invest in solutions that make a positive impact on American families.
John Mangan is Vice President & Deputy, State Relations at the American Council of Life Insurers (ACLI). He is responsible for state legislative and regulatory affairs in California, Idaho, Nevada, Oregon and Washington. He also leads the ACLI’s state advocacy team on the issues of state-run retirement plans and independent contractor proposals.
