The Galveston Essential Workforce Housing Fund I, LLC
The Galveston Essential Workforce Housing Fund I, LLC
About the
GEWH Fund
The Galveston Essential Workforce Housing (GEWH) Fund is a mission-driven capital fund created to support the development of workforce housing on Galveston Island. GEWH Fund was formed by Build Galveston, a nonprofit community development corporation.
Build Galveston was formed to pursue one of the four main strategic initiatives developed by Vision Galveston. Anyone who works in Galveston—first responders, teachers, healthcare workers, and young families—should be able to afford to live in homes in healthy neighborhoods on the island. Build Galveston will support projects designed to develop more workforce housing on Galveston Island. Most of Build Galveston’s projects are economically feasible only when funded, in part, with lower-cost capital, such as the capital to be provided by the GEWH Fund.
The GEWH Fund’s support may include providing loans and credit enhancement to projects on Galveston Island that are consistent with the GEWH Fund’s fundamental principles of supporting the development and availability of attainable workforce housing in the form of (i) single family rental housing, (ii) multi-family rental housing; or (iii) single family homeownership. These projects will be consistent with the GEWH Fund’s purpose as a statutory Delaware public benefit limited liability company to benefit a broad group of community stakeholders including area residents and business owners; employees and potential employees of area businesses; homeowners and potential homeowners, tenants, and prospective tenants; Galvestonians and others that benefit from the services provided by an educated workforce.
Objectives
The GEWH Fund will focus on making investments intended to increase the supply and affordability of workforce housing in Galveston, Texas, thereby strengthening the entire Galveston community.
More than 65% of island workers commute from off the island (equating to an estimated 21,255 people working in Galveston who don’t live in Galveston). Fifty percent of Galveston residents have a housing cost burden where their income to cost of housing ratio is too high, making it harder to afford other living expenses. Since 2010, Galveston has lost an estimated net total of 775 families with children. The loss of attainable housing is one cause of the reduction of young families on the island.
Parts of Galveston have suffered from a persistent lack of investment and associated social issues related to the reduction in quality attainable housing. While incremental progress has been made by groups such as the Galveston Housing Authority and other government and private organizations in addressing these conditions in recent years, there remains a need to continue to invest in attainable housing in Galveston.
The term “workforce housing” is most often used to indicate residential units targeted for households that earn too much to qualify for traditional attainable housing subsidies. The largest rental subsidy program, housing vouchers funded by the U.S. Department of Urban Development (HUD), targets families making up to 50% of the median income for their metropolitan area (AMI). Households earning up to 80% of AMI are eligible to live in Low Income Housing Tax Credit (LIHTC) properties. Relative to these programs, workforce housing is most commonly intended for households with incomes between 80% and 120% of AMI. Developments supported by the GEWH Fund may include some units that are eligible for housing subsidies, but that will not be a requirement for consideration by the GEWH Fund. The GEWH Fund may also consider supporting developments that include industry or employer-specific workforce housing programs – such as those aimed at teachers and police officers — that are tied to both household income and occupations or industries.
Investment Strategy
A source of “patient capital” and statutory public benefit limited liability company, the GEWH Fund is a mission-driven capital fund primarily created to make below market-rate subordinated or unsecured loans or to provide other credit support (such as guarantees) in support of residential and mixed-use real estate development projects on Galveston Island sponsored by Build Galveston.
The GEWH Fund intends to provide loans and other credit support to projects that are consistent with the GEWH Fund’s fundamental principles of increasing the supply of attainable workforce housing in Galveston through the development of new and refurbished residential units for rent and purchase.
The GEWH Fund intends to leverage its limited resources to support projects in its role as a “gap” lender bridging the shortfall in available commercial financing. The GEWH Fund will look more favorably on proposed investments that place a smaller weight on the GEWH Fund’s resources and attract other private and public resources.
