Frequently Asked Questions

Why would a developer use the Affordable First model?

Developers using the Affordable First model still get paid for their development work as they normally would. Our model simply takes the profit (usually used to pay back equity investors) and redirects it back into the community as affordable housing units.

Who owns the affordable housing?

The public institution that provides the financial commitment or an organization that it designates would own the affordable housing.

Is Affordable First competing for the affordable housing bond funds raised in my community?

Affordable First is an alternative financing strategy to the housing bond strategy. This means it can complement and even enhance a bond strategy. Affordable First developments don’t require the bond money to function.

How can Affordable First help seniors? Could Affordable First be used to prevent seniors from losing their homes?

There are a couple of ways Affordable First could be used to help seniors: First, Affordable First could develop dedicated affordable units to house homeless seniors or seniors with medical or mental health needs. Second, in the way the that profits generated from market rate development are used to cover the cost to build affordable housing, profits could be used to establish a fund to stabilize seniors in their existing living situations.

How can Affordable First help the homeless?

By leveraging the profit generated by market-rate housing, the Affordable First financing models allows local governments to get housing at such a low cost, that governments can afford to house homeless individuals and families. Furthermore, the profits from the market-rate units from an Affordable First development could be used to also fund programming and services needed to keep people housed and healthy.

How does Affordable First help middle income people?

While qualifications vary, many middle-income people actually qualify for affordable housing. This is especially true in high-income areas. People who don’t qualify for affordable housing still benefit from the increased supply of housing, which helps to keep the price of market-rate housing down.

Does the public institution that gives the financial commitment have to be the same public institution that provides the land?

Not necessarily. The land could come from any source, for example: a city or county could provide the financial commitment to develop housing on the site of a closed elementary school provided by a school district.

Is Affordable First just a new way to finance affordable housing?

Yes! With the added benefits of developing affordable housing for every income level.

What is a forward commitment?

A forward commitment is a promise to pay something in the future. This can take the form of a promise to rent or buy a development for a specific price if certain conditions are met.

Why should government get involved in development?

The problems created by the housing shortage affect everyone in any given community, not just those being priced out and displaced. Without government participation in the housing market, the market will not deliver enough affordable units to stop displacement, end homelessness, manage healthcare costs and maintain a workforce. Stable, affordable housing leads to a healthier community overall.