Kaiser Permanente's big boost to affordable housing, economic health

Kaiser Permanente, the nation’s largest nonprofit integrated health system, is increasing its financial commitment to economic development and investing in affordable housing across the United States by doubling the capital in its Thriving Communities social impact investment fund to $400 million. This step comes as part of Kaiser Permanente’s efforts to address the impact of COVID-19 among underrepresented communities, including low-income and communities of color, whose health and economic wellbeing have been hardest hit by the pandemic.

Kaiser Permanente currently has three funds (RxHome, Bay’s Future Fund and Housing for Health Fund) available to affordable housing projects/preservations in Marin county. We welcome the opportunity to work with developers operating in the area who are committed to community health.

The Thriving Communities Fund, which represented a pioneering approach for a health care organization when it was launched in 2018 with $200 million, is on track to create and preserve 15,000 units of affordable housing by 2025. Doubling the fund to $400 million will double the impact to create or preserve 30,000 units before 2030, while also advancing inclusive economic development in communities to address systemic economic disadvantage and discrimination that underpin the housing crisis.

Impact investing is a form of values-based investment that is used to deliver positive, measurable social and environmental benefits in areas such as affordable housing, community social services, and inclusive small-business financing to contribute to economic health and well-being in communities. Kaiser Permanente views impact investing as a meaningful way to support healthy, financially strong communities– where all people can keep a roof over their heads, put food on the table, get the medical care they need when they need it, and lead the lives they want to live. This further commitment to the impact investment strategy deepens the investment into the communities served by Kaiser Permanente, supporting the thriving economies and high-quality affordable housing that are the foundations for overall health and wellbeing.

“I had already been in therapy for my mental health challenges for 5 years. Getting housed gave me the ability to focus on my mental health and really make therapy work for me. I didn’t have the stability in my life to be able to do those things before,” said Donte Lewis, a 44-year-old previously homeless veteran in Baltimore who was housed through a Thriving Communities Fund investment. “I have a different outlook and attitude, and I’ve grown. My friends and family hadn’t seen me like this before.”

Health systems are ideally suited to be impact investors, deploying their resources to reach upstream and move the economic levers that drive community health. Directing investments to high-impact assets like affordable housing and local businesses has the potential for strong, long-term returns on community health.

“By bringing together the capabilities of the health and investment sectors, Kaiser Permanente can strengthen neighborhoods, improve health and help communities thrive,” said Bechara Choucair, senior vice president and Chief Health Officer for Kaiser Permanente. “Kaiser Permanente supports equitable economic opportunity through its approaches to hiring, purchasing, building, investing, and partnering with communities. Ultimately, this work will help our communities overcome systemic and structural economic disadvantages.”

The fund's preliminary financial performance results are in line with expectations and have demonstrated how impact investing can be aligned with Kaiser Permanente's broader responsible investment approach. The fund is also creating social change for the people and communities it reaches, in the form of increased affordable housing supply and increased financial resources to neighborhoods and entrepreneurs of color.

The Thriving Communities Fund’s outcomes to date include:

• Preservation or production of over 7,000 affordable housing units located across the U.S. in Los Angeles; Oakland; Sacramento; San Diego; Sonoma County, CA ; Portland, OR; Atlanta; Washington, D.C.; Baltimore; Prince George’s County, MD; Denver; and Seattle.
• A $50 million investment in SDS Capital Group’s rapid housing development fund catalyzing an additional $100 million in investments from other funders, allowing 1,800 supportive housing units to be built across California at half the typical development cost and three times faster than the average construction timeline.
• Providing critical predevelopment loan capital to transform a previously underutilized 8-acre area in Washington, DC, with mixed-income housing, public health resources, and retail, office, and arts space.

Increasing access to affordable housing and supporting longer term economic stability in communities provides residents with hope and security while improving conditions for health and equity on a broader scale.