The leaders of Upper Valley MEND are closing in on their goal of building the first phase of an affordable housing development called Meadowlark and have found a unique investment approach that should be appealing to well-heeled investors who want to build a stronger community. Now they just need enough investors to get the first phase of their project off the ground.
I met with MEND's executive director, Chuck Reppas and board member John Agnew recently to review progress on what is an audacious effort. Meadowlark appears to have been well thought out and meticulously planned.
There is broad consensus among business and political leaders as well as citizens that it is mission critical to Leavenworth's viability as a residential community to address housing affordability. You need more than businesses to make a community work. At full buildout of the site between the Chumstick and Titus roads, it's a $12 million project with 105 housing units with a mix of affordable houses where the land is held in trust and the purchaser is only buying the physical house, plus a percentage of houses of the same type that will be sold at market prices.
The first phase, which is expected to launch in April, will have 30 units — 22 units in the land trust. Agnew points out that they intend to market this as a development and not a "low-income" project. The plans call for attractive housing built in a production-line method to keep costs down. The intent is to have a family-oriented, mixed-income neighborhood.
So far, they've raised about $780,000 in local funding to help finance the project, but they need another $1.2 million. They've hit upon a creative way to accomplish that goal through a socially conscious investment approach. They're working with an organization called Semble, which does work across the country with nonprofits like MEND.
It's a straightforward investment deal, in which investors agree to accept a modest financial return. It functions like a 5-year coupon bond with interest paid monthly. It is the kind of investment that someone interested in building a stronger community might relish because of the good that it will accomplish. Those driven by "what's in it for me" wouldn't find this appealing.
Getting the last $1.2 million is critical to getting the project started, according to Reppas and Agnew. The city of Leavenworth needs to see that accomplished before releasing a similar amount in community development block grant funds. So time is of the essence.
The investment plan was pioneered by Semble and it has been used to finance hospitals, housing developments, churches and the like nationwide.
If MEND is successful in this endeavor, it's a technique that could be used effectively for other projects in which wealthy individuals would be willing to forego some financial return to do something constructive for the community as a whole.