The Healthy Futures Fund, a collaboration of LISC, the Kresge Foundation and Morgan Stanley, connects health services and affordable housing projects in imaginative new ways. Kevin Boes of the New Market Support Company, a LISC affiliate, lays out the architecture of financing these projects and describes the fruitful connections being forged between organizations that once ran along parallel tracks.
Crippling rates of chronic disease continue to rise in low-income communities—even those that have benefited from investments in good housing, health facilities, jobs, and community safety. Lack of affordable health insurance for low-income families pushes them to seek care at hospital emergency rooms because preventive and primary care are unreachable.
What can we do to more explicitly connect community development to health services in ways that break the link between poverty and poor health?
That question brought together the Local Initiatives Support Corporation (LISC), Morgan Stanley, and the Kresge Foundation (Kresge) to launch the Healthy Futures Fund: an investment vehicle designed to connect health services and affordable housing projects. The Healthy Futures Fund brings these three partners together with a creative, shared vision for a new finance tool.
Thus far, the Healthy Futures Fund has proven to offer a compelling case for both health and community development by integrating multiple financial tools. It provides a mechanism to finance affordable housing by investing equity in Low-Income Housing Tax Credit (LIHTC) projects. It supports new community health centers with equity investments in New Markets Tax Credit (NMTC) transactions. It provides predevelopment grants and loans to advance both types of projects. And it offers grants that promote cross-sector collaborations to make health and housing part of the same whole.
What’s more, the Healthy Futures Fund structures transactions so that the process is replicable, minimizes repeated documentation, and limits the third-party support necessary to close transactions. This process makes these deals less expensive, even though they are often more complex than a traditional development project.
The result? Our initial $100 million Healthy Futures Fund is fully deployed, and we are expanding with an additional $100 million in new capital for 2016. Since our launch, we have signed on more than seven supporting partners to diversify our resources and expertise. And we are creating new on-the-ground connections that are slowly making housing and health care part of a common community development mindset.
ABOUT THE AUTHOR
Kevin Boes, President and CEO, New Markets Support Company (NMSC)
Since January 2011, Kevin has been responsible for the oversight and management of NMSC and has led the expansion of LISC's New Markets business to include syndication and CDE services. Prior to his current role, Kevin served as the senior vice president and CFO of National Equity Fund (NEF) and continues to support NEF’s work in an advisory role.