In metropolitan areas across the United States, the inventory of naturally occurring affordable housing (NOAH) units has been declining at an alarming rate. The middle-class relies on NOAH to live within a reasonable distance of workforce centers. The COVID pandemic has exacerbated this housing crisis by highlighting the negative impact the loss of affordable housing has on the country economically and socially.
As a social impact investor, you are looking for investment opportunities that allow you to make a positive social impact while also making a profit. NOAH investment is an ideal way to make a long-lasting, positive social and economic impact that also allows you to make a consistent, reliable profit.
To learn more, explore the six reasons why NOAH is an investable asset class for social impact investors who want to make a positive impact.
1. Competitive Annual Returns
Although traditional investing still averages 1% more in return on investment than impact investing, 88% of impact investors report meeting or exceeding their financial expectations on their investment projects.
A growing body of evidence shows that impact investment returns may exceed those from traditional investment types, especially when the broader social and economic returns are taken into account.
The bottom line is that by investing in NOAH assets, you can expect to achieve competitive annual returns on your investment.
2. Safe, Low-Risk Investment
Contrary to value-add real estate investments, impact investing in NOAH is a lower-risk opportunity. During the recent pandemic, value-add investors who poured money into updating and modernizing luxury rentals found themselves with devastating financial losses as people lost their jobs and could not pay rent. Even without a pandemic, value-add properties are prone to expensive rents that become unaffordable to tenants.
NOAH investment properties are low-risk because they serve middle-class workers who remain in a stable position for long periods and consistently pay rent, thus providing investors with steady cash flows.
The Street Corner Ventures asset management strategy is to perform the necessary rehabilitation work to provide safe, well maintained properties, rather than expensive luxury upgrades. The benefit for investors is a lower risk profile with stable cash flows.
3. Consistent Rental Income
Street Corner Ventures preserves NOAH by maintaining affordable rents for middle-class workers. Middle-class teachers, first responders, and healthcare workers are looking for affordable homes where they can raise their families. They pay their rent as long as it remains at a stable rate that they can work into their monthly budget.
When you invest in NOAH with Street Corner Ventures, you will most likely see more consistent and predictable cash flows from your investments than you would with add-value property investments.
4. Housing Preservation
When you invest in NOAH, you can participate in an important housing preservation movement. It is estimated that there are only 5.5 million naturally occurring affordable housing units left in the U.S. Most of these properties were built over 30 years ago and have deferred maintenance issues that require rehabilitation. NOAH properties that are not preserved are subject to two outcomes: 1) conversion to luxury rentals; or 2) demolition and then ground up construction to luxury rentals.
Our teachers, first responders, and healthcare workers should not be forced to spend more than one third of their income on rent; or commute long distances because housing within a reasonable commuting distance from their jobs is unaffordable. By investing in NOAH with Street Corners Ventures, you are preserving a precious resource for middle income residents.
5. Beneficial Economic Impact
Perhaps one of the best reasons to invest in NOAH is the positive economic impact. Street Corner Ventures NOAH preservation acquisitions allow middle-income earners to remain in their homes because the rents will remain affordable. This impacts the community and economy in many positive ways, such as:
● Increased sense of community
● Ability to support local businesses and shops
● Attend and grow local schools, which supports local teachers
● Reduces commuting to or from other areas
● Less stress and anxiety over housing situation
● Better quality of life overall
When you support affordable housing, you support the community as a whole. When rent is affordable, people can use their money to further stimulate the local economy.
6. Positive Social Impact
Overall, the best reason for investing in NOAH preservation is that by creating affordable housing options for middle-class families, you are helping to address pressing social issues that left unaddressed have a negative impact on communities.
People who struggle with paying rent are often forced to move, quit their jobs, lack health insurance, and rely on government assistance. This greatly impacts not only the adults in these families but also the children.
Research shows that children who move around are less likely to do well in school. Families who cannot afford healthcare are at risk for major health problems that either go untreated or send them into an even further spiral of debt that reduces their chances of living comfortably in the future. It is important that families have safe and stable house environments that promote a sense of community. By investing in NOAH properties, you become part of the solution to these social problems.
Make a Difference with NOAH Investment
If you want to make a difference for middle-class families living and help keep housing affordable, reach out to Street Corner Ventures to learn about our investment strategy that can help you make the impact you want and get competitive returns at the same time.
James Williams is the Founder and Managing Partner of Street Corner Ventures. Street Corner Ventures is an African American real estate investment firm committed to positive social impact. Through the acquisition and rehabilitation of NOAH properties, Street Corner Ventures preserves affordability for middle income residents while providing solid returns for investors.