US hospitals step up in bid to provide affordable housing

Washington — When Whitney Brown decided to move back to her home town in Virginia after graduating from university two years ago, she ran into an obstacle: There was nowhere for her to live.

She could not move back into her old home in Richmond, the state's prosperous capital, because her mother was looking to sell her house, nor could she find a place of her own that was both affordable and in a safe area.

Developers were “building bigger houses, super-close together, that locals couldn't afford”, said Brown, 24.

Eventually, a real estate agent pointed her towards a different option: the Maggie Walker Community Land Trust, a nonprofit that buys homes, renovates them and then sells them at a reduced price while keeping title to the underlying land.

Community land trusts are on the rise across the US as cities look for ways to ease a crisis of affordable housing.

But the Maggie Walker land trust is unusual in how it was created: It was funded in large part by a hospital system, Bon Secours Mercy Health.

This month, Bon Secours was one of 14 health-care systems across the US that committed to more than $700m in “place-based” investments, with a primary goal being the development of affordable housing.

They are all part of a group called the Healthcare Anchor Network (HAN), a project of the Washington-based research group Democracy Collaborative.

Since 2017 the network has grown to more than 40 health systems seeking to use their financial might and public sway to improve housing in their communities, according to David Zuckerman, the director.

“We wanted to help them think about ... how they could leverage their assets differently to better address the needs coming at them,” he said.

For Brown, buying her house through a land trust meant she paid about 20% less than a comparable home in the area.

Now settling into a place with a yard, two bedrooms and a new kitchen — on a block where four other homes are also part of the Maggie Walker project — Brown cannot believe her luck.

The land trust, she said, “has really added value to the neighbourhood, without pushing people out”.

Gentrification effect

Gentrification — the conversion of working-class districts into more affluent areas — is regarded as a sign of economic development by some and of social injustice by others, as it can lead to higher rents that price out old residents.

In a report published in March, the National Community Reinvestment Coalition in Washington showed that Richmond’s rapid rate of gentrification has had a particularly devastating effect on black families.

It became clear to officials at Bon Secours that the group’s Richmond hospital was sitting in an underserved neighbourhood, said Becky Clay Christensen, director for community health at Bon Secours Richmond.

“Literally right outside the doors, you could see dilapidated housing,” she said.

Wanting to be a “good neighbour”, the hospital started to make one-off housing investments, Christensen said.

But it soon realised it was contributing to the problem. When the houses it had helped refurbish were resold, they would again be out of reach for many low-income people, thus fuelling the negative effects of gentrification.

The Maggie Walker land trust was already being developed at that time, and Bon Secours saw an opportunity to have a longer-term affect, said Christensen.

Home ownership within the land trust is limited to those making less than 80% of the area median income, which Christensen said includes families that can handle debt but “can’t quite get a loan at the bank”.

In such projects, a prospective homeowner buys only the home and not the land, often agreeing to a reduced price for any future resale, according to the Grounded Solutions Network based in Portland, Oregon.

By the end of 2018, the year it launched, the Maggie Walker land trust had helped 11 homeowners buy their own places and had 30 more homes under development.

Christensen described Bon Secours’s new approach as a “neighbourhood strategy” on health and wellness, noting that the effects are ultimately long term.

“If a nonprofit rehabilitates Ms Smith’s house, she’s not instantly healthier. But because of her rehabbed house, [she] is now in a more stable situation,” Christensen said, using a hypothetical example. “We know that the constant stress that goes with poverty is profound and real. So, in a strange way, this all does come back to health.”

Redevelopment engines

Along with Bon Secours, some of the largest hospitals and health systems in the country have promised to invest more in their communities as part of the Healthcare Anchor Network.

They include Trinity Health, Boston Medical Center and Kaiser Permanente, one of the country's largest nonprofit health plans.

The strategy for the network, which represents more than 700 hospitals — about 20% of the country’s total, said Zuckerman — is based on the community-building power of what the Democracy Collaborative refers to as “anchor” institutions.

These are “nonprofit or public institutions (that) have a long-term interest in balancing their own organisational needs with that of their communities, they can’t just pick up and leave,” Zuckerman said.

Today, anchor institutions are often the largest employer and landowner in their area, and they have become key engines of urban development and redevelopment, according to Democracy Collaborative.

Other types of large institutions have increasingly been moving in the same direction, Zuckerman said.

For example, several universities, as well as a rising number of major technology companies such as Microsoft have been making larger investments in affordable housing.

But there is particular potential among health-care systems, Zuckerman said.

Together, the health systems in the US have about $400bn in investment assets, estimates the Democracy Collaborative.

The HAN encourages its members to direct at least 1% to 2% of their investment portfolios to supporting affordable housing, in addition to other efforts to bolster local economies, Zuckerman said.

The growing focus on the link between health and housing is happening outside the network, too.

The state of New Jersey is partnering with a six health-care systems to build affordable housing, for instance, and the city of Baltimore is working with 10 hospitals to provide housing as part of an initiative to end homelessness.

In announcing the new effort, several HAN members cast their actions as extending “beyond the walls” of the hospital, seeking to tackle health issues and inequities.

“The 85-year life expectancy for a resident of Chicago’s downtown drops to 69 years just six miles away,” Rush University Medical Center CEO Omar Lateef said.

“These death gaps are unnatural, unjust and must be addressed by improving the economic conditions in the neighbourhoods we serve, not only the health conditions of the people who live there.” 

Thomson Reuters Foundation