2018 Southern California Symposium Group 5

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USC Southern California Symposium
June 1, 2018
Authors: Blanca Pacheco, Jesse Ibarra, Ken Billups, Lori Nascimento, and Yoomee Ha
BUILDING AN EQUITABLE FUTURE
Homeownership is considered one of the highest achievements of the American
Dream. Families strive for and people see it as an accomplishment. Yet, owning a
home has become increasingly unattainable, especially in the State of California, due to
a shortage of housing and the high price of owning a home in California. Historically
homeownership has always been difficult for a segment of the population, which mostly
consisted of minority groups. As a result of discriminatory practices against minorities,
the Civil Rights Act of 1968 also known as the Fair Housing Act was established. This
landmark legislation provided equal housing opportunities regardless of race, religion, or
national origin, and made it federal crime to do so. Yet, a housing inequity still exists
amongst these historically disadvantaged groups, even though this year we celebrated
50’s years since the passage of the Fair Housing Act. Due to this inequity, our group
has decided to write a paper that will focus on creating equitable homeownership
amongst historically disadvantaged groups and the path towards creating equitable
homeownership with a concept called the Community Real Estate Fund. The
Community Real Estate will be a mechanism to accomplish our North Star, which is to
achieve equitable rates of home ownership in Los Angeles County among historically
excluded groups.
The Community Real Estate Fund will be a social collaboration amongst a
diverse group of community leaders, employers, non-profit organizations, and the

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government. We believe that a puzzle cannot be solved without including every piece.
This same perspective is what guided the thought process to create a socially
innovative program that tackles the issue of inequity in homeownership rates. We
propose a collective financial mechanism that promotes ownership in the community to
all who comprise them.
The Community Real Estate Fund is the solution. This mission driven fund uses
public and private investments to acquire real estate to finance desperately needed
development and other related projects. The board of directors of this fund will
comprise of representatives from various sectors to ensure outcomes are met and
ensure there is a balance of power among all stakeholders. Each sector will bring to the
table their own perspective but all will work toward a common vision.
The largest employers in Los Angeles County (and the State) would be taxed on
every low to moderate income employee. For the purpose of this project, the definition
of a large employer will be those with 500+ employees. These employees include
universities, like USC and UCLA, as well as hospitals, and community colleges. If
employers choose to implement an employer-assisted housing program, they can
receive shares in the fund and realize returns up to 90% of amount taxed. Any
company, regardless of size, can invest in the fund. They will not only receive shares
but receive a tax credit on any long-term investments. Employers would be incentivized
to create robust housing benefit programs to gain maximum returns.
Labor unions would be activated to help organize laborers and hold employers
accountable for housing benefits programs. They would play an important role in

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encouraging employers to have the most robust housing benefits programs and counter
any resistance from employers to provide adequate services.
Low to moderate income community members will be able to earn shares in the
fund by completing financial education courses and volunteering in their community.
These shares can be sold for cash or be used as down payment for projects funded or
owned by the fund. This aids in curing common barriers to homeownership for many low
to moderate income households while also incentivizing volunteerism and community
engagement.
Government will play a key role in ensuring outcomes are reached and projects
contain affordability provisions. They will be responsible for taxation, facilitating
partnerships between employers and program service providers, land acquisition, and
would also make long term investments in the fund.
Financial Institutions will have an opportunity to earn Community Reinvestment
Act (CRA) credit by investing in the fund, restore trust in the community, make good
loans to underserved populations, and loan capital to developers. Their contributions
would be used to provide resources for programs and subsidize affordable housing
projects.
Private investors will be able to gain market rate returns while still supporting the
community. Much like the Opportunity Funds, investors would be offered an increase to
their basis of 15% and capital gain exclusion with investments commitments of 10 years
or more.
Nonprofits would be utilized to administer employer assisted housing programs,
lead community events, complete community development projects, and ensure

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accountability to both the community and the collective. They will have authority to
certify hours of education and community service hours completed to those interested in
receiving shares.
Lastly, developers will have an entirely new finance mechanism to build and
restore the desperately needed housing supply in Los Angeles County. Developers will
be able to utilize underused lands and will be able to work with the community and local
government to think of an imaginative way to create more housing.
Through collaboration between various sectors of the community, we have
established an innovative plan in solving and building equitable homeownership
amongst historically disadvantaged groups. Sometimes people need to think outside
the proverbial box in order to address and solve life’s complex issues. This is
something that our group has been able to accomplish. We are looking forward to this
innovative plan being implemented and look forward to an equitable future.