Three-Way Partnership Forms to Boost Affordable Housing Delivery

Three separate companies have come together to form a unique affordable housing venture.

Neighborhood Partnership Housing Services (NPHS), an established nonprofit and certified Community Development Financial Institution (CDFI), has become an equity partner in Homes & Hope, a mission-driven, for-profit developer based in Southern California.

For-profit and nonprofit organizations often team to develop individual affordable housing projects, but this partnership makes NPHS a co-owner of Homes & Hope, joining McCarthy Cos., a multifamily construction company and developer, as an equity partner in the company.

“We’re bringing the best of a lot of different aspects of the affordable housing industry under one platform to accomplish goals that we couldn’t do alone,” says Alexander Russell, CEO and co-founder of Homes & Hope. “Each organization brings something unique to the table and synergistically provides an opportunity to do this difficult work more efficiently.”

The partnership combines his firm’s affordable housing development experience, NPHS’ nonprofit mission and impact, and McCarthy’s construction expertise.

Together, they will be more innovative and resilient with the goal of delivering affordable housing faster and more smoothly, says Russell.

His firm has worked with several other nonprofits on projects in the past. Now, with NPHS as a co-owner, there’s more consistency in vision along with access to grants and other benefits, he says.

Established more than 30 years ago, NPHS has grown from a small grassroots organization into a multifaceted regional organization providing an array of housing and economic development programs and services in Southern California.

The new partnership aligns with the organization’s goal of unlocking affordability at scale, according to president and CEO Clemente Mojica.

“You have a nonprofit that is a CDFI and is also in development,” he says. “You have Homes & Hopes that has incredible project management capacity, and you have the McCarthy Cos. that brings depth in construction and construction innovation. You’ve got a really good vertically integrated nonprofit and for-profit platform.”

Affordable housing is an important part of the McCarthy company’s business, says Sarah McCarthy-Garcia, a partner at the 45-year-old firm.

“Our development execution, capital structuring, and construction expertise helps us be a part of this partnership that spans the full life cycle of housing from vision to keys in hand,” she says.

Unveiled in January, the platform is still new, but the partners are at work on a number of developments.

Homes & Hope has an initial focus on California’s Los Angeles, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura counties, with an eye toward expanding across the state and beyond.

The firm has 10 projects with more than 1,200 units in its pipeline. It is nearing the completion of The Morris, a 95-unit community in Los Angeles’ Skid Row for people experiencing homelessness, including veterans. It’s being developed in partnership with the Coalition for Responsible Community Development.

Homes & Hope, along with NPHS and Cabrillo Economic Development Corp., was also recently selected to develop two sites in the Inland Empire through California’s surplus land initiative.

“There’s such a tremendous need in our community and country that no one organization or organizations even can do it alone,” Russell says. “We’re trying to create something that changes the model a little bit and does it in a way that is replicable and maybe people in other states and regions will want to try it.”