In May we shared that our investment in the Hilltop Encanto attainable single-family homeownership project had closed.
Since we were founded in 2016 and in combination with other housing projects, Mission Driven Finance has supported bringing 300 units to the San Diego housing market.
Now we are excited to announce the successful exit of the pre-development loan. Construction has started and the first phase is scheduled to be completed sometime in 2022.
Impact is deeply embedded in this development, and we are pleased to share that some of the returns from the investment will be set aside to support first-time homebuyers with their down payments. In addition, the homes will come with solar panels and wiring for electric vehicles.
The development of this space, however, has been far from smooth.
“The site had been sitting undeveloped for some 20 years,” says Mission Driven Finance Chief Financial Officer Louie Nguyen.
Direct investments to accelerate progress
With the support of Mission Driven Finance, the Hilltop team created a financial structure that made it possible for individual investors and foundations—including BQuest Foundation and Alliance Healthcare Foundation—to make direct investments.
“The Hilltop Encanto project is being built without any tax credits or government subsidies,” says Louie. “It was purely market-driven by investors.”
“In addition to the critical need for more workforce and middle-income housing generally, Alliance Healthcare Foundation invested in the Hilltop project because of the intentional focus and grant support for first-time homebuyers,” says Sarah Lyman, the foundation’s executive director.
“Many of these homes will be purchased by families that otherwise might not be able to transition from renting to homeownership, which is a critical wealth building and financial security tool,” says Sarah. “We share a commitment to intentionally supporting historically marginalized populations as this new housing stock is created.”
“The Hilltop Encanto team is very pleased and excited on the start of construction of one of the few new homeownership subdivisions in Southeastern San Diego serving missing middle households,” says Roxanne Girard, the president of Ito Girard & Associates and broker with Neighborhood Real Estate.
“Our team is committed and passionate about targeting residents of all of our existing neighborhoods.”
Sustainable and energy-efficient
Not only is the development priced affordably for middle-income workers and their families, but the units have also been outfitted with some energy-efficient features, including solar panels and plugs designed for electric vehicles (“EV”).
San Diego-based BQuest Foundation aims to address the climate crisis by funding projects that both lower or mitigate greenhouse gas emissions and create financial savings or other related benefits within communities experiencing poverty higher than the regional average.
Co-founders Kara and Andy Ballester invested directly in the Hilltop Encanto project when they heard about it from Louie. They were driven to do more to address climate change after reading the catastrophic 2018 report from the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change.
“We’re already seeing the effects of the climate crisis such as wildfires and droughts increasing each year and nowhere near enough is being done to control further warming. With two young children, we worry about what type of world we are leaving for them and want to ensure a livable future for the next generation,” says Kara.
The Hilltop Encanto project allowed Kara and Andy to combine their passions—climate and renewable energy, and affordable and attainable housing, respectively—in their investment.
The estimated cost for installing EV chargers for the 47 units at Hilltop Encanto at this stage is $250 per charger, which makes this a relatively low investment.
“It’s such a reasonable cost to make the whole community EV-ready, and will hopefully help increase EV adoption by making home charging instantly accessible,” says Kara.
In addition, the units at Hilltop will be constructed gas-free, another important feature that helps California move to 100% clean energy.
Constructing all-electric buildings from the start is cheaper compared to installing buildings with electric and gas infrastructure after construction.
Costs of construction aside, gas stoves can cause higher rates of asthma, cancer, premature births, and other diseases, which often impacts those living in small dwellings at a greater capacity. These impacts add up to wider climate injustices.
Energy-efficient features lower construction costs, improve health outcomes, and also benefit homeowners from cost savings associated with these features.
A recent study by Vibrant Clean Energy found that California ratepayers could save over $120 billion by 2050 through local, rooftop solar for an average savings of $300 per residential customer per year.
Not only does rooftop solar offer savings that support the local economy while reducing pollution, but it creates family-sustaining green jobs and reduces gas use contributing to environmental injustices and accelerating the climate crisis.
We’ll share more updates on this project as it progresses. If you aren’t already subscribed to our newsletter, be sure to do so here.