The Brief

The Brief: Los Angeles lowers the cost and complexity of capital for affordable housing

ImpactAlpha · May 14, 2026
Credit: LACAHSA

Greetings Agents of Impact!

In today’s Brief:

  • Los Angeles lowers the cost and complexity of capital for affordable housing
  • Loosening the grip of Brazil’s banking giants 
  • Roots of Impact pursues ‘impact by design’
  • Jewish Investors Network presses PayPal on Palestine

Los Angeles tries to show how affordable housing can be built more quickly and cheaply. It’s the financing, stupid. In Los Angeles, a novel mechanism that is expected to finance the construction of more than 1,500 units of new housing may suggest a way for the rest of the state, and the country, to get more housing built more quickly and cheaply. Local officials on the board of the LA County Affordable Housing Solutions Agency, or LACAHSA, the area’s three-year-old regional housing authority, on Wednesday approved the issuance of a $204 million social bond to back 20 housing projects (for background see, “Building regional engines for affordable housing in California”). Instead of relying primarily on federal low-income housing tax credits, or LIHTC, the new approach leverages the $4 trillion municipal bond market to make low-cost capital available to mostly nonprofit housing developers. The key: A layer of catalytic capital that mitigates the risk of losses for institutional bond buyers. “There’s a new source of construction financing in the state of California, especially in LA county,” LACAHSA’s Ryan Johnson, tells ImpactAlpha. “It’s cheaper than LIHTC, and it’s less complex.”

  • Capital stack. The biggest obstacle to housing construction may not be local opposition or environmental regulation, but financing. A one-stop shop for housing developers, LACAHSA covers about 20% of the cost of projects and requires developers to break ground within 12 months. At its meeting, the LACAHSA board approved $155 million in financing for a slate of 10 projects that include low-income housing tax credits, after approval last month of a $100 million package for 10 other projects that do not include LIHTC. Johnson said LACAHSA’s analysis suggests that non-LIHTC projects can be built for at least 12% less than LIHTC projects – each layer of financing on an affordable housing development adds 3% to the project’s total costs, according to the Terner Center for Housing Innovation at UC Berkeley (listen to the podcast, “Build more, build cheaper”). “It’s a natural experiment,” says Johnson. “This has never been tried before in state history. No government has tried this in California – a LIHTC alternative.”
  • Risk mitigation. In essence, Los Angeles’ approach treats affordable housing as civic infrastructure, much like roads, schools and parks. LACAHSA receives about $385 million a year from a half-cent sales tax approved by voters. Most of that funding goes to housing and services for the area’s large population of unhoused residents. But a portion of the capital will provide a junior layer for the social bond. That will reduce the risk, and thus the return expectations, for institutional bond buyers to buy the senior layer. The difference could amount to four full percentage points, reducing the cost of capital from more than 7% to under 4%. Many affordable housing projects that don’t pencil out at 7% interest might well be viable at 3.5%, Johnson says. “This is true catalytic capital that’s trying to change policy and induce the private sector to come in and do this at scale.”
  • Keep reading, “Los Angeles tries to show how affordable housing can be built more quickly and cheaply,” by David Bank. 

Dealflow: Inclusive Fintech

Franq raises $12.4 million to expand access to banking and credit in Brazil. Brazil’s banking system is concentrated in the hands of a few large institutions. Brazilian fintech startup Franq raised $12.4 million to loosen that grip. The Florianópolis-based company gives the country’s independent financial advisors access to 150 offerings from more than 50 banks and lenders, including Itaú, Santander and Bradesco, rather than being limited to a single institution’s lineup. “What we are enabling is for this banker to be not the bank manager, but the client’s manager,” said Franq’s Paulo Silva. Investors in the Series B round included Valor Capital Group, which backs technology companies operating across the US and Latin America; Quona Capital, a financial inclusion investor active in emerging markets; and Globo Ventures, the venture arm of Brazilian media conglomerate Globo. The capital will support Franq’s expansion into insurance, investment and business lending products.

  • Financial inclusion. Silva, who previously worked at Banco do Brasil, Citi, HSBC and Santander, developed Franq after noticing two problems: banking professionals in Brazil had few career paths outside large institutions, while consumers and small businesses struggled to access financial products tailored to their needs. “The structure should serve the customer, not the other way around,” Silva said in a LinkedIn post. Franq’s model was made possible by Brazil’s open banking reforms. In 2021, the country’s central bank required financial institutions to share customer data with authorized third parties, giving independent advisors access to the information needed to compare and offer competing products. Franq now serves more than 120,000 individuals and 35,000 small businesses; it supported more than $420 million in transactions in 2025. 

Dealflow overflow. Investment news crossing our desks:

  • Hint, a startup supported by Martha Stewart, raised $10 million in seed funding from Slow Ventures, Energy Impact Partners and others. The company’s home system helps homeowners manage energy bills, insurance, maintenance and repairs. (Hint)
  • Beneficial Returns made impact-linked loans to two waste collection and recycling companies: Colombia-based Ciklo and Honduras-based Recyproco, ImpactAlpha has learned.
  • New York-based Econcrete raised $14 million from Builders Vision, Barclays Climate Ventures, Monaco’s ReOcean Fund, Open Road Impact and other investors for its building concrete that can be used in marine infrastructure projects while fostering healthy habitats for ocean wildlife. (Econcrete)

Impact Voices: Impact First

Moving impact capital from safe bets to ‘impact by design.’ A fault line in the impact investing community cracked open again this year, splitting investors over whether impact and financial returns can be compatible and mutually reinforcing. In a guest post, Bjoern Struewer and Natasha Dinham of impact advisory firm Roots of Impact argue that the impact-first debate obscures what really matters: the impact. “Both sides are arguing on financial terms, debating how much return investors should be willing to give up, or not,” they write. “We should be debating how to maximize impact across the full spectrum of capital.” Roots of Impact made its name more than a decade ago with deal structures that tied the terms of capital to impact outcomes. The team still champions such impact-linked finance instruments, but has expanded its toolkit for helping investors prioritize and deepen their impact.

  • Impact by design. Struewer and Dinham outline an approach for investors to design impact incentives and goals into deal structures with the goal of delivering “the greatest possible impact.” The approach focuses on “what can change the system, not merely what feels safe,” as well as realistic time horizons for achieving impact outcomes, and scaling impact, “not just financing volume.” “We call this ‘impact by design,’” they write. “It seeks to advance direct, indirect and systemic outcomes across the entire spectrum of capital.”
  • Go deeper. 

Jewish Investors Network presses PayPal to provide payments in Palestine. In the West Bank, Israeli settlers are able to send money and make transactions using PayPal. Their Palestinian neighbors cannot. On May 19, PayPal shareholders will vote on a resolution that urges the company’s board to change that. “Access to PayPal would be life-changing for Palestinians, offering financial self-determination and dignity by enabling freelancers and entrepreneurs to bypass costly barriers and finally integrate into the global economy,” write Chicory Wealth’s ari rosenberg and Mission Driven Finance board member Dorianna Blitt, both members of the Jewish Investors Network, in a guest post on ImpactAlpha.

  • New network. The letter supporting the shareholder resolution was the first action by the Jewish Investors Network, or JIN. “As part of a long lineage of Jewish collective economic action for social justice, the Jewish Investor Network aims to activate the collective power of Jewish investors – from contesting corporate harms to investing in a world where all beings flourish,” write rosenberg and Blitt. The PayPal resolution was filed by JIN member Deborah Sagner. A similar resolution introduced by Harrington Investments in 2023 drew just over 11% of shareholders’ votes.

Agents of Impact: Follow the Talent

Chris Herrmann, Rob Bachmann and the rest of Enterprise Community Partners’ real estate equity arm joins Impact Capital Managers… EWA Capital is hiring an operations and administrative analyst in Bogotá… Sahel Capital seeks a credit risk intern in Lagos… IDB Invest is looking for a principal officer of international business in Miami… Consulting for Sustainable Solutions has an opening for a principal consultant in Cape Town… Holland House Mexico is on the hunt for a sector coordinator for agriculture and climate solutions in Mexico City.

New Ventures and MAR Fund are hosting a LinkedIn Live session on Her Ocean, a program supporting women-led conservation and blue economy projects along the Mesoamerican Reef, today at 6pm ET / 3pm PT… Accelerator CATAL1.5T is hosting a virtual demo day for Latin American climate tech startups working on sustainable buildings, circular economy, and industrial decarbonization, Wednesday, May 27.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– May 14, 2026