ImpactAlpha, October 27 — Women-owned real estate impact firm MSquared is aiming to tackle the U.S. affordable housing crisis at the intersection of sustainability and inclusion. Former NYC Deputy Mayor Alicia Glen launched the firm to invest “in impactful affordable housing projects while supporting a much more inclusive and diverse real estate sector,” she told ImpactAlpha.
MSquared has secured a $20 million commitment from New York-based Trinity Church Wall Street to provide “flexible, cost-effective capital” to nonprofit and mission-driven women and minority developers for affordable mixed-income projects in the five boroughs.
“A lot of people are doing either 100% market-rate or 100% low-income housing, but we feel that the most important piece of the puzzle right now is to support true mixed-income communities because its better for families and neighborhoods,” said Glen. “If we’re really thinking about impact and inclusion, we need to really do more economically integrated housing.”
MSquared initially pitched to Trinity Church its MSquared Impact Partners Fund, which has raised $40 million to date and is targeting a $200 million raise to invest in similar projects nationally. After Trinity committed to the impact partners fund, Glen said, “we started talking about how they were really interested in trying to do more in New York City and to find a way in which we could work together to focus more on the housing crisis in the city.”
In NYC, one out of every three renters spend more than half of their income on rent. The city government’s housing agencies have failed to help maintain the development pace for affordable housing units for the lowest-income New Yorkers, exacerbating further mass homelessness, says the New York City Coalition for the Homeless.
“New York City desperately needs more affordable housing, and to do that, we need more capital and more creative solutions to address this urgent problem,” said Glen. The MSquared Affordable NYC Fund will offer developers different deal structures, ranging from debt to equity, to secure predevelopment, bridge, acquisition and construction financing.
As part of its sustainability approach, MSquared will target projects using sustainable designs, green materials and energy-efficient systems to make it easier for tenants to reduce their carbon footprint.
MSquared’s funds, including its $108 million Equitable Housing solutions Fund, have raised capital from investors including Citibank, Urban Investment Group, Goldman Sachs Asset Management, Wells Fargo, Community Preservation Corp., Capricorn Investment Group and several family offices and foundations.
Glen said the MSquared will look to partner with LPs like Trinity Church to set up similar place-based housing funds in cities impacted by the affordable housing crisis.