Finding Housing Solutions
New Way Homes is Scaling Affordable Housing Development through Crowdfunding Investment
New Way Homes Founder and President Sibley Simon has participated in MBEPs regional housing work since its inception, including co-authoring MBEPs two housing policy white papers. Meanwhile, New Way Homes has been advancing its own work to find new ways to fund affordable and workforce housing in the region.
With 350 homes now under development, New Way Homes is seeking to accelerate its work by allowing anyone in the region to invest in the New Way Homes Fund.
“With the pandemic, recession, and now fires, we’re seeing the desperate need for more affordable housing increase. We have amazing non-profit housing developers in our region, but they are limited by the amount of public subsidy available for all-lower-income housing. So every day, we meet people asking what can be done to get more homes built that are affordable to lower- and middle-income households. Now that we have homes under construction, we’re asking those who are able in our region to invest in our crowdfunding offering, where people can receive a modest financial return while helping solve one of our region’s biggest challenges,” explained Sibley.
New Way Homes (NWH) is a non-profit started in Santa Cruz that aims to truly prove how to solve the state’s housing crisis. Sibley Simon, a former tech entrepreneur, started this effort in 2015 to create a scalable model for building the amount of below-market-rate rental housing that is actually needed.
Five years later, the effort is beginning to succeed. NWH has its first units under construction and over 350 more in design and permitting. To raise the investment capital to get those next six projects through the design and permitting phase while also starting subsequent projects, NWH has received approval for crowdfunding investment. This is a relatively new way to raise investment stemming from the federal 2012 Jobs Act that isn’t limited to wealthy individuals.
The NWH model combines impact investment capital, partnerships with landowners (often non-profits, from churches to social services organizations), environmental sustainability that lowers operating costs, new state laws allowing more density in certain locations and less parking around transit, and many other techniques. All of this put together is allowing a range of housing types, from permanent supportive housing to mixed-income apartment buildings to rehabilitating historic buildings into apartments. NWH’s work has been supported by the Community Foundation Santa Cruz County, Dignity Health, Facebook, Santa Cruz County Bank, and numerous individual and institutional investors.
In the years ahead, NWH aims to build thousands of units in our region. Even more importantly, its big goal is to help seed a new part of the housing industry that is not limited by the amount of public subsidy and yet focuses on increased affordability.
Sibley describes this goal as the organization’s central thesis: “The improved state land-use laws are helpful, from allowing backyard units to transit-oriented development. But the only way we’ll start creating enough housing in California and do so more equitably is to have a new part of the development industry that lowers risk, fixes modest investor returns, and maximizes affordability. This can fill the gap between the existing publicly subsidized housing development (which we also need more of) and the high-end housing created by market-rate development. That’s what we’re doing, and there’s no reason we can’t spread the system until it solves our housing shortage in an equitable way.”
Construction will begin this fall on seven units of permanent supportive housing at 801 River St. in Santa Cruz that will be owned by the nonprofit Housing Matters. This long-vacant historic Victorian home will serve chronically homeless individuals exiting the recuperative care center who have an ongoing need for support services. This is a pre-curser for a new 120-unit permanent supportive housing building that New Way Homes and Housing Matters are collaborating on. This larger project is within the Housing Matters existing campus and aims to significantly change the degree of chronic homelessness in Santa Cruz. New Way Homes also initiated an 80+ unit project of mixed-income rental housing in East Salinas that is now beginning its design and community engagement phase, and several other rental housing projects around the region.
For more on New Way Homes’ work, see the investment profile at: