Local capital investment group Access Ventures launched a $3 million competition on Monday to address housing insecurity in the Louisville area, which will solicit ideas from all over the country.
Instead of a brick-and-mortar solution to the affordable housing crisis that involves constructing or renovating homes, the Reconstruct Challenge is seeking innovations that would lower the ancillary costs of low-income people that make rent or mortgage payments difficult, such as those relating to transportation, food and utilities.
Citing research from the Eviction Lab at Princeton University, Mallory Sanborn, who leads the BetaLab initiatives around affordable housing for Access Ventures, said Louisville averages 14 evictions per day in 2016, a rate which was double the national average.
Access Ventures will award $300,000 each to six applicants who pitch plans to reduce such costs that lead to eviction and housing insecurity. After an 18-month proof-of-concept phase, successful innovations can receive some of the remaining $1 million to continue such work on a larger scale or over a longer period of time.
While the applications can come from all over the country, they must focus on innovations that will be implemented in either Jefferson County or in Clark and Floyd counties in southern Indiana.
Sanborn said that applicants could submit a wide range of ideas, such as programs that allow homeowners to gain equity, decrease utility costs with better insulation, or provide transportation for individuals who work where there is no direct bus line.
Mayor Greg Fischer attended the news conference announcing the challenge at the Access Ventures headquarters in Shelby Park. He noted that while the city has devoted $42 million to affordable and workforce housing during the past three years, that is “just a drop in the bucket” when compared to Louisville’s overall need.
The mayor praised not only the challenge to come up with new innovations but also the work of Access Ventures to fund new businesses and transform the Shelby Park area during the past five years, saying that there “wasn’t much” in Shelby Park before those investments, but “there’s now a thriving neighborhood.”
Fischer also cited the promise of the new federal Opportunity Zone program, saying “if we could reconstruct corners like this all around our country in opportunity zones, it would lead to the type of shared prosperity that I know we’re all looking for.”
Access Ventures is developing a fund to invest up to $100 million in capital beyond Shelby Park through the Opportunity Zone program.
Access Ventures’ founder and managing partner Bryce Butler said that the new competition is part of their approach to have a “social mission” at the center of their investment strategy, beyond just a financial return on investment.
“We can play that critical role of testing out new ideas and investing in innovative solutions to solve some of our community’s most pressing problems,” Butler said.
Access Ventures is providing all $3 million of the awards from the Reconstruct Challenge, he said.
Applications for the project are due by the late spring, with a panel of judges picking six finalists at a “live pitch event” in August.