Too many people live in places that have experienced disinvestment for generations. Traditional models of investment in housing and retail tend to exclude low-income communities and reinforce the cycle of disinvestment, perpetuating disparities in health, wealth, and sustainability across generations.
Our experience developing and implementing the Healthy Neighborhoods Equity Fund (HNEF) —a private equity fund investing in mixed-income, mixed-use real estate developments along with transit systems in Greater Boston urban neighborhoods—provides insights on investing for impact. This innovative investing approach includes raising funds with lower-cost capital and longer-term investment periods, paired with rigorous screening for community, health, and environmental benefits.
Key takeaways for investing for impact include the need to:
- Convene key stakeholders: Key stakeholders informed the development of the fund and helped to connect the fund strategy with our vision for transit-oriented development.
- Build the Financial Model Before Building the Fund: It was critical to develop a financial model that clearly presented the fund’s economics to support decision making and inform investors.
- Identify the Right Data Sources: It was important to identify the right data sources to effectively assess and track project and portfolio impacts.
- Learn, Iterate, and Improve: Every step in this process is a chance to learn, reflect, and evolve. As the team learned from investments on the ground, from data, and from resident input, our framework for measurement evolved.