Funding Alternative Housing Solutions with Elizabeth Funk – Episode 5

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Guest Elizabeth Funk, innovator and Board Member of Life Moves, talks with host Robert Strock about her work in the microfinance industry abroad and current focus and efforts to eliminate homelessness in the United States. Together, they shed new light on the complexity of the growing housing crisis, from the needs of interim housing to potential solutions that involve portable, permanent housing units. The COVID pandemic has left more people unsheltered, but it’s also been a catalyst for changing attitudes and forces that have acted as barriers to permanent housing solutions. New ideas are on the horizon as organizations develop practical solutions that benefit the unsheltered and private companies and citizens, such as private developers or landowners leasing unused land for use of portable, permanent shelters. Funk also shares ways listeners can promote, help, and become a part of eliminating homelessness.


Mentioned in this episode
Dev Equity
Dignity Fund
Life Moves
Dignity Moves
Mayor Breed
The Village Bank
The Global Bridge Foundation

Note: Below, you’ll find timecodes for specific sections of the podcast. To get the most value out of the podcast, I encourage you to listen to the complete episode. However, there are times when you want to skip ahead or repeat a particular section. By clicking on the timecode, you’ll be able to jump to that specific section of the podcast

Announcer: (00:00)
The Missing Conversation, Episode Five.

Elizabeth Funk: (00:04)
Whatever we’re doing, obviously not doing it right, because we’re spending more and more money and the problem keeps getting worse. And so maybe some fresh thinking, you know, it can be helpful. And so the role that I see myself playing is exactly like I did with you, which is to help bring really passionate, smart people in and start thinking about where we can all contribute.

Announcer: (00:25)
On this podcast. We will propose critical new strategies to address world issues, including homelessness, immigration, amongst several others, and making a connection to how our individual psychology contributes and can help transform the dangers that we face. We will break from traditional thinking. As we look at our challenges from a freer and more independent point of view. Your host Robert Strock has had 45 years of experience as a psychotherapist, author, and humanitarian, and has developed a unique approach to communication, contemplation and inquiry born from working on his own challenges.

Robert Strock: (01:03)
Welcome to The Missing Conversation, where we explore issues on the world stage that have not been brought into the public eye to benefit our planet in the maximum way. It seems so essential today that we each look at how we can be a part of that. We have a truly exceptional guest on multiple fronts that I’m excited to share the program with today. Elizabeth Collet funk is the senior general partner at Dev Equity an impact investment fund, focusing on low-income housing, urban revitalization and sustainable agriculture and Latin America, Nicaragua, Honduras, Panama, and more. After graduating from Harvard business school, she joined Yahoo as one of the earliest employees where among other things, she was a founder of Yahoo shopping and became a leader in developing and shaping Yahoo’s e-commerce strategy. Since that time, Elizabeth has dedicated her career to impact investing and corporate social responsibility, demonstrating that strong financial performance and positive social change are inherently connected.

Robert Strock: (02:18)
Her first impact investment fund, the Dignity Fund provided growth debt to 14 micro-finance institutions in 12 countries enabling loans to over 35,000 poor entrepreneurs per year. The Dignity Fund was one of the very first for-profit investment vehicles in the micro-finance industry paving the way for the massive influx of capital into that field. Elizabeth has been actively involved in addressing homelessness here in the United States. She currently serves on the board of Life Moves, the largest homelessness services agency in Silicon. During the pandemic, she started a new nonprofit called Dignity Moves, focused on replicating the innovative interim housing model we’ll discuss today. Welcome Elizabeth. It’s really, truly a, just an honor and a joy to have you join us today.

Elizabeth Funk: (03:17)
Thank you, Rob.

Robert Strock: (03:19)
So would you tell us about the projects that you’re working on in San Francisco, in Mountain View area, for the unsheltered, again a good close of your roles in each area, and I know you’re doing what you’re doing in a very unique and creative way.

Elizabeth Funk: (03:36)
Thank you. Well, I’m really excited about it. I think, um, you know, we’re focused specifically on the unsheltered segment of the problem and homelessness is so multifaceted and there are so many different aspects of it, but I think we felt like, you know, we could bite off one segment of the problem and really have a specific and concrete solution for that. Just like lots of other smart people are focusing on other segments of the problem. And there are so many people working on building permanent housing, whether it’s permanent supportive housing or affordable housing, and we need that badly, but there are much better financial minds than mine who understand those complex financial stacks and things. Um, but we’ve been focused in California, um, as a, as a society we’ve been so focused on the, the emphasis on permanent housing that we’ve done that at the expense of thinking about the interim places where people need to be while they’re waiting for permanent housing. And as a result, 72% of California’s homeless, um, are unsheltered. And we feel like that’s, that’s not right. And there’s no, there’s, there’s no excuse. So what we’re doing is focusing on, um, using manufactured housing, manufactured units of different dimensions, depending on the project, but using manufactured tools, um, to build, you know, inexpensive but dignified shelters where people can be, um, while they’re, while they’re figuring out life, getting transferred, hopefully to a permanent supportive housing unit or, um, or other exits of homelessness.

Robert Strock: (05:13)
And I suspect you agree that that, that the permanent supporting, supportive housing industry itself needs to also move in that direction to have more affordable units rather than the five to $700,000 per unit. Something more like the $30,000, plus hookup fees. I suspect that we’re pretty in sync on that level.

Elizabeth Funk: (05:34)
So, absolutely. And the way that we’re going to truly address homelessness is to have an ample supply of affordable housing or permanent supportive housing for the folks that need that kind of support. That’s the ultimate solution, but in California, we’ve been so focused on building that part of the problem that we’ve done it at the neglect of shelter also. And I think it’s an also, I really feel like an important role for both. Um, and you know, once folks get into a shelter system, or what we’re calling interim housing, mostly because shelters really earned itself justifiably a pretty bad reputation over the years. So we’re not calling it shelter, but that interim housing stage, um, a lot of good and important work can happen while people are waiting for a permanent house. And so, um, you know, some of those folks get reunited with family and they exit homelessness by being reconnected with, with family who are willing to take them in. Some of those folks, um, relocate to a less expensive city. And I hate to say it, but in California, that’s, you know, a very real hindrance to, uh, to folks being in housing is that it’s just so darn expensive. And so some portion of those folks will stay in that city and we’ll need permanent affordable housing or permanent supportive housing, but not all of them. And so that interim step where people can come in and get stabilized and work with a service agency to help figure out which path is, is best for them, um, is really important.

Robert Strock: (07:03)
So I, I know that you have incredibly good comprehensive psychological services and other services in Mountain View. Could you elaborate a little bit more about that just to give us a feel?

Elizabeth Funk: (07:15)
Absolutely. So I am a business person. I am not a practitioner. Um, and my role I see is to pull together the pieces that are necessary to create these interim housing sites so that the best of Breed services agencies can come in and do their magic. So housing alone will not solve homelessness. What solves homelessness is those services that they need a place to do them. And so that’s the piece that I can help with, um, and then step out of the way and let them do what they do best. And, um, in Mountain View, we’ve partnered with Life Moves, which was, uh, the organization, as you mentioned, that I’m on the board of, um, which is just excellent at working with people where they are as whole individuals and addressing whether it be mental health issues. You know, everyone is going to need different kind of support.

Elizabeth Funk: (08:05)
Some of them need help writing a resume and with their job search for others, that’s not relevant. Um, for others, they may need, uh, help reuniting with family. As I mentioned, which is something that’s really, you need help with tracking people down, getting coached on how to get over the emotional embarrassment of your situation to reach out to family, you know, all those kinds of things. Um, so, uh, Life Moves, I think is quite frankly, one of the best services agencies I’ve had the pleasure of working with. Um, and they, so they, the site that we’ve done in Mountain View, um, they’ve done the site, this is, this is Life Moves site. I’m just sort of here to help pull the pieces together. Um, and, uh, and they are building a site that will be a hundred doors, um, that will be for 88 individuals and 12 families. Um, and it’s in a few weeks,

Robert Strock: (08:57)
But when you, when you talk about helping pulling the pieces together, I want to honor you as somebody who did that for me at the beginning, when I started to really focus on homelessness and regenerative agriculture, you were so generous in introducing me to people, helping me understand the right words to use. And so I’m just immensely grateful for your just truly generous support.

Elizabeth Funk: (09:25)
Thank you. Well, it was a pleasure and I love being a catalyst, um, trying to help bring more fresh thinking into the space. And I do feel like fresh thinking is a big part of this. You know, one of the benefits I have is that I haven’t been steeped in the homelessness world for the last 20 years and sometimes coming in with a fresh eye and in my case with a business mind and taking a step back and saying whatever we’re doing, obviously not doing it right, because we’re spending more and more money and the problem keeps getting worse. And so maybe some fresh thinking, you know, it can be helpful. And so the role that I see myself playing is exactly like I did with you, which is to help bring really passionate, smart people in and start thinking about where we can all contribute.

Robert Strock: (10:09)
Yeah, exactly. Yeah. That’s it, it’s so great to have you, uh, as a, uh, fortunate team member to be able to do work. I think that we both love, and we, you know, it’s just a wonderful feeling to be in a situation where we can contribute. Um, could you give us a sense of, I know you’re doing something or attempting to do something very creative in San Francisco. So could you give us an idea of what, what you’re attempting to do because I, I don’t know anybody else that’s trying to do that.

Elizabeth Funk: (10:39)
Right. Well, we’re, we’re trying to take the idea that we’ve done in Mountain View, uh, and replicate that hopefully all across the state. And the role that we play is we come in and we help find the land, help find the funding, and then find the services agency that’s going to own and run the site. And so, you know, I can, can play that role and pull those pieces together. Um, and, and, you know, I think that, um, it’s really important to have, as we’re building a small organization that can really just be there to raise our hand and say, we’ll help make it happen because there aren’t, you know, currently most nonprofits aren’t thinking about expanding and building more sites, they’ve got their hands full with the mandate that they’re, that they’re running today. And governments don’t tend to have project development teams.

Elizabeth Funk: (11:30)
They sit on top of contracts and for-profit real estate developers. Aren’t going to see this as lucrative. And so there’s sort of not anybody there to pull these pieces together. So that’s what we’re trying to do. And in San Francisco, um, that we are looking at finding a location to do a modular, uh, based interim housing site that would use prefabricated units similar to what we did in Mountain View. The one, the thing that we’re looking at in San Francisco, because land is so scarce and so expensive is we’ve designed our product such that it can be portable. And the idea is that we can borrow land that is maybe only available for a few years. So for instance, real estate developers who have got a project that’s been delayed, or, you know, they’re, they’re waiting for a few years for the entitlements to come through, or on the other hand, government owned land, or even faith-based organizations that have parking lots that they don’t know what to do with. And all of those groups may not be willing to part with the land forever to build a permanent housing unit, but they might be willing to put these little modular units on it for a few years. And then the idea is that when we need to give the land back, we, we pick them up with a forklift and drive them to the next site.

Robert Strock: (12:46)
Yeah. And I think it’s so innovative. And any of our listeners out there that are landowners that, that are land banking, or are just beginning permits, or what, whatever stage of beginning development you would be a great person to be in touch with, because this, this is a very unique niche that I think has a lot of potential to adding a percentage gain of, of homelessness, uh, homes, or, or at least shelters that would be just tremendously needed.

Elizabeth Funk: (13:18)
Thank you. Well, and we are, you know, my, I see my role as a catalyst is, is to try to pull together lots of ways where people can be involved. And so, um, for instance, land owners who might want to step up and let us borrow their land, but, you know, also this is a public/private partnership. And I feel like, um, we, as, um, as, as business leaders and investors and donors, um, feel like, you know, we’ve, we’ve put this too much on the government and expected the government to do it all. And the government has a role, but they shouldn’t do it alone. I feel like we should all be contributing to helping those less fortunate in our community. And so the model that we’re looking at is the units themselves are interesting for donors to participate in. There are about $10,000 per door, and we’re feeling like philanthropy is eager to participate. And to some extent at a $10,000 price point, um, you know, it’s democratized where you don’t have to be a major multi-million dollar foundation to participate. And so the model we’re using is to have donors come in and donate the money to build the units. If we will get the commitment from the government, that they will pay for the services to keep them going on an ongoing basis. And that’s the partnership offer that we’re making to cities and counties.

Robert Strock: (14:38)
And how much resistance, um, have you had, do you anticipate having furthermore in San Francisco with, with nimbyism with, you know, Not In My Backyard How is that playing out so far and how has it played out in Mountain View?

Elizabeth Funk: (14:56)
Well, it’s a new world. COVID has changed everything and it’s changed things in a number of ways. One is that for the first time, um, the shelter in place orders, um, have made it so that it is now legal, uh, in fact, encouraged to have tents if you’re homeless and unsheltered. And so all of a sudden communities are seeing huge tent cities starting to sprout up on their sidewalks. And all of a sudden people are maybe more interested in seeing a nice tidy, secure shelter that’s got a fence around it where people are showered and their security, it all of a sudden starts to appear like a much more attractive alternative than the tents that are already there. And the other thing is we’re finding that, um, communities are well aware that homelessness is becoming now a public health issue. And so selfishly the NIMBYs realize that having folks on the streets who are potentially carriers of COVID is, is dangerous to them. And so the, the community sentiment is shifting and in Mountain View, we’ve gotten almost nothing but positive support and thanks.

Robert Strock: (16:09)
Yeah, it’s both a sad and unfortunate thing. I think that it takes, uh, oftentimes for we as people to take action when we’re affected by something, you know, it’s, it’s like with global warming. Yeah. Okay. If our land is threatened, we’ll be, we’ll be much more willing to act, or if we are having people knocking at our windows, when we’re at a stoplight, we’ll be much more willing to act if we have people roaming around our neighborhoods. But fortunately it’s, it seems like we’re right at that cusp turning point. Whereas as a general issue, there are plenty of people that are really willing, partially because they have been touched and had a window into, uh, the, an experience, uh, that, you know, in some ways, as you’re knocking on the window, you say, we know this really could be me. I could be on the other side of the window.

Elizabeth Funk: (17:02)
And Robert, I feel like, you know, in my career, um, I, I tapped into this concept early, which is that self-interest is unfortunately a much more powerful motivator in general than generosity is. And so it’s really the root of where impact investing has come from, which is that if people can get super rich solving the world’s problems, they will get solved and philanthropy and generosity only goes so far. So I think to some extent that same theme is starting to appear on homelessness, where, um, if it’s in people’s selfish best interest to solve the problem, sadly, if that’s what it takes to get the problem solved, I’ll harness that.

Robert Strock: (17:46)
I, I couldn’t agree more. And I’m glad that the awareness is something sort of a secondary gain of global warming and the secondary gain, you know, of even COVID where people realize, oh, I guess I really am going to die. Um, oh, this really might affect me. And the, and the self-interest can be channeled into a positive way, rather than it being seen, as self-centered centered, it can be seen as self-beneficial and other beneficial. And I think we’re right at that stage.

Elizabeth Funk: (18:17)
Well, and I think, you know, I’m trying to also continue to harness that same impact investing model. As we look at homelessness, and I would love to find a model, and we’ll probably experiment with this where we could actually have investors invest in the buildings themselves, and then lease them back to the city or county at a rate that would pay the investors back with a, with a handsome fee, a handsome profit. And then we’re going to start seeing these sites come up everywhere. One of the other things I’ve been trying to do is to figure out if there’s a way where land owners might be able to get a break on their property taxes, if they were willing to lend us the land, again harnessing that self-interest, then all of a sudden we’re going to have all sorts of land developers standing in line, asking us to put shelters there. And so we’re trying to, to, without being cynical, but trying to be, be really practical about what’s going to motivate folks to step up and be involved.

Robert Strock: (19:13)
Yeah. I think it’s far from cynical. I think it’s actually, uh, seeing goodwill and, and saying that, that, that people actually do want, do want to do good if they’re given an option and yeah, they’d like to make a little bit of money and they’re even willing to cut them out the money they’re making. And I think what you’re talking about with impact investing is such an important thing. And if our listeners are any of them are impact investors, certainly hope that they’ll be in touch with you and with others that are wanting to take advantage of money, really being used from my vantage point, I think how capitalism was really designed to be, and to be a positive capitalist.

Elizabeth Funk: (19:49)
Well, and that’s, that’s where I kind of got my start in impact investing, as you may recall, was in micro finance and the micro finance industry was, was back then. This was in 2004 was almost exclusively nonprofit. And because of that, these little organizations, they weren’t really banks. You know, the vast majority of them had 2,000 borrowers or fewer and no economies of scale. And because there were no economies of scale, it was, you know, the only way they could break even would be, you know, with massive interest rates. And so when we came in and we took a look at that, and we said, if we could raise for-profit capital for micro finance, we could scale it so much more, much more quickly and reach more people, but we could actually get the economies of scale and be at a lower interest rate. And, and then, you know, the, the individual borrowers, they’re the ones with the entrepreneurs and they’re the hard workers. And they get to build their own way out of poverty. And that pride, that’s why we called it, the Dignity Fund is again, it’s harnessing their own self-interest. They want to build their own way out of poverty. They just don’t have the access to the save, you know, the $200, it costs to buy a sewing machine or a cow.

Robert Strock: (21:01)
And I think the word dignity is such a key word for the unsheltered, and to be able to really provide a situation that can create a sense of community, a sense of well-being, whether it’s interim housing or whether it’s permanent supportive housing, where there’s really an identification with a community and a sense of maybe in many cases, I’m home for the first time. And so I think recently, I know recently that you and I discovered that we had two parallels, both the micro-finance, which for us, we started when it was called Village Banking, uh, which was really even before micro-finance. And that was really the beginning of Global Bridge. And we, we were doing it individually, you know, with, with starting Village Banks, um, and giving small loans to third world village people. It has the same kind of common sense. And then we also have discovered recently another overlap, which I’m kind of excited about, especially as it potentially relates to the unsheltered community, which is combining it with, uh, acreage that’s right near the city centers or in San Francisco’s case, it would probably be, have to be a little bit further out where regenerative agriculture can be combined, where they can be individuals that are appropriate for it can be mentored and learn the skill, which as, as we are, I think all beginning to see that regenerative agriculture and, uh, ecosystem restoration, which is basically having land be covered with plants.

Robert Strock: (22:37)
And in some cases, uh, farming materials actually takes carbon out of the atmosphere. And the idea of having homeless unsheltered individuals learn those trades is not only a service to the country and the world, but it’s mind blowing to the image of the unsheltered person. So it has such a win-win-win, very excited about the, the ongoing progress we’re making with people that are leaders in the regenerative agriculture field and the unsheltered field.

Elizabeth Funk: (23:07)
I think that is a fabulous intersection and I would love to see, uh, see that happen. And it does come back to the word dignity Robert is that, you know, the homeless, if they could be involved in also doing something great for our, for our environment, um, the dignity that, that gives them to not always be, you know, asking for something, but to be also be helping. Um, I think that would . . . the pride. And, um, and of course, you know, it, it would get more people doing the regenerative agriculture work, which we need.

Robert Strock: (23:35)
Yeah. So where right now, either in Mountain View or San Francisco, where do you feel like you need the most help, most support, uh, not only by government, but by our listeners, by, by people that are just good hearted people that think that we’re kind of powerless or helpless, how, how would you message it that as to what, what you feel are the greatest needs for what the work you’re doing?

Elizabeth Funk: (24:02)
Well, thank you for that, for that question. And there are lots of ways that people can help the, the first need that we have is to scale our organization. And so we’re looking for some founding, uh, grants to hire our first, uh, couple of key employees who would be project managers who know how to do, um, you know, building permits and fire and, and, and so forth, and really manage the projects. Um, and then also business development, because the only thing holding us back now is we need to get introduced to the people in government, at the cities and counties who are interested in being serious about doing something for their unsheltered population. And then the third thing that we’re looking for is of course, uh, donors who would be willing to, uh, to donate to the, to the specific projects so that we can go to the governments and say, look, we’ve got the philanthropy to build the sites. If you will, uh, commit to running doing the services.

Robert Strock: (25:02)
Could you tell us just a little bit about what you’re doing, uh, with, uh, sustainable agriculture, agriculture, and kind of how, how long you’ve been doing that and how, how comprehensive you you’ve been doing that. And cause we’re, we’re kind of kissing cousins between sustainable agriculture and regenerative agriculture, and I think it would be good for our audience to really get a feel for how important that is in the world and how important that is in our country.

Elizabeth Funk: (25:28)
Absolutely. So, uh, the fund that I’m involved with in Latin America called Dev Equity is a fund that is investing, it is an impact investment fund, specifically focused on poverty. And so, uh, you know, low-income housing and, and, and so forth and, and responsible, um, urban revitalization are a big part of what we do. But then, you know, the vast majority of the world’s most extreme poverty is rural. And we, um, and so if we’re going to really address poverty, we need to be having programs that, that, that help poor farmers. And so what we do is we invest in businesses that buy from small hold farmers and whether it be, um, mangoes and dragon fruit in Nicaragua or cacao in Costa Rica or quinoa in Peru, hot chili peppers in Ecuador and Peru, we have a handful of these companies, but the thing that they have in common is they all buy from the poor farmers.

Elizabeth Funk: (26:27)
And then they, rather than just being a purchaser, there’s a two way relationship where we help to educate the farmers on sustainable agriculture processes. So for instance, in Nicaragua, we certify organic. Um, and then of course the grower can now make three times per mango, what he was able to make before, when he was selling an uncertified, uh, mango in the local markets. Now we can dry them and sell them to Whole Foods for dramatically more so, um, that’s sustainable agriculture practice. Um, obviously it’s the right thing for the environment, but it also helps increase the yields for the farmers and allows them to increase their, their livelihoods.

Robert Strock: (27:10)
Yeah, and I think the key piece is anyone that really is not in a survival mode can contribute by being part of the impact investing opportunities that are there. And I think knowing, just knowing that we’re at a time now where all of us can collectively find a way to move from our helplessness to being helpful, whether it’s a dollar or $5 or a thousand dollars or whatever it is. And it’s so important that, uh, that we focus on how it’s going to take us all to really make this shift to finally care for the people that were just born into or trauma led them to much more difficult life circumstances. And for us to all feel like we can join in that effort together, I think is just an enormously inspiring thing and something that clearly you’ve been doing a long while with the impact investing and something that people need to learn more and more about and how it applies to homelessness.

Elizabeth Funk: (28:14)
Absolutely. I couldn’t agree more.

Robert Strock: (28:17)
So I, I just want to thank you so much for, um, giving us a glimpse into your unique world of, uh, everything from micro finance to, uh, regenerative agriculture, to homelessness and distinguishing between interim and, and permanent supportive housing. Uh, and again, I thank you for your help with me, and, and, uh, I look forward to working with you, uh, as, as long as possible. It’s matter of fact, as long as I’m alive, I look forward to it.

Elizabeth Funk: (28:46)
Oh, Robert, I have been so blessed to have you in my life. I’ve really enjoyed getting to know you over the last year and, and collaborating. And I’m very excited about your idea, particularly as it relates to, um, pulling together two themes that we’re both passionate about regenerative agriculture and helping the homeless. Uh, so I’m really excited to see that project come together. I hope and support that, however I can.

Robert Strock: (29:12)
Okay. Thanks so much. It’s been great to be with you as I, I was pretty sure it would be. Likewise. Thank you. Thanks so much.


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