Alumni Consulting Team (ACT)

ACT News

Stanford ACT Team Inspires Innovation in the
Silicon Valley Housing Market

Deep in the gloom of today's declining housing market,  few investors see any reason for optimism.  But an ACT team focused on affordable housing in the Bay area found a silver lining amidst the market's dark clouds.

ACT consultants worked closely with the Housing Trust of Santa Clara County to explore how an equity-sharing fund to finance residential down payments could benefit both the public and private sector.  With equity-sharing, family members or employers provide loans to supplement a home buyer's down payment.  The ACT team proposed institutionalizing this practice by creating a regional investment fund to provide financing to credit-worthy individuals buying homes at all levels of the market.  Individuals and corporations would invest in the fund which would be administered by the Housing Authority.

"We learned there was much pent up demand for this kind of program.  Both employees and employers are eager to find creative solutions for the housing challenges in the Silicon Valley," reported David Ai, Stanford MBA class of '92 and one of the volunteer consultants leading the team.  "There are good indications that business leaders are open to a new model of investment-grade housing assistance that does not require constant fundraising to keep it afloat."

With one of the most expensive housing markets in the country, Silicon Valley is a difficult place to buy a home.  Middle class workers like teachers and police officers can not afford to purchase homes in the Valley communities where they work. Local corporations suffer when their access to talent is compromised by the valley's high-priced housing.  And a limited inventory of government subsidized or affordable housing narrows the options for low and medium income families.

The proposed investment fund would benefit all of these constituents. Homeowners could purchase a home with less debt payment or finance a more expensive home closer to work.  New homeowners could step on to the property ladder sooner in life.  Investors would gain access to the single family housing asset class.  Systematic screening for responsible home buyers would reduce risks, and such risks are spread among a diverse portfolio of many single family homes.  And the fund would be especially attractive to those interested in socially responsible investments.

Finally, local housing agencies would reap benefits as well.  Currently their subsidy model generates little or no revenue so they are forced to depend on ongoing fund raising, which has become increasingly difficult.  As managers of the investment fund, they would gain both fees and investment returns, providing them with a sustainable source of revenues to reinvest in local housing.

Encouraged by the interest in this concept, several ACT consultants have continued to work with Bay Area community leaders to implement these ideas.  "Our goal" said Ai, "is to get this concept off the ground."

ACT consultants:
David Ai, MBA 1992
Mark MacDonald, MSM 2007
John Crean, MBA 1992
Don Diltz, MBA 1982
Terry Lee, MBA 1992
Taylor Dial, Executive Director, Housing Trust of Santa Clara County

ACT Project Leaders Spring/Winter and Fall/Summer 2007

Hats off to the alumni who contributed their time and management skills as project leaders in 2007.  Thanks to their commitment, ACT was able to bring together 140 volunteers to provide business consulting to nonprofits throughout the Bay Area.

 

Spring/Summer 2007
David	Ai	Eden Housing
Donald	Diltz	Eden Housing
JoAnne	Goldberg	QuestBridge Scholars Program
Lana	Guernsey	Nueva School II
Kavitha	Kannan	San Francisco Film Society II
Sunny	Mahant	NamasteDirect (a project of the Namaste Foundation)
Steven	Monosson	Acterra II
Stan	Moore	Hospice By The Bay
Brian	Service	Hospice By The Bay
Kamael	Sugrim	Sevak Solutions
Barbara	Bishop	Monterey Adult School
Denny	Paul	Central Coast Center for Independent Living
Hilman	Walker	Big Sur Land Trust

Fall/Winter 2007
Al	Davis	Opportunity Junction
Ernie	Leopold	Opportunity Junction
Jim	Dern	Parents Place (Jewish Family Services)
David	Gebala	YMCA of Santa Clara Valley
Bruno	Kaiser	YMCA of Santa Clara Valley
Raleigh	Klein	Seacology
Arun	Paul	Seacology
Cor	van der Wal	Child Family Health International
Scott	McGilvray	Child Family Health International
Richard	Mickley	Headlands Center for the Arts
Roger	Steiner	Headlands Center for the Arts
Janet	Nicolini	Berkeley-East Bay Humane Society
Rudy	Reich	Berkeley-East Bay Humane Society
Jon	Richards	SF Playhouse
Arthur	Roth	SF Playhouse
Karl	Matzke	Smart Voter (a program of League of Women Voters III)
Tony	Ramsden	Smart Voter (a program of League of Women Voters III)
Laura	Hattendorf	Woods Institute for the Environment
Tony	Ramsden	Woods Institute for the Environment