Funding the Future of Affordable Housing

Funding the Future of Affordable Housing

Westmount’s Environmental, Social and Governance (ESG) Portfolio allocates client assets across a diverse selection of investment managers that directly support innovative companies driving positive social change. Westmount’s ESG managers are aligned with the United Nations Sustainable Development Goals, a globally recognized framework adopted by the U.N. General Assembly to collaboratively tackle humanity’s most pressing issues.


It's a global concern shared by both emerging and developed economies: lack of quality housing and shelter. These are basic needs that no one should live without, yet roughly 1.6 billion people—or 20% of the global population—are estimated to live in inadequate housing today.1

With higher development costs, rising mortgage rates, urbanization, and scant financing options often cited as contributing factors, housing represents both a dire social issue and a compelling investment case.

Importantly, this issue affects both emerging and developed economies. Here in California, for example, the housing crisis has been particularly acute in recent years thanks to a rapidly growing population, abundant job opportunities (particularly in the tech sector), and pleasant weather that has made living in the state attractive to people from all over the world.

Despite these pressures, the state has consistently failed to keep up with housing demand, which has led to skyrocketing rents and a shortage of affordable homes. With the median price for single-family homes in California hovering near $735,000 in March 2023, nearly 40% of California households are considered “housing cost burdened.”2,3 In Los Angeles alone, nearly 70,000 unhoused people are estimated to be living in Los Angeles County, up 4.1% from 2020.4

There are numerous tactics that institutions can deploy to address housing. At the federal level, for example, the Biden Administration released a sweeping Housing Supply Action Plan in 2022 aimed at increasing the number of affordable housing units across the country in the next five years.

Recognizing affordable housing's potential as an asset class, institutional managers are beginning to offer investment products that allow investors to participate in all stages of the housing lifecycle, from construction and financing to supportive infrastructure and more.

Portfolio Spotlight: Variant Impact Fund

Case in point is the Variant Impact Fund, a new addition to our ESG lineup. The fund provides capital to opportunities in niche, underfinanced markets across three core impact areas: financial inclusion, equitable growth, and responsible consumption. Here's a look at some of the companies the Variant Impact Fund has invested in to date:

Castellan Affordable Housing

The Castellan Affordable Housing Fund (CAHF) provides pre-acquisition and development capital to fund affordable housing construction. The fund provides capital for early-stage funding, including land acquisitions, tax credits, and government incentive applications. It also funds upfront development costs ahead of more permanent financing from private and public sources. The fund also invests in multi-family apartment buildings and other residential properties that can be redeveloped or refitted into affordable and sustainable units.

Variant recently provided CAHF with enough capital to fund 13 properties, providing over 1,500 housing units in total. They rent the units at a discount to market rates, helping provide thousands of people with access to affordable housing in California. The properties are intended for individuals and families who make less than 60% of the area's median income, with roughly 45% earning less than 30% of the area's median income, and 34% earning between 30% and 50% of the area's median income. Tenants are estimated to pay about 31% of their income to rent, ensuring they can afford their monthly rental expenses without being classified as “rent-burdened.”

Dream America: Turning Renters Into Owners

In America's top 50 metropolitan cities, about 9% of borrowers who apply for a mortgage are denied due to low or bad credit. African American households in particular are denied at a rate nearly twice that of the overall population.5

Accordingly, the Variant Impact Fund has provided a credit facility to Dream America—a lease-to-own real estate company and one of the fund's holding —using secured promissory notes to provide a roadmap to homeownership for individuals who are otherwise unable to obtain a mortgage through conventional means. Dream America buys homes at between $150,000 and $400,000, places approved tenants into the homes, and sells the homes back to the tenants at a predetermined price after 6 to 12 months.

The Dream America program also offers credit building and educational resources to prepare tenants to apply for a mortgage when they decide to purchase the property. The company targets underserved communities and creates access for individuals to build their credit and obtain a mortgage. Through this program, Dream America has been able to provide housing ownership to 18 individuals and families so far in 2023, and since inception has sold a total of 62 properties to new homeowners, with more than 90% of those sales going to underrepresented groups.6

Almond African Affordable Housing

In Kenya, significant housing crisis is taking shape amid a growing urban population, limited affordable housing options, and a shortage of financing for new housing units. Nearly 61% of urban households live in slums, many of which are lacking in basic amenities like clean water, sanitation, and electricity. The capitol, Nairobi, sees an estimated 500,000 new city dwellers each year, yet new housing construction averages only about 50,000 units each year, which resulted in a housing deficit of over 2 million units.7

Companies like Nairobi-based real estate developer and property manager Almond Estate Co. are helping to close the gap by building more affordable units, roads, electricity access points, and water supply connections in these underserved urban areas. Notably, the Variant Impact Fund was the sole credit provider to Almond on two projects: Adah Gardens, a 33-acre site outside of Nairobi with 211 affordable home plots including water and electricity on-site; and Kitisuru, a 98-unit entry-level condominium with modern utilities and appliances in Nairobi. The first block of Kitisuru has 35 units.

Have a question about our ESG offering or investment platform? Call us at 310-556-2502 or email to speak with an advisor today.

6,7Variant Impact Fund. Additional information available upon request

This document was prepared by Westmount Asset Management, LLC (“Westmount”). Westmount is registered as an investment advisor with the U.S. Securities and Exchange Commission. Westmount believes the sources used in this document are reliable, but Westmount does not guarantee their accuracy. The information contained herein reflects subjective judgments, assumptions, and Westmount’s opinion on the date made and may change without notice. Westmount undertakes no obligation to update the contents of this document. It is for information purposes only and should not be used or construed as investment, legal or tax advice, nor as an offer to sell or a solicitation of an offer to buy any security. No part of this document may be copied in any form, by any means, or redistributed, published, circulated, or commercially exploited in any manner without Westmount’s prior written consent. If you have any comments or questions about this report, please contact us at