With the cost of rent up 11.4% across America and more than 25% in some cities in Florida, Georgia, and Washington, it’s clear that the country faces an affordable housing crisis. What is behind the increase is up for debate, with some experts pointing to COVID and the recession and others listing an increase in demand for apartments and rental homes. No matter the cause, perhaps the better question is this: what are we willing to do so that everyone has an affordable, safe place to live? One man who cares deeply about finding the answer to this question is Dr. Van Williams, CPEP, the Founder and Managing Partner of The Proactive Realty Income Fund, LLC. I learned more about his ideas one Saturday afternoon in his office, where I talked to him about the work he is doing to help lower-income families across the United States to find dignified, reasonably priced housing. 

“I am convinced that we have a strong solution to the housing problem,” Dr. Williams said, showing me to my seat before claiming his own. “With the help of our investors, we are renovating Class B and C properties, properly managing them, and providing secure homes for our tenants. We also build manufactured homes communities, where our tenants can rent-to-own their mobile homes and experience the security of stable housing. As a result, so many lives are being transformed, and our investors are seeing strong returns.”

He explained that it is all possible because The Proactive Realty Income Fund has a two-tiered approach that prioritizes both their tenants and their investors. “In the past, impact-investing has had this stigma that it could never be profitable,” Dr. Williams stated. “I have heard that a lot in the 22+ years I’ve been fighting for affordable housing, but I refuse to believe that. When I first started the fund in 2019, I knew I was going to have to create a strong program that would address the realities of renovating rundown properties as well as generating significant returns for our investors. Without both, the fund would go nowhere, so I sat down with my staff and created a solid, realistic way for us to be successful in both areas.”

Dr. Williams targeted 12%, the minimum return that investors would consistently make. Also, they would need the assurance that when they made their first investment, they would receive a payment at the start of the very next quarter. Immediate income would help them to believe that “ESG” and “social impact” could mean excellent returns.

“It then became a question of how we would do that,” he remembered. “It starts with being able to negotiate the best prices for properties, with no extra financing or leverage. I have so much experience in buying, selling, and repositioning properties that it was easy to set up this structure. I knew risk would be a concern, so I made sure that we only have A-rated insurers. Importantly, we are active managers of our portfolio. Doing it this way means that we can consistently produce our cash flow and long-term capital appreciation.”

The properties are carefully selected, Dr. Williams continued. “We have strict social impact metrics and guidelines for everything we purchase. The property must be able to generate immediate income so that our investors are paid quarterly. It’s a very realistic, practical way to provide housing for our tenants while taking care of our investors.”

Transparency, he decided, would be crucial. “Our investors need to believe in what we’re doing but also in our integrity,” he explained. “That’s why we use a third party,  Impact Fund Administrator, and we employ a strong fiduciary standard.”

Dr. Williams said that after two years, he is seeing the results. “I can’t tell you how grateful our tenants are to not have to work 300 hours each month just to afford a place to live. When you don’t have a dignified place to live, your life is so unstable. Your community may have crime. There may be family violence, and you may see teens drop out of school so that they can work. Without the security of a real home, so much falls apart in our society.”

He brought out some photos of Orangeburg, South Carolina, a manufactured home community that The Proactive Realty Income Fund built. “This is one of our success stories,” he recalled, smiling as he looked at the pictures. “This is proof that good housing provides the foundation for other doors to open for people.”

They chose Orangeburg, Dr. Williams continued, because its poverty rate was 31.32% and the average household income was only half the nationwide average. “Can you believe that people were living with a 133.33% unemployment rate? How could anyone get ahead when they were having to work 300 hours a month just to be able to pay rent?”

By establishing and managing the manufactured home community, stability was brought to hundreds of people. “We didn’t just put in homes,” Dr. Williams said. “We improved their streets, erected signs, installed security cameras around the park, and hired staff to run the park when we couldn’t be there. We helped them to build a real community.”

Today, 98% of single mothers and other low-income families in the park own their own homes. “That’s due in large part to our investors,” Dr. Williams revealed. “Because of them, our tenants could rent-to-own at only 6% with just $3,500-$8,500 as their down payment. They are a big reason why we have been able to put keys into the hands of so many first-time homeowners.”

While Dr. Williams is proud of the work accomplished by The Proactive Realty Income Fund, he is focused on helping more families obtain housing. “Domestic violence victims, homeless persons, veterans, single moms – they all need good homes,” he said. “We are raising $10 million to fill out the South Carolina manufactured housing park, and we have our eye on Memphis, Tennessee, where a sixty-room, single room occupancy property will be able to generate up to $55,000 each month. We’re just getting started.”

Sam Zell, Dr. Williams believed, said it best. “‘Whatever goals you set, you need to constantly readjust them so that at no time do you reach them before your time is up.’ With so many people needing affordable homes, I will never stop working to help the person in front of me. And the next one. How could I do anything else?”