Sep 24, 2014

Richmond City Council on Tuesday voted to move forward with a plan to use social impact bonds to rehabilitate and sell about 1,000 dilapidated and abandoned properties that have contributed to neighborhood blight.

The strategy, pitched earlier this year by prominent attorney and Richmond resident John Knox, would come at no cost to the city.

The city would issue social impact bonds, targeting investors who want their investment to have a positive social impact, then loan the bond proceeds to the nonprofit Richmond Community Foundation, which would buy the vacant homes from lenders such as banks, and then rehab and sell the homes at affordable prices to lower-income homeowners.

Potential homeowners would be identified by SparkPoint, a nonprofit financial education center in Richmond that guides low-income clients to becoming financially stable.

Following the sale of a home, a significant portion of the proceeds will be used to acquire and rehabilitate more properties.

Knox said the goal is to have the first home under the program purchased and rehabbed by the second quarter of next year. Knox hopes to rehab and sell 10 properties per quarter, or about 40 per year.

There is even a possibility the program could allow for the purchase and construction of homes on unused lots in the city, Knox said.

There were concerns expressed by Mayor Gayle McLaughlin and council over what happens if lower-income residents are not found to buy the homes, and whether some will be able to afford the homes after moving in. McLaughlin questioned whether the homes would become unaffordable for low-income residents.

Knox said that if local, lower-income buyers are not found, other buyers will be sought.  The sale would still have achieved the goal of improving the neighborhood, Knox said.

“It is an excellent opportunity to clean up this city and get many of those homes back on the market,” said Councilmember Nat Bates.

For more information about the program, visit this PowerPoint presentation.


  1. Will this provide any oportunities for people to aquire a property to re-hab themselves? I am experienced at re modeling and re hab and would like to somehow acquire a property I can fix up myself, with help from the city perhaps. This would be my first ownership oportunity and I could make significant improvements, but am not presently steadily employed in my trade as a carpenter. I have done painting, property maintenance, some plumbing, and am a union certified journeyman carpenter. I would like the oportunity to own a home in the bay area and in the process perhaps improve a neighborhood.

    nick fullerton | Sep 27th, 2014
  2. I also think that there are many renters in Richmond that would love to work toward home ownership. Today there are many renters in the construction field that have resources and know how. The challenge would be how financing could be established so that these homes are completed in a timely manner and properly managed. The last thing we need in Richmond is a bunch of unfinished homes, with pending finances and time invested.
    I hope to be a part of a pilot program. Sign me up.

    Michael De La Paz

    Michael De La Paz | Jun 4th, 2015

About the Author

Mike Aldax is the editor of the Richmond Standard. He has 13 years of journalism experience, most recently as a reporter for the San Francisco Examiner. He previously held roles as reporter and editor at Bay City News, Napa Valley Register, Garden Island Newspaper in Kaua’i, and the Queens Courier in New York City.