Former Franklin RE Head Launches Impact Homebuilder
Jack Foster transforms his late father’s homebuilding firm into a real estate impact investment fund targeting distressed inner cities across the U.S.
The former head of real estate at Franklin Templeton, Jack Foster, is transforming his late father’s homebuilding business into an impact investing firm aimed at revamping distressed neighborhoods across the U.S.
Foster, who left Franklin Templeton last year after almost 30 years with the firm, says it’s a natural progression for Foster Communities; Foster took over the business from his father, Bruce, after his death in 2016. Since 1986, Foster Communities has built more than 2,500 homes in Maryland, Virginia, Pennsylvania and West Virginia.
“I spent the better part of 2016 in Baltimore with the homebuilding team and what I found were amazing people who wanted to remain an integral part of the communities they’ve worked so long in,” says Foster. “So in deciding how to keep the business running, we started thinking about the idea of impact.”
For financing, Foster hopes to raise an impact investment fund. Baltimore will be one of the first cities Foster Communities targets, in part because, according to the Housing Authority of Baltimore City, the city has 30,000 vacant properties; 75 percent are privately owned.
Foster’s ambition is to leverage Foster Communities’ homebuilding experience to rehab and rebuild properties and blocks into energy-efficient, healthy neighborhoods with green space and better food options. The homes will then be sold (or potentially leased under a rent-to-own agreement) at affordable prices.
“This is about the social impact on forgotten communities and their people through the building of long-term relationships,” he says.
“While we’re focused on guiding people into home ownership, at its core we want to encourage job creation in these communities.” Foster says.
A key part of the firm’s strategy involves community outreach, Foster says, with seminars helping people learn how to become homeowners, build credit and share “life tools” in qualifying for a mortgage. “I was called today by a young gentleman living north of Baltimore,” Foster says. “He’s has two kids and he’s never owned a home. He wants to learn how to do that and what steps he has to go through [to get the credit rating he needs].
“This is not about uprooting people for gentrification—transformation does not mean displacement. We know that there are a lot of challenges in doing this and we know in certain areas this’ll be a loss-leader for some time while communities come back. This is about wanting to give residents a stable environment. And it’s critical to collaborate and get buy-in from community groups.”
Foster plans to raise capital for the real estate impact fund from institutional investors, such as foundations, and financial institutions governed by the Community Reinvestment Act.
“What I would like to see the organization doing is building in multiple cities across the country and the rest of the world,” he says. “I think the idea of going in and providing quality housing for challenged neighborhoods is a huge opportunity on this planet.”
Jack Foster transforms his late father’s homebuilding firm into a real estate impact investment fund targeting distressed inner cities across…
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