NYC Affordable Housing Gets Lift from Predevelopment Fund

New Fuel for Affordable Housing

As construction costs rise and federal support for affordable housing is strained, one nonprofit developer is taking a new approach to get ahead of the curve, per Bloomberg. Volunteers of America–Greater New York (VOA-GNY) has launched a $20M Housing Innovation Fund designed to pay for predevelopment costs—often one of the most difficult and underfunded phases of the housing development process.

“Here we’re talking about a $20M gift that will leverage literally hundreds of millions of dollars in new construction,” said Jeffrey Ginsburg, VOA-GNY’s CEO. The fund is part of the nonprofit’s broader goal to create 2,000 affordable units in the next five years.

Closing the Funding Gap Early

Predevelopment costs, such as land research, legal reviews, and architectural design, are often too risky for traditional lenders to finance. For smaller nonprofit developers, these costs can prevent them from even entering the market.

Ginsburg noted that VOA-GNY had previously passed on several projects due to a lack of upfront capital—even when the financial outlay was as small as $10,000 or $20,000.

Now, with in-house access to the fund, VOA-GNY can move faster on potential sites, offering the kind of agility usually reserved for large, for-profit developers.

A National Trend

VOA-GNY’s new fund reflects a broader shift among housing nonprofits and philanthropy groups who are targeting the predevelopment phase to unlock larger investments.

Destination: Home, a Silicon Valley nonprofit, launched its own Supportive Housing and Innovation Fund in 2018 with $50M from Cisco and a follow-up $50M from Apple. Their model includes low or no-interest loans and small grants for site research and early staffing.

Ray Bramson, COO at Destination: Home, emphasized the strategic value: “You can reinvest dollars five or ten times over and create thousands of units as opposed to hundreds.”

Why It Matters Now

With new tariffs driving up material costs and cuts to HUD programs straining local budgets, developers need new financing tools more than ever. Predevelopment lending offers relatively fast returns for investors—money is typically repaid when construction financing is secured, not years later after project completion.

Philanthropies and corporate donors are increasingly seeing this as a high-impact strategy to accelerate housing production while maintaining financial sustainability.

What’s Next

While many communities have revolving predevelopment loan funds, VOA-GNY’s approach is rare in that the developer controls the capital directly, without oversight from outside lenders. This flexibility could become a model for other nonprofit developers looking to act quickly in competitive markets.

And as public funding remains uncertain, philanthropic innovation may play an even greater role in bridging the early-stage funding gap for affordable housing nationwide.

Bottom Line

The VOA-GNY Housing Innovation Fund is setting a new precedent by targeting one of the most overlooked stages in the affordable housing pipeline—providing not just financial support, but a faster path to shovels in the ground.