Silicon Valley Bank didn't just support tech startups — it also played a major role in financing affordable housing in California and Massachusetts.
The collapse of Silicon Valley Bank is threatening affordable-housing developments at a time when rents and home prices are out of reach for many Americans.
Aside from its role supporting tech startups, SVB played a significant part in financing below-market-rate apartments and other affordable-housing projects in California and Massachusetts. “Their departure leaves a huge gap in the ecosystem of affordable housing,” Murray said. “We’ll figure it out, but we’re going to need some help figuring it out.”
— Kevin Murray, interim executive director of the Massachusetts Association of Community Development Corporations While deposits at SVB will be covered by the Federal Deposit Insurance Corporation, the future of SVB’s planned investments in affordable-housing projects is unclear, Murray said.
Mounting mortgage rates have put buying out of reach for many would-be homeowners. In 2022, just one in five home listings was affordable to a household making the median income, a recent Redfin report found — down from two in five in 2021. After soaring during the pandemic, rents aren’t growing as fast, but nearly half of renters — a record number — are “cost-burdened,” meaning they spend more than 30% of their income on rent. The median rent in the U.S.
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