Usually when banks and policymakers are trying to help people in low-income communities achieve home ownership, they lower qualification standards or offer a subsidy. One bank in San Francisco is taking a very different approach. The Federal Home Loan Bank of San Francisco isn’t giving potential home buyers a break, but instead, they are giving them job opportunities in their hometown.

Quality Jobs Fund

The Federal Home Loan Bank of San Francisco is taking a dramatically different approach to home ownership with the creation of their Quality Jobs Fund. The bank established the fund after years of doing their homework and getting to the root of the problem facing many low-income communities. With a 100 million dollar donation to the New World Foundation, they will disburse funds to nonprofit and for-profit organizations that commit to creating employment in areas that need it. The foundation will vet the organizations and provide job training with the goal of helping boost the job market in struggling communities.

Setting the plan in motion

One company that is on board with the program is the baby food manufacturing company, Initiative Foods out of Sanger, California. They will be using five-million dollars of the fund to buy new factory equipment that will lead to the creation of over 30 new jobs. The technology introduced into the factory will require a higher skill set, therefore creating higher paying positions within the company.The company plans on going one step further and will not only train the employees on how to operate the new equipment but also fix it in the case of a malfunction. These new positions will pay around $20 per hour and will include health and life insurance. Previous positions at the factory paid around nine dollars per hour.

No free handouts

While the fund doesn’t expect any return on their investment, they won’t just be giving the money away. If a company involved doesn’t meet the quality standards of the fund, they will be forced to pay back everything they received in full. To reach the point where standards were established and funds could be allocated, the foundation needed to do a lot of listening to local companies. Round table discussions were held with company leaders to learn about the struggles they face in hiring more people, maintaining high-quality positions and expanding their businesses. Many in the discussions cited lack of capital as their biggest hindrance. Even a few hundred dollars can help a company open a new line which could create up to ten new positions.

Getting to the root of the problem

Even with $100 million dollars to start, there is still a long way to go in changing the lives of people in these communities. There is still a major job crisis in the country and efforts like these need to be made in all communities to make a difference. The bank hopes that with the results they are achieving, they will have some hard data to report back for others to replicate similar programs. With more steady, good quality jobs, more people can achieve healthy home ownership that would have otherwise been out of reach. The bank is hoping to break old habits we saw during the mortgage crisis where loans were given to anyone despite the fact that they didn’t have enough income or assets to back them. Instead of just lowering qualification standards and perpetuating the problem, the bank is changing the real issue at hand which is the availability of quality jobs.