LOS ANGELES — Taking pictures of nature, graffiti and unusual objects on his walks helps Dane Brown see life from a different perspective. He likes to blow the pictures up and print them, but he didn’t have anywhere to hang his own photography until recently.

“I was actually homeless for about a year, it was very rough; it took a lot of patience,” said Brown.

And that patience and perseverance eventually paid off. Brown is now living in permanent supportive housing on East Vernon — the brand-new apartment has given him a fresh start.

“I feel like an adult now,” said Brown who is in his late 30s. “I always dreamed of having my own home, I’ve never had my own home to do the way I want to do.”

What You Need To Know

  • SDS Capital Group is a high equity impact fund that supports projects in underfunded parts of the state and country

  • RMG Housing is a development firm that builds permanent supportive housing for people with special needs or who have experienced homelessness

  • These two organizations are working together to create more housing in the LA area

  • The apartments are being built without any government subsidies, which is unusual for these types of projects

The structure where Dane now lives in is part of a new venture to provide permanent, supportive housing for unhoused people, that brings construction and private equity together in a symbiotic way.

Debbie La Franchi has a key role in the initiative. She is the founder and CEO of SDS Capital Group, a high impact private equity fund.

“It’s private sector capital that we’re using to finance these developments which is really great,” she said.

La Franchi got her start in the public sector working as the assistant deputy mayor of Los Angeles, but realized she could have more of an impact for social good working in the private sector.

She founded SDS Capital Group in 2001 and works with investors to support underserved communities. Her latest project is focused on building permanent supportive housing around Los Angeles and California, where she’s working with developers, Tim Roth and Mo Zahrawi, who run RMG Housing.

RMG has developed a way to build apartments for under $200,000 per unit, an impressive feat in the supportive housing world. Roth said they’ve made that achievable by fine-tuning their building work.

“We have a sweet spot that we try to hit,” said Roth. “We just try to get better in all the different trades that we are applying, whether it be fire sprinklers, fire alarms, electric, plumbing. All those elements come together in the build and are really important.”

The typical price for permanent supportive housing is over $500,000 according to data collected by the LA Controller’s office. Supportive housing in California is usually developed using government funding and subsidies. The subsidies tend to hike up the building costs. Instead, for these projects La Franchi’s fund provides all the capital, allowing developers to work in a more streamlined way. La Franchi, Roth and Zahrawi plan on developing at least 1800 units in California.

La Franchi looked for specific investors who she thought would be open to developing the project, with its unusual approach. “We’re fortunate that there are investors out there who are willing to take that leap of faith based on their due diligence in the model, in something that’s so dramatically different,” she said.

But La Franchi clarified that the collaboration is not charitable, it’s a fund created to make a return for the investors. The capital that investors put into the fund is used to build the projects. Once the construction has been completed, and all the tenants have moved in, they begin to pay rent primarily using government sources of funding, like section 8 vouchers. Subsequently, a bank replaces the investors’ capital with a loan. The loan is always larger than the original investment and that’s how they make a return.

La Franchi said she is committed to bringing private equity and supportive housing together. “We need more of this to be happening so these individuals have a fighting chance to really elevate out of homelessness and rebuild their lives,” she said.

And that’s exactly what Dane Brown is doing in his new apartment, “I feel good, I feel elated, I feel like I can be myself again,” he said. “I have the privacy to be who I love to be.”