Philanthropist Ron Simon has kicked in $100 million to help build affordable workforce housing for nurses, firefighters and teachers in Orange County, where a typical home tops $1.2 million.
The veteran executive of RSI Equity Partners and other ventures ranging from commercial cabinet making to homebuilding over decades gave the seed funding to RSI Dream Communities, a nonprofit he launched to develop housing for what some call “the missing middle,” the Orange County Business Journal reported.
RSI aims to circumvent clunky bureaucracies by using private funds, a route that can shave three to five years off the development process.
The nonprofit is employing a new strategy for workforce housing development: partnering with employers.
Simon has tapped Jim Palmer, the longtime CEO of the Orange County Rescue Mission, to run it.
“We’re looking at partnering with hospitals, colleges, school districts” and other local organizations struggling with retention and recruitment because of the rising cost of living, Palmer told the Business Journal.
Simon built RSI Home Products into the world’s largest kitchen and bath cabinet manufacturer before selling it for $1.1 billion, also has a successful career as a homebuilder. The Business Journal estimates his personal fortune at $1.3 billion.
He started RSI Communities, a development firm he sold for $460 million. Simon previously told the Business Journal that he knows techniques to reduce prices, such as having 8-foot ceilings rather than sought-after 10-foot ceilings.
RSI Dream Communities marks a return to the Simon Family Foundation’s previous attempt to develop affordable housing in OC. In 2008, Simon set out to develop housing using public funds in Santa Ana. His efforts were met with pushback by not only city officials but also residents.
The foundation built affordable homes in Santa Ana and Buena Park. But it hung up its housing arm after struggling to break through government red tape.
Prices for homes in Orange County are rising faster than anywhere in the country, led by a surge in the luxury market. The price of a typical home in OC rose 10.5 percent in the 12 months through May, driven by a 12.3 percent gain in luxury homes, which also led the nation.
The median price for a home in OC in May was $1.2 million, according to Redfin, which charted an 18 percent gain on the year.
At the same time, apartment rents fell in Los Angeles County and much of the U.S., but not in Orange County. Overall rents in OC rose 2.2 percent last year, while falling 2.6 percent across L.A. County.
— Dana Bartholomew
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