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Thursday, Jul 18, 2024

Simon to Spend $100M On Affordable Homes

The rising cost of living is driving out essential, middle-income workers from Orange County.

RSI Dream Communities, founded by local philanthropist Ron Simon, is aiming to put a stop to the exodus by creating workforce housing for nurses, firefighters, teachers and other public servants whose budgets are getting squeezed by increasing rents and inflation of goods.

Simon, whose ventures include RSI Equity Partners and the education-focused Simon Family Foundation, is backing the nonprofit with $100 million in seed money. He also recently tapped Jim Palmer as CEO.

Palmer is well known as the long time CEO of the OC Rescue Mission shelter that provides, meals, rehabilitation and career placement services for locals struggling with homelessness.

Palmer views his return to the nonprofit space as an extension of his work serving OC’s unhoused population.

The people helped by OC Rescue Mission “also all needed affordable housing,” Palmer told the Business Journal.

His work with RSI Dream Communities “is just taking it to the next level,” he said.

“We’re looking to support our communities” by providing essential workers with housing close to their employers.

Despite their charitable intentions, Simon and Palmer know the road to developing workforce housing isn’t going to be a walk in the park.

“The word ‘affordable’ is a dirty word to most people,” Simon told the Business Journal.

They anticipate having to educate the neighborhoods RSI Dream Communities develops in to counter the stigma around affordable housing and ease residents’ fears.

“Who wouldn’t want a firefighter, a police officer, a nurse, or a teacher next door?” Palmer said.

Homebuilder History

Simon, who 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.

He started homebuilder RSI Communities, which he sold for $500 million. He’s previously told the Business Journal that he knows techniques to reduce prices, such as having 8-foot ceilings rather than much sought after 10-foot ceilings.

“Business can be a battlefield, and I have decades of stories and the mental scar tissue to prove it,” Simon wrote in his memoir, “Tell me why I can’t; winning my battle with China by making it in America.”

“Disagreement – even when it’s heated – ensures that alternative solutions are always heard and considered. When offered respectfully and professionally, differing points of view help, not hurt, our business.”

RSI Dream Communities marks a return to the Simon Family Foundation’s previous efforts to provide affordable housing to OC residents in need.

In 2008, Simon set out to produce housing using public funds in Santa Ana. His efforts were met with pushback by not only city officials but also residents.

“Without the support of former Santa Ana Mayor Miguel Pulido, NIMBYism would have prevailed,” Simon said.

The Simon Family Foundation built affordable units in Santa Ana, and later on in Buena Park.

The foundation, however, hung up its housing arm after struggling to navigate through the bureaucratic red tape of local governments.

The charity then turned its focus to education; its Simon Scholars program has since provided over $100 million in financial support to high school, college and graduate students.

Today, RSI Dream Communities is aiming to dodge the cumbersome bureaucratic process by using private funds, which shaves three to five years off the development process, according to officials.

The nonprofit is also implementing a new strategy for workforce housing development: partnering with employers.

“We’re looking at partnering with hospitals, colleges, school districts” and other local organizations struggling with retention and recruitment due to the rising cost of living, Palmer said.

OC’s healthcare sector is especially in dire need of support.

The county “is short by more than 10,000 needed healthcare workers,” City of Hope OC President Annette Walker said in a statement. “The lack of reasonably priced housing opportunities significantly affects [their] recruitment and retention.”

While RSI Dream Communities’ approach to providing housing is simple, the work ahead of Simon and Palmer will not be easy.

“The most difficult places to accomplish this are areas like OC, where there’s every expensive land and there isn’t an abundance of it,” Simon said. “But we are going to work our tails off to make this happen.”

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