Many Texans live in urban and rural communities where there is very little availability of healthy, fresh, affordable foods. This lack of access affects 3.4 million people across our state, impacting not just their health, but their social and economic well-being.
It’s often the case that these areas can actually support healthy food retail, but not necessarily the creation of new food retail -- whether a grocery store, corner store, farmer's market, mobile market, or otherwise. This economic barrier to entry prevents many Texas families from being able to purchase the kinds of foods needed to maintain a healthy lifestyle.
Solution: Healthy Food Financing Initiatives
Federal, state, and local policy initiatives can play an important role in increasing the availability and affordability of healthy food. A Healthy Food Financing Initiative (HFFI) supports projects that increase access to healthy, affordable food in communities that currently lack these options. High construction and workforce development costs, along with other barriers to entry, make it difficult to bring healthy food retailers to areas with low access. State and/or local dollars invested with HFFI can offset those costs and bring new and expanded retailers to communities. HFFI funds can also be used for other projects that increase healthy food access. What's more, HFFI programs work to leverage private dollars to maximize the impact of the public investment.
What do Healthy Food Financing Initiatives really look like in the community? Check out My HFFI Story, a project by PolicyLink celebrating stories of community action, impact, and hope through images captured by Healthy Food Financing Initiative grantees working to foster access to healthy food, good jobs, and opportunities to thrive.
Texas Grocery Access Investment Program
In the 85th Texas Legislature, House Bill 3324 (authored by Representative Eddie Rodriguez) and Senate Bill 2156 (authored by Senator Judith Zaffirini) were introduced to create a Texas Grocery Access Investment Program to extend access to capital toward developers who want to create a food retail outlet in an underserved area. This initiative gained support from across many sectors, including retail, public health, and economic development, and while there is not yet legislation enacted, momentum continues to drive forward during the interim.
If you'd like to lend your support to this initiative, please click here as an individual or see below to join the Texas Grocery Access Task Force as an organization.
Task Force: Get Involved!
The Texas Grocery Access Task Force is a statewide, cross sector coalition of organizations committed to improving access to healthy food in both rural and urban communities throughout Texas. The Task Force is leading an effort to establish a statewide healthy food financing initiative. The Task Force’s goal is to establish the Texas Grocery Access Investment Program to provide public funding to incentivize food retailers to build in underserved communities. If you are interested in joining, please contact Christopher.Walker@heart.org.
Healthy Food Financing Initiatives 101
In recent years, Healthy Food Financing Initiatives (HFFI) have proliferated around the country as a tool for state and local governments to bring new supermarkets and grocery stores to low-income, underserved communities. Programs have frequently been started with public economic development funding or philanthropic program-related investments that are awarded to Community Development Financial Institutions (CDFIs) to be leveraged with other sources of public and private capital and then invested in new and expanded grocery stores.
Financial Tools: What are they?
Healthy food financing programs provide grants and loans to support a range of large and small grocery projects whose credit needs are unmet by conventional financial institutions.
- Flexible financing can support the multiple costs related to developing stores in underserved communities like pre‐development, site assembly and improvement, construction and rehabilitation, equipment installation and upgrades, staff training, security, and start‐up inventory and working capital.
- Compared to conventional credit, HFFIs offer more flexible terms and structured financing customized to the needs of the project
- The total amount of funding awarded per store varies, and average grant size has been approximately $100,000; substantially more funding for projects may also be supplied for projects with extraordinary need in the form of traditional loans from private lenders or New Markets Tax Credits.
Public/private partnerships create more bang for the buck
CDFIs have the knowledge and capacity to leverage state funds with other forms of public and private capital such as New Markets Tax Credits and private lenders community development financing, and as a result can greatly expand the impact of a state’s investment. A program in New Orleans was started with $7 million dollars and leveraged with additional public and private funds by a CDFI for a total of $14 million dollars. Other programs have been able to leverage double or triple the amount of a state’s investment.
How do HFFIs work?
Many HFFIs have been developed as public private partnerships with several managing partners. Government entities have seeded programs with investment capital and monitored program implementation. CDFIs, which have significant experience lending in underserved communities, can effectively and efficiently administer program dollars by leveraging state investments and providing customized financing packages to applicants. Food access organizations have worked with CDFIs to conduct marketing and outreach for healthy food financing programs, and have screened applicants for eligibility.
Who can apply?
Eligible stores are in low and moderate income communities underserved by grocery stores. Applicants must plan to either open a self-service supermarket or other grocery retail outlet that primarily sells fresh produce, seafood, meat, dairy and other groceries or renovate and substantially improve a store’s ability to stock and sell a variety of fresh fruits and vegetables. In some instances financial awards may be made to develop real estate projects that will lease space to a grocery retail tenant.