Affordable Housing Finance

THE BUZZ

POP QUIZ

AFFORDABLE HOUSING FINANCE • September 2008

MEET BRUCE GUNTER, president of Progressive Redevelopment, Inc. (PRI), a leading nonprofit housing developer in Georgia.

Since its first project in 1989, PRI has created more than 3,000 units in a wide range of developments serving families, seniors, and special-needs populations.

Gunter shares what’s new at the organization and what’s in store for him.

Q: How did you get started in affordable housing?

A: I asked my pastor about raising money for my church to build a Habitat for Humanity house, and he said, “When can you start?” I raised the money, built the house, and joined the local Habitat board. That was in 1984.

Q: What was your first job in the affordable housing industry?

A: Other than the volunteer work with Habitat—which evolved from that first house into being the treasurer of the board of Habitat for Humanity International for five years—I became the first paid executive director of PRI in 1992, working part-time. Of course, I had to raise my own salary.

Q: How is PRI changing?

A: We’re growing and are now up to 165 employees and a $6 million operating budget, not including our property management. After questioning the sanity of being completely committed to the affordable housing specialty— with the oppressive regulatory regime, arcane financing, and scant public support—we realized that these substantive barriers to entry provide job security, and we have wholeheartedly embraced this niche. However, we are actively planning to stretch beyond this niche to include larger, more cashflow producing deals to create more of an operating cushion.

Q: What is the biggest challenge for your organization this year?

A: With 40-year-old, highly rent-restricted, under-rehabbed properties in our portfolio, as owners we face the daunting challenge of restructuring/recapitalizing a host of problem children. We are much more astute about more complete rehabs (or new construction) and creating sustainable cash flow these days, but we cannot avoid our “special assets.”

Q: What’s a recent move made by your group that other developers can learn from?

A: It’s not so new, but we have found our “three-legged stool” approach to developing, owning, and managing affordable housing—that is, project development, property management, and resident services—works real well. These three divisions, with very different business models and cultures, support one another yet are standalone in some respects. PRI is actually a holding company.

Q: Tell us about a favorite amenity or design feature at one of your projects.

A: Since we do some supportive housing, that would be the resident services on some of our properties. As a finance guy, I needed convincing of the efficacy of such services. After seeing the transformative effect on the lives of some of the kids and of some of the formerly homeless men that well-aimed services have, I am a believer. As for a physical feature, I am pleased to see us installing community gardens on a few of our properties, and we have embraced green design and construction for all of our projects going forward.

Q: Share with us a favorite statistic or fact about affordable housing.

A: Is “favorite” the right word in this context? The exact amount eludes me, but the enormous level of the mortgage income tax deduction, a housing subsidy by any other name, compared to the relative pittance of direct housing subsidies for those that really need a housing subsidy renders most of the country as “welfare queens.” We are “them.”

Q: What inspires you?

A: Those I love most dearly in this world—my two college-age children, possessed with inquisitive minds, big hearts, and a yearning to find ways in which they can contribute—and my companion for two years, a cancer survivor and single mom. Calvin Trillin wrote lovingly about Alice, his late wife, that he never quit trying to impress her, she inspired him so. I feel the same way about these loves in my life.

Q: What makes you mad?

A: Any agency with the word “housing” prominently featured in its name that in fact acts as an obstacle to creating and running affordable housing. I also chafe mightily at the gross income disparity that exists and is growing in this country and a capitalist ideology that so rewards those who have and chastens those who have not or cannot for some reason. As a practicing Christian, I would also like its good name back, which has been hijacked in many respects by those who have hitched it to empire and absolutist dogma.

Q: Who’s your hero and why?

A: I lived for 22 years in a house that was equi-distant from the Carter Center (on whose Board of Counselors I sit) and the King Center. I could do far worse than to name those two Nobel Peace prize winners as heroes. I am privileged to know President Carter personally and admire him tremendously. He has grown into a fearless prophet, working on behalf of poor, powerless, and disenfranchised people around the globe. Besides, as we know, he is darn good with a hammer.

Q: What do you do when you are not working?

A: I am on a bicycle, both mountain and road. This fall I have a trip planned to mountain bike from Telluride to Moab—200 miles—with five buddies. No cell phone, no email, lots of adventure in store.

Q: How do you balance work and personal life?

A: I do a pretty poor job, actually, since I love what I do. Turns out there are more affordable housing related boards than I realized, and I can’t keep my mouth shut! Plus, my office happens to be conveniently located just off Atlanta’s only real bike path, and I manage to rationalize biking to the office for a few hours on most weekends. As my children are safely away in college, Dad can indulge his passion.

Q: What’s on your iPod playlist?

A: I think Steve Earle calls it alt-country, though that is not what Gram Parsons called it when he was with the Flying Burrito Brothers. Blues tunes are populated throughout. And I still maintain a healthy dose of Dylan (of course), Springsteen, the Dead (still), and being a Southerner, the Allman Brothers.

Q: What’s next for Bruce Gunter and PRI?

A: Approaching 20 years now, PRI has learned the lessons of youth and is really, really, really working hard to move to a higher, more sustainable level of activity on all fronts, including our back-office systems. Four of our six senior staff members have been together over 10 years. Our staff and board members are well suited and extremely committed on this “bus,” and we are even slightly encouraged that affordable housing will garner increased support in the coming years. We have earned a good name and carved out a respected civic role in our hometown of Atlanta, and see no reason why we shouldn’t stay the course. There remains much to do. As for me, I have a yearning to commit these stories and lessons learned to paper in a book of some fashion, knowing that we have helped shape the fabric and lives of communities and people for whom such stories matter greatly and deserve to be told. They are, after all, about home.