Meet Dave Liette, partner and president of Miller-Valentine Residential Development, part of the Miller-Valentine Group. The Ohio-based firm is one of the nation’s top affordable housing developers. It recently expanded its footprint to 13 states. Liette shares what he is working on in 2013.
What was the first affordable housing development that you worked on?
My first affordable housing development was in 1988. I resigned from Coopers & Lybrand and went to work for a local Dayton, Ohio, not-for-profit to lead them in the development of affordable housing utilizing the low-income housing tax credit (LIHTC) program. The first project was mirrored off of a lease-to-own acquisition/rehab program done successfully by the Cleveland Housing Network. We purchased and renovated 20 single-family homes and rented the homes to qualified residents with an option to purchase in year 15. I sold the credits to a local bank for $0.52! All 20 homes have now been turned over to homeownership by the residents.
What lesson did you take away from that experience?
I learned you must plan for surprises in acquisition/rehab deals. Ten percent rehab contingency is not high enough. I also learned that you have one shot at getting your operating expense budget right, and the shot is before you close the deal. If there is a material error, ownership will likely be burdened with supporting the development for 15 years.
Tell us about a development that you are working on now.
One of the more interesting and challenging developments we hope to close in December is The Lofts at Roberts, an 83-unit senior acquisition/rehab historic tax credit and LIHTC property in Muncie, Ind. We are purchasing the historic landmark hotel from a local bank, which took ownership of the property after a condo development failed in the building during the great recession. The property is located in a redevelopment area of Muncie, including a new city park and amphitheater, a children’s museum, convention center, and a YMCA. The development includes seven sources of financing.
How are your affordable housing projects changing?
Lender and equity documents continue to get more complicated and lengthy. I wish I could wave a magic wand and go back to our 40-page operating agreements in the 1990s!
When you visit one of your properties, what do you look for?
I first look for how the Miller-Valentine associates working at the property (both community managers and service technicians) are interacting with our residents. If they are greeting residents with a smile and know them by name, I know they are likely doing a good job. I also, of course, inspect the condition of the grounds and the buildings. Our expectation is that all Miller-Valentine communities look as if they are new, regardless of the age of the property.
What is a move that Miller-Valentine recently made that other developers can learn from?
To improve our odds of receiving a more consistent number of 9 percent awards on an annual basis, we expanded our geographic footprint from six states to 13 states. In addition, we upgraded the quality and experience of our associate team during the downturn, when more talent was available in the market.
What is the firm planning for 2013?
Miller-Valentine Residential Development is planning on nine new 9 percent tax credit awards in 2013 and plans on closing one new market-rate development.
Affordable housing matters because ...
Affordability is the most crucial housing problem facing renter households today. As our country works through the foreclosure crisis, nearly half of all renters today are rent burdened and pay over 30 percent of their income in rent. This not only significantly impacts the quality of life and peace of mind of renter household families, but impacts local businesses hurt from families having less disposable money to purchase their goods and services.
Favorite fictional hero and why?
Batman because he was intelligent, mysterious, successful, and had a fun social life.
Best business advice that you have ever received?
Always hire people smarter than you.
What is the best business advice that you can give?
Pray daily for God’s wisdom and direction.
When you have an afternoon or a day off, where would we find you?
Both spending time with my family, including my wife, Cheryl, and our two youngest daughters adopted from China in the past several years (ages 5 and 6), or on the golf course.