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Q&A with Doris Koo

By Donna Kimura

Oct. 15 —Doris Koo has been a community organizer, a developer, and a public housing authority administrator, which have all led to her latest and most prominent position.

Since the beginning of 2007, she has been president and CEO of Enterprise Community Partners, Inc., a national nonprofit provider of development capital and expertise for affordable housing and community development.

One of the 25-year-old organization’s recent efforts has been to build more than 8,500 healthy, environmentally friendly homes for low-income people. “I really feel we have hit a home run with the Green Communities initiative,” Koo said. “Frankly, we’ve only seen the tip of the iceberg as it relates to attracting new capital into affordable housing, reducing costs for both property owners and residents, and literally transforming how we do affordable housing in this country.”

Koo’s first year as president has also come at a time when the subprime mortgage market has fallen into turmoil. “It was a train wreck waiting to happen,” she said. “It has terrible consequences for millions of families and their neighborhoods in which we work. The credit crunch can, in a very negative way, impact the way our affordable housing partners gain access to capital, and carry out their mission to build better neighborhoods and affordable housing.”

Q: What do you see as the biggest threat to affordable housing today?

A: Family income simply isn’t keeping pace with housing costs. A lot of existing affordable housing is being lost for a variety of reasons. The industry and the affordable housing movement is losing ground. The bust in the subprime market is one symptom of this issue and it threatens to destabilize neighborhoods that we have worked in for over two decades.

The solution lies in aggregating substantially more financial capital for affordable housing. That’s the only way we can move to much greater speed and scale in affordable housing production and preservation.

The hard fact remains that low-income housing tax credits (LIHTCs) and the whole menu of federal, state, and local investments into affordable housing just aren’t keeping pace with market demand. Just like we helped invent LIHTC and a whole new industry back in the 1980s, it’s time for the next big idea.

Q: What are you doing to alleviate that threat?

A: Enterprise has developed strong expertise in creative leveraging of public, philanthropic, and private capital—the prime example is our work with the New York City Acquisition Fund. Due to the generosity of the Starr Foundation, we were able to leverage a $12.5 million grant into a $230 million pool of capital for affordable housing production and preservation. We are well on our way toward meeting our $1 billion promise in New York City.

Enterprise is busy adapting that model, and others, in a number of markets—Atlanta, Los Angeles, the Gulf Coast, Denver, and San Francisco, just to name a few places. The fact is that we’ve got to leverage public, philanthropic, and private capital in much more creative ways. By demonstrating how to do things differently, we can drive more public investment, attract more philanthropic and private capital, and drive new industry practices. Our Maryland Regional Workforce Housing Fund is another example of bringing creative solutions to the shortage of quality housing affordable for our nation’s workforce.

Q: How will the availability and flow of capital to affordable housing developers change in the year ahead? And what will that mean for developers?

A: The downturn in local real estate markets and the turmoil in the subprime sector and larger economy present real challenges. We’ve helped create a whole new industry around LIHTCs over the last 20 years, and now we’ll see if developers have the skill and financial capacity to weather this part of the economic cycle.

The LIHTC market itself appears to have settled down, and that helps attract the private capital that ultimately drives the bulk of the production of affordable housing. In 2006, Enterprise provided more than $1.2 billion in equity, debt, and grants to affordable housing developers. We don’t see that slowing down, and Enterprise is actively helping our developer-partners with expertise and capital to weather the current storm.

Q: What is the biggest project you are working on today?

A: We’ve taken a big bite in the Gulf Coast—a series of inter-related projects. Overall, we’ve made a commitment to rebuilding 10,000 affordable homes and comprehensive redevelopment of an entire neighborhood in New Orleans to ensure it is economically diverse and sustainable. Right now, we’ve got more than 1,700 of these units in the financing pipeline, including 1,000 senior units underway. I can’t imagine a more complex environment in which to operate.

Q: What’s been the hardest decision that you have made since becoming CEO?

A: Change is constant and not easy. Decisions about people have been the toughest thing. It is difficult to quickly size up what the organization needs and assemble the talent that can provide leadership and skill in just the right ways.

I inherited a great group of people and had the advantage of working inside Enterprise for five years prior to becoming the president and CEO. I also have a great partner in Bill Frey, our executive vice president and COO, who has been here a lot longer than I have and brings tremendous creativity and respect from within the industry. I’ve also chosen to bring in some outside talent.

All of this adds up to a lot of organizational change that can be difficult for some people to adapt to. If you don’t get the transition and changes in corporate culture right, then it can lead to a lot of confusion and less energy directed at serving customers and communities.

Q: Do you have any new products or programs for developers?

A: Yes, we’ve built a new business—equity, debt, and grant offerings—around the Green Communities initiative. Nationally, we’ve benefited from a big investment from one of our trustees, Ron Terwilliger, to develop new programs and products around workforce housing in partnership with the Urban Land Institute. As one example, we’re organizing a new equity fund in Maryland to finance workforce housing in Maryland, Washington, D.C., and northern Virginia.

Q: What do you want to accomplish in the coming year?

A: Some of it will sound like “inside baseball”—creating much more seamless integration across various entities inside Enterprise. This is important because it will pay off by allowing us to focus more effectively on customers and communities, and to use each dollar more wisely.

Externally, 2008 is the year we will begin to see homes come out of the production pipeline in the Gulf Coast, and people down there will benefit from the fruits of our labor with our partners. I also see growing momentum in our Green Communities initiative as more developers and policy makers understand where we are driving this initiative and we demonstrate through experience that this pays off for everybody—that affordable housing and community development, and sound environmental practices are mutually reinforcing. We want to see major shifts in the policy framework to recognize and support the importance of affordable housing in our cities, communities, and our overall economy.

Doris Koo is president and CEO of Enterprise Community Partners, Inc., a national nonprofit provider of development capital and expertise for affordable housing and community development. She has been a community organizer, a developer, and a public housing authority administrator.