Enterprise Community Partners and the Urban Land Institute’s Terwilliger Center for Housing released a new report Thursday that explores solutions to expanding the nation’s affordable housing supply while overcoming barriers to development that many industry stakeholders face.
Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals is the culmination of a 16-month period of roundtable discussions and interviews with nearly 200 developers, financiers, and policymakers in Boston, Chicago, Denver, Houston, Los Angeles, Minneapolis, New York City, Pittsburgh, San Francisco, and Seattle. First findings were unveiled at ULI’s fall meeting.
“At the end of the day, the entire industry as well as the country is struggling with doing more with less,” said Andrew Jakabovics, senior director of policy development and research at Enterprise and one of the authors of the report.
He said as the need for affordable housing continues to grow, the more units that can be delivered at a lower cost is in the best interest of the nation. The goal is for this report to help industry stakeholders move the needle in terms of putting better product out there at a better cost.
The detailed report identifies some of the main intertwining cost drivers to creating affordable housing. They include: project scale; project design and construction; finance and underwriting; program and investor requirements; and state and local regulations.
It then offers recommended actions to overcoming these cost barriers:
· Promote cost-effectiveness through consolidation, coordination, and simplification;
· Remove barriers to reducing construction costs and delays;
· Facilitate a more efficient deal assembly and development timeline;
· Improve and align incentives;
· Improve the flexibility of existing sources of financing and create new financial products to better meet needs; and
· Support the development and dissemination of information and best practices.
“Enterprise and ULI will use the joint research to spark federal, state, and local conversations that lead to policy change and financial innovation, ultimately stretching limited resources for affordable housing,” said Ali Solis, senior vice president of public policy and external affairs at Enterprise, in a statement.
Jakabovics said the unveiling of the report is not the end of the process, and ULI and Enterprise will continue the dialogue at all levels.
For example, Enterprise, ULI Minnesota, Minnesota Housing Finance Agency, and The McKnight Foundation are co-sponsors of the MN Challenge to Lower the Cost of Affordable Housing, an idea competition that will kick off at the end of January to find lower-cost affordable housing solutions.
He also added that many of the practitioners who participated on the roundtables and in the interviews are excited to have the report in hand so they can have something to point to when they begin conversations and move the discussions forward internally and at the local and state levels.
To read the full report, go to http://www.uli.org/wp-content/uploads/ULI-Documents/BendingCostCurve-Solutions_2014_web.pdf