Affordable housing development costs have come under the microscope over the past several years, with many state housing finance agencies instituting cost-containment requirements.

“It’s our responsibility to be stewards of these [federal] funds,” said Meg Manley, senior vice president of McCormack Baron Salazar. “It’s incumbent on us to be cost effective in what we do.”

Some leading affordable housing developers shared some of their top cost-effective strategies at AHF Live in November.

1. Hire people you trust

Christine Madigan, senior vice president of development at Enterprise Homes, said the process starts with a general contractor, architect, and engineer that the developer trusts.

“A key thing in terms of hard costs and construction is to make sure we trust the people at the top so when there’s a problem, there’s someone who’s there who will work with us and is a problem solver to help us resolve issues,” Madigan said. She added that Enterprise never adds more than one new member to the development team at a time, so there always will be experienced partners familiar to the developer.

2. Focus on design

“We work very closely with the architects to talk through different ideas to use less to do more,” said Whitney Weller, senior vice president at Michaels Development Co. “There are tricks on façade that are readily available and less expensive that bring character to the building.” She added it’s also important to identify readily available construction materials, which can be more efficient and save on transportation costs.

3. Select the right square footage

“One item that drives up cost is square footage,” said Manley. She said developers need to move away from larger units to more practical sizes. “You want to design a good unit, but how much space do you really need? Being smart about the size of a unit can help with savings.”

4. Keep on schedule

Predevelopment and development schedules are critical. “The key is to use past experience, understand the process, plan for it, keep it tight, and schedule meetings to keep the process moving,” said Weller. “Build in extra time to get funding lined up and for the community process. On the construction side, we have a dedicated person on-site to keep that process moving.”

5. Reduce soft costs

Legal and accounting costs can add to the development total. On the legal side, Madigan said Enterprise Homes encourages lawyers to produce the blacklines on the last deal they did with an investor or lender so they don’t have to start from square one.. Unless a deal is really complicated, she said her firm will use local accounting firms instead of the big nationals, which can be more expensive.