Despite all the uncertainties and disruptions caused by the COVID-19 pandemic, affordable housing developers managed to keep building in 2020.
The AHF 50 developers started construction on 354 developments with 41,754 affordable units last year, easily outpacing the prior year’s group, which broke ground on 290 developments and 33,073 units in 2019. Overall, this year’s AHF 50 developers report starting construction on 26% more units, a sign of the strong pipeline of projects entering the year.
LDG Development tops the AHF 50 after starting construction on 12 developments with 2,679 affordable units last year. Headquartered in Louisville, Kentucky, the firm was also the top affordable housing developer last year.
On the latest AHF 50 developers list, four firms report surpassing 2,000 units started in 2020. Twelve firms broke the 1,000-unit mark compared with nine the year before.
“We made a concerted effort to stay focused and keep moving on our business priorities and not let all the noise distract us too much,” says Chris Dischinger, a principal at LDG Development. “We had certain obligations to our partners to let them know what was going on, but we also tried to stay focused on the business of our business.”
One priority was to support the firm’s employees, he says, adding that people had different degrees of COVID concern. Like most firms, LDG increased its use of technology and level of communication during the year. “We tried to make everybody feel safe and comfortable,” Dischinger says.
While posting impressive numbers, developers faced extraordinary challenges during the pandemic, from delays in construction to increased deal scrutiny, from all-time high lumber prices to rent delinquencies across their portfolios. In addition, they were called on to meet the increasing needs of their residents.
Like many owners, Linc Housing’s staff worked to provide internet connections to families, expand on-site food distributions, and arrange rent payment plans. In addition, the Southern California-based nonprofit had its most productive year, starting construction on seven projects with 470 units and closing on the financing for several more developments at the end of the year.
CEO Rebecca Clark credits the Linc team and its many partners for finding ways to keep developments on track whether it meant holding construction prices longer or adding an extra crew when needed.
“Everybody worked together to keep projects on the critical path and moving forward,” she says, noting that early on in the pandemic the team made an effort to identify the different issues that could come up.
Looking ahead, 60% of all the developers surveyed expect finance conditions to be better by the end of 2021 while nearly 29% expect conditions to be about the same and 11% expect conditions to be worse. More than 100 firms took part in the AHF 50 survey.
The 2021 AHF 50 developers’ list is based on the number of affordable housing units the firm started construction on 2020. Fifty-one firms made the list because of one tie this year; there were 52 firms on the list last year.
The Michaels Organization remains the top AHF 50 owner with 45,647 affordable housing units nationwide. The owners’ list is based on the number of affordable housing units owned as of Jan. 1.
Starwood Capital leads the Top 10 firms completing acquisitions, and The Millennia Cos. heads the Top 10 firms completing substantial rehabs, at least $20,000 per unit, last year.