LDG Development tops the AHF 50 Developers list after starting construction on nine projects with 1,763 affordable housing units last year.
The Louisville, Ky.–based firm started almost twice as many units as it did in 2016, says Chris Dischinger, co-principal of the company along with Mark Lechner. The duo started the company in 1994 doing infill development and other projects before turning their focus to affordable housing around 2004.
Since then, LDG has become a strong and steady developer of low-income housing tax credit (LIHTC) developments for families and seniors in need of affordable housing.
The for-profit firm’s tag line is, “Everyone deserves a quality place to live.” That statement comes after going through tough NIMBY (not in my backyard) battles over the years.
“I really get offended by the terrible comments and attacks that many of the people opposing affordable housing hurl at people they’ve never met,” Dischinger says. “We truly believe that people of all incomes and backgrounds deserve clean, safe, and affordable housing.”
LDG’s primary focus is on new construction that provides much-needed housing units in areas that are underserved. This often comes with fights that can get very personal.
“We believe that if the opposition would take the time to meet our residents and get to know them, they would understand they’re hardworking, good people who may not have had all the advantages others have had,” Dischinger says.
Like other affordable housing firms, LDG has had several pivotal moments in its history, including closing deals it needed and getting through the economic recession.
This includes a Gulf Opportunity Zone deal in New Orleans following Hurricane Katrina. After facing a neighborhood struggle, the firm decided to change locations.
“A new site was selected, and after months and months of battles, it was finally approved to build. Our plans then needed to be drawn, and in the ensuing months the financial crisis hit,” recalls Dischinger. “We couldn’t find investors to buy our credits, and time was beginning to run out on our placed-in-service deadline.”
LDG was able to close the deal and start construction by deferring all fees, reimbursements, and sunk costs. It also had substantial cash invested in the land. The firm sold the tax credits at 35 cents with a provision that it could buy the credits back at a small premium.
“In the next couple of months, as construction began we found a new buyer for the credits and sold them at 65 cents,” Dischinger says. “The deal was then able to repay the predevelopment and land costs as well as the fees.”
Today, The Muses is a well-functioning development that serves a mixed-income clientele and anchors a neighborhood that’s undergone a dramatic revitalization.
Since that time, LDG has continued to expand its presence into other states, including Georgia, Tennessee, and Texas. And last year, LDG took on one of its most ambitious projects to date when it partnered with Marian Development, also based in Louisville, and broke ground on Riverport Landings—an intergenerational community that will include three types of affordable housing in Louisville: the 108-unit Riverport Senior Living; the 240-unit Riverport Family Apartments; and Riverport Scholar Housing, which will offer 64 units for low-income, single-parent families and young adult foster alumni. Residents from all three properties will also have access to a community park, retail space, and other amenities.
Funding for the $71 million development was secured through tax-exempt bonds, 4% LIHTCs, HOME, and the state Affordable Housing Trust Fund provided by Kentucky Housing Corp. Other funding partners include Red Stone Tax Exempt Funding, PNC Bank, U.S. Bank, and the Louisville Metro Government’s HOME and the Louisville CARES programs. Construction on the development is expected to be completed early next year.
“Their developments are structured with the tenants’ needs and wishes as their top priority,” says Cody Langeness, president of Red Stone Tax Exempt Funding, a frequent financial partner. “Their properties are in the top tier of amenities and services provided while remaining an affordable community. LDG does not believe in cutting corners or taking the easy way, instead focusing on providing quality housing for the long term,” Langeness adds.
Going forward, the firm hopes to build on its momentum by completing eight developments with nearly 1,500 affordable units and starting construction on another 11 projects comprising more than 2,100 affordable housing units this year. Dischinger says sticking to what it does best—building affordable and mixed-income developments—will help the company grow.
More important, he says, this focus will ensure that LDG remains true to its guiding philosophy that everyone deserves a quality place to live.