Many affordable housing developers and owners reported taking steps to expand their businesses and pursue new affordable housing models in 2019. Here’s a look at what some leading firms are doing to improve their brands and create more housing.
Wisconsin-based Gorman & Co. is aiming to expand its presence in Illinois and the Southeast, primarily Georgia and Florida. The developer has recently hired Ron Clewer to be the firm’s Illinois market president and Joel Reed as the Southeast market president. Gorman is also working to increase its presence in the redevelopment of public housing across the nation this year.
In 2019, Providence St. Joseph Health provided nonprofit Jamboree with a $9 million acquisition loan to acquire and convert an Econo Lodge into permanent supportive housing for individuals facing homelessness in Anaheim, Calif. Rehabilitation of the two-story, 70-room motel will include adjusting room layouts to provide for 69 efficiency studio units for individuals earning no more than 30% of the area median income.
Commitment to Diversity
Boston-based The Community Builders (TCB) is backing its commitment to diversity in hiring and in the selection of business partners. Over 60% of its senior staff are women, over 40% of its senior staff are people of color, and over 30% of its annual construction spending is with minority-owned business enterprises. TCB’s compensation philosophy includes a minimum living wage for staff that increases to $15.75 this year.
TCB also recently announced the retirement of industry veteran Beverly Bates and the appointment of Patricia Belden, another affordable housing pro, as her replacement as executive vice president for real estate development.
New Life in Old Colony
For the past 10 years, Beacon Communities has poured its efforts into reshaping Old Colony in Boston, one of the nation’s oldest public housing properties. In the first two phases, the developer rebuilt 285 affordable units as well as the Joseph M. Tierney Learning Center, which offers residents access to education, wellness programming, and community-building resources.
In 2019, the firm embarked on the third phase of this massive endeavor at the redeveloped Anne M. Lynch Homes at Old Colony. Beacon’s $150 million effort in the latest phase will include one-for-one replacement of another 250 multifamily apartments and will add 55 new affordable apartments for seniors. The 55 net additional apartments are being financed with an innovative new tool in the city, whereby a nearby market-rate project is fulfilling its obligation under the city’s Inclusion Development Policy by contributing soft debt to fund the 55-unit affordable transaction alongside 4% tax credits and a first mortgage. The building will be built to passive house standards.
Firm’s Largest Project
Virginia-based nonprofit Community Housing Partners is working on its largest real estate project, the renovation of J. Van Story Branch Apartments, a 350-unit community in Baltimore. The Rental Assistance Demonstration project’s total development cost will exceed $73 million.
Arlington Partnership for Affordable Housing (APAH) and American Legion Post 139 have entered into an innovative collaboration to develop the 160-unit Lucille and Bruce Terwilliger Place. When the American Legion decided to sell its property in 2016, APAH proposed a mixed-use space that would provide affordable housing for veterans and others and allow the group to stay in place and expand its mission to meet the needs of local veterans and low-income families.
A number of developers report working on larger projects to take advantage of economies of scale as well as help meet the enormous need for affordable housing.
For example, The Doe Fund says it is focusing on larger developments with at least 100 units. Dominium, Nevada HAND, and The NRP Group also report developing larger communities. Some companies are also going taller. “As land becomes more expensive and difficult to find, our developments have to go vertical and be designed to generate additional revenue,” says Matthew Rieger, president and CEO of Housing Trust Group. “As a result, we are building more mid-rise and high-rise developments as well as creating more mixed-use residential, commercial, and retail spaces.”
At the same time, several firms note that they are taking steps to contain rising costs, including shrinking the size of units.