Louie Lange III is the founder and principal of The Commonwealth Cos., a major affordable housing developer and owner headquartered in Fond du Lac, Wis. His firm is one of the most active in the industry, starting construction on 15 new projects with nearly 900 affordable homes last year.
Here, Lange shares the pivotal moment that led to Commonwealth, what he learned in the Marines, the design feature he would add to every project, and more.
How did you get your start in affordable housing?
I needed a real job. All kidding aside, we had decided to move on from military life, and there was a family friend named Dick Freund who had a company in my hometown developing apartments in the state with “tax credits,” whatever that meant. I did have an interest in real estate and tried to dabble in it while I was at my last duty station, so I reached out to them. As luck would have it, I was offered a job in their construction division but quickly moved over to development.
Is it true you founded The Commonwealth Cos. in your basement?
That is true, and it was not as cool as it sounds. After a few years in the business I decided to strike out on my own, and I had very little money to make it happen. So, we moved to a smaller house, and I threw an old desk on top of a rug down in our unfinished basement. Our house was so small that we had an extra couch that didn’t fit upstairs so I got that by default. That couch only had one visitor—I needed an attorney that could do tax credit work (among other things) and had been told about a guy named Bill Cummings in Milwaukee, so I reached out to him. Bill insisted on coming up to Fond du Lac to meet face to face so I invited him to “the office.” I don’t know what I was thinking, he rolled up in some fancy car—you know the kind with power locks, etc.—and I marched him right through the house, into the garage, and down into the basement. I was so embarrassed, but we hit it right off and have been friends ever since. I am certain to this day that Bill’s office visit was the reason I was given such great payment terms, too!
What was a pivotal moment in your career?
The most pivotal moment in my career and life was my wife, Colleen, being diagnosed with Type 1 diabetes. I was about halfway through flight school in the Marines and decided that that life wasn’t going to work. The Naval medical system struggled to figure out what was wrong with her. We wanted a family, and I wanted her to have the very best care with a healthy life, so I made the decision. If that doesn’t happen, no Commonwealth. Everything happens for a reason.
Tell us about an interesting project you’re working on this year.
Every project is unique and interesting. That’s one of the things that makes our work so fun.
What’s the best recent move made by the company?
We just merged with a company out of Madison—Mirus Partners. It is a great capacity builder for Commonwealth, allowing us to groom and place our next generation of leadership.
What’s the greatest challenge for Commonwealth today, and how are you meeting that challenge?
Construction. The cost and time to build is constantly a struggle, and everyone in the business is experiencing it. First and foremost, we are spending more resources on budgeting and committed to not chasing unrealistic credit usage points. We would rather not get a project than get one that doesn’t have enough credits to be built. Other steps include longer construction schedules and additional project management/site supervision to work with our subs. One of the things I think we as an industry need to continue to do is to educate the state agencies on the true costs out there and push for them to allocate the appropriate amount of credit given all of the market conditions (construction costs, credit pricing, etc.). I understand the need to not allocate any more credits than necessary, that is good for all of us, but right now many states are underallocating projects. It should not surprise anyone that developers will chase points to get an allocation. It is best for the industry not to award points for things that could be disastrous to their projects.
What did you learn in the Marine Corps that you are applying to your business?
Delegation and responsibility. An old saying in the Corps is: “You can delegate authority, but you can’t delegate responsibility.” It is OK to pass work/tasks along—we all have to, but that doesn’t mean we are not still responsible for it. I have been surprised over the years since leaving the Marines how many people don’t understand that concept. They simply think if they pass something along, they are free and clear. We are trying to create a culture where people own their work and their people and they embrace responsibility.
If you could add any design feature or a resident amenity to one of your developments, what would it be and why?
Large patios or decks. I think they add a lot to curb appeal and our residents’ enjoyment.
Favorite fictional hero and why?
James Bond. As the saying goes, “If I have to explain, you wouldn’t understand.”
Besides the usual work items, what’s in your office?
Booze. I can’t tell you the last time I poured a glass, it has been years, but it’s nice to know it’s there, and I am sure James Bond would have it in his office.
Best advice you’ve received?
“Don’t do it.” When I resigned my commission, I was convinced I didn’t have any marketable job skills for the real world so I was going to law school. Every lawyer I spoke to gave me the same advice.
If you unexpectedly had the afternoon off, where would you find you?
Outside for sure, probably in the woods or on the water.