If a local news reporter calls and asks why your new affordable housing development costs what it does, do you have a good answer? Can you provide a concise explanation to adequately tell the story of your development and its costs?
Explaining affordable housing isn’t easy. You may know all the expenses inside and out, but being able to articulate the reasons for them is another story.
As development costs rise and more scrutiny falls on affordable housing, the industry needs to be able to explain costs in a candid and cogent manner. That was one of the messages sounded at AHF Live: The Affordable Housing Developers Summit, in Chicago, this past November.
I’m reminded of a story I covered back in my newspaper days. A city was borrowing funds from its redevelopment agency. The same city leaders oversaw the agency. Now, it almost didn’t matter if it was kosher to bum the money. The story became a much bigger deal when officials couldn’t provide a strong, coherent answer for their complicated financial moves.
A better example comes from Bryan Zises of the Illinois Housing Development Authority. During AHF Live, he pointed out that the federal HOME program became a target and its funding reduced after one, just one, news article. Not being able to explain development costs is dangerous.
There’s good reason to be concerned. Construction costs are rising. There’s a push for developments to be located in more expensive, high-opportunity neighborhoods. And federal officials are taking a close look at housing programs.
I understand that each project is unique, but there are some common cost factors that can be articulated, such as land, regulatory requirements, and the use of green technology and quality materials that have long-term benefits. This coming year, one of the tasks of the industry should be to come up with strong talking points to clearly explain costs.
