Chickie Grayson Leads Enterprise Homes to Produce Housing, Navigate Challenges
By Caitlin Jones
5 min read
Tax Credit Advisor, August 2009: “Diversity has helped us in this last real estate boom-to-bust,” says developer Chickie Grayson, president and CEO of Baltimore, Md.-based Enterprise Homes, Inc., referring to the organization’s shift in development strategy.
Enterprise is a familiar name in the affordable housing industry. Enterprise Homes, Inc., is a subsidiary of Enterprise Community Investment, Inc. (ECI), which syndicates low-income housing tax credits, historic tax credits, and new markets tax credits, and provides permanent financing and other financial services for the affordable housing industry. ECI is a subsidiary of Enterprise Community Partners, Inc. (ECP), the nonprofit parent organization that provides technical expertise, grants, and public policy advocacy to help create affordable housing nationwide. Also under the Enterprise umbrella is the Enterprise Green Communities Initiative, the first national building standard for green affordable housing.
Enterprise Homes does the “bricks and sticks” through its development and consulting services. It develops affordable, workforce, and mixed-income rental and for-sale homes.
“We act as a [development] lab for [ECI and ECP], and they act as a resource for us,” says Grayson. Enterprise Homes develops the housing, obtains equity for projects through ECI, and develops all its housing to Green Communities standards.
Enterprise Homes develops alone or in partnership with others, usually nonprofits, primarily in the Baltimore and Washington, DC metropolitan areas, Virginia, and Pennsylvania. It’s produced around 4,500 housing units, and has roughly another 1,000 under development.
Grayson, a native of nearby Baltimore who still lives there, joined Enterprise in 1987 to help it close and build two housing developments. Before joining Enterprise, she developed smaller multifamily residential properties.
Success from Evolution
Grayson credits Enterprise Homes’ success in large part to changing course over time.
“You have to keep evolving,” she says. “That’s an important part of the development process, because nothing is static; it’s a very dynamic process. So it’s really important to stay ahead of the game and to have as much diversity as you can, while sticking to your knitting.”
That practice has helped Enterprise Homes remain successful in the single-family housing market. Enterprise Homes managed its way through the downturn in the single-family market by adjusting its development strategy to include more rental projects, before the home sector began to sour. Today about 70% of the housing units it develops are rental and 30% are homeownership, compared to 90% homeownership in the organization’s early years. As financing dwindled in the late 1990s and early 2000, Enterprise Homes began focusing more of its effort on development of affordable and workforce rental housing.
Grayson said the foreclosure rate on Enterprise-developed for-sale homes has been “really minimal.”
Enterprise Homes makes heavy use of the federal low-income housing tax credit (LIHTC) for its rental housing developments, typically reserving a large chunk of the units in each project for households earning well below 50% of the area median income (AMI).
For-sale developments usually consist mostly of affordable and some market-rate homes. Units are made affordable to lower-income households through favorable fixed-rate, 30-year first mortgage financing and some other subsidy source, such as a soft second mortgage. Affordable buyers must complete homeownership counseling sessions prior to settlement.
Biggest Current Challenge
Grayson said obtaining financing for new projects is her biggest challenge today. “We’re seeing it in every phase of what we’re doing,” she notes. “We’re seeing it with private lenders. We’re seeing it with low-income housing tax credit equity.”
To meet this challenge, Grayson says, “we’re working really hard to figure out how to put the financing together. The thing that’s helped us is the stimulus [act] money, particularly the TCAP.”
Grayson noted Enterprise Homes planned to submit applications within days to request federal Tax Credit Assistance Program (TCAP) funds for four stalled LIHTC projects in Maryland.
In spite of the current challenges, Enterprise Homes is busy completing new developments, including:
- The Greens at Rolling Road, a new construction, green LIHTC development in Baltimore County with 65 one-bedroom and 18 two-bedroom apartments for seniors. Now in lease-up, the three-story building is designed with steep sloping roofs and stone cladding that complement surrounding early 20th century historic residences.
- Stevens Forest Apartments, a $13.8 million preservation of a 37-year-old apartment property into 106 units of green, affordable rental housing in Howard County, Md. The refinanced and renovated property, now in lease-up and targeted to families earning up to 60% of AMI, has 18 one-bedroom, 60 two-bedroom, and 28 three-bedroom units in a garden-style community.
- Renaissance Square, a 196-unit new construction development in Baltimore County that closed in early 2009. Occupying 17 acres, it will include 81 affordable apartments for seniors, and 115 for-sale townhouses, cottages, and single-family homes. Prices will range from $250,000 to $375,000, with a little over half the units income-restricted and the rest market-rate. A soft second mortgage will reduce the first mortgage amount for affordable buyers to as little as $150,000.
Asked what she enjoys about being an affordable housing developer, Grayson says it’s the positive impact made on residents’ lives, and the high-quality housing that is produced. “You get the best of both worlds,” she says.
