Generational Shift: Wave of Retirements Brings New Leaders into Affordable Housing Space
By Pamela Martineau
10 min read
New Leaders Continue Company Legacies While Adapting to New Housing Realities
With the Baby Boomer generation retiring en masse, a wave of new leaders is stepping up in the affordable housing space creating a generational shift in the industry. Many of the newly appointed leaders say they are working to maintain their companies’ legacies, while adapting to an increasingly complex funding stream and a critical shortage of affordable housing. Tax Credit Advisor spoke with some newly ascended leaders about the transitions into their new roles. These leaders offer advice on creating a smooth transfer of power and one former company founder lends his thoughts on how to best pass the reins. All who were contacted said they believe a larger shift in leadership is afoot.
“You have a lot of leaders who are Baby Boomers who are now exiting the work force and moving on, and a new leadership is coming on,” says Christopher Donald, executive director and CEO of the District of Columbia Housing Finance Agency (DCHFA) who stepped into his new role in January 2020 after the sudden death of his predecessor, Todd Lee. “Many in new leadership have a new perspective.”
Dara Kovel, CEO of Beacon Communities who took over in January 2019, says she believes the industry is at a “natural transition point” where a “new generation of CEOs is stepping into the role.”
“Long-time founders are retiring,” says Kovel. “What does it mean for the industry? Honestly, I think it depends on the company itself.”
Charles Anderson, co-president at CREA, also sees a shift.
“I do see a shift in the founders within the affordable housing space beginning to step back from the industry, allowing the next wave of leadership to evolve,” says Anderson.
Transitions Well-Planned with Varying Degrees of Continued Oversight by Former Leaders
The transitions in leadership at the companies TCA spoke with were largely well-planned and kept the people who were retiring or stepping back in some role at the company for a transition period. At CREA, Anderson and Tony Bertoldi stepped into co-presidency roles in the fall of 2020. They took over the presidency from company founder Jeff Whiting, who moved into the roles of chairman of the board and CEO.
“Notwithstanding the improved structure, Jeff plays an active role in organizational decision-making; he is the visionary and leader of the organization,” says Anderson. “And I know I share this sentiment with many others – we hope he never leaves, but we also know that is not realistic.”
The CFO, head of human resources, and the head of social impact at CREA still report to Whiting, and Anderson and Bertoldi often seek Whiting’s advice on matters.
“We are routinely communicating with him and seeking guidance in terms of our leadership and how we carry out the (company) vision,” says Anderson.
Anderson added that, although there are no current plans for Whiting to retire, he, Whiting and Bertoldi are “taking strategic steps” to prepare the organization for if/when that day comes. He went on to say that the culture at the company is of paramount importance and that the three of them are committed to preserving it.
Brian Swanton, president and CEO of Gorman and Co., LLC, took over leadership from company founder and CEO Gary Gorman in January of 2018. In this case, Gorman also stayed on as chairman of the board.
“I wouldn’t say I play a large role,” explains Gorman. “Brian will ask me to be on calls where we are trying to structure particular financing or do projects…I play more of a risk management role.”
Swanton says he doesn’t believe there has been a shift in company culture following the change in leadership structure.
“When I first took over, the most common question was – ‘What changes are you going to make?’” explains Swanton. “What I had to do was just reassure people that we’re not changing anything.”
Swanton says company leaders and staff spent a lot of time in facilitated strategy sessions to ensure “corporate alignment” to get everyone on the same page. The company re-branded itself, keeping the original logo, but adopting a new tagline. Swanton says it is important to be deliberate in legacy planning.
“Ultimately, you decide how that change happens or some external force decides,” he explains.
Building on a Former Leader’s Legacy
Matt Reilein, CEO of National Equity Fund, took over in early 2019 from then company President Joe Hagan. Reilein was hired from the outside but says that the transition “couldn’t have been written up better.”
“You had a long-time leader—Joe Hagan—who’s been at the company 20 years. He was the second founder …He signaled to the NEF board what his plans were for retirement and gave them the ability to have a thoughtful, long-term transition plan,” says Reilein.
Hagan stayed on until the end of 2019 after Reilein was hired, creating what Reilein calls an “informal overlap” during the transition.
“I still talk to Joe,” says Reilein. “I talk to him about institutional knowledge.”
Reilein says he works to build on Hagan’s legacy, while the company has grown. They adopted a strategic plan “not to change what we had, but to crystallize the success and commitment” that we already had. The company has grown by 35 percent in the last three years, moving beyond solely Low Income Housing Tax Credits. Reilein also adds that the company worked to bolster employee retention by taking a hard look at benefits, training, performance evaluations and other offerings.
“We have not seen the great resignation,” he says.
Reilein’s advice for other new leaders replacing long-time founding members is to “understand and respect the history of the organization.”
“Build on the strengths of that legacy, because in the affordable housing industry, people are long-tenured,” he says.
Reilein also advises leaders to be “aggressive and creative” in their efforts to further affordable housing goals.
“The affordable housing crisis is just that – a crisis in this country…,” he says. “We as an industry should continue to push all levels of policy to support this.”
Dara Kovel, CEO of Beacon Communities, also works to continue the mission-driven legacy at Beacon. Kovel stepped into the CEO role in January 2019, taking over from CEO Pam Goodman. Kovel worked with Goodman for four years during her time running the development company. When Kovel was named to the CEO position, she overlapped with Goodman for a year in the CEO role before Goodman fully stepped aside.
“For me, a lot of challenge and opportunity of being in this role is to both honor the past and the accomplishments of the organization and the individuals I now have the benefit of leading – and thinking of expanding for the future,” says Kovel.
Kovel adds that retirements aren’t just happening at the CEO level. Employees in many levels of leadership are retiring throughout the country and companies need to develop strong transition plans.
“We need to find the next generation of talent,” she says.
Kovel says it is also helpful for newer CEOs to talk with their peers in the industry to “learn and share best practices.”
An Abrupt Transition
Christopher Donald didn’t enjoy the long transition period other newly appointed CEOs and executive directors experienced. He stepped up as interim executive director and CEO of the DC Housing Finance Agency on Jan. 2, 2020, the day after his predecessor Todd Lee died suddenly in his early 50s.
“He was a brilliant and incredible leader. Awe-inspiring to all here,” says Donald. “He was adored and respected.”
Donald says he felt imposter syndrome when he stepped into the new role. The organization was in mourning. Donald was the youngest person on the executive team.
“I am navigating the loss and then I am the leader of an organization of my peers, most of whom are five or ten years older than me. Some almost 20 years older,” says Donald. “Then COVID hits.”
“I told people if I can make it through this, I can go on the speaker circuit,” says Donald.
Donald attributes the company’s strong culture and employee bonds as key factors that helped the organization weather the storm.
“We have a very resilient organization,” he says. “There is a familial atmosphere. People really care about you as a person.”
Donald says the agency has kept focused on its core mission and commitment to the community. Right now, the agency is working to make reality DC Mayor Muriel Bowser’s goal of 12,000 new affordable housing units by 2025.
Donald advises new leaders to work to keep the company culture intact, but also to sometimes veer away from the way things have always been done.
“Just because the organization has been doing it all along, doesn’t mean that you need to continue doing it,” he says.
Many of the founders of today’s affordable housing agencies and companies were “long-time elders, children of the 60s who were activists,” Donald says.
“A lot of the commitment of our elders was deeply rooted in our people,” he says, adding that that commitment is still there, but the funding and construction of affordable housing has become much more complex today. Financing is more complicated, technology, such as social media, has speeded up the transmission of information, costs are higher and dynamics are different. Leaders need to be nimble business people.
“You are competing with this capital that moves much faster and is more inclined to take risks and be more transactional,” he says. Leaders must adjust accordingly and figure out how to create more opportunity, he says. But the challenges bring rewards, he adds.
“It makes me want to get out of bed in the morning to go fight the good fight,” he says.
One Company Founder Offers His Advice on Transitioning Away From Leadership
Gary Gorman spent a great deal of time considering his retirement and the transition. He offers some advice to longtime leaders looking to transition to a lesser role in their companies or completely out of their companies.
“When you are picking the new CEO,” advises Gorman, “ask people in your company, ‘If you got hit by a truck tomorrow, who would you want leading the company?’ It was interesting to see who folks say they wanted and who they didn’t want.”
Gorman also advises companies to share ownership. They created a new company and out of 500 employees, 28 invested their own money in the company. He adds that leaders who are thinking of retiring or stepping down should not wait and stay too long in their current positions.
“Many founders hang on way too long to the point where they become dysfunctional. Or leaders who would like to step into the CEO role leave because they don’t see the fossil leaving,” says Gorman.
Gorman also says that when a leader makes the decision to retire or step back, he or she should truly step back.
“Because you can’t ask somebody to take your place as CEO if you are still as high profile as you used to be,” he says.
