Lessons from the Road

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3 min read

This past month has taken me to Lansing, Los Angeles, Louisville, and Nashville and provided me the opportunity to meet with developers to try to put my finger on the pulse of our industry. Along the way, I’ve noticed a few trends and opportunities are apparent:

 

  • Rebooting Your Business. Housing resources remain scarce and, as a result, developers are thinking differently. Our members are being forced to search outside the traditional LIHTC box and are exploring new product types, partnerships and structures. Many of our private and non-profit developers are creating new joint venture partnerships with other non-profits, housing authorities and even market rate developers. Developers are seeing opportunities to create value in mixed-income and inclusionary zoning transactions. To make themselves competitive in the acquisition market place and allow for quicker executions, other developers are raising private equity and selling fractional interests in new and existing general partnerships.
  • Crisis Communications. Let’s face it: things don’t always go the way we plan. Accidents happen. NIMBY campaigns come seemingly out of nowhere. Our residents and our staff make mistakes that can have long term impacts for the safety and success of our properties. A crime committed in the vicinity of one of your properties can quickly spiral into an unmitigated disaster, destroying your reputation and community capital. I often write in this column about creating positive press for the sake of business development and advocacy, but being armed with an effective crisis communication plan is worth far more than a dozen feel- good ribbon cuttings or grand opening stories. A day of crisis communications training could be the best investment you ever make in your company.
  • Resident Services. The programs NH&RA members utilize primarily provide capital subsidies to develop and construct a physical piece of real estate. Rent subsidies can help house a more diverse population with special needs or extremely low-incomes. Our real estate creates the stable environment our residents deserve. But it’s the community volunteers, resident service coordinators, and grant writers that break the cycle of poverty. We know that resident services are critical in creating positive life outcomes, but they are often the first line item to be value engineered when the construction budget comes up short or when expense growth exceeds rent growth. What we don’t always talk about is the positive economic effect these services provide to the properties. This week I spoke to two developers who are studying the opportunity cost of not providing high quality resident services to residents of affordable housing. The data is still preliminary but it appears that the additional costs of hiring a resident service coordinator probably pays for itself and more by reducing turnover, physical and economic vacancies, marketing budgets, and wear and tear on the property.

 

Going on the road is invigorating. It provides me the chance to look at our business through your eyes. Each of these trends will be fodder for further conversation at our upcoming conferences.

Thom Amdur is Associate Publisher of Tax Credit Advisor and Executive Director of National Housing & Rehabilitation Association