Jonathan Rose’s Urban Housing Vision

To the veteran developer, affordable housing is more than bricks and mortar. A wide-ranging conversation about his successful strategy.

Jonathan Rose, CEO of Jonathan Rose Cos.

Earlier this month, ULI awarded Jonathan F.P. Rose the 2021 Prize for Visionaries in Urban Development. In doing so, the organization cited the “inclusive, equitable and sustainable” nature of the affordable multifamily properties that Rose, the urban planner and CEO of Jonathan Rose Cos., has developed in New York City, Chicago, Philadelphia and other cities.

MHN Executive Editor Therese Fitzgerald spoke to Rose just after he received the $100,000 award about the “communities of opportunity” he strives to create and other critical topics, including rent payment challenges, the digital divide, and the Build Back Better bill in Congress.


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MHN: What is your vision for affordable housing and how have you brought that to life in your properties?

Jonathan Rose: First, there are some aspects of what I think I’m being celebrated for today, and what are called visionary, that in fact are quite normal. The only thing that made them visionary is that I thought of them 30 years ago, and I’ve been advocating for them for a long time.

We have long advocated that housing, particularly affordable housing, should be near or in walkable communities and near mass transit. Thirty years ago, that was considered very radical. Today, it’s normal.

Thirty years ago, I was saying that buildings should be built much greener. Twenty, 25 years ago, I built the first housing for homeless people with AIDS that was toxic-free because people who were living with immune deficiency diseases shouldn’t be living in toxic environments. And today, if you follow any of the LEED or WELL building standards, they all focus a lot on non-toxic.

We know now that human-caused climate change is probably the biggest destabilizing threat to humanity, but also the subset of humanity called the economy. We’re seeing city after city asking owners—and they will ask them progressively more—to be energy efficient.

All these things, which are normal today, were pretty clear to me a while ago. But I think it is really wonderful that they’re becoming part of the standard urban redevelopment practice.

Here’s the visionary part: We know that affordable housing is necessary, but it’s not the complete package. Cities also need great schools and healthcare systems and parks and open space. They need public safety. They need mass transit.

We’ve been looking at how we can bring these things into what we call “communities of opportunity.” Our affordable housing all has a health exam room, and we partner with local health care agencies to bring health care on site. We have computer rooms, and we partner with Boys & Girls Clubs and after-school programs to bring in education for the kids and job training for the adults on site. We partner with mobile groceries to bring in healthy food. We use affordable housing as the integrator for opportunity, and we think that is a forward-looking idea.

MHN: The pandemic revealed stark income and health inequities in the U.S. It also put a spotlight on the digital divide and environmental justice issues. How are you addressing those concerns?

Rose: The digital divide is an essential issue. We set as a goal this year to figure out how we can best help our residents overcome the digital divide and bring digital access to over 1,000 units.

Our total portfolio is about 18,000 units now. Digital access means not only high- speed Internet access. It means having a computer or some device that is suited to work on effectively. It means having the software. It means having the culture and the elements that go with it.

For example, we have residents that have digital access, but they don’t have digital bank accounts. They’re getting on buses and going to Walmart or check-cashing places and turning their Social Security payments or other checks into money orders. It is inefficient and actually, in COVID time, an exposing thing to be doing.

We’re trying to build to help our residents completely over the digital divide, and, again, we think that housing is a wonderful platform to be able to do that.

As for environmental justice, all our new development is urban redevelopment, and, in almost every case, we are cleaning up a brownfield site.

One of the impacts of environmental injustice is that typically lower-income communities are more heavily impacted by bus depots and being near highways, etc. We focus a lot on indoor air quality for our residents and have long focused on non-toxics. We partner with an extraordinary group called the Healthy Building Network. We run every one of our building materials through them to make sure it’s as low-toxic as possible.

All of our buildings have courtyards and gardens, and we plant only native species. We’re trying to create more nature-filled and healthy environments for our residents but also to begin the restoration of the neighborhoods that our projects are in.

MHN: This is an exciting time to be in real estate, and it’s a challenging time. How can the real estate industry balance the need to recover economically with the fact that many renters still struggle to pay all of their rent?

Rose: The first thing that would help is the federal rental assistance program, which was poorly designed because all the funds to go to residents and the residents have to apply for them. I was part of an advocacy group for affordable housing owners that spoke to Congress at the time of the design, and there was a deep distrust of landlords.

Some states are good at processing these applications. Some states, like New York, have been very bad at it. But also, the applications are complicated, and residents refuse to apply for them. Hopefully, (Rep. Maxine Waters, chairwoman of the House Financial Services Committee) is working on a revision, which hopefully will go through before time runs out, to help get rental assistance funds to landlords.

The real estate industry has been put in a complicated position in general, in which we’ve been asked not to evict people for non-payment, and also we’ve been put in a position where it’s been hard to collect the payment that was supposed to support that.

Interestingly, the affordable housing sector has a low level of non-payment. Depending on the project, it’ll range from almost zero to 6 percent, and it is probably averaging two and a half percent or something across the portfolio.

We are sure there’s a lot of non-payment happening somewhere. Our portfolio is project-based Section 8 or has a lot of low-income housing tax credits. We think there’s something about the difficulty of the process of being able to rent in projects such as ours. We don’t know if that’s tied to higher employability, but we seem to have a population that has been less hurt by the economic pandemic.

There is another thing that we are concerned about: The longer the eviction moratoriums take place, we’re seeing—not just me but also my colleagues—the beginnings of a culture that says: “Landlord, this is your problem.”

MHN: Congress is debating potentially historic investments in both physical infrastructure and, more broadly, the nation’s social fabric. What is on your wish list in terms of making cities more livable and making housing easier to build and attain?

Rose: There are so many things are on our wish list. These are not in the order of preference: There’s a lot of money in the bill for helping lower-income families and rural families bridge the digital divide. We just talked about how important that is.

Due to the way it is financed, affordable housing is highly government-regulated, and we have very little room in our operating budgets. We would love to give free digital access to our residents. We don’t have the funds in the budget to be able to do that. Federal support for that would be fantastic.


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To really create what we call communities of opportunity that integrate a high degree of social, health and educational services, each project should hire one or two resident service coordinators. These are social service workers that connect the residents to these other services. We’d love to have that funded under the social infrastructure side.

There are proposals to dramatically expand the low-income housing tax credit—the amount of credit—and to fix some of the flaws in the way the programs are constructed that could literally double the amount of affordable housing that’s built in America every year. We would love to see that done.

As I mentioned, city after city is increasing its climate regulations and affordable housing will not have the capital funds to decarbonize. Decarbonizing means getting rid of any natural gas or fossil fuel-powered equipment and replacing it with all-electric equipment. There are funds in these bills for helping affordable housing make it through the energy transition. That would be great from a larger societal point of view.

Jonathan Rose Cos.’ Sendero Verde in New York City is on track to be the tallest Passive House community in the U.S. Image courtesy of Credit Volley Studio.

On the solid social side, there are funds to dramatically improve payment for child care in America. One of the things that became really clear during the pandemic is how working parents struggle to provide child care in the American system. Either one parent stays home or, if you’re lucky, there are grandparents who can cover. But typically, parents are paying $10,000 to $15,000 a kid to put them in a childcare system and, if you’re earning a median-income wage in America, that’s pretty hard.

We think the child-care support thing is a double-whammy investment in children and the parents of working families.

And then on the hard infrastructure side, we would love to see more mass transit because that really is less expensive, has lower climate impacts, and helps weave neighborhoods together. When you put mass transit in underserved neighborhoods, it puts them back on the map. Again, it’s a win-win infrastructure investment. We’d love to see much more investment in renewable energy.

And then, much of America is facing the negative impacts of climate change. In the Southwest, there’ll be increased droughts. In Miami, there’s going to be increased sea level rise. We’d love to see more money invested in the hard infrastructure necessary to adapt to climate change.

MHN: Throughout the pandemic, you’ve managed to raise equity and be an active financier, including closing a $525 million fund focused on affordable housing preservation. Are you seeing a change in how the investment community views affordable housing?

Rose: Yes. First, the investment community has come to learn that affordable housing has very reliable income, is very low risk and has a high social benefit. Both regular investors and impact investors see that it’s an asset class of tremendous value. There’s an enormous flood of money into affordable housing funds.

Some of them like ours are pure preservation funds. We buy affordable housing that is maybe at the risk of turning to market, and we extend the affordability. Most funds, though, are not as rigorous as we are in the preservation side. They get the returns that they’re promising, but rents can be rising within those funds.

Anyway, the investors love the idea, and there’s probably more money to buy affordable housing now than there is affordable housing being sold.

MHN: You come from one of New York City’s storied real estate families. What did you take from that experience and instill in your company, and what have you done differently?

Rose: First, I learned so much. I started when I was quite young, like in elementary school, going with my father on weekends to visit the projects that he had in construction. We’d go and inspect them, and I love the smell of construction.

I really have to thank him and my uncles for my exposure to real estate and for bringing me into the family real estate business. Our family business, which continues today and is run by my cousin Amy Rose—it’s called Rose Associates—was a highly honorable business. It still is, and its word is its bond. You didn’t need a contract with my family. You just needed a handshake, and that amazing level of integrity and commitment to excellence is a wonderful legacy for me.

When I started out, I know my last name helped me. Even though I was just a little startup company, people who knew of the family gave me more credit, and I really am grateful for that legacy. We’ve never had a single default. I felt like I had a real obligation to continue that.

My family had built some affordable housing in the 1960s under New York City’s Mitchell-Lama program, which really inspired me. But by the time I came to the firm, it really was not an interest of the firm. I wanted to be national, and they really wanted to be local. I wanted to be green and, in the 1970s and ’80s, they didn’t have any interest in being green. I wanted to do affordable mixed-income housing. They didn’t. So in a very friendly way, I separated because I just had different aspirations than the family had.

I also took a bunch of sayings from my father that were so wise. My father passed away 20 years ago, but I continue to use them today. Literally last night, I quoted him. One of the things he said is: “Vacancy is a disease that can only be cured by renting at the market.”

MHN: Some people might look at your business and say: “How does he do that?” How do you build affordable housing in some of the most expensive cities in the country?

Rose: I am not the only one doing this. In these cities, there is a vibrant industry of both for-profit and not-for-profit affordable housing developers.

And it’s hard. We all have to put together the same package of low-income housing tax credits, tax-exempt bonds, infrastructure money and, maybe, brownfield clean-up money and, maybe, some green bank money and gap filler programs offered by cities. It’s complicated. It takes time to learn it, but ultimately these (programs) fully pay for the projects.

What affordable housing developers typically have to do is front all the pre-development money, and front all the pre-development time and expertise. Then, when we close, we put up substantial completion guarantees and tax credit compliance guarantees that say we’re going to really rent to low-income people and not break the rules.

If you can pull all that off, there’s a system that pays for it. There’s not enough money in the system. Very often there is literally 10 times as many people applying for projects, applying for tax credit allocation, as there is allocation available. That’s why I hope that Congress will expand the amount of tax credits.

MHN: You lead a pretty public professional life. What is something about Jonathan Rose that most people don’t know?

Rose: I play bass and harmonica in a band that brings together a cross of jazz, blues and Indian raga.

MHN: That’s fabulous! Thank you very much.

Rose: Thank you.

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