New Partnerships to Bridge the Affordable Shortage
The need for affordable rental housing can’t easily be met with new construction right now. But a growing number of developers are partnering with community-centered organizations that have excess property and an interest in helping fill the gap.
It’s well noted that there’s a shortage of rental housing in this country, and it’s a particular problem at the workforce and affordable price points. The availability of land and cost of construction aren’t making it any easier, and the perpetual shortage of tax credits doesn’t help, either.
That’s an easy recipe for focusing on luxury projects. But with so much demand, a good-size group of investors and developers continue to evaluate alternatives to supply lower-price rental housing. And they’re identifying new types of partners to make it financially feasible.
Associate Editor Gabriel Frank examines a variety of interesting examples this month in his “How Teamwork Can Push Affordable Housing Projects Across the Finish Line.” Meanwhile, in the past several months, I’ve had quite a number of conversations with developers who’ve been exploring opportunities with community-centered landowners that have excess property and a commitment to doing good. These landowners include hospitals, faith-based organizations (so-called FBOs), municipalities—and in some cases big corporations looking to ensure affordable options for their employees and other members of the communities where they’re based.
DeLisa and Elde Guerrier, husband-and-wife founders of Nashville, Tenn.-based Guerrier Development, are focused on what they call “intentional” development, partnering with communities and churches to build housing for essential workers. Over coffee in my office, Elde told me about a partnership with a church that owns 17 acres of land. They’re replacing the original building with a multipurpose community that includes a new church and 350 three- and four-bedroom apartments for families, plus townhomes. The project reduces the church’s liability, with a profit split. (For more about their initiatives, listen to senior editor Laura Calugar’s interview with DeLisa for her Mission Success: Women in Multifamily podcast.)
The NHP Foundation is also involved in faith-based projects, including plans to build affordable housing around a church-turned-gospel museum in Houston. And the Michaels Organization’s initiatives have included working with hospital systems that have extra land, the city of Steamboat Springs, Colo., and Walt Disney World, which I discussed with Executive Vice President Ned Williams as we prepared for the MHN Voices webinar “How to Make Workforce Work for You.”
The concept is growing so quickly that this spring the Federal Reserve Bank of New York and the NYU Furman Center cohosted a conference series specifically focused on working with hospitals and with FBOs to build affordable housing. The events brought together the variety of roles needed to identify best options for underutilized property, line up financing and create a model that meets the mission of the community-based property owner.
Of course, as New York State Assemblymember Brian Cunningham pointed out during the FBO-focused conference, “Fostering Neighborhoods,” such efforts won’t solve the housing crisis. They’re just one tool. But they’re a tool that’s been lying on the workbench waiting to be put to use.
