Prophets & Profits: 7 Strategies for Faith-Based Housing
- Aug 28, 2019
A perfect storm for the creation of new affordable housing is brewing in New York’s Hudson Valley.
- Today, there are nearly 5,000 tax-exempt properties designated as religious entities: 1,300 in Westchester, 1,000 in Rockland, 700 in Orange, 500 in Duchess and Ulster, and 150 in Putnam.
- A majority of these properties have development potential in the form of large parking lots, green space or air rights.
- A recent Gallup poll found the percentage of Americans who report belonging to a church, synagogue or mosque to be at an all-time low, averaging 50 percent in 2018. We spend far more time looking down at our smart phones than we do looking up.
- Developers and landowners are interested in converting these developable spaces into much-needed affordable housing, creating a joint venture that also frees up resources that can be applied back into a faith-based mission.
The recent annual Hudson Valley Affordable Housing Summit featured a panel titled “Faith-Based Housing: Prophets & Profits,” during which panelists discussed how developers and religious leaders can create housing that both serves the social good and produces a profit. All of the panel participants have meaningful experience creating affordable housing in partnership with faith-based and other mission-driven partners such as YM and YWCAs. Here, according to the panelists’ recommendations, is a seven-step due diligence process for anyone considering this type of investment:
Ensure an alignment of interest
Do all parties understand that whatever they do must reflect on the sponsor’s history and legacy, and that it’s their families and communities that must be kept in mind throughout the process? Does the group respect your mission? Satisfying the alignment issue is the first key.
Assemble a Top-Notch Team
A successful faith-based residential development requires an experienced team. A thorough assessment of the existing structures and of the development potential should be a priority. Many of these great structures may also have huge capital needs. The development teams will run into zoning issues as sure as the sun rises, so expert zoning and legal advice is indispensable. A well-rounded team features a seasoned developer, qualified attorneys, a knowledeable syndicator and a visionary architect.
Ensure proper ongoing communications
Like any successful partnership, establishing honest, open and regular communication helps ensure a smooth process. Communications must start with education: For the community, the immediate neighbors and congregants as well. Also key? Communicating with a local journalist. A positive article goes a long way to lobby for an important project.
Set specific goals
An early faith-based development in the South Bronx was successful because a goal-driven strategy was baked into the deal. Congregants were educated on the financial details and sacrifices needed to be made to qualify for income-producing duplexes. Any team embarking on a faith-based project must set specific and achievable goals for their project and future residents.
Understand the process
Anyone entering into affordable housing with a mission-based partner must also be aware of the specialized levels of approval that must be built into any timeline and budget. For example, the New York State Attorney General requires that the sale of any real property owned by a faith-based organization be approved by the court.
Keep community needs at the forefront
Creating or preserving affordable faith-based housing requires getting the entire community to support the efforts. Don’t simply rely on board hearings or mailers. Invite all members of a community to learn firsthand about housing and social justice through events, op-eds and other activities that bring issues to life.
Listen to questions—Be Ready to Answer
Successful developers are mindful of future residents’ concerns and pose questions about transportation, medical care and retail, for example. Our panelists agree that their expectations and recommendations must be addressed yet also balanced with smart construction and decision-making to create housing that fulfills the needs of residents and funders.
Finally, all panelists agreed on the importance of making and keeping a commitment to partners, the community and future residents—all parties need ask themselves: How far are you willing to go to get this project developed? Answer that honestly, and honor that answer.
Frank Cerbini is a vice president at The NHP Foundation.