Turning SFR Developments Into Thriving Communities
5 min read
Geanna Franqui of NHP Foundation on some dos and don'ts for single-family rental success.
Some might say 2022 has been the year of the single-family rental (SFR). According to recent data from Arbor Realty Trust’s Q3 2021 Single-Family Rental Investment Trends Report, economic drivers combined with long-term demographics are helping drive the demand for professionally managed single-family rental homes.
At NHPF, we are seeing this trend up close and personal with the purchase and redevelopment of the award-winning Hollander Ridge, 94 units of scatter-site housing in Baltimore.
For both the families moving into SFRs and those who acquire, rehab, and provide services for such properties, there is a panoply of opportunities, challenges and rewards.
Families experience the home ownership lifestyle in quality housing in superior school districts, with abundant green space and access to shopping, transportation, and other amenities. Providing these homes furthers the mission of developers like NHPF to preserve and create sustainable, service-enriched multifamily housing that is both affordable to residents and beneficial to their communities.
NHPF’s development, construction, asset management and resident services teams, however, faced challenges in this redevelopment that simply don’t exist in multifamily building.
To start, our teams had to shift from one shared plan and scope of work for many units to 94 individual scopes of work, including separate permits for building, mechanical, electrical, plumbing, lead certifications, property registration & use, occupancy as well as dealing with individual HVAC systems, appliances and warranties, etc. And that doesn’t even account for the various community organizations into which the scattered housing fell.
As we have worked together to make Hollander Ridge a thriving community, we wanted to share our recommendations with any organization that is contemplating a single-family rental home development:
- How to contend with pushback from community and neighbors against affordable housing placement in their neighborhood. Some longtime residents of homes in the different neighborhoods that comprise Hollander Ridge determined that some newer residents were renting rather than owning. This led to complaints to the City of Baltimore mayor’s office and Baltimore City Housing Authority. Our solution was to first meet with community representatives and neighbors to explain what our development was all about and answer questions as well as provide a point of contact during the construction process. Next, in partnership with our property management team, we established a formal grievance process for residents and neighbors to continue the dialogue and resolve any issues. This led to increased community support, mitigation of continual complaints from neighbors and resolution of existing complaints.
- What to do about squatters in properties? Unfortunately, there is always the possibility that an unoccupied house will attract squatters. And, due to less-than-effective laws and other issues, these “unwanted guests” are often very difficult to evict. In our case, NHPF engaged in a laborious judicial process for eviction which delayed units 4-6 months and included costs for relocation. Our recommendation based on that experience is to allocate additional financial contingency in budget to cover such events. This allows for the option to negotiate payment for the individual to relocate circumventing the lengthy judicial process. Also very important, a plan should be developed to secure and frequently monitor the properties for potential trespassing and squatter activity.
- What to do when previously renovated properties had unpermitted work performed that is not in compliance with city code? Here our experience shows that you can never do enough due diligence including obtaining all previous permitting/inspection approval documentation for review during the acquisition/design process. At the same time, building in contingency budget to cover unpermitted/uninspected work and unforeseen existing environmental conditions such as lead, ACM, radon, and mold will also help teams effectively manage budgets and schedules to get the properties up to code and in compliance with City requirements.
- How to complete work when properties adjoin? Many homes in the Hollander Ridge footprint have neighboring and/or adjoining roofs, porches, fencing, etc. This presented challenges when obtaining approvals from owners to proceed with work on the NHPF owned properties. NHPF notified residents by letter and relied upon the value added by mitigating issues that potentially impacted neighboring property conditions and property values. NHPF also leveraged the positive relationships with neighbors and community representatives to create good lines of communication to get the approvals we needed.
- How can families use resident services that aren’t centrally located? This challenge has fallen to Operation Pathways, NHPF’s resident services subsidiary. Typically, RSCs (resident services coordinators) operate out of a community room or other onsite location that provides easy resident access. Without such an accessible community meeting place for Hollander Ridge, the organization got creative by using a mass communication tool that allowed us to text, email, or send voice messages to residents. Staff also incorporates home visits when necessary and provides some group community supports (events at centrally located spaces) when possible. RSCs also offer one-to-one coaching via phone and video calls. Our summer internship program gave teens the opportunity to work in the leasing office with the property site team and resident services coordinator. Providing resident services in multi-site SFR communities is still a work in progress, but we have learned a lot in the first year.
- Can single-family renters and owners peacefully coexist? The renting families of Hollander Ridge have blended fairly seamlessly into the neighborhood. Many are living in a single-family home for the first time. They have availed themselves of assistance from Operation Pathways such as participating in the “single family home rental resiliency” classes offered and are now taking great pride in maintaining their homes, dispelling the fears of some of their owner-neighbors.
We look forward to the challenges and opportunities single-family affordable housing will bring in 2023, along with the rewards.
Geanna Franqui is construction manager, NHP Foundation.