Category Archives: Affordable Housing

Press Release: Davidson’s Landing Apartment Homes

Featured

Posted on by

Introducing Davidson’s Landing Apartment Homes – our newest workforce housing development located in Kansas City.

After three years of challenges – the COVID pandemic, supply chain disruptions, record inflation, interest rate hikes, capital market dislocations, investor skittishness, etc – we have successfully completed the construction and lease up (ahead of schedule and under budget) of this 115-unit workforce housing development.

Many thanks to my development partners (Robert Hughes and Jason Young ) and my design partners (John Urban, Michael Lash, Philip Agee, Chris Mathis, Chris Bloom and Erik Henson) for their help in making this project a success.

And many thanks to our financing partners as well (Tracy Howren, William Teschke, Michael Lear, Susan Calderon, Alissa Ice, Heather Olson, CCIM and John Sabatier), without whom this project would not have been possible.

The Plight of the Workforce Housing Renter

Posted on by

About 30 percent of renters nationwide make too much to live in government-subsidized housing and not enough to live in newer market-rate housing. These families are often forced to live in older apartments with fewer amenities located on less-desirable areas.

This market segment includes police, firefighters, teachers, manufacturing & construction workers, health care workers, and administrative personnel – the people who make the world turn every single day.

It’s a shame that most municipalities have relegated these renters to inferior, dilapidated housing because they do not have the courage to build sufficient numbers of workforce housing units in their towns.

From the piece:

“It is with a heavy heart that I report to you all … (that) this means no tenants may move back into the apartments,” property manager Josh Mothner wrote in an email to residents on April 24. “You are going to have to find new places to live. I know this is tremendously difficult for everyone.”

A link to the piece is found here

Factory-Built Housing

Posted on by

I am glad to see that factory-built housing is making inroads into the affordable housing space.

From the piece:

“Though residential high-density construction units remain the most prevalent type of modular building, Vaughan Buckley, CEO at Volumetric Building Companies, a Philadelphia-based modular builder, noted a recent shift away from market-rate multifamily projects to affordable housing developments.

Affordable housing projects jumped from around 10% of VBC’s pipeline to about a 50% share over the past year, according to the company.”

A link to the piece is found here

Affordable and Workforce Housing Defined

Posted on by

“Workforce housing” includes low-income housing (below 60% of Area Median Income), middle-income housing (60% to 120% of AMI), and luxury housing (above 120% of AMI).

“Affordable housing” refers to housing (low-income, middle-income AND luxury) that is priced above 30% of a family’s monthly income (including utilities).

We have BOTH a workforce housing problem as well as an affordable housing problem here in the United States. Both problems stem from onerous land use regulations and permitting requirements at the local level.

From the piece:

“Bushman started by talking about workforce housing. He emphasized that workforce housing developments in the area aren’t low-income housing, rather, they’re affordable places to live for the middle-class workers employed at places like Hitachi, Scholastic and Unilever.”

A link to the piece is found here

Single Parents and Workforce Housing

Posted on by

Supporting single parents is one of the most important missing elements in many workforce housing development initiatives.

From the piece:

“And, after talking to some 15-20 other single parents, I found that their biggest need and a pain point, was a lack of a support system and a community – feeling like everything is on your shoulders, that you are on your own, and that no one is there to help you, especially when it comes to raising your child.”

A link to the piece is found here

Triple Bottom Line Development

Posted on by

We’re building a Triple Bottom Line product at Tartan Residential – bright green apartments targeting the underserved workforce housing market that generate attractive returns, are socially responsible, and are energy efficient. We’ve learned that spending a little more on energy efficiency generates huge future benefits, which can be monetized today as a gap-filling capital source.

It appears that the TBL Fund has figured this out as well!

From the piece:

“The Triple Bottom Line Foundation (TBL Fund), a CDFI founded in 2015 that’s part of the nonprofit social enterprise ICAST, serves small and mid-sized multifamily properties, such as apartment buildings, that house underserved groups, including low-income senior citizens, veterans, people with disabilities and other underserved groups. The organization funds sustainable retrofits on these properties, including weatherization upgrades, solar installations, and health and safety projects.”

A link to the piece is found here

How to Keep Projects Affordable and Energy-Efficient

Posted on by

Unfortunately, most affordable and workforce housing developers use “first cost” as a metric for evaluating the feasibility of a project. They focus on construction cost reductions in an effort to close sources/uses gaps for their deals. Lower construction cost normally means less energy efficiency.

My development team discovered that by spending a little more on carefully-selected components, we can increase energy efficiency and attract private capital to close our sources/uses gaps. By focusing on “sources” rather than “uses” of funds, we are able to make our projects pencil out, keeping them affordable AND energy-efficient.

From the piece:

“Local developers say efforts to combat climate change are valuable, but the new rules are costly, threatening their ability to help resolve the region’s housing shortage.”

A link to the piece is found here

Net-Zero Affordable Housing

Posted on by

The backbone of my company’s workforce housing development initiative is energy efficiency. In 2014, we constructed a two-phase project to explore the benefits of building with structural insulated panels as opposed to traditional stick-built framing.

We discovered that by spending as little as $5,000/unit more on carefully-selected components, we could attract up to $30,000/unit of additional capital to finance our projects. With construction costs of $150,000/unit, this $25,000 net benefit goes a long way towards keeping our projects affordable.

What to do with $25,000/unit? We decided to target the hard-to-reach workforce housing market. We engineered a family of 3-story garden apartment buildings and have several workforce housing projects underway at this time.

What we discovered is totally counterintuitive. We actually closed a $25,000/unit funding gap by spending MORE on construction, not less. Unfortunately, most developers, contractors, architects, and engineers have not yet come to understand the economics behind this. But they will one day – I am certain of that.

From the piece:

“The local branch of Habitat for Humanity is constructing Wapiti Commons, a 20-unit development slated for completion next summer. The project boasts units that are not only affordable, they’re also net-zero, meaning the development will produce as much energy with its solar panels as its efficient appliances consume, making utility bills cheaper. This is no custom-built one-off, but part of Habitat’s plan to show that sustainability can be standard, not just a luxury add-on. Habitat sees Wapiti and its sister site, Basalt Vista, as templates of what’s to come.”

A link to the piece can be found here

Accessory Dwelling Units

Posted on by

One of the problems with relying on single family accessory units to address our affordable housing crisis is the fact that professional management and providing appropriate supportive services need to be considered as well.

Many homeowners and property managers are not qualified to do this.

From the piece:

“If California actually wants housing to be inexpensively produced, it must enable large-scale production of housing by private firms that have strong incentives to cut costs. Whether politicians like it or not, housing production is indeed governed by the laws of supply and demand.”

A link to the piece is found here

Rent to Own Program for Low-Income Seniors

Posted on by

This is a great program.

My development team and I built a similar project in Kansas City several years ago. Residents could purchase their units in 15 years at up to a 45% discount. We targeted 55+ renters who, in 15 years, will have the opportunity to purchase their duplex unit and have as much as $150,000 of equity already built into their home.

What we put together is more than a homeownership program – it’s an estate planning tool for lower income seniors.

From the piece:

“A new affordable housing unit is going up in Phoenix where those who qualify will be able to buy the homes. A ribbon cutting ceremony was held Wednesday for new housing units.”

A link to the piece is found here