The Future of Affordable Housing: Interconnecting Construction, Demographics, Government & Innovation
We congratulate The NHP Foundation on their 7th Annual Symposium
DEVELOPMENT AND CONSTRUCTION MANAGEMENT SERVICES
HOMER SARABI homer@sarabigroup.com • www.sarabigroup.com
The NHP Foundation 2023 Symposium We are proud to be a sponsor and participant of this important event
Blue Mountain Apartments, Boston, MA
Construction Manager General Contractor Paul Haynes, President 32 Progress Avenue Seymour, CT 06483 203.888.9048 / fax 203.888.5358 www.haynesct.com
A FAMILY-OWNED BUSINESS SINCE 1962
THE NHP FOUNDATION 2023 SYMPOSIUM • 3
Welcome to The NHP Foundation 2023 Symposium RICHARD F. BURNS CHIEF EXECUTIVE OFFICER & TRUSTEE, THE NHP FOUNDATION
NHPF Board of Trustees
In the affordable housing industry, all of our work today is for a tomorrow where residents live in safe, sustainable housing that won’t require heart wrenching choices to make monthly rent. The future we hope to see would include the ability for families, seniors, those with disabilities and others to have abundant housing choices—everything from traditional multifamily housing to single-family rentals
Ralph F. Boyd, Jr. CHAIR Glynna K. Christian VICE CHAIR Robert H. Abrams Richard F. Burns Sarah E. Feinberg Cherie Santos-Wuest Sheldon L. Schreiberg
ultimately available to purchase. And this housing must include amenities uniquely tailored to the wide variety of generations in need of housing, everyone from the Silent Generation, the Boomers, Gen X, Millennials, Gen Z, and those yet to come. This same future would take sustainability seriously, using materials and processes that ensure high-quality long-lasting and durable buildings, constructed safely and cost-effectively in areas where natural and other disasters are a part of life. Affordable housing for the future would factor in proximity to the places residents need to access. This means abundant local transportation, shopping, medical facilities and jobs. The future workforce would ideally have housing near their places of employment. We also have a future in mind where authorities at all levels—city, county, state and federal—are able to modify archaic zoning restrictions that inhibit affordable housing construction. It is incumbent upon our industry to encourage elected officials to make changes to these restrictions that can benefit all communities. With this same future in mind, NHPF’s teams of developers, asset managers, construction personnel and others are striving to ensure that our industry is as inclusive as possible, providing and encouraging opportunities for all. This year’s Symposium offers up experts with plenty of recommendations and bright ideas for the affordable housing of the future. We hope you will start thinking about incorporating their suggestions for a future that will most certainly impact affordable housing as we know it today.
Charu Singh Grace Torres Adam Weers
NHPF Officers
Richard F. Burns Eric W. Price Mansur Abdul-Malik Mecky Adnani Scott L. Barkan Neal T. Drobenare Alla A. Eleon Carlos A. Gonzales Stephen M. Green Dawn Gutierrez John G. Hoffer Fred C. Mitchell Tim B. Pryor C. Meade Rhoads, Jr. Ian Sobel, VP Thomas G. Vaccaro Kenneth D. White Joseph P. Wiedorfer John M. Welsh
4 • THE NHP FOUNDATION 2023 SYMPOSIUM
SYMPOSIUM CO-CHAIRS Glynna K. Christian HEAD, GLOBAL TECHNOLOGY TRANSACTIONS, HOLLAND & KNIGHT, LLP Charu Singh MANAGING DIRECTOR, PORTFOLIO MANAGEMENT, EMERGENT CAPITAL PARTNERS
PRESENTERS Philip Bump NATIONAL COLUMNIST, THE WASHINGTON POST Roger Krulak, CEO, FULLSTACK MODULAR Garet Marr MANAGING DIRECTOR, FRANKLIN STREET INSURANCE SERVICES Donahue Peebles III CHAIRMAN, LEGACY REAL ESTATE DEVELOPMENT
3:30 PM REGISTRATION & NETWORKING COCKTAILS & HORS D’OEUVRES
6:30 PM DINNER
5:00 PM PROGRAM / EAST HALL
Kenneth D. White EXECUTIVE DIRECTOR, OPERATION PATHWAYS THE NHP FOUNDATION SHORT FILM “Pathway to Success” Rebecca Ely DIRECTOR OF RESOURCE DEVELOPMENT, OPERATION PATHWAYS SPECIAL GUEST SPEAKER Ethan Handelman DEPUTY ASSISTANT SECRETARY, OFFICE OF MULTIFAMILY HOUSING PROGRAMS, HUD
SYMPOSIUM MODERATORS Mansur Abdul-Malik SENIOR VICE PRESIDENT, DEVELOPMENT, THE NHP FOUNDATION Camden Carpenter ASSISTANT DEVELOPMENT MANAGER, THE NHP FOUNDATION WELCOME & AWARD PRESENTATION Ralph F. Boyd, Jr., Chair, NHPF Trustee PRESIDENT & CHIEF EXECUTIVE OFFICER, SOME (SO OTHERS MIGHT EAT) Richard F. Burns CHIEF EXECUTIVE OFFICER & TRUSTEE, THE NHP FOUNDATION Eric W. Price PRESIDENT, THE NHP FOUNDATION AFFORDABLE HOUSING ADVOCACY AWARD HONOREES Suzan DelBene, Representative (D-WA) Brad Wenstrup, Representative (R-OH) AFFORDABLE HOUSING TRAILBLAZER AWARD HONOREE Donahue Peebles III CHAIRMAN, LEGACY REAL ESTATE DEVELOPMENT
KEYNOTE SPEAKER Wemimo Abbey CO-FOUNDER & CO-CEO, ESUSU
URBAN FUTURIST Dr. Cindy Frewen, FAIA, PhD
7:30 PM THANK YOU / DESSERT
THE NHP FOUNDATION 2023 SYMPOSIUM • 5
Symposium Co-Chairs
GLYNNA K. CHRISTIAN HEAD, GLOBAL TECHNOLOGY TRANSACTIONS, HOLLAND & KNIGHT, LLP
CHARU SINGH MANAGING DIRECTOR, PORTFOLIO MANAGEMENT, EMERGENT CAPITAL PARTNERS
Symposium Moderators
MANSUR ABDUL-MALIK SENIOR VICE PRESIDENT, DEVELOPMENT, THE NHP FOUNDATION
CAMDEN CARPENTER ASSISTANT DEVELOPMENT MANAGER, THE NHP FOUNDATION
6 • THE NHP FOUNDATION 2023 SYMPOSIUM
Award Honorees NHPF Affordable Housing Advocacy Award SUZAN DELBENE REPRESENTATIVE (D-WA)
NHPF Affordable Housing Advocacy Award BRAD WENSTRUP REPRESENTATIVE (R-OH)
Representative Brad Wenstrup was elected in 2012 to represent the people of Ohio's Second Congressional District in the United States House of Representatives. He brings experience as a doctor, Army Reserve officer, Iraq War veteran, and small business owner to help Congress tackle the economic and
Congresswoman Suzan DelBene represents Washington’s 1st Congressional District, which includes parts of King and Snohomish Counties. First sworn into the House of Representatives in November 2012, Suzan brings a unique voice to the nation’s capital with more than two decades
security challenges facing the nation. In the 118th Congress, Brad serves on the House Committee on Ways and Means and the House Permanent Select Committee on Intelligence. He also serves as Chairman of the Select Subcommittee on the Coronavirus Pandemic. As a member on the Ways and Means and Intelligence Committees, Brad is working to address the national health and systemic poverty issues, while strengthening our national security. He has long been a voice of support for southern Ohio's veteran community. He also serves as a Co-Chair of the GOP Doctors Caucus. A Cincinnati native, Brad completed his residency as a podiatric surgeon and established private practice in Cincinnati, treating patients for 26 years. Brad served in the U.S. Army Reserve for 24 years and retired with the rank of Colonel. He served a tour in Iraq as a combat surgeon and was awarded a Bronze Star and Combat Action Badge for his service. In 2018, Colonel Wenstrup was awarded the Soldier's Medal for heroism and the Legion of Merit Medal. Brad and his wife, Monica, reside in Southern Ohio with their two children.
of experience as a successful technology entrepreneur and business leader. Suzan takes on a wide range of challenges both in Congress and in the 1st District. She is a leader on issues of technology, health care, trade, taxes, and environmental conservation, and is a champion for working families. She serves on the House Ways and Means Committee, which is at the forefront of creating a more equitable tax code, health care reform, trade deals, and lasting retirement security. She serves on the Select Revenue Measures and Trade Subcommittees. Suzan also serves as Chair of the forward-thinking New Democrat Coalition. She is also a member of the Pro- Choice Caucus. Suzan is Chair-emeritus of the forward- thinking New Democrat Coalition after chairing the coalition in the 117th Congress. After fourth grade, her family moved all over the country in search of work. Through hard work and financial aid, she earned her BA in biology from Reed College. She started her career in immunology research before earning an MBA from the University of Washington and embarking on a successful career as a technology leader and innovator. Over more than two decades as an executive and entrepreneur, she helped start www.drugstore.com and served as CEO and President of Nimble Technology, a business software company based on technology developed at the University of Washington.
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Award Honorees NHPF Affordable Housing Trailblazer Award DONAHUE PEEBLES III CHAIRMAN, LEGACY REAL ESTATE DEVELOPMENT
ETHAN HANDELMAN DEPUTY ASSISTANT SECRETARY, OFFICE OF MULTIFAMILY HOUSING PROGRAMS, HUD Special Guest Speaker
Donahue Peebles III, is a Washington, DC native and Columbia University graduate, earning his Bachelor’s of Economics in 2016. Upon completing
Ethan Handelman is the Deputy Assistant Secretary for the Office of Multifamily Housing Programs at the U.S. Department of Housing and Urban Development. He was appointed in February 2021 by the Biden-Harris Administration. The Office of Multifamily Housing Programs administers
his degree, Donahue immediately began
cultivating his personal legacy working side-by- side with his father, Don Peebles, to propagate the continued success of
the family’s namesake real estate development firm. His early executive work includes managing the development of office, hospitality, and condominium product, with notable projects like 108 Leonard in Manhattan, 10 G Green Street in Washington DC in his portfolio. As Executive Vice President at the Peebles Corporation, Donahue steers the company's day-to- day efforts and leads an experienced acquisitions and development team that is focused on public-private partnerships. The team consistently exceeds public benefit and diversity and inclusion goals nationwide. Donahue founded Legacy in 2017 as a means for The Peebles Corporation to achieve its affordable housing goals across its national portfolio. In collaboration with his business partner and CEO, Jerrod Delaine, Donahue has realized his vision for Legacy to invest in growing development capacity among people of color through his invaluable affordable and workforce housing development and finance expertise. Demonstrating his commitment to equity, inclusion, and sustainability, Donahue’s efforts extend far beyond the conference room. He serves the Washington DC, New York City and Miami communities through various philanthropic endeavors that benefit and expose youth to various opportunities in entrepreneurship. Donahue actively works with various organizations working to improve the quality of life of impoverished and special needs individuals on a global scale, including the New York City Mission Society, Best Buddies, and Harlem Mothers S.A.V.E.
the Federal Housing Administration mortgage insurance program for multifamily properties and oversees more than 23,000 assisted properties, including affordable housing for the elderly and persons with disabilities. Approximately 2.6 million families find housing in the Multifamily’ s portfolio of 30,400 properties, which are found in every state and some U.S. territories—urban, suburban, and rural areas. Prior to joining HUD, Ethan was a Senior Policy Analyst at the Federal Housing Finance Agency in the Office of Housing and Community Investment, which oversees the affordable housing mission activities of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. There he wrote the amendments to the housing goals for the Federal Home Loan Banks, worked on the Duty to Serve program, and other affordable housing policies. Prior to joining FHFA, he spent seven years as Vice President for Policy and Advocacy at the National Housing Conference (NHC), finishing his time as Acting CEO. While at NHC, Ethan directed the policy agenda aimed at ensuring affordable housing for all, led national working groups, spoke, wrote extensively and testified before Congress. Ethan also previously led the advisory practice at Recap Real Estate Advisors, assisting public and private- sector clients to understand and shape the affordable housing financial and policy environment.
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WEMIMO ABBEY CO-FOUNDER & CO-CEO, ESUSU Keynote Speaker
Urban Futurist DR. CINDY FREWEN, FAIA URBAN FUTURIST & ARCHITECT
Wemimo Abbey is the Co-Founder and Co-CEO of Esusu, the leading financial technology company helping individuals save money and build credit. Wemimo grew up in the slums of Lagos, Nigeria, and came to the United States when he was 17. He and his mother struggled to receive a loan without
Dr. Cindy Frewen, FAIA, urban futurist and architect, teaches the Design Futures Workshop and Social Change at the University of Houston graduate program in Strategic Foresight. She consults, speaks, and writes on urbanization, future cities, and design futures, specializing in the intersection of people,
a credit score and borrowed money from a payday lender at over 400% interest. That experience inspired Wemimo and his co-founder to start Esusu, a financial technology company that helps households use their on-time rent payments to build credit in 2018. The company also offers zero-interest loans to struggling families through a partnership with the charity Stable Home Fund. Most recently, Esusu raised a $130 million Series B equity financing round with a $1 billion valuation. The company was also named to the Time 100 Next List. Beyond Esusu, Wemimo is Board Member/ Commissioner at the Smithsonian National Portraits Gallery. He graduated Magna Cum Laude from the University of Minnesota with a B.S. in Business Management. He earned his M.P.A. from New York University’s Robert F. Wagner Graduate School of Public Service. Wemimo was recognized on Forbes 2020 30 Under 30 list; and Crain's and Fortune 's 40 Under 40 2022 lists. In 2021 and 2022, he was selected by Goldman Sachs as one of the 100 Most Intriguing Entrepreneurs. This year the Esusu partners were selected as EY Entrepreneurs of the Year Award.
technology, and environment. Clients include the United Nations Development Program, UNESCO, US AID, US Treasury, US Federal Reserve, US General Services Administration, IBM, Hallmark Cards, VF Corporation, Transforming Local Government, and Water.org. She has presented to groups in Dubai, Vancouver, Singapore, Taiwan, Paris, London, Johannesburg, Rio de Janeiro, Washington DC, New York City, and Chicago. Cindy serves on the board of the Kansas City Design Center, chaired the board of the Association of Professional Futurists (APF) for seven years (a global organization of over 500 members in 40+ countries) and wrote a column for The Kansas City Star newspaper. Cindy is: • A business owner for three decades focused on design, sustainability, community development, and public works • An instructor at the University of Houston graduate program in Strategic Foresight since 2007 • The chief architect for design and planning of the Kansas City downtown civic center, a sixty-block vision and development strategy, centered on Ilus W. Davis Park, a two-block civic commons anchoring the government district • Recognized by The American Institute of Architects as a Fellow and with her work featured in a national traveling exhibit “That Exceptional One” • Recognized as a Distinguished Alumna by the School of Architecture, Design, and Planning at University of Kansas • Honored by The National Association of Women Business Owners in Kansas as the inaugural Business Owner of the Year
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Presenters: The Future of Affordable Housing Through Different Lenses
PHILIP BUMP NATIONAL COLUMNIST, THE WASHINGTON POST
ROGER KRULAK CEO, FULLSTACK MODULAR
Philip Bump is a national columnist for The Washington Post . Prior to that he led politics coverage for The Atlantic Wire. In the past, he worked as a designer at Adobe Systems.
Roger Krulak has over 35 years of experience in bringing innovation to the construction and development sides of the real estate business. For 12 years, Roger served as SVP of Mixed
As one of the paper's most read writers, he focuses on the data behind polls and political rhetoric. He also writes a weekly newsletter, "How To Read This Chart." He has appeared or been heard on most major media outlets, from MSNBC to Fox News to PBS to NPR. Bump has written about politics and the environment at Grist and has contributed to The Daily Beast, The Atlantic, The Daily, and Huffington Post . In 2010, he was a finalist for an S.I. Newhouse School of Journalism Mirror Award for writing about the media. His book, The Aftermath: The Last Days of the Baby Boom and The Future of Power in America , looks at the overlap of the end of the baby boom and the upheaval in American politics and the U.S. economy. Philip is a graduate of Ohio State University.
Use and Residential Development at the Forest City Ratner Companies (FCRC). During that time, he was responsible for entitling and planning over 1,000 residential apartment units integrated into many of FCRC’s retail projects. Frustrated by the inherent inefficiencies of conventional construction, Roger spearheaded the first R&D project for modular construction at FCRC in 2008. This initiative led to the creation of FC Modular division, which focused on incorporating technology into construction workflows and using modular building systems. During his tenure as SVP of Modular Construction and Development, Roger established the formation of the FC Modular Brooklyn Navy Yard factory and staff, and he oversaw the construction of the world’s tallest volumetric modular building. In 2016, Roger formed FullStack Modular after assembling an investment group to purchase FC Modular’s IP and facilities from FCRC. Since its founding, FullStack Modular has established itself as a first mover in using advanced technologies for building design and using high-rise modular construction. Their current pipeline includes hundreds of thousands of buildable square feet for hospitality, multifamily, and student housing. Notable wins include the Grant Ave Municipal Lot RFP by New York City’s Department of Housing Preservation and Development (HPD)—an RFP specifically issued to support modular construction for the city’s affordable housing supply. Roger received the Popular Mechanics Breakthrough Award 2014 for his work on creating a high-rise modular process.
10 • THE NHP FOUNDATION 2023 SYMPOSIUM
GARET MARR MANAGING DIRECTOR, FRANKLIN STREET INSURANCE SERVICES
DONAHUE PEEBLES III CHAIRMAN, LEGACY REAL ESTATE DEVELOPMENT
Garet Marr serves as Managing Director of the National Accounts Team for Franklin Street’s Insurance Services. In
Donahue Peebles III, is a Washington, DC native and Columbia University graduate, earning his Bachelor’s of Economics in 2016. Upon completing his degree, Donahue immediately
his role, Garet has a sole focus on the insurance and risk management needs of commercial real estate companies nationwide. These companies represent owners, developers, and managers, many of which have a strong focus on affordable housing. Garet’s responsibilities include spearheading business development initiatives and providing operational oversight of the strategic risk management platform offered to clients. His dedication to ensuring the success of every insurance-related need has enabled his team to extend coverage to approximately 500,000 units nationwide. Garet and his team are a driving force behind Franklin Street's commitment to safeguarding businesses and properties across the country. With a proven track record in delivering tailored solutions, Garet continues to be a transformative figure in the field of insurance. Marr consistently ranks as a top producer with Franklin Street and has earned several production and merit-based awards within the firm, including its Leadership Award for his outstanding leadership skills, as well as the Breakout Performer Award. He has also been recognized as a Top Retail Broker by Insurance Business America in 2022 and 2023.
began cultivating his personal legacy working side- by-side with his father, Don Peebles, to propagate the continued success of the family’s namesake real estate development firm. His early executive work includes managing the development of office, hospitality, and condominium product, with notable projects like 108 Leonard in Manhattan, 10 G Green Street in Washington DC in his portfolio. As Executive Vice President at the Peebles Corporation, Donahue steers the company's day-to- day efforts and leads an experienced acquisitions and development team that is focused on public-private partnerships. The team consistently exceeds public benefit and diversity and inclusion goals nationwide. Donahue founded Legacy in 2017 as a means for The Peebles Corporation to achieve its affordable housing goals across its national portfolio. In collaboration with his business partner and CEO, Jerrod Delaine, Donahue has realized his vision for Legacy to invest in growing development capacity among people of color through his invaluable affordable and workforce housing development and finance expertise. Demonstrating his commitment to equity, inclusion, and sustainability, Donahue’s efforts extend far beyond the conference room. He serves the Washington DC, New York City and Miami communities through various philanthropic endeavors that benefit and expose youth to various opportunities in entrepreneurship. Donahue actively works with various organizations working to improve the quality of life of impoverished and special needs individuals on a global scale, including the New York City Mission Society, Best Buddies, and Harlem Mothers S.A.V.E.
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NHPF Industry Report
Co-Creating The Future of Affordable Housing
“Transforming the housing industry will likely take at least a generation. Affordable housing impacts not just construction and financial industries, but needs to account for population growth, demographic shifts, technological disruptions, and environmental changes. While simpler fixes will be accomplished sooner, systemic change will take 15–25 years.” —DR CINDY FREWEN, FAIA, URBAN FUTURIST & ARCHITECT T his study offers insight on how decision-makers in the next decades can harness the power of Construction, Demographics, Government, and Innovation to dramatically increase the availability of smart, safe and reliable affordable housing. It is an amalgam of survey results plus existing third-party research and the expert opinions of the presenters at this year’s NHPF Symposium. One thing that all parties can agree on is the urgency of finding workable strategies to ensure there will be affordable housing in the future.
12 • THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT
NHPF Industry Report
Leverage the Strengths of Millennials and Gen Z
“They survived a global pandemic and arguably some of the biggest historical struggles, but they’ve developed resilience and [the ability to] bond with others through hard times. With their spirit and support from others, they can create a bright tomorrow.” —TRACY BOWER, PHD, AUTHOR Baby Boomers have dominated our country for the better part of the last five decades. Many credit the exceptional wealth generated by this cohort for fueling America’s strong economy and providing opportunity. Many others harbor negative views, particularly when it comes to social issues such as affordable housing. NHPF’s proprietary annual survey posited that Baby Boomers were to blame for the current lack of affordable housing. Each generation (Baby Boomers, Gen X, Millennials, Gen Z) agreed, about equally, with Gen Z polling slightly higher. Respondents cited Boomers’ tendency to stay in houses and jobs longer, prevent younger people from moving up socioeconomically, and NIMBY behavior—working to prevent construction of less “desirable” housing. Gen Z also believed more strongly than other groups that Boomers have contributed to a non- sustainable lifestyle. The cohort with the most power 20 years from now will be the youngest Millennials and the oldest Gen Zers with 72M 40–60 year-olds—larger than the Boomer generation. A 2022 NHPF study found that this group has a passion for activism, supporting human rights and social causes, with 33% supporting affordable housing based on “societal benefits of decreased poverty and crime and increased economic opportunity.”
The Coming Decades of Demographic Change
Source: Philip Bump, author, The Aftermath: The Last Days of the Baby Boom and The Future of Power in America
Upon achieving career success and/or political will, might Gen Z fall back on a previous jaded mentality? Or will their tendency towards individualism, tech prowess, and belief in “access more than owning” empower them to transform America’s affordable housing?
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NHPF Industry Report
They are very motivated to succeed with 87% reporting at least a “somewhat difficult” time finding affordable housing. However, what will “successful housing” look like to Gen Z, with its passion for inclusivity and sharing? Nearly 70% view “healthy housing” as the most important component of future affordable housing. This will likely include an emphasis on biophilia—proximity to communal green spaces and water—as well as access to medical and wellness facilities, sustainable energy, and other “healthy housing” features. It is also likely that as Gen Z ages, they may prefer communal living—sharing energy, water, community gardens, and food, plus knowledge and services that can make a community self- sufficient—their inclination towards sharing could prove truly transformative.
Create a Federal Zoning Agency
“Right now, there’s no one in the federal government whose full-time job is to improve land use and housing supply. Creating such a position would be a useful first step towards better outcomes.” —JENNY SCHUETZ, SENIOR FELLOW, BROOKINGS METRO Can we achieve a future with abundant affordable housing without changes to current zoning policy? Many in the study agreed that Boomers, with their penchant for NIMBYism, bear some responsibility for the maintenance of static and unproductive zoning law. Recent research reveals these codes as the number one “villain” standing in the way of the future of affordable housing production.
STATES WITH A NATIONAL ZONING ATLAS
14 • THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT
NHPF Industry Report
Zoning has long been used both as a tool to build cities and as an exclusionary practice to keep neighborhoods, towns, and cities racially and economically divided. According to a study by preeminent housing law scholar and Cornell University professor Sara C. Bronin, “zoning codes nearly universally establish areas exclusively for single- family housing. Lifting numerical caps in these areas brings the promise of increasing housing supply.” In a 2019 study conducted by NHPF, “onerous regulations” such as zoning also keep some would-be investors from even entering the affordable housing market. The creation of a federal zoning agency like USICH (United States Interagency Council on Homelessness), the only federal agency created to prevent and end homelessness, could mean an overhaul of the nation’s archaic and often arcane zoning laws impacting lot size, single residence per lot requirements, and parking minimums. We would also advocate for federal penalties for municipalities with restrictive zoning policy including withholding federal funding. A helpful tool for anyone looking to overhaul the zoning system could begin by supporting the creation of a national zoning atlas already in the works by a team including Professor Bronin.
Expand and Safeguard the Low-Income Housing Tax Credit (LIHTC)
“LIHTC is the only tool we have to create and preserve affordable housing supply at any meaningful scale. Any attempt to solve our nation’s affordable housing crisis must include a significant expansion of the program and reforms to allow the Credit to break more ground.” —EMILY CADIK, CEO, AFFORDABLE HOUSING TAX CREDIT COALITION LIHTC has financed over 3.7 million affordable homes since its inception in 1986. Though widely regarded as a successful program, spanning nearly four decades, and receiving broad, bipartisan support, the program is perennially at risk. In 2018 Congress increased the Housing Credit allocation by 12.5% on a bipartisan basis, but the increase has now expired at a time when rents are skyrocketing. In addition to restoring these resources, the program should be significantly expanded to meet the vast growing demand for affordable housing. Bipartisan legislation, the Affordable Housing Credit Improvement Act (S. 1557/H.R. 3238), would restore the 12.5% allocation increase, further increase the Housing Credit allocation by an additional 50%, and make other changes to unlock additional resources, streamline the program, and facilitate more developments in hard-to-reach areas like rural and Native communities. Though the legislation has the support of more than one-third of Congress, evenly divided between Republicans and Democrats, it has not yet advanced because of congressional gridlock. It is essential that Congress pass the Affordable Housing Credit Improvement Act this year, to allow thousands of shovel-ready affordable housing developments to move forward and LIHTC to continue unabated.
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NHPF Industry Report
Rental Subsidies Have Increasingly Shifted to Tenant-Based Assistance and Tax Credits
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1992
1998
2004
2010
2016
2022
Public Housing
Housing Choice Vouchers
Project-Based Section 8
LIHTC
LIHTC occupancy is based on the 96.6% rate reported by Novogradac in 2021. LIHTC units include low-income units only. Source: JCHS tabulations of HUD, Picture of Subsidized Households Reports and Low-Income Housing Tax Credit Database; Robert Collinson, Ingrid Gould Ellen, and Jens Ludwig, Low-Income Housing Policy, NBER Working Paper, 2015
Donahue Peebles lll, Founder and Chairman, Legacy Real Estate Development also advocates for LIHTC and HCVP (The Housing Choice Voucher Program) derivatives to include 100%- 165% AMI bands to ensure access to market rate housing in job-generating urban centers. When looking at future affordable housing, there are important legislative and other avenues to be pursued including:
• Expansion of down payment assistance programs; easing hurdles for Co-Op and Condo acquisitions; reduction of RMBS (residential mortgage-backed securities) reserve requirements and allocation of CRA (Community Reinvestment Act) credit to allow for non-agency single-family housing financing options. • Increase emphasis on M/WBE (Minority or Women-owned Businesses) capacity building programs, more stringent First Source and M/WBE utilization requirements; a greater emphasis on local hiring. • Ensure tax credit and gap resources can function assertively within single capital stacks. • Considering that, according to Philip Bump’s demographics predictions, the youngest Boomers will be in their 80s in 2050, municipalities must also look to provide them with ancillary assistance and co-locate essential services they have come to expect.
16 • THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT
NHPF Industry Report
Make More Modular Housing and Make it Close to Cities Where it is Needed
“When buildings are constructed in a pre-fabrication plant, the quality is better than on site building. These houses are so well-designed even a trained eye struggles to tell the difference between one built in a factory and one built onsite.” —AVI FRIEDMAN, PROFESSOR OF ARCHITECTURE, MCGILL UNIVERSITY, CANADA Nearly 70% of those surveyed believe residential buildings should be required to have a percentage of rental units for lower-income earners. However, ensuring enough affordable housing is built by future generations will take more than a positive attitude. It will take changes to the construction industry at a granular level. According to Roger Krulak, CEO, Full Stack Modular, future builders must incorporate modular construction, building components or entire houses in a controlled factory environment and then assembling them onsite. The process streamlines everything,
significantly reducing construction time, delivering projects 20 to 50% faster than traditional methods, with elevated quality, and with practice, cost savings of up to 20%. This approach also offers a strong business case, mitigating delays due to weather exposure, materials availability, on-site delivery issues and assembly. It also requires 67% less energy to manufacture modular buildings.
According to Krulak and others, the process is also generally safer and healthier, shielding employees from the outside elements. These factors resonate with younger generations’ emphasis on healthier lifestyles. For modular to become industry standard, leaders like FullStack have to solve the proximity issue, i.e., eliminating the need for long-haul deliveries that use gas and other resources.
POSSIBLE SOLUTIONS TO IMPROVE MODULAR BUILDING PROXIMITY:
• Network of manufactories, way stations, and project sites. Just as Amazon delivery drivers optimize their routes for efficiency by making multiple stops, the modular construction industry could similarly benefit from this approach that would significantly enhance the efficiency of on-road deliveries, thus reducing the overall carbon footprint associated with construction projects. • Standardize certain project aspects to further multiply efficiency gains.
• Establishing strategically located regional "way stations" partially pre-fabricated and partially pre-assembled modules can be collected, organized, and temporarily stored, similar to Amazon or FedEx distribution centers • Specialized materials management and schedule management software would enable manufacturing managers to order raw materials in bulk, simultaneously assemble modules for multiple projects, and then deliver these modules to their respective sites with exceptional efficiency.
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NHPF Industry Report
Lower the Costs of Insuring Affordable Housing
“Every option [must be considered] to reduce costs, enforce anti-discrimination measures and reverse the trend of insurance companies simply walking away from affordable housing. ” —BAABA HALM, VICE PRESIDENT & NEW YORK MARKET LEADER, ENTERPRISE COMMUNITY PARTNERS Today, many insurance companies refuse to insure certain properties, making the ability to produce more affordable housing in the future even more arduous. These include project- based section 8 properties, ones in high crime areas, old properties, and those in high- probability climate-related disaster areas.
US Property Insurance Rates Have Increased for 20 Quarters Straight
24%
21% 22%
19%
18%
15%
13%
10%
9% 10%
8%
7% 7% 6%
4% 3% 3% 3% 4% 4%
–5% –4% –4% –4%
Q2 17 Q1 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22
Q4 16
Source: Marsh Specialty and Global Placement
According to a recent survey from the National Multi Housing Council, as of the first quarter of 2023, property insurance rates in the United States have increased for twenty-two consecutive quarters. Over the past three years, insurance premiums have skyrocketed, with many owners having experienced year-over-year premium increases from 30 to 100+ percent at affordable rental housing communities.
Garet Marr, Regional Managing Director, Franklin St. Insurance Services, believes insurance companies are not intentionally discriminating against affordable housing owners and tenants, but market conditions and industry inefficiency lead them to the conclusion that economically they must. He sees a future where affordable housing can have affordable insurance. It begins with a shake-up of the staid housing insurance industry. There must be new ways to look at the riskiest parts of insuring affordable housing—crime and climate-related disasters. Marr would like to see underwriting incentivized to focus on community investments and revitalization looking forward, with some real skin in the game. According to a 2017 American Sociological Review study, there is a causal relationship between local nonprofits and the decline in violent crime. The study found that “approximately every 10 additional organizations focusing on crime and community life per 100,000 residents leads to a 4% reduction in the property crime rate.” When a community takes an interest in themselves, with the right resources, crime, and unemployment rates decrease. Insurers need to be part of this equation at the outset. With regards to climate-induced crises, often the solution is to cease investment in areas prone to natural disaster, and many private companies have chosen to do that. This leaves an increasing void in affordable housing units in areas that need it most. The big idea here is to integrate climatology into future construction and development. By assessing the sustainability of developments not only under today’s climate conditions but considering those far in the future, insurance companies can insure with more confidence, while still calculating risk.
18 • THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT
NHPF Industry Report
The way forward includes accessing data and technology to model out climate change along with social and demographic changes at the local level, allowing owners and developers to better understand where they should build, and which infrastructure improvements need to be made. Insurance modeling software today is both cost-prohibitive to many and primarily models based on how historical events would have impacted a portfolio’s assets. While that data is important, more advanced software becoming available includes “Climate Risk Analytics”, provided by CoreLogic, which does the pre-building work, ensuring properties are built to withstand catastrophic weather events. The goal is for products like these to be made widely available. The industry must do all it can to enshrine the goal of housing insurance: to protect residents, and assets, long term, and control costs (including insurance) to guarantee continuous investment in communities.
Invest in Trade Schools and Other Skilled Labor Education
“Bridging the labor mismatch in US construction should start with early training and early talent acquisition through partnerships with universities, colleges, and high schools.” —GARO HOVNANIAN, RYAN LUBY, AND SHANNON PELOQUIN, MCKINSEY & COMPANY Shortages in skilled labor have been on the rise since US families were sold an American dream with only one path—a four-year college degree. Stupefying student debt, recessions, the housing crash, paychecks unaligned with the cost of education and other factors have caused many to rethink that path. Yet, there is good news.
THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT • 19
NHPF Industry Report
Thousands of high-paying building jobs go unfilled. Nearly 90% of construction companies have trouble finding qualified workers , reports the Associated General Contractors of America. Baby boomers remember “Shop” and “Home Economics” classes in high school where training for a career in skilled labor began and could begin again. A reinvestment in skills training as early as middle school is being advocated to address this “labor mismatch.” The Rework America Alliance highlights the merits of skills-based, rather than credential- based, hiring—tapping into the 106 million workers who have built capabilities through experience yet lack a four-year college degree. This skills-based approach should complement apprenticeships that bring younger students and vocational talent into the industry earlier. Employers need to partner with local technical schools, providing scholarships, instructors, and apprentice programs. This path could also work with a range of nontraditional sources of talent, including veteran-transition programs, formerly incarcerated individuals, and others. Moreover, identifying and attracting talent from outside the typical construction industry paths will help to increase the diversity of its workforce, which as of today is 88% white and 89% male.
Incorporate the Best of AI and Other Tech Advances
“Artificial intelligence is taking a more prominent role [in affordable housing], and we can leverage it to create more comprehensive real- time data to improve our operating systems and procedures.” —DAVID A. NORTHERN SR., HOUSTON HOUSING AUTHORITY PRESIDENT & CEO Developers are using AI programs like ChatGPT or Bob.AI with various assistance programs to expedite the application and borrowing processes. Many report trying out these services with Asset Management and Resident Services Coordinators to scan for health and community resources. Many in our industry use AI-assisted platforms like Grammarly to ensure writing is error- and plagiarism-free. Some use ChatGPT to kickstart grant proposals, outlines for Powerpoint presentations, award entries and other repetitive writing. We are enthusiastic about time- and labor-saving AI tools that reduce resident burden by offering such a reusable, single-fee application, powered by real-time data and that produce an “ability to pay” score from factors including assets, income, and previous rental history. This AI promotes more inclusive scoring giving property managers a quick and accurate financial profile of a prospective renter, more equitably and with less bias—especially valuable for those states where vouchers are often routinely denied. Other technology advances paving the way for future affordable housing include Wemimo Abbey’s Esusu Inc. which taps into on-time rental payments typically excluded from credit reports (unlike missed rental payments which are reported to credit bureaus). Esusu addresses this disparity that leaves some 45 million credit-invisible renters without the benefits accrued to homeowners who pay mortgages. Esusu calculates that rent reporting could unlock a potential $4.1 trillion, generating hundreds of millions in tax revenue and significantly contributing to the GDP.
20 • THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT
NHPF Industry Report
Second Century Ventures works with proptech startups to solve affordable housing issues through investing in and adopting new building techniques and materials, and digital tools to lower development and property management costs, new construction materials and processes among other solutions. As we incorporate more AI into our business, the industry must remain vigilant against the spread of misinformation and seeing technology replace jobs. Our recommendation here? Use technology in balance with the human touch. We are in the business of providing housing to people and only other people have the compassion and understanding to make housing and other personal connections meaningful. ESUSU WORKS WITH 65% OF THE NMHC TOP 50 PROPERTY AND ASSET MANAGERS. BUSINESS RESULTS INCLUDE: • An average credit score increase of 34 points . • Over $12.9 billion in mortgage loans and over $4 billion in auto loans were accessed by Esusu renters with increased credit. • Over 121,000 auto and 29,000 mortgage loans were accessed by Esusu renters with increased credit. • Millions in eviction prevention and zero-interest rent relief distributed to 8,000+ households in 46 states. • 82% of recipients are BIPOC (Black, Indigenous, and other People of Color) and 63% are women. • 81% of borrowers have an AMI below 80% .
Conclusion: Co-Create the Future
The baby boom has had a profound and lasting impact: Over 11,000 people are still turning 65 daily in 2023. However, by 2048, the baby boom will dwindle, and the nearly-as-large millennial generation will reach retirement age, with the vibrant Gen Z picking up the mantle. What is the worst that can happen in 2050? The senior population that is projected to grow from 18% to 22% in 25 years suffers even more housing scarcity, risings costs of living, social unrest and lower wages—dire problems for everyone and even a total collapse of the country is possible. What is the best that can happen? The combined recommendations in this report resonate enough to make real change. All the segments of the affordable housing equation; all the living generations co-create a vision that provides high quality healthy housing, breathes new life into cities, eliminates the affordable housing gap, and builds a way of life for future generations.
THE NHP FOUNDATION 2023 SYMPOSIUM: INDUSTRY REPORT • 21
Operation Pathways: Transforming Affordable Housing Communities
Operation Pathways is the resident services subsidiary of The NHP Foundation (NHPF). NHPF preserves, builds, and owns service- enriched affordable housing. For over 25 years, Operation Pathways has provided customized on-site programs and services to residents living in NHPF’s affordable housing communities. Operation Pathways’ mission is to transform affordable housing communities through innovative programs that engage, empower, and support residents to achieve the futures they desire. Programming is categorized into four focus areas, Academic Achievement, Financial Stability, Healthier Living, and Aging in Place. Each “Pathway” offers residents the opportunity to build skills and overcome common obstacles that families of low-income encounter. Today, Operation Pathways serves over 5,000 residents annually across 31 properties in 12 states and the District of Columbia. Operation Pathways is CORES certified (Certified Organization Resident Engagement & Services) and
works one-on-one with residents to overcome underlying issues and work towards achieving their goals through a resident-centered process called Family-Centered Coaching. Through this model, RSCs walk beside, guide, support, and motivate residents as they set and achieve goals for themselves and their families. Operation Pathways is resident centered. Residents are included in the design, implementation, and evaluation of services. Each site has an active Operation Pathways Resident Advisory Council who partners with the Resident Services Coordinator to develop opportunities for their community. Operation Pathways is grateful and honored to be the beneficiary of the monies raised from this annual symposium. The generosity of all sponsors, ticket holders, and contributors allows Operation Pathways to continue providing residents with these supports and services that help create housing communities that are collaborative and vibrant, where neighbors help neighbors and families thrive.
22 • THE NHP FOUNDATION 2023 SYMPOSIUM
Congratulations!
Park Heights Senior Apartments, Baltimore, MD
to
for 35 years of providing high quality affordable housing. AGM is pleased to be your lending partner.
www.agmfinancial.com
THE NHP FOUNDATION 2023 SYMPOSIUM • 23
24 • THE NHP FOUNDATION 2023 SYMPOSIUM
PURPOSE-DRIVEN FOR MORE THAN 50 YEARS
Boston Financial is America's largest syndicator of affordable housing. We believe the communities we invest in not only give residents a place to live, but also provide a path to a better life.
Proud Sponsor Of The NHP Foundation
bostonfinancial@bfim.com | www.bfim.com
This advertisement does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service by Boston Financial.
DC HOUSING FINANCE AGENCY The District’s Resource for Innovative Solutions in Affordable Housing
@DCHFA
WWW.DCHFA.ORG
THE NHP FOUNDATION 2023 SYMPOSIUM • 25
We wish The NHP Foundation continued success in all their endeavors. Congratulations on 7 years of thought leadership.
FCHC, 330-B.S. Virginia Avenue, Ste 2, Falls Church, VA 22046 / www.fchccdc.org
Changing Lives and Shifting Perspectives
At Forge Craft, we create places that empower and inspire. Project by project, we are changing outdated perceptions about what affordable housing can be through intentional architecture and interior design. Rather than focusing on the challenges, we see each project as an opportunity to stretch the bounds of ingenuity – to envision solutions that will make daily life better for people.
26 • THE NHP FOUNDATION 2023 SYMPOSIUM
RGE CRAFT ARCHITECTURE + DESIGN
RSEQUITY.COM
BOSTON • CHARLOTTE • CHICAGO CLEVELAND • NEW YORK • SAN DIEGO
Red Stone Equity Partners is proud to sponsor NHPF’s 2023 Annual Symposium
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A SUBSIDIARY OF R4 CAPITAL FUNDING
28 • THE NHP FOUNDATION 2023 SYMPOSIUM
TRADITION. INNOVATION. DISTINCTION.
We are proud to support The NHP Foundation Symposium and join in acknowledging the accomplishments of the Honorees.
NHPF Affordable Housing Advocacy Award Representative Suzan DelBene (D-WA) and
Representative Brad Wenstrup (R-OH)
NHPF Affordable Housing Trailblazer Award Donahue Peebles III (Chairman, Legacy Real Estate Development)
NEW YORK
NEW JERSEY
CONNECTICUT
windelsmarx.com
THE NHP FOUNDATION 2023 SYMPOSIUM • 29
is honored to support The NHP Foundation in celebrating more than three decades of creating a ordable, safe and connected communities.
Partnering with NHPF for Affordable Housing
Learn more at camdenliving.com
NYSE:CPT
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