With the demand for affordable housing increasing, minority real estate developers see an opportunity to expand their businesses into the space while also supporting “green” solutions. Building better partnerships as a project moves from design through to construction was the theme of a session at Baker Tilly’s 2022 DevelUP affordable housing workshop in Milwaukee.
The educational and networking event brought together underrepresented multifamily housing professionals, allies and advisors to meet one another and learn the ins and outs of affordable housing.
Ray Plummer, a Baker Tilly manager and long-time construction project manager, kicked off the session by likening the relationship between a housing project’s owner, architect and general contractor as a marriage. “It’s going to be very painful to have a divorce in the middle of the project,” he warned. He suggested affordable housing sponsors choose their key players carefully, and make sure their experience – and people skills – prepare them to be team players.
Building affordable housing involves three distinct phases, said Spencer Skinner, real estate senior transaction manager at Baker Tilly. The first, known as the “predesign phase” is the time when project planners establish what the project will be and where it will be sited. By the end of the predesign phase, Skinner said, “you have a basic overlay of a site plan. You can see where your building is. You know where your parking is. You know conceptually how many units you’re going to have. You can start asking the city if they have incentives and you can start to attract investors or other equity providers to your project.”
Next, in the “design phase,” planners configure the housing units and finalize construction documents to request bids. Finally, during the “construction” phase, builders erect the buildings. In each of the three phases, Skinner said, a series of seemingly endless questions must be answered. Skinner said a development plan can help keep track of design requirements and the decisions made to support them and make sure state and/or municipal building requirements will be met. A market survey will reveal whether the chosen site is an affordable area where the local housing authority will be “chomping at the bit” to invest. Early environmental studies will reveal “what’s in the dirt,” he said, and predict whether the chosen site will be a healthy place for people to live. The answers to all these questions will figure prominently in the ability of developers to win financing and tax credits for the project.
Nicole Chavas, president and chief operating officer of Greenprint Partners, suggested that increasing public interest in “green infrastructure” is driving demand for sustainable site design. “Our mission is really around creating more climate-resilient communities, especially as climate change is creating stronger storm activity, more rainfall and more flooding. Stormwater management is really, in my opinion, the next frontier of sustainability,” she said.
Site developers and city regulatory agencies want to make sure affordable housing communities are “resilient sites” that can withstand the effects of climate change and, in particular, reduce stormwater runoff. She said that several communities in Milwaukee county charge storm water fees, based on the number of impervious surfaces (like a building roof or parking lot) that can cause storm water runoff. Depending on the size of a property, these fees could range from a few hundred to a few thousand dollars per year. Chavas noted, however, that developers and building owners who incorporate green infrastructure into a site can get credits and rebates on those fees to lower operating costs.
“With this move to green solutions, your civil engineer can be your sustainability partner. The green movement is moving toward nature-based solutions for storm water management that also add aesthetic benefits for the tenants,” Chavas said.
One effective strategy Chavas mentioned is to replace traditional lawns with turf grass, whose deep roots help soak up rainwater. Another strategy calls for building “rain gardens,” strategically placed plantings of native vegetation to soak up runoff. Rain gardens often include attractive flowers and trees that filter out pesticides and other pollutants as runoff makes its way into city sewers.
“Access to green space – even just being able to see green space from your home – has all sorts of benefits to tenants, including improving mental health and reducing stress,” Chavas said. “When you beautify the property, you bring the tenants together.”
Baker Tilly’s DevelUP: affordable housing workshop is an event designed to help underrepresented developers conquer affordable housing, scale their business and build diversity. Through comprehensive consulting services, Baker Tilly assists emerging developers of affordable housing by helping them navigate the many steps necessary to bring a project to successful completion — from funding to project management.
For more information on this topic or to learn about services for underrepresented developers, contact our team.