Developing workforce housing involves much more complex financing as well as more complicated political and social realities than developing market-rate housing. This means that while development leaders in the market-rate industry must demonstrate a unique mix of leadership, management, financial, and political skills, leading developers of workforce housing must demonstrate these same skills and more. The successful workforce housing developers must possess effective political skills to build coalitions and sell the vision of their development proposals. Company leadership combined with best business practices is crucial to the success of a workforce housing developer.
The rapid escalation in home prices, combined with a dwindling supply of affordable rental units has resulted in the squeezing of moderate, low, and very low income households out of housing options. Income is measured as a percentage of AMI (Area Mean Income).
The development process for workforce housing involves predevelopment strategy, site selection, relationship building and community outreach, design, project financing, construction, and finally property management.
Predevelopment Strategy:Go where the ceed is.
Where the community is welcoming.
Level of Subsidy.
Site Selection:Proximity to Mass Transit.
Proximity to Job Centers.
Size and current ownership of the Site (multiple owners or not).
Relationship Building and Community Outreach:Developing relations with:Local Politicians and Government.
Local Network of support for the project.
Developer needs a strong professional reputation.
Design:Consistent with surrounding neighborhoods.
Green Building (lower utilities cost can help homebuyers qualify for mortgages).
Financing:Multiple layers a Medley of:Federal.Sale of Low-Income Housing Tax Credits (LIHTC) to:
Private.Banks.Historic Preservation Tax Credits.
Other large institutions.
Debt leveraged by equity.
Authorized by the Federal Tax Code and administered by State Housing Financing Agencies.
Usage may be based on AMI.
Community Development Block Grants (CDBGs)
HUD Section 202 Supportive Housing or the Elderly.
State Low or No cost Loans.
Tax Exempt Bonds.
Public Sector Subsidies.
Cross Subsidy, (market-rate units produce income to subsidize Workforce Units).
Property Management:Continuing property management in many cases is extensive. For many developers of Workforce Housing, property management is a significant service that serves multiple goals, in some cases expertise in property management allows some developers of workforce housing to market their services to others.
Fulfillment of an organizationís mission to build communities and help residents in need move toward self-sufficiency.
Cleanliness and Security.
Other Offerings:Social Services.
After School Programs.
Job Training. Avoid Culture Clashes:Mixed Income.
Market and Subsidized Households.
Singles and Couples with Children.