Any development project depends on strong partnerships and relationships to move from concept to reality. Unsubsidized affordable SMMF preservation is no exception. In fact, relationships are often more critical in these projects—particularly for purchasing the property and securing the financing needed to preserve it. Relationships are especially important since there are limited examples of successful projects at this scale, fewer established systems to support it than other preservation deals, and (sometimes) tighter financial margins.
These relationships will impact every stage of the preservation process. Tips related to relationship building for unsubsidized affordable SMMF preservation projects have been incorporated throughout the toolkit. These tips are highlighted with the following icon: . They focus on dynamics that may be unique to an unsubsidized affordable SMMF project relative to a larger-scale project or a project preserving subsidized housing.
KEY RELATIONSHIPS THROUGHOUT THE UNSUBSIDIZED AFFORDABLE SMMF PRESERVATION PROCESS
Stakeholders who may own unsubsidized affordable SMMF properties
- Public sellers – local government
- Private sellers – mom and pop owners, other local/regional owners, institutional owners and investors
Stakeholders who can help acquire unsubsidized affordable SMMF properties
- Brokers or real estate agents
- Local government
- Real estate attorneys
Stakeholders who can help finance unsubsidized affordable SMMF properties
- Community Development Financial Institutions (CDFIs)xii
Community Development Financial Institutions (CDFIs) are mission-driven financial institutions dedicated to expanding economic opportunity through lending and financial services in underserved communities, such as low- and moderate-income neighborhoods.
- Local and state governments
- Housing finance agencies
- Real estate investment trusts (REITs)
- Government-sponsored enterprises (GSEs)
Other private investors
Other stakeholders that will influence the success of the project
Development team – architects, engineers, construction managers and contractors
Local, regional and state policymakers
Local planning commissions
Stakeholders that can help manage the property
See Figures 1 and 2 below that show the key stakeholders to engage in Atlanta and Miami.
HOW DO RELATIONSHIPS FOR UNSUBSIDIZED AFFORDABLE SMMF PRESERVATION DIFFER FROM LARGER PROJECTS OR SUBSIDIZED HOUSING PRESERVATION?
OWNER PROFILE You will likely be working with fewer institutional owners. Unsubsidized affordable SMMF property owners tend to have smaller portfolios and are more likely to live near their properties.
BROKERAGE EXPERTISE There are fewer established frameworks for identification of unsubsidized affordable SMMF opportunities than with other property types. Fewer established practices means you or your broker partner will need more expertise about what makes a property a strong candidate for preservation. When brokers have this expertise, plus strong relationships with unsubsidized affordable SMMF property owners, they can help you identify opportunities for property acquisition before they are listed for sale. Off-market opportunities can help keep costs low and increase the financial feasibility of preserving unsubsidized affordable SMMF properties. Considerations related to identifying strong candidates for SMMF preservation are outlined in the Property Identification section.
EVALUATION BY LENDERS Lenders tend to place a larger emphasis on their belief in the owner when evaluating affordable SMMF deals, as compared to other affordable housing deals.
BROAD COMMUNITY ENGAGEMENT There will be fewer requirements (if any) for community participation in the preservation of an unsubsidized affordable SMMF property, unless subsidies are used or significant local land-use approvals are needed. In addition to obtaining approvals, community support and relationships can be critical when you are identifying properties for preservation, engaging existing owners, and finding tenants.
FIGURE 1. KEY STAKEHOLDERS: ATLANTA, GA
- Public Entities
- HouseATL Funders’ Collective
(Philanthropy, Private, Social, Impact, Public)
FIGURE 2. KEY STAKEHOLDERS: MIAMI, FL
- Public Entities