On Friday, April 5, panelists for Fresh Fridays discussed the costs of building affordable housing.
The session’s panelists included:
- Charlie Thomas-Davison, Director of Real Estate, Women’s Development Corporation
- Rebecca Schofield, Developer, Pennrose
- C. Eric Alexander, Director of Multifamily Programs, Tennessee Housing Development Agency
- Jennifer Hawkins, President & CEO, ONE Neighborhood Builders
The discussion focused on the many challenges developers face when constructing and financing affordable housing in Rhode Island and throughout the country, including land acquisition, environmental remediation, construction costs, design requirements, and development timelines.
As a level-setting reminder for participants, Charlie Thomas-Davison said “It should be noted that there’s an affordable housing need in every part of the state, in every type of community, at every scale. I think that should be obvious but isn’t and I think that even within the community there is not a recognition that the people who would qualify for these units are already there.”
Jennifer Hawkins, highlighted the added complexities that nonprofit develops face, acknowledging that while “the cost drivers around constructing housing regardless of the AMI of the eventual occupant has just skyrocketed. And I think affordable housing developers are feeling that more acutely because of the fact that we’re trying to contain costs because we can’t charge high rents or sell homes at high prices because of our mission and that work that we’re trying to do. The fundamentals of development just like the skyrocketing costs of land, of increasing materials costs, etc. are an industry wide phenomenon.”
Thomas-Davison expanded on the complexities of developing in suburban areas and some of the added costs that are associated with developments such as utility access which can sometimes be hundreds of feet away from development sites. Developments that are set back off the road “lead to added costs such as snow removal of a road. Might be talking about $20,0000 for one major snow event. So even predicting it, let alone dealing with it is a serious thing.”
While the impact of rising costs is affecting developers across the country, Eric Alexander, whose work is currently focused in Tennessee, highlighted the importance and value in having financing partners to make developments happen. “I think Rhode Island is positioned better in many respects than some of the other [Housing Finance Agencies] that I’ve worked in recently because there are additional soft-sources and gap financing resources available that we don’t necessarily have access to in my present agency…I think that affordable housing providers and practitioners in Rhode Island are blessed to have an innovative agency with a lot of resources to bring bear, but the issues are still the same,” said Alexander.
Becca Schofield highlighted the impacts of sustainability practices on the success of a development and how nonprofit developers often must “become experts where we didn’t intend to be.” “There are a bunch of ways that sustainability and energy priorities are enforced. It can be through code; it can be through permitting and zoning; It can be through the QAP from the housing finance agency; so you’re not going to score if you don’t include the sustainability priorities. But also, they’re going to add costs and then you’re going to have worse scoring on financing,” said Schofield. “I think it’s just a really tricky puzzle that we try to solve.”
Previous Fresh Fridays Sessions:
Thanks to Our Sponsors:
