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November 29, 2018
There are many misconceptions about nonprofit, affordable housing developers and the homes that we produce. From the myth that we are overly reliant on public funds to the false belief that our buildings are costly and unattractive, developers of income-restricted homes face a never-ending battle of dispelling misconceptions and stereotypes.
To set the record straight, we’ve identified 10 key points you should understand about mission-driven housing development.
1. Public funding generates private funding.
The cornerstone to most affordable housing development is securing city, county, state and federal resources. But that’s not where funding ends. Public dollars are leveraged to secure private financing, such as traditional bank debt and Low-Income Housing Tax Credits. For every dollar of public funding received, we generate approximately two or more dollars from private funding.
2. We’re innovative.
Nonprofit developers constantly look for smarter, better ways to build. That’s how we stretch public financing to build as many homes as possible. Bellwether Housing’s recent innovations include dramatically increasing building scale, using green building techniques to reduce operating costs, and designing building layouts that reduce construction costs.
3. We compete with market-rate developers for land, labor and general contractors.
Just like market-rate developers, nonprofits are impacted by the region’s high land costs and construction labor shortage. Free or reduced-cost land surplus public land or land from philanthropically minded sellers may offset development cost, but public funding is critical in the Puget Sound’s high-cost construction market.
4. We’re cost efficient.
Nonprofit developers must make the best use of financial resources. We develop apartments for the same or lower cost as market-rate developers. We also operate our buildings efficiently. Just like a for-profit owner, many nonprofits pay debt service and operating expenses on their buildings. Any cash flow received is reinvested in maintaining our buildings or developing more homes.
5. We develop homes the market is not providing.
Most new market-rate apartments lean heavily towards studios and one-bedroom units geared for smaller households. Larger families often struggle in the housing market, frequently squeezing into too-small homes, living in substandard conditions, or leaving the region all together due to a lack of suitable housing options.
Nonprofits develop two-, three- and even four-bedroom permanently affordable apartments to serve larger families. Bellwether plans for 40 percent of the homes we build in the next five years to have two-plus bedrooms to meet the overwhelming need for affordable, family-friendly housing in Puget Sound.
6. We build long-lasting, attractive and high-quality homes.
Nonprofits are in it for the long-haul, so we build homes to last for generations. We pick durable building materials that stand up to heavy usage. We choose sustainable building features that will reduce operating costs and energy consumption.
Our buildings are beautiful and complement the neighborhoods in which they are built. Our buildings meet the same design standards as market-rate buildings. We design homes our residents feel proud of, because everyone deserves a dignified place to live, regardless of income.
7. We value partnership.
Working jointly with other mission-driven nonprofits lets us tackle larger, bolder and more innovative developments. Bellwether Housing and Mercy Housing Northwest have partnered to build 244 homes next to the future Roosevelt light rail station.
Bellwether and Plymouth Housing have teamed up to develop Seattle’s first affordable high-rise in decades.
Our partnerships create cost efficiencies, combine organizational capacity, and most importantly, multiply our impact in meeting the need for affordable housing in our community.
8. Our team skillfully negotiates complex deals.
Affordable housing developers deal with all the challenges of real estate development and much more. Our deals have more complex legal and financial structures. Our financing comes with rules and regulations market-rate developers don’t face.
To navigate these complexities, Bellwether has assembled a development team with expertise in market-rate development, architecture, public policy, urban planning and direct service. This breadth of knowledge uniquely positions us to successfully develop income-restricted housing.
9. Our homes create stronger communities.
By locating our buildings in great neighborhoods near transit, schools and job centers we ensure that we are all surrounded by a diversity of ideas, perspectives and cultures, and can share in our region’s success.
We employ “resident service coordinators” to assist residents in connecting to services that support housing stability and build community.
The people who live in our buildings report many successes including improved educational outcomes, increased health and well-being, and professional advancements.
10. Our residents are just like you.
For many people in the region, rents are increasing faster than wages. Access to affordable homes helps give our residents peace of mind and security that they can afford to remain in their communities. Our residents include families with kids, young people starting out, recent immigrants and seniors.
For some residents, a Bellwether home means exiting the trauma of homelessness. Your Bellwether neighbors might be teachers, students, bus drivers, veterans or social workers. Our residents are an essential part of the economic and social fabric of our region.
Affordable homes are vital to our collective prosperity. Bellwether’s comprehensive approach to real estate, property management, and community development supports positive outcomes for residents and our region.
Bellwether Housing is Seattle’s largest nonprofit provider of affordable housing. Richard Loo leads Bellwether’s Real Estate Development team. Claire Magula promotes Bellwether’s development work and is a Bellwether resident.