Size Doesn’t Matter When It Comes to Affordable Housing
When it comes to working with rental housing developers, one size does not fit all.“We work with a whole range of developers,” said Chris Thompson, Director of Strategic Housing at Virginia Housing. “From small, private and nonprofit developers to very large-scale for-profit and not-for-profit developers.”
What separates them are the levels of investment and experience. Typically, large developers are putting together proposals upwards of $5 million, have their own brokers, and are armed with years of experience. Smaller developers, on the other hand, typically propose developments under the $5 million mark and are less than 10 units.
In recent years, Virginia Housing has made a concerted effort to create a more robust network of smaller developers by creating a Strategic Lending Department, new community outreach initiatives and educational tools.
“In many cases, smaller developers don’t know where to start,” said Wally Robinson, Strategic Lending Officer with Virginia Housing. “They have great ideas but might not have direction. We work closely with them and help them put their ideas on paper, come up with a strategic plan and get things going.”
“Pre-COVID-19 we would go meet with them one-on-one and walk the property site with them,” added Thompson. “Now, we have transitioned a lot of that to virtual discussions, but we remain just as involved. We discuss finances, feasibility studies, how to apply for grants that can help them with market analysis and project planning, as well as determine if their development is viable.”
Zarina Fazaldin, a Richmond developer and community activist, has worked with Virginia Housing on revitalization projects since the early 2000s.
Most recently, funding she received through Virginia Housing allowed her to purchase an abandoned historic mansion in the Jackson Ward section of Richmond and transform it into a four-unit affordable housing complex. The two-story house was built in 1915 for Dr. William Henry Hughes, a prominent African American physician at the time.
Without the low-interest loan from Virginia Housing, Fazaldin said she would have had to separate the property into 10-12 units instead of four just to make a profit. That many units would have taken away from the character of the home, which was built by Richmond’s first African American architect Thaddeus Russell.
“Virginia Housing’s help didn’t just allow me to purchase the property, but to keep its historical character inside and out,” said Fazaldin.
While Fazaldin loves old houses and transforming them into something new, she’s most passionate about how that transformation affects the surrounding community.
“It’s so important, especially in the Richmond area where there are so many historic homes,” she said. “The neighbors get excited, and they start working on their houses too and then others purchase homes in the community. Eventually these once-ignored and abandoned neighborhoods start to come back to life.”
This kind of result is a perfect example of how small developers can make a big impact.
Urban Hope, another small developer based out of Richmond, recently worked with Virginia Housing for the first time. The small faith-based nonprofit has been in operation for nearly 20 years and focuses on providing affordable housing opportunities and financial health education to those in the East End of the city.
“They are a well-organized group that fundraise their money, collaborate and bring in investors and truly focus on individuals and their housing needs,” said Robinson, who worked with Urban Hope on the lending side.
Virginia Housing provided $415,000 in funding through its REACH Virginia program to help cash out short-term investors and provide permanent financing for an affordable housing development Urban Hope owns in the Church Hill area.
Urban Hope’s Executive Director Sarah Hale said the experience was amazing, and that she hopes Virginia Housing will “continue to be an essential partner” in future deals.
“Many people pointed us in the direction of Virginia Housing as a place of great resources in terms of guidance, information and potentially capital,” said Hale.
Feedback like Hale’s is exactly what Robinson and Thompson want to hear as they continue to spread the word about Virginia Housing’s programs and assistance for small developers throughout the state – particularly in rural areas. “We really want to focus on the underserved markets,” said Thompson. “I think a lot of small developers don’t know what’s available and don’t realize the level of direct technical assistance we can provide in addition to financing.”
To learn more about partnering with Virginia Housing, contact Chris.Thompson@VirginiaHousing.com.