Proven Strategies for Successful Affordable Housing Development
BY MIKE HILLIARD, AIA

Originally published in Multifamily Trends Magazine, Summer 2003, Volume 6

Long before 9/11, the dot.com bust, and the downturn of the stock market, America was in the midst of an affordable housing crisis. Nationwide, we have a shortage of 5 million affordable rental units. The number of working families who spend more than half of their income on rent or mortgage payments has jumped 30 percent in just two years. Developers consistently cite three major hurdles in the way of viable, new affordable housing projects: a scarcity of appropriate sites, a shortage of suitable financing packages, and a lack of community support. At Hilliard Architects we have proven strategies for overcoming these obstacles.

Strategy 1
Obtain price breaks for parcels along commercial corridors.
Environmentalists, transportation activists, and affordable housing advocates agree that building near major transit routes capitalizes on existing infrastructure and increases opportunities for neighborhood amenities. But there is also a financial incentive for developers to maximize these parcels: well-located projects in traffic-choked cities such as San Francisco may be exempt from expensive parking space minimums. When our firm proposed building 54 units on an inner-city plot, the city set aside their customary parking space minimum because of the site’s proximity to major transit. Often, parking on small lots must be built underground at $100,000 per space - more than the cost of the apartments themselves. In this case, the waiver left space in a tight budget to include conveniences such as walkin closets, washer/dryers, and full kitchens. This type of cost break allows even modest infill tracts in prime locations to support affordable housing.

Strategy 2
Design to secure an inexpensive HUD-insured mortgage.
Firm President Mike Hilliard’s thorough understanding of the construction requirements for the Department of Housing and Urban Development (HUD) and his ten years as a HUD trained inspector contribute greatly to the success of our projects. Designing within HUD guidelines makes project financing relatively easy and inexpensive. HUD provides some of the most comprehensive financing for pre-construction, building, and housing loans. HUD-backed loans currently are at fixed rates of under 5.5 percent, including 40-year, fully amortized nonrecourse construction and permanent financing for one price. Furthermore, their previously stringent cost limitations have become more flexible and the system is easier to navigate.

For the extensive rehabilitation of Ponderosa Estates, 56 units of multifamily housing in Marin City, our firm built a new fully accessible community building, replaced gravel roofing with shingles, and added a play area for toddlers, among other design improvements. By incorporating facilities and features and restoring the aesthetic level of the property, we far surpassed the requirements for Section 8 affordable housing. To learn more about building to HUD standards and securing a HUD loan, you can visit our Web site at www.hilliardarchitects.com and click on “How to HUD.”

Strategy 3
Turn heated community activists into productive development-team members.
It is not uncommon for an affordable housing project to be hindered or even terminated due to protests by neighbors who fear a decline in their property values. Inviting community activists to participate as an extended part of your development team will foster buy-in and promote superior design. Communicate openly with neighborhood organizations and city planning staff, listen attentively to their concerns, and adjust the concept of affordable housing to address the needs of the neighborhood as a whole.

Hilliard Architects used the firm’s Web site to gather feedback from neighbors during design of the 80 unit Wildhorse Apartments in Davis, CA. Our team also frequently attended district meetings to build positive relationships with the people most affected by the new construction. We responded quickly to local opposition about the proposed structure’s density by masking taller units with two-story buildings and muting the colors palate. Hilliard went so far as to stand in a resident’s hot tub to make note of the view the neighbor wished to preserve. These steps
helped us gain public support for the project while meeting Davis’s density requirements.

Consider integrating these three strategies into your next affordable housing plan. You will increase your chances for success and help satisfy a nationwide need.