Building a bridge between affordable housing design, financing and construction

With the demand for affordable housing increasing, minority real estate developers see an opportunity to expand their businesses into the space while also supporting “green” solutions. Building better partnerships as a project moves from design through to construction was the theme of a session at Baker Tilly’s 2022 DevelUP affordable housing workshop in Milwaukee.

The educational and networking event brought together underrepresented multifamily housing professionals, allies and advisors to meet one another and learn the ins and outs of affordable housing.

Perfect partnerships

Ray Plummer, a Baker Tilly manager and long-time construction project manager, kicked off the session by likening the relationship between a housing project’s owner, architect and general contractor as a marriage. “It’s going to be very painful to have a divorce in the middle of the project,” he warned. He suggested affordable housing sponsors choose their key players carefully, and make sure their experience – and people skills – prepare them to be team players.

Building affordable housing involves three distinct phases, said Spencer Skinner, real estate senior transaction manager at Baker Tilly. The first, known as the “predesign phase” is the time when project planners establish what the project will be and where it will be sited. By the end of the predesign phase, Skinner said, “you have a basic overlay of a site plan. You can see where your building is. You know where your parking is. You know conceptually how many units you’re going to have. You can start asking the city if they have incentives and you can start to attract investors or other equity providers to your project.”

Next, in the “design phase,” planners configure the housing units and finalize construction documents to request bids. Finally, during the “construction” phase, builders erect the buildings. In each of the three phases, Skinner said, a series of seemingly endless questions must be answered. Skinner said a development plan can help keep track of design requirements and the decisions made to support them and make sure state and/or municipal building requirements will be met. A market survey will reveal whether the chosen site is an affordable area where the local housing authority will be “chomping at the bit” to invest. Early environmental studies will reveal “what’s in the dirt,” he said, and predict whether the chosen site will be a healthy place for people to live. The answers to all these questions will figure prominently in the ability of developers to win financing and tax credits for the project.