September 03, 2021
We are continuing a new feature called Developer Tips for Success. Fred Bennett, managing partner and chief financial officer with The Bennett Group, LLC, is our second participant. Participation in the Low-Income Housing Tax Credit (LIHTC) program and other federal housing programs requires significant individual and team experience/expertise, a tolerance for financial risk, and an ability to obtain major banking and credit relationships. We hope hearing from successful AHFA developers will inspire and educate others who are interested in becoming affordable housing owners/developers or increasing their level of experience.
Q: How long have you worked in the affordable housing industry?
A: I began working to organize migrant farm workers into self-help housing groups as a VISTA volunteer in the Fort Myers area of Florida in 1967. I knew and worked with migrant families there who lived in shacks with no plumbing, and some even slept under the produce trailers with their kids. That’s when I felt a calling to develop affordable housing, and I’ve been working as an affordable housing developer ever since.
Q: What are the key challenges or barriers to participating in this industry?
A: Ours is a niche industry requiring knowledge of Section 42, HOME, HTF, and other federal programs that change from year to year. One must keep up with this in addition to following good real estate development practices in various locations. The costs are high to bring a project-funding application together and the selection process is highly competitive. Developers need enough capital to compete and to keep their team together between jobs. Meeting ever-increasing environmental regulations is expensive and challenging. Since last year, supply shortages and very rapidly escalating costs for materials have been the greatest challenge.
Q: What tips would you give others who might be interested in a career in affordable housing development?
A: I think the best way to start, perhaps the only way, is as an employee working with an affordable housing developer.
Q: Share any tips to becoming a successful owner and/or developer?
A: There are no “Lone Ranger” developers and The Bennett Group is no exception. Internally, we work as a team. The process is complex and also requires a team of third-party professionals who communicate and work well together. A good developer works a lot like the conductor of an orchestra – he or she identifies talented professionals, inspires them with a common mission, and communicates constantly, trying to draw the best from them. This all has to be done within a budget and a timeframe, and it must be done with a supportive “win-win” attitude toward all involved.
Q: What do you see as the greatest benefit of affordable housing?
A: There’s a gladness we share with residents when they first see their new apartments. Many are astonished to see a quality of housing they thought they never could afford. But the greatest benefit is seeing these new neighbors become real neighbors over time, and becoming a healthy community.
Q: Anything else you’d like to include?
A: For a few years, in addition to my development activity, I worked on the acquisitions team for a syndicator and had the opportunity to meet developers in several states, attend their state housing conferences and learn how the various state agencies operated. Alabama has one of the best state housing finance authorities in the nation, some of the best developers, and one of the best looking and best managed affordable housing portfolios in the country. Our trade group, the Alabama Affordable Housing Association is, I believe, the top group in the country.
