Recommendations: Goals and Strategies

Based on our mission, along with analysis of the external environment and stakeholder input, we have established 4 overarching goals, 16 strategies and approximately 70 specific actions. The actions are contained in a separate Implementation Plan that will be monitored during the next three years by senior staff and the Board.

After the thorough review described in the above sections, we have concluded that, overall, NNEHIF is a vibrant organization with a clear focus on bringing together both resources and talent to create more and better affordable housing. We recognize the challenges ahead involving external competition, the economics of the low income housing tax credit program, and evolving stakeholder expectations. To sustain the NNEHIF mission, we will:

  • strengthen products and services
  • advance affordable housing through leadership
  • invest in our Board and staff to deliver outstanding products and services
  • emphasize stakeholder communication

Goal I: Strengthen Products and Services

NNEHIF is firmly committed to the mission of ensuring a sufficient supply of quality affordable housing. Our first strategic goal builds on NNEHIF’s knowledge and expertise as the sole nonprofit LIHTC syndicator in the region. We remain committed to this program as well as to new strategies that will help us to sustain our mission.

As mentioned above, NNEHIF is competing with national syndicators that have the ability to invest in projects nationwide, and that are able to offer favorable price and terms. This threat may be mitigated to some extent by client appreciation for NNEHIF’s commitment to Maine and New Hampshire, as well as its deep expertise in regional real estate. As a result, outreach will increase to educate potential clients about the benefits of a nonprofit syndicator, and in particular, the advantages of using locally based NNEHIF.

We will also pursue strategies to address the issues of rising costs and declining resources, including strategies to better leverage existing capacity. In this regard, two new products and services are under active consideration—full service consulting and third party asset management. Several other potential growth areas also may be evaluated over the next three years, including expansion of financial intermediary services and direct development.

Strategies

A. Increase LIHTC marketing efforts
As the principal LIHTC syndicator in Maine and New Hampshire, NNEHIF was traditionally sought out by prospective clients. Today, however, prospective clients are being courted by larger for-profit syndicators who have the capacity to offer favorable price and terms. Regionally based NNEHIF offers a unique service which, in many ways, is unmatched by its national counterparts. This includes intimate knowledge of the regional real estatemarket, close relationships with state HFAs, and substantial expertise in both development and asset management. To ensure that prospective clients are fully aware of LIHTC products and services available through NNEHIF, we will:

  • increase outreach, including personal and informational contacts, with prospective clients
  • distinguish the value of a nonprofit low income housing tax credit syndicator from forprofit syndicators

B. Diversify products and services

NNEHIF has a deep reservoir of expertise in financing, real estate, development, and third party asset management. To keep pace with client needs and expectations, these strengths will be leveraged into new products and services. The purpose of creating new ventures is to ensure the long-term viability of NNEHIF’s mission—to increase the quantity and quality of affordable housing in Maine and New Hampshire. After carefully reviewing the options, the development areas that best match our resources and client priorities are full service consulting and third party asset management. Expansion into these areas will improve outcomes for individual projects, for NNEHIF, and for the affordable housing system as a whole. Over the longer term, other products and services will be considered, including direct development and new financial products or services. Any real or perceived conflicts of interest associated with these ventures will be managed through rigorous internal diligence and open communication with stakeholders.

C. Align governance and corporate structures with new business ventures

Changes in the external environment and the possible development of new products and services require a fresh look at our corporate structure and governance. Our objective is to streamline internal processes, including mechanisms that enable the Board to focus on priority issues. To that end, we will:

  • focus Board attention on providing overarching guidance on strategy, while project-byproject decision making remains the purview of appropriate Board committees
  • consider alternative corporate models to better support new products and services
  • research best corporate practices among nonprofit syndicators in other states

D. Continue system-wide influence in affordable housing and in the LIHTC program

While the creation of affordable housing is critically important to the economies and communities of Maine and New Hampshire, efforts to create such housing face significant challenges. For example:

In 2005, the New Hampshire Workforce Housing Council commissioned a study to analyze the impact of housing on the workforce and economy. The study found that up to 2,800 jobs could be lost annually unless the current housing imbalance is corrected (Dr. Lisa Shapiro, Housing New Hampshire’s Workforce, 2005).

A white paper produced for the Greater Portsmouth Chamber of Commerce estimated that by the end of the decade, the housing deficit will result in New Hampshire having 14,000 fewer workers than it needs to sustain economic growth (Barbara Kravitz, Housing for Everyone, What Business Leaders Can Do, 2005).

Similar research with comparable results has been conducted in Maine. In those studies, rising property taxes, diminished public resources, time consuming and expensive permitting processes, high land and building costs, municipal indifference, regulatory burdens, and lack of developer capacity have been cited as barriers to the development of affordable housing (Maurice A. Selinger III, Top Obstacles to Creating Affordable Housing, 2005).

During the 1980s, federal subsidies for new construction of affordable apartments and homes were cut drastically. Between fiscal years 1981 and 1989, for example, federal housing assistance dropped from $30 billion annually to $7.5 billion (Fannie Mae, 1991). Aggravating these cutbacks were tax code revisions that treated apartment investments less favorably (Frank O’Hara, Barriers and Solutions, 2003).

These challenges make it all the more important for NNEHIF to sustain its mission. As an expert in low income housing tax credits, we will continue to strengthen the system proactively by:

  • participating in the development of guidelines for the Qualified Allocation Program (QAP). This effort will help bring together syndicators, housing officials, investors, and accountants to influence the selection criteria used to determine housing credit priorities in the LIHTC program
  • engaging champions to promote the value of LIHTC, as well as NNEHIF’s participation as the principal nonprofit LIHTC syndicator in the region

Goal II: Advance Affordable Housing through Leadership

Nationally, the development of low income housing is facing a myriad of challenges. In Maine and New Hampshire, these issues are compounded (to varying degrees) by high energy and transportation costs, economic variances, older populations, and taxation issues. Structural issues within the LIHTC program further exacerbate these challenges, including the fact that project incomes are capped while expenses continue to rise. These issues require vigilance among affordable housing leaders.

Strategies

A. Support community advocacy efforts

Bringing stakeholders together around common objectives increases capacity to educate national, state, and local leaders about low income housing issues. In Maine, NNEHIF provides financial resources to the Maine Affordable Rental Housing Coalition, and will continue to do so. We will seek out, or encourage the development of, comparable group(s) in New Hampshire. In both cases, we will advocate for a statewide approach to affordable housing.

B. Identify and offer services, assistance, and training that supports overall system improvement

During the past several years, NNEHIF has offered periodic training and forums for partners, managers, consultants, other capital sources, and the HFAs. These forums will continue, and over time it is our intention to provide such opportunities on an ongoing basis. In addition, from time to time we will produce periodic white papers designed to advance public discourse on affordable housing.

C. Act as a “clearinghouse” for restricted properties in transition

From time to time, properties that have been used for low income purposes are abandoned from their original purpose. These properties may represent an opportunity for NNEHIF and its partners. During the next three years, we will evaluate the feasibility of establishing a clearinghouse of these properties, and disseminate the information to interested parties who may be able to utilize the available properties.

D. Increase public visibility

As stated above, we believe that affordable housing is the cornerstone of successful communities. As such, it is integral to many other public policy issues. The absence of affordable housing has profound ramifications on economic development. The type of affordable housing affects local support. The intersection of affordable housing with other community services is essential to the well-being of seniors, low income individuals, and others. The integration of affordable housing policy with transportation and health care policy may mean the difference between project success and failure. It is imperative for those involved in affordable housing to inform policy makers and the general public about the importance of incorporating progressive housing strategies into community and economic development. We will seek opportunities to champion this message in an array of venues, including print and broadcast media, speaking engagements, articles, legislative communications, and publications.

E. Seek partnerships

No one group can solve the affordable housing crisis. In addition to the coalition building described above, strategic alliances are needed to meet more targeted goals. For example, the New Hampshire Business and Industry Association has a strategic goal of improving the availability and affordability of workforce housing. Similarly, GrowSmart, an anti-sprawl coalition in Maine, has identified affordable housing as a priority. These are examples of two groups, not primarily devoted to affordable housing, who have incorporated the issue into their overall strategy. During the next three years, we will evaluate these and other opportunities to advance our mission by aligning with complementary efforts.

Goal III: Invest in Board and Staff Development to Ensure Outstanding Products and Services

NNEHIF’s human resources are our greatest asset. Our success depends on a Board of Directors committed to affordable housing, with the technical and leadership ability to advance that goal. Equally important are staff who are the best in their field, and who are motivated to deliver superior service. In this regard, our focus will be on strategies to ensure staff satisfaction, professional growth, and retention. During the next three years we will enhance the effectiveness of both the Board and staff. Specifically, we will:

A. Recruit Board members who are high visibility community leaders and committed to the goals of affordable housing

The strategic planning process reinforced the need for public education regarding affordable housing. This includes the general public, business leaders, and policy makers. Advancing this goal is easier when those promoting it represent a wide variety of sectors and are well known and highly regarded.

B. Provide Board members with an annual education and training program designed to educate them on NNEHIF’s work and advance their knowledge of the field

Nurturing the capacity of Board members to advance affordable housing both in their role with NNEHIF and in their respective sectors requires ongoing support. We will identify professional development opportunities that meet this goal. In addition, Board members must have a clear understanding of their roles and responsibilities. This includes an understanding of general governance processes and issues, as well as the specific responsibilities necessary to provide oversight for NNEHIF.

C. Increase opportunities for Board dialogue on strategic issues

Board meetings typically are devoted almost exclusively to financial oversight. While this responsibility must be maintained, it is important to enable the Board to focus on other strategic issues such as:

  • Investors are under increasing pressure to perform. As such, NNEHIF must be vigilant regarding the participation of current investors, as well as the cultivation of new investors.
  • Some external stakeholders perceive that investor interests at NNEHIF dominate decision making and diminish the ability to support worthy, but “high risk,” projects. As this report describes, the factors that underlie investment decision making are numerous, varied, and complex. Board and senior staff understand the need for dialogue with key constituencies on this topic.
  • NNEHIF’s contributions as a nonprofit syndicator need to be clearly defined and articulated by Board members to colleagues and associates in their respective sectors.

D. Increase opportunities for Board members to interact with staff

While Board and staff play distinct roles within NNEHIF, it is beneficial for them to be acquainted with each other. To that end, we will create periodic opportunities for Board and staff interaction.

E. Identify opportunities to increase staff satisfaction

As individual professionals, staff benefit from a broad understanding of NNEHIF work. This understanding increases opportunities for professional growth and personal satisfaction, and contributes to NNEHIF in several ways. First, it is an investment in staff retention. Second, it enhances a sense of team. And third, it increases the number of people who can speak knowledgeably about NNEHIF’s work to external stakeholders. As such, we will:

  • seek opportunities for more targeted professional development
  • review job descriptions to ensure that staff are being sufficiently challenged in terms of responsibilities and workload
  • modify staff meetings to encourage communication, and to ensure that staff have the capacity to represent all aspects of NNEHIF operations

Goal IV: Communicate with Stakeholders

During the planning process, a great deal of time was devoted to the issue of improving communication. Enhancing NNEHIF relationships with key constituencies will help solidify the organization’s regional profile, connections, and expertise in a market increasingly populated with large national syndicators. To this end, NNEHIF will increase outreach to key constituency groups including:

State Housing Finance Authorities. NNEHIF works closely with the two state housing finance authorities (HFAs): the New Hampshire Housing Finance Authority and MaineHousing. The Maine and New Hampshire HFAs are the acknowledged public sector leaders in affordable housing in their states. They have extensive expertise, as well as staff and leaders who are committed to their missions. Quasi independent, the HFAs are governed by boards of directors appointed by each state’s Governor, and vary in scope and responsibility. The Maine authority, for example, has an unusually broad charter in comparison to other states. The Maine and New Hampshire HFAs were instrumental in the creation of NNEHIF almost 10 years ago. Specifically, the HFAs wanted a resource that could provide comprehensive technical assistance to developers, as well as offer a means to create smaller projects that might not otherwise be undertaken through traditional financing. Today, the two HFAs appoint members to the NNEHIF Board. The HFAs are essential to the NNEHIF mission and we will:

  • periodically bring together the NNEHIF Board with officials from the two HFAs
  • advance, where possible, HFA policy initiatives
  • identify ways to collaborate with the HFAs on research and policy issues

Investors. NNEHIF fulfills its mission by bringing together investors and developers around specific projects. Without investors, this process cannot occur. Yet, the environment in which investors operate is changing, and those changes have implications for NNEHIF. Key among these changes is the continuing aggregation of independent banks. This affects NNEHIF in a number of ways. First, because senior banking executives and decision makers increasingly are located outside northern New England, new strategies are needed to develop relationships with them. Second, national banks are balancing their community investments across a wide geographic area, and in some cases are turning to national—as opposed to state or regional—syndicators to achieve their objectives. Finally, the competition among banks is ever increasing, which pressures them to improve performance in all areas, including investment in funds. We are sensitive to these and will:

  • address, where possible, the changing needs and expectations of existing investors
  • provide information to investors regarding project outcomes—i.e., community benefits
  • reach out to smaller banks to understand needs relative to community reinvestment

Developers. To accomplish their goals, developers must be skilled in the acquisition, development, and operation of housing projects. In addition, they must have the capacity to navigate the syndication process, secure financing, and structure partnerships. Today, developers are conducting these operations in an increasingly complex environment of escalating costs, increased regulation, and new scrutiny from municipalities concerned about land use issues. As such, we are exploring ways to:

  • improve internal transaction processes to lessen administrative burdens on developers while maintaining appropriate underwriting and asset management standards

Nonprofits. A wide range of nonprofits are either involved, or are considering involvement, in residential services. In particular, special needs populations such as seniors, people who are homeless, and people with disabilities are placing new demands on the affordable housing system. To ensure that NNEHIF is prepared to meet future needs of a more diverse client base, we will:

  • reach out to nonprofits in Maine and New Hampshire to understand their needs and determine how NNEHIF may be able to support their efforts
  • provide, where possible, information and training that will be useful to these organizations

Municipalities. The need for affordable housing is not concentrated in any one sector. People who live in big cities, small towns, and rural areas have similar needs when it comes to housing. Today, developers work closely with neighborhoods and local planners to create housing that blends or enhances the community—a sharp contrast to the era of large “project-style” developments. Local governments are responsible for a range of issues affecting the quantity and quality of affordable housing. These include administrative processes; building and housing codes; fees; growth restrictions; redevelopment standards; historic preservation; and zoning, development, and construction regulations. In addition, major cities deal with an influx of people with special needs who are attracted by the availability of services. All these issues affect affordable housing, and during the next three years, we will:

  • increase communication with municipal associations and with major municipalities to understand needs and to help create an environment conducive to the creation of affordable housing
  • consider ways to be more responsive to affordable housing needs and developments in rural areas