RESULTS FROM AFFORDABLE HOUSING STUDY DEMONSTRATE COST SAVINGS IN PROPERTIES WITH RESIDENT SERVICES
April 18, 2007
Contact: Rachel Maleh, 410-772-5285
301-717-7553 (cell)
rmaleh@enterprisecommunity.org
Columbia, MD – A report released today by Enterprise Community Partners and Mercy Housing shows that resident services in affordable, family rental housing helps reduce operational costs related to turnover and nonpayment of rent as well as bring significant benefits to the residents of that housing property.
The "Impact of Family Resident Services on Property Performance" study of 36 properties found that in 2005 and 2006, affordable family properties with resident services outperformed similar properties without resident services in vacancy losses per unit, the cost of legal fees per unit, and the cost of bad debt per unit. For instance in 2006, properties with resident services outperformed those without resident services by 42 percent when it came to reducing the costs of vacancy losses per unit.
Because properties with resident services performed better, they saved as much as $225 per unit in 2005 compared to properties without resident services. In 2006, these properties saved even more – $356 per unit. This demonstrates that resident services help pay for themselves through costs savings.
The study was funded by Freddie Mac Foundation and Enterprise Community Partners in cooperation with Mercy Housing, whose properties were involved in the study. It was released at the Affordable Housing Leaders' Policy Symposium on Financing Sustainable Family Services in Rental Housing. This research presents solid data that resident services not only benefit residents, but also contribute to the financial well-being of affordable housing properties.
"This research validates what we have known for many years, anecdotally, that properties do better financially when families are working toward their goals, obtaining good jobs and their children are succeeding in school," said Doris Koo, President and Chief Executive Officer of Enterprise Community Partners. "Mercy Housing is the first large nonprofit housing developer to participate in and share such research with the field, and we encourage more developers to follow suit so we can continue to build an even stronger body of evidence to support funding and favorable policies for provision of resident services in all affordable family rental housing."
Mercy Housing manages a portfolio of 129 family properties with 7,870 rental units that are home to about 19,800 residents. At this time, 74 family properties provide resident services programs with paid professional resident services staff. This research reviewed property performance data on a total of 1,790 units of family housing, or 22.8 percent of Mercy Housing's total family portfolio. For the purposes of this study, researchers chose family properties that had a similar number of units, consistent resident services staffing, similar geographies (urban vs. rural), and complete data on their programs. For comparison, similar properties were selected which did not have resident services.
Mercy Housing's resident services vary widely from property to property. Services include after-school and summer programs for children, financial education programs and leadership programs for adults, and health and nutrition classes for families and seniors. All Mercy Housing properties offer a minimal level of resident services and most family properties of 50 units or more provide paid professional resident service staff members who coordinate programs.
"We are a believer in the resident services model. The Enterprise-Mercy Housing new research confirms that this social service delivery system makes business sense – which is the best of both worlds," said Ralph F. Boyd, Jr., chairman, Freddie Mac Foundation. "This also confirms that resident services will increasingly play an important role in keeping families together, healthy, and financially secure. We look forward to working with Enterprise to make that a reality."
This research supports the Pennsylvania Housing Finance Agency's 2005 study of 17 properties in Philadelphia. That study showed that over two-year period, properties with services performed better on three property performance measures – legal expenses, bad debts and unit turnover.
Mercy Housing and Enterprise Community Partners, Inc. are members of the National Resident Services Collaborative, established in 2003 by several national, regional and local community development organizations to improve and increase the delivery of resident services for families in affordable housing.
For additional information and to obtain a copy of the study go to www.residentservices.org or contact Diana Meyer at dmeyer@enterprisecommunity.org.
Mercy Housing, a national not-for-profit affordable housing organization headquartered in Denver, has a presence in 41 states, serves more than 58,000 people each day and has developed nearly 19,000 homes. About 69 percent of Mercy Housing's portfolio is rental units, and the remaining 31 percent is homeownership. Mercy Housing serves families, seniors and people with special needs (formerly homeless, people with HIV/AIDS and the developmentally disabled). For more information about Mercy Housing, please visit www.mercyhousing.org.
Enterprise Community Partners is a leading provider of the development capital and expertise it takes to create decent, affordable homes and rebuild communities. For more than two decades Enterprise has pioneered neighborhood solutions through public-private partnerships with financial institutions, governments, community organizations and others that share our vision. Enterprise has raised and invested $7 billion in equity, grants and loans and is currently investing in communities at a rate of $1 billion a year. Visit www.enterprisecommunity.org to learn more about Enterprise's efforts to build communities and opportunity, and to meet some of the half a million people we have helped.
Created by Freddie Mac in 1991, the Freddie Mac Foundation is dedicated to creating hope and opportunity for children, youth, and their families. As the largest corporate funder in the Washington, DC metropolitan area, Freddie Mac and the Freddie Mac Foundation have invested more than $312 million in organizations serving the community.