2008 Resident Services Symposium
Ralph F. Boyd, Jr.
President and CEO, Freddie Mac Foundation
Chairman, Freddie Mac Foundation
Thursday, May 15, 2008
[20-minute remarks. Introduction by David Bowers, Director of the Enterprise Office, of D.C.]
Opening and Acknowledgements
Thank you Doris for your kind words, your vision, and your leadership. You, and they, are an asset to all of us.
Let me offer a very sincere "welcome" to everyone. I want to thank each of you for joining us for this important policy and strategy-focused symposium. And the "us" that I refer to, of course, is Freddie Mac and the Freddie Mac Foundation, along with our great colleagues and partners at Enterprise Community Partners and NeighborWorks.
Now we have a lot of work ahead of us today, and so I'd like to set the stage for the dialogue we'll have about resident services, which is a subject about which our experience and research are adding to our knowledge base almost daily.
There's a lot that we know about resident services programs – or think we know anyway; but we now know for sure – both empirically and from experience – that focused and calibrated investments in well-conceived and well-executed resident services programs can be very effective in helping transform the socio-economic fortunes of financially stressed and vulnerable families. This is good news; but the even better news is that the same thing is also true for depressed and financially underperforming properties as well, and for the communities where they're located.
So with this in mind, our challenge then is to secure adequate, sustainable funding for resident services – and it's a challenge that's more difficult in an environment where – as now – capital is constrained. And in order to meet that challenge, we really have to alter the thinking of property managers, affordable housing developers, investors, planners and policy makers about what's achievable and how. This often will mean that we have to present new approaches, and a different vision of how to deploy resources to achieve human gain – human gain that brings with it the likelihood of improved financial performance of affordable developments. And of course, the more evidence-based these approaches and the resulting outcomes are, the better our chances are for attracting the community investment capital we need.
Whatever the challenges though, one of the clear lessons we've already learned is that the key – or one of the keys to delivering successful resident services programs is having the right partners, at the right time, in the right place, with the right stuff. And as good fortune and good planning would have it, several such partners are here with us this morning. I can't name them all, but let me recognize a few of them who are in the audience and who you'll hear from during the symposium. You've already heard from our good friend and long-time colleague Doris Koo from Enterprise Community Partners – and we're so grateful for her enormous, ongoing contributions, and for her being here today and sharing her thoughts/ideas.
I also want to recognize Ken Wade and Francie Ferguson of NeighborWorks … Nan Roman of the National Alliance to End Homelessness … and Doris's Enterprise colleague Diana Meyer, who I know from working with her, is something of a resident services expert. Diana also has taken the lead in planning today's event (and that's just another reason why we're so grateful to her). And there are many other "experts" who are here today as well, and from whom we have much to learn. I thank all of you for being here and participating in our sessions, and I anticipate for adding to our learning.
I also want to recognize collectively my Freddie Mac colleagues who are here this morning. There are too many to mention individually. Let's just say that Freddie Mac is well represented here today – qualitatively and quantitatively. I hope that you'll consider the robust Freddie Mac turnout to be a strong affirmation of our purpose, confirmation of the importance of our work, and evidence of Freddie Mac's continuing commitment to making safe and decent affordable housing with services accessible to vulnerable families.
Salute to Enterprise Community Partners
Let take just a minute to say a few words about our out co-sponsor, Enterprise Community Partners. As most of us know, working within the complex maze of social service delivery systems and trying to effectively reach those families that may be teetering on the edge of financial or personal collapse, is not easy. But because it's not easy, and because we have to be successful in this critical outreach – we've consistently partnered with Enterprise.
For 15-plus years, Freddie Mac and the Freddie Mac Foundation have collaborated with Enterprise on many affordable housing and related community investments; and each year we've achieved meaningful – and almost always replicable success in our joint undertakings, undertakings that one way or another involve delivering safe, decent and affordable housing or supportive services to those who desperately need it – often at scale.
For example, I'm especially pleased – proud even – that the Freddie Mac Foundation's investment in Enterprise's Family Resident Services Initiative has helped Enterprise to take what started as a small pilot program and make it – in a relatively short time – national in scale and impact.
Now my colleagues know that I'm sometimes given to mild over-statement (not for want of intellectual honesty, but rather out of "youthful" exuberance). Notwithstanding that, I do think that it's fair to say that this Initiative genuinely is transforming the nonprofit affordable housing industry. And we're very grateful to our Enterprise colleagues for that, and for being so effective generally in deploying (and leveraging) resources to maximize human gain.
Providing Resident Services – More Important Now Than Ever
This policy symposium really couldn't have come at a better time.
We all know that foreclosures are rising at an unprecedented rate; while at the same time the costs of affordable housing haven't declined in a comparable way. This is quite a paradox, and whatever the
Let me offer a couple of examples of this. Right across the river in Arlington, applications for the County's housing grant program for renters are up 17 percent over where they were just one year ago. And in neighboring Fairfax County, housing assistance requests are up sharply, and mortgage aid inquiries are expected to rise 42 percent over last year. As one Montgomery County human services director noted in a recent Washington Post story, "[T]hese aren't people at risk of foreclosure. They're at risk of homelessness."
Clearly we have our work cut out for us.
The Resident Services Model – Helping Families Reach Their Potential
I know that it's not likely that anyone here today needs to be convinced that just as bricks and mortar, and walls, floors and a roof are important to the survival, stability, and ultimately the long-term well being of vulnerable families – the same is true with respect to resident services. What I've said many times before bears repeating. Access to job training, various counseling services, evidence-based, effective after-school programs for children at risk, financial literacy, asset building (and increasingly for many vulnerable populations) wellness programs – these programmatic elements are, or are fast becoming "categorical imperatives" that need to be part of our affordable housing offerings if we're going to meaningfully change the socio-economic trajectory of vulnerable families. Without these supportive services, we risk perpetual (or at least episodic) financial stress for vulnerable families, which eventually hits the P&L's of the properties where they live, and ultimately diminishes the overall quality of life across/throughout our communities.
As we know, social services usually are funded through various public and private agencies, and they're delivered locally, often on a fragmented and intermittent basis. The difficulties that even the most energetic, determined and resourceful single mother, with several children and working two jobs, would face trying to navigate today's all-too-often bureaucratic social services delivery system is uncomfortable to think about. So it's against this backdrop that we consider the impact that resident services can have on lives, housing, and communities. And it's fitting how one of Enterprise's publications sums up that impact, noting that "resident services are the link between physical assets and human potential."
Making a Business Case for Services – Measurable Savings
One of the most significant aspects of our discussions today will involve clarifying the business case for resident services. Although it's difficult to devise a metric that adequately captures the full magnitude and range of human gain that our resident services investments help families achieve, we can nevertheless establish baselines, and develop targets and definable outcomes that we can use to measure the success of resident services programs.
I suggest that this approach is necessary to determine the effectiveness and efficiency of programs that we've invested in. As investors, we need to know whether the programs are working, and if not, why not. Measuring outcomes also helps us identify areas where improvement is needed, and where certain programmatic elements may need to be added or adjusted to achieve optimal results. This outcomes-based approach to community investing, I think, is an important part of our efforts to attract more business partners and funding sources. We simply have to be able to demonstrate human gain. Of course that gain won't be measured in basis points, but it will however, still need to be quantifiable, meaningful, and, of course, positive.
The business case for resident services is significantly strengthened (made more convincing) because what we now know about the impact that strong resident services programs can have on the financial performance of affordable properties. As many of you know, thanks to the two-year Enterprise/Mercy Housing study that involved a thorough review of Mercy Housing's portfolio containing almost 2,000 affordable units at 36 Chicago sites, there's now compelling evidence that well-designed and executed resident services programs can have a positive material impact on unit costs of affordable developments [per unit cost savings of $225 in year 1, and $356 in year 2].
To me, these results are profound – and have far reaching implications. We all know that financing affordable housing is a "dicey" proposition to begin with – especially during periods where capital markets are depleted of liquidity. Affordable developments rely on a complex funding mix that includes varying proportions of conventional bank financing, public financing (mortgage revenue bonds, low income equity tax credits, etc.), and philanthropic support. Therefore anything that positively impacts unit costs enhances the overall financial performance of the development, which in turn helps sustain affordable rents and the quality of the programs the development is able to offer residents.
So going forward we have to stress this emerging nexus between effective resident services and cost effective affordable housing. We'll be discussing this in more detail during one of today's sessions.
Freddie Mac Foundation's Resident Services Focus
So what are we doing? What are Freddie Mac and the Freddie Mac Foundation doing with this information? Well the answer is that the Foundation has supported, with Enterprise, the development of an adaptable, replicable resident services model. And going forward, Freddie Mac and the Foundation are sharpening our mission-critical focus on eliminating homelessness, stabilizing families in crisis, and meeting the challenge of making safe, decent and affordable housing more achievable for those who need it most.
Helping create effective, replicable (and ideally scaleable) resident services programs is an important part of this work. In fact, in an effort to improve the programs we support and be more responsive to residents' needs, we recently partnered with several high performing non-profits to add a new health and wellness component to our resident services menu. We're now piloting that health and wellness module at certain National Housing Partnership Foundation properties in New Orleans. And I should say that we're very excited about the prospects for this module, and about the work Enterprise is doing with us to make it scaleable, replicable, and right-sized for developments with varying budgets and differing appetites for spending on resident services programs.
And we're also excited about a current partnership we have with NeighborWorks to pilot a comprehensive family asset-building program, which includes a new "coaching" component for residents at affordable rental sites. Our first pilot is at the Arlington Housing Corporation development, across the river in Arlington. We're fortunate that AHC also is a long-standing partner of our Foundation.
This focus on resident services fits quite well with our increased support of "housing first" models, which are emerging as important tools for fighting homelessness and stabilizing families. As many of you know, housing first programs focus on very quickly placing families who are homeless, or who are at risk of becoming homeless, into permanent, affordable housing with the intensive, supportive services that are necessary for these families to achieve stability and self-sufficiency. This doesn't mean that we no longer need temporary, emergency shelters, or longer-term transitional housing with services. It simply means that housing first is another complementary approach to combat – and ultimately to defeat homelessness – and I should say that the early returns appear to be very positive. It's an approach that holds promise, and it relies heavily on providing resident services for families that have been rapidly re-housed in permanent, affordable units.
In fact, just last month we announced an $800,000 Foundation grant to the National Alliance to End Homelessness to enable them to assist nonprofit groups and public agencies in the District of Columbia, and in Fairfax and Montgomery counties that are implementing housing first initiatives with resident services.
Let me conclude by noting that over the years we've seen how resident services investments in a variety of different settings help transform vulnerable families' lives. So I assure you that we will continue our commitment to supporting resident services – and we'll encourage and incent governments and high performing nonprofits to continue to partner with us to provide effective, supportive services to affordable housing residents.
Going Forward – Today's Busy Agenda
What do we hope our symposium will accomplish? The answer is that we want to develop sharp, focused, and concrete approaches to securing sustainable financing for resident services programs over the "long haul." We're essentially recruiting capital for resident services, and whether we'll be successful ultimately depend on our ability to improve the quality of resident services and the reportable outcomes/results these services deliver.
And to help us reach these goals, we have a number of panels, speakers, and breakout sessions.
First, we'll hear from a panel of practitioners on the value of resident services to families, and the impact on property performance. These experts will report on the state of the resident services, and the funding challenges that persist.
Next, we'll hear from Ken Wade (President & CEO of NeighborWorks) about the work of the National Resident Services Collaborative led by Enterprise and NeighborWorks. Then Ken and his panelists will discuss best practices, research, outcomes tracking systems and policy and systems change.
Around noon, Nan Roman will address the importance of resident services in preventing – or responding to homelessness. Knowing Nan as I do, she'll provide us with a mix of "food for thought" and inspiration for our work later this afternoon, which will focus on public and private approaches to securing sustainable funding.
Now, finally, it's my privilege to introduce the moderator of our first panel of the day – Mike Pitchford. Mike is the President & CEO of the Community Preservation and Development Corporation, which creates more affordable housing in the District of Columbia than any other nonprofit. I'm happy to say CPDC also is a grantee of the Freddie Mac Foundation.
Before coming to the CPDC, Mike spent a decade serving on the Board of the National Housing Conference, including a three-year stint as its president. While there, he developed a strong understanding of how national and local policy impact housing affordability. Mike also has important real estate and community development experience, having lead Bank of America's Community Development Equity Businesses for nine years.
In a recent interview in the Washington Business Journal, Mike discussed the need to combine the social mission of serving low-income residents with a development mission. He said, and I quote: "there is a recognition that simply providing safe, decent and affordable housing is not enough. There are certain social needs to be met as well, and that the two of them working together can give you much better outcomes."
I agree, Mike.
Please join me in welcoming Mike Pitchford, our first panel moderator.