Improving Business Model Key For Future Success
By Bruce Luecke
Jan. 1 brought us more than a New Year, it began a year-long celebration of Homeport’s 30 years of providing affordable homes and support services as well as homebuyer and financial education.
Since our start in 1987 we have built more than 5,000 apartment and single family homes in Central Ohio and served over 30,000 individuals seeking financial education.
But to sustain a business – and that is what we are at Homeport – one needs to assess its practices, to determine how to grow and better meet our core mission to enable another 30 years of impact. Our conclusion: We can’t be everything to everybody.
For sure, we remain committed to maintaining and developing safe, quality, affordable homes that are the foundation for opportunity, health and dignity. Development of affordable real estate is our core competency.
And we will continue to be a service connector for residents in crisis or seeking self-improvement.
But there will be differences and improvements.
Central Ohio has numerous social service organizations that are great at what they do. We are creating enhanced connections that will better serve our residents and, quite frankly, helps our economic model.
This shift was realized during our strategic planning this past year.
Another important conclusion from this process?
We need to grow our real estate stock faster, to meet the demands that exist in our community, to reduce the toxic stress that exists when residents pay a disproportionate of their income for rent.
Today, we primarily use a low-income housing tax credit as our primary construction financing tool. It is an absolutely wonderful tool, a great public-private partnership. However, it’s a finite tool and it’s very competitive. Even if we are fortunate enough to win a couple of tax credit awards in any one year, we’re capped. We can only do so much. And so what we’re doing right now is seeking other sources of lower-cost capital.
This is not an easy task but one we believe we are up to. Our residents pay restricted rents, so we can’t pay the same rate of return that a market-rate builder would. We have to seek different forms of financing that would make the economics work. We’ve always had a need for grants and for donations to pay for resident programs. But for real estate capital, that is new.
So the summary of our future goals: Close the affordable housing gap and think differently so we can make more and better services available to our residents. To last at least another 30-plus years and grow our business, we’ll concentrate on what we do best and leverage the expertise of partners. Because we know, and firmly believe, that if we keep a laser focus on our clients and their needs, both our clients and Homeport will be successful.
Bruce Luecke is Homeport’s President & CEO