Tuesday, January 26, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Preservation of Affordable Housing, Inc.

NHC Member Partner Preservation of Affordable Housing, Inc. (POAH) was named as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its business model focused on the non-profit ownership and operation of affordable housing properties.

This model was developed to comprehensively and simultaneously help ensure the health of the deal, the health of the portfolio and the health of the sponsor organization. At the deal level, by underwriting for cash flow, this model ensures the long-term preservation of the housing by providing a cushion for the property in the event of hard times, and insulating it from risks posed by external factors. At the portfolio and sponsor level, this approach puts the sponsor organization in a better position to support and stabilize properties throughout its portfolio and to weather the ups and downs of the economic climate.

This approach has successfully contributed POAH’s ability to provide quality affordable housing to an increasing number of families. For example, the organization’s recent acquisition of a portfolio of 846 affordable rental units from a failing non-profit in Florida demonstrates both how the original sponsor’s financial weakness placed units throughout its portfolio at risk and how working with the properties on a portfolio basis created opportunities for preservation of the housing deals. Also, by focusing on the portfolio’s energy consumption, POAH is identifying ways to improve the financial stability of many of its properties. And, the organization’s corporate budget has been sustained in large part from site cash flow this past year, demonstrating how the health of non-profit sponsor organizations should be of real concern, as healthy organizations are in a better position to continue the work of building and preserving affordable housing opportunities.

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