With a team and a site ready for your affordable housing development, you will still need to demonstrate the project is acceptable to the community and answers to a definite need. You will also need tools to prove to lenders and stakeholders that your plan is workable.
Demonstrate the need for affordable housing
Proving that the community has a need and building a clear picture of that need are important to get buy-in from stakeholders and lenders.
You can use statistics, housing market trends, community profiles, or personal stories. Some of the most convincing data includes market data (vacancy rates, average rents, sales, existing stock, construction starts, and waiting lists) and demographic data (age, income, family size, and population trends).
Test financial feasibility
Stakeholders and lenders also need to know that you can meet the community’s need while staying on budget yourself. First, assess the costs of living at your planned development. Rent is a big factor, but it is not the only one. An efficient building can lower utility costs, for example, and a walkable neighbourhood allows some residents to live without a car.
Then, assess your own costs through a preliminary capital budget that identifies:
- all capital costs (purchase price, construction, fees and permits, carrying costs, marketing)
- all equity contributions (donated land, cash and in-kind contributions, waivers of taxes or fees)
- financing (loans, mortgages)
- funding (government subsidies and grants)
You will also need to draw up a preliminary operating budget that identifies all your ongoing expenses (such as mortgage payments and insurance) and revenues (from rent to subsidies) after completion.
You can also prepare by finding out from lenders how much of a mortgage you can obtain, securing pre-development funding, and developing a cash-flow plan for the construction phase.
Plan for community engagement
Even if you’ve demonstrated a clear need for affordable housing, the community might not agree. Informing and involving community members is the best way to build trust and acceptance.
A variety of engagement tools are at your disposal, whether it is outreach through social media, town halls, or through community groups and leaders. A solid engagement plan specifies which of these channels to use and sets out strategies for answering objections, dealing with contingencies (such as bad press), and adapting your plans in response.
Write a business plan
A business plan is the essential tool for showing that your project is viable and worthy of support. Here are some of the most common elements that stakeholders look for:
- organizational information (team structure and membership, including their experience, credentials, or community involvement)
- market information
- project information (a project description and step-by-step plans)
- financial information