Like many states across the U.S., Virginia is facing an affordable housing shortage. With interest rates at the lowest they’ve been since the 2008 financial crisis, an opportunity exists for developers to reinvest in the affordable housing market. However, tackling the in-depth tax credit applications and building requirements may pose a challenge for even seasoned developers. From feasibility and pre-development through the closeout process, partnering with an experienced construction manager (CM) can bring tremendous value to affordable housing projects. When selecting a construction partner, owners should reflect on a few key factors at each stage of the project lifecycle.
Feasibility & Pre-Development
Even when project plans are still largely conceptual, a CM with knowledge of multifamily product types and affordable housing financing applications can provide technical support and insight that minimizes hurdles throughout the entire construction process. When working with your CM, gathering information on items such as Low-Income Housing Tax Credit (LIHTC) and VHDA minimum design requirements, accessibility requirements both inside and outside of the building, and amenity efficiencies will help streamline the process. Tax credit requirements all look a little different, and so may your approach depending on a variety of factors. Whether you are tackling a complex renovation, adaptive re-use or applying for a more competitive tax credit program, partnering early with a knowledgeable contractor is a critical step towards creating a design that checks all the boxes.
Preconstruction & Design:
Once a project moves beyond the conceptual phase, the right construction partner can provide an in-depth constructability review that ensures your plans are consistent with design requirements—such as Earthcraft and Uniform Federal Accessibility Standards (UFAS) Compliance. And beyond ensuring consistency, the right partner will provide support around the ultimate goal of providing a healthy and balanced community while promoting resilient and sustainable design components.
Value engineering and product selection is another phase of the preconstruction process that a construction manager can offer support to ensure costs and schedule are tracking in line with the project’s Proforma. Depending on a project’s procurement method, the construction partner will work collaboratively with the Design Team and Owner, or Leasing Company, to bridge the gap between the vision, design, and a budget that optimizes your investment. With the current economic volatility, suggestions such as alternative materials or suppliers can make a big difference to the overall project schedule and costs. A construction manager that brings the right experience and lessons learned will evaluate various approaches and alternative building methods, such as using prefabricated components, which can potentially reduce overall costs as well as schedule duration.
Evaluate which considerations are top of mind. The right construction partner will always factor in the comfort of future tenants, as well as leasing and maintenance requirements, when recommending changes to the program. The lifecycle of every product is weighed against upfront costs to ensure that all features are both compliant and enjoyable. With this in mind, your construction partner should also consider aesthetics, ensuring compliance with local jurisdictions and accounting for community impact.
One of the most critical ways that a construction manager can help optimize an affordable housing build is by maintaining an expedited schedule and ensuring efficiency every step of the way. An optimized affordable housing project not only places people into housing faster, but it can also result in a higher tax credit return.
A crucial part of building with efficiency is establishing a detailed plan from the beginning and ensuring proper sequencing of activities on site. Quality construction that complies with tax credit design requirements will lead to a streamlined tax credit application process and limit the possibility of issues that need to be addressed later down the road during VHDA latent defect checks. A strong partner will help this process run smoothly.
The closeout process can be challenging for affordable housing projects. The certifications required and subsequent paperwork can be confusing and tedious. Having an experienced CM as part of the team who can help navigate any complexities and ensure a detailed and thorough quality control process is in place dramatically improves the closeout process. Construction managers can also offer support in obtaining a building’s EarthCraft Certification, submitting Homesphere documentation, providing guidance on energy tax credit programs in your municipality, and training property management on facilities management.
Bringing a construction manager with a proven track record onto your multifamily affordable housing project results in a quality build that will provide fast, comfortable housing to the community. Your construction partner is a critical member of your team so choosing a partner with relevant experience, as well as extensive knowledge of the affordable housing development process, can streamline your project from start to finish. By assembling the right team from the onset, you can ensure that your affordable multifamily project is successful.Previous Post Next Post