Lessons Learned
Lessons Learned
The SITO team has decades of experience in affordable housing. We've made our share of mistakes along the way, but these mistakes have helped us establish a set of important reminders that we've summarized in the maxims and guidelines below.
The best is the enemy of the good (gut rehab vs. selective rehab)
George Eberle, former president and chief executive officer of Grace Hill Settlement House and Health Center, once said, "Where liberals failed [was ...] we spent money setting up model programs that cost so much they could not be duplicated." -- Riverfront Times, February 1, 1995.
Measure what counts
This is a key principle, listed by Steve Rothschild in his 2012 book, The Non Nonprofit: For-Profit Thinking for Nonprofit Success. What counts is the total number of decent affordable units that exist from all efforts.
Cost Control: Keep it Simple
A November 1993 HUD report, Nonprofit Housing, Costs and Funding, concludes with, “In addition to some system of cost control, it appears that a system is needed that provides more of the subsidy and financing from fewer sources [...] which would function both to reduce processing costs and to focus more clearly the responsibility for cost control.”
SITO proposes: 10-year interest-free financing at 20% loan-to-value.
Right does not make might
SITO will partner with Justine PETERSEN, a major NPO, in order to have financial strength. To have political strength, SITO will collaborate with members of St. Louis City Continuum of Care (CoC). SITO will provide housing for people to whom CoC provides other services.
The concept of "place matters"/"focus areas," is relevant, but it should not become a new form of redlining
When there is some local support, SITO strategy can be used anywhere.
Home ownership is not for everyone
Bob Brandhorst, of Youth, Education and Health in Soulard (YEHS), said that over 40 years, none of their efforts to convert renters to homeowners were successful. However, when rental property is stabilized, home ownership becomes desirable and possible.
Healthy development takes time and does not need to use eminent domain
- How Eminent Domain Abuse Harms the Poor by Ilya Soman, George Mason University
- Letter to Citizens Review Board of the St. Louis Development Corporation
Caring and competent property management is difficult
Nearly all NPOs struggle with management. It is just as important as selective rehab, financing, and NPO ownership. It must not be an afterthought.
“Moving to opportunity” is seldom possible
A better motto is that of the City of St. Louis's Neighborhood Stabilization Team: “You don’t have to move to live in a better neighborhood.”
Affordable and mixed
Affordable means rent may not exceed 30% of income. SITO units must be affordable for someone at 50% of St. Louis City area median income (AMI). Many units will be affordable at 30-50% of AMI. Some units will have government rent subsidy. We seek a mixture with no less than 25% subsidized and no less than 50% market rate.
The best is the enemy of the good (gut rehab vs. selective rehab)
George Eberle, former president and chief executive officer of Grace Hill Settlement House and Health Center, once said, "Where liberals failed [was ...] we spent money setting up model programs that cost so much they could not be duplicated." -- Riverfront Times, February 1, 1995.
Measure what counts
This is a key principle, listed by Steve Rothschild in his 2012 book, The Non Nonprofit: For-Profit Thinking for Nonprofit Success. What counts is the total number of decent affordable units that exist from all efforts.
Cost Control: Keep it Simple
A November 1993 HUD report, Nonprofit Housing, Costs and Funding, concludes with, “In addition to some system of cost control, it appears that a system is needed that provides more of the subsidy and financing from fewer sources [...] which would function both to reduce processing costs and to focus more clearly the responsibility for cost control.”
SITO proposes: 10-year interest-free financing at 20% loan-to-value.
Right does not make might
SITO will partner with Justine PETERSEN, a major NPO, in order to have financial strength. To have political strength, SITO will collaborate with members of St. Louis City Continuum of Care (CoC). SITO will provide housing for people to whom CoC provides other services.
The concept of "place matters"/"focus areas," is relevant, but it should not become a new form of redlining
When there is some local support, SITO strategy can be used anywhere.
Home ownership is not for everyone
Bob Brandhorst, of Youth, Education and Health in Soulard (YEHS), said that over 40 years, none of their efforts to convert renters to homeowners were successful. However, when rental property is stabilized, home ownership becomes desirable and possible.
Healthy development takes time and does not need to use eminent domain
- How Eminent Domain Abuse Harms the Poor by Ilya Soman, George Mason University
- Letter to Citizens Review Board of the St. Louis Development Corporation
Caring and competent property management is difficult
Nearly all NPOs struggle with management. It is just as important as selective rehab, financing, and NPO ownership. It must not be an afterthought.
“Moving to opportunity” is seldom possible
A better motto is that of the City of St. Louis's Neighborhood Stabilization Team: “You don’t have to move to live in a better neighborhood.”
Affordable and mixed
Affordable means rent may not exceed 30% of income. SITO units must be affordable for someone at 50% of St. Louis City area median income (AMI). Many units will be affordable at 30-50% of AMI. Some units will have government rent subsidy. We seek a mixture with no less than 25% subsidized and no less than 50% market rate.
Assembled by Jim Roos, SITO Founder