Two years after the devastation of Hurricane Katrina, CityView executive chairman and former HUD secretary Henry Cisneros has issued a challenge to bring desperately needed housing to the Gulf Coast. Calling for more private capital and collaborative investment that doesn't depend completely on government funding, Cisneros's model relies on unifying local stakeholders, including financial institutions, non-profits, elected officials, builders, developers, employers, and neighborhoods, to create affordable housing at a rapid pace.
Cisneros points to the success of Gates on Manhattan, a collaborative rehabilitation of a severely wind-battered 320-unit apartment complex in New Orleans, which had been largely abandoned due to hurricane damage. Leading the effort were urban housing investor CityView; American Sunrise Communities, a national non-profit founded by Cisneros and CityView president Joel Shine; and Le Triomphe Property Group, a Baton Rouge, La.-based firm led by Stewart Juneau.
Pacific Palisades, Calif.-based Our Castle Homes has joined the national team as a home builder partner. American Sunrise Communities is manning the helm of homeowner outreach, education, and services, which includes participation from Chase Bank, Fannie Mae, and others.
Completed and opened for sales in May 2007, the Gates on Manhattan rehabilitation project resulted in 320 two- and three-bedroom condominiums with market values in the $65,000 to $85,000 range–thanks in no small part to the partnership's creative financing and construction, according to Juneau. "The development expertise of the partners converted these former tax-credit units into condos that are more affordable than many of the area's rental units," he explains. "Partnering with CityView and American Sunrise Communities was an opportunity to show that new homes for the area's working families can be created with no government subsidy and at the speed of business."
To ensure that the buyers at Gates on Manhattan become fully invested in the community, the partnership is reaching out to community groups, faith-based organizations, and major employers, both public and private, to provide subsidies, low-interest mortgages, case management assistance, and homeowner education.
And, as Cisneros points out, building homes at affordable prices for the region's working families will undoubtedly result in rapid sales–an attractive proposition in light of current market conditions.
"This is an opportunity for builders to keep their teams active [as the slowdown continues]," Cisneros notes. "The level of rebuilding that needs to be done in New Orleans is of a massive scale that will be the equivalent of the most rapid growth in any area of the United States. The build-back will equate to hyper-growth demands in actual buildings, supply sales, construction, and infrastructure development of the most rapidly growing regions of the U.S.–surpassing what we've seen in Las Vegas or Phoenix in the past decade. Builders can come in from all over the country and actually contribute something [while serving] their own business needs in the process."
However, Cisneros expresses his hope that those who answer his challenge are serious about building–not merely looking to exploit an untapped source of demand. He points to "the most motivated, the most sincere, and the most capable" as those who are needed throughout the Gulf Coast.
The benefit of participating in the rebuilding effort extends beyond generating activity during the downturn, allowing builders and developers to strengthen their teams and corporate culture. "It enhances a sense of purpose, which contributes to esprit de corps, level of commitment, activity–all of those things I have seen enhanced in our company by the fact that we're participating," Cisneros says. "I'm sure that would be the case for other companies as well: to help other human beings who need the help, to be part of a great American cooperative endeavor, and to engender a sense of purpose and mission in what building is supposed to be about.
Learn more about markets featured in this article: San Francisco, CA.