Article

The Art of Selecting a Good Development Partner

By: Willa Williford

Consider this scenario: Your community has a housing problem. Your elected officials have promised solutions. The private sector can’t overcome the financial gap alone. There’s a nice piece of publicly owned land, and political will to build housing there. Now what? Creating a public/private partnership to share risk and achieve community goals could be the way. Public/private partnerships for housing have loads of creative potential. And, a few common pitfalls. Here we explore some best practices to set your community up for success.

  • Open and transparent process – Include the public before, during, (and after) your development partner selection. I usually recommend a Request for Qualifications (RFQ) or Request for Proposals (RFP). A well-crafted process creates a competitive playing field where the best proposals and most qualified partners can rise to the top. Public outreach before or during the selection process can stimulate new ideas, create community buy-in, and ensure the project is aligned with community values. In one community, proposing developers were required to give 10- minute pitches and neighbors were able to ask questions and rank responses.
  • Clear but flexible goals – Guiding principles communicate a sense of the overall purpose of the project and if a partner might be a good fit. Goals or guiding principles often clarify topics such as:
  • Who are we seeking to house? Owners or renters? At what income or mix of incomes? In what housing types?
  • Sustainability – expectations for quality, durability, density, energy consumption
  • Neighborhood compatibility – what other amenities or aesthetics are important in this context?

Creating clear but flexible goals is a Goldilocks proposition: Requests that are overly open ended are frustrating; prospective development teams feel like they are shooting in the dark. Overly prescriptive requests (build 12 net zero homes for sale to families below 60% AMI) are unrealistic, and usually fail to attract a qualified partner.

  • Baseline feasibility and data - Understand the basic parameters of your site. In crafting your process and negotiating with your development partner, be realistic about site constraints, project costs, and market need. Keep in mind that the project is intended to satisfy a public good first, but must also be somewhat profitable. 
  • Relationship – Who do you want on your team when the chips are down? Building housing takes time, and there will be unexpected hurdles along the way. Does your partner have a good reputation? Do they understand and respect the values of the community and project? 

Do your due diligence and check references. Some red flags to consider: no experience in your community or region, no experience doing similar projects, over estimating the size of the market, unwillingness to be “open book” about finances, and/or previous financial difficulty with projects.

Good luck with your project. And keep in mind, well-crafted public/private partnerships have the potential to draw on the best skills and resources of each sector, creating positive community outcomes neither sector could do alone.

Willa Williford is an affordable housing consultant based in Crested Butte. She works throughout the mountain west helping communities identify and implement their housing goals. She has worked on dozens of successful public/private partnerships, and a few not so successful ones.

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