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The Role of Nonprofits in the Development of Affordable Housing

February 28, 2019

Q&A with Sally Mackin of the Woodlawn Foundation

Sally Mackin is the executive director of the Woodlawn Foundation based in Birmingham. She recently answered our questions about the opportunities and challenges for nonprofits interested in developing affordable rental housing and shared some of the successes of the Woodlawn Foundation.

Q: Why should nonprofits be involved in developing affordable rental housing?

A: I believe nonprofits bring a unique lens to all community development, not just the housing component. Having a social impact perspective is critical to the healthy redevelopment of a community.

Q: What successes has the Woodlawn Foundation had in terms of affordable housing?

A: We have co-developed 64 affordable homes through a 9% Low Income Housing Tax Credit (LIHTC) deal and have plans underway for another 8 affordable homes. We hope to do another LIHTC project within the next few years.

Q: What contributed to those successes?

A: Having a clear vision for a mixed-income neighborhood, strong board leadership, and experienced partners.

Q: What are some of the things nonprofits should have in place if they want to develop affordable housing?

A: I believe that strong leadership is important, and having a staff trained with specific technical skills is helpful. Affordable housing programs can be complicated, and having someone on the team with expertise and experience is a must. However, some of that expertise and experience can be provided by an outside team including legal counsel, financial analysts, consultants, board members, and sometimes volunteers. I can’t emphasize enough the importance of board leadership – having the expertise among board members who also understand and believe in the importance of affordable housing in a community. Finally, a clear strategy for planning and carrying out housing activities is important for any programmatic area of a nonprofit. We often have to shift our strategies, but having a clear mission and long-term goals is critical to avoiding “mission creep,” which can easily happen if you start chasing resources that do not align with your vision.

Q: Tell us some of the main reasons projects do not work out or come to fruition.

A: Obviously, sometimes the resources are just not there. Even a well-resourced nonprofit has to prioritize resources, and many potentially impactful projects don’t happen because of either financial or human resource constraints. Another reason we have seen projects stall is because of high land cost and infrastructure expense. At least in Woodlawn, the infrastructure has been neglected for a long time. It is very expensive to get a lot ready for development, especially when you have high acquisition costs (because of absentee landlord overvaluing properties), demolition costs, and environmental expenses before you even get started. This is an area for local governments to step in and assist.

Q: What are some opportunities for nonprofits interested in developing affordable housing?

A: Cooperation from local governments certainly accelerates projects and makes them easier, but other partners can bring resources to fill gaps, too. Not only does having partners bring more expertise and resources to a project, but it shares the risk as well. The critical thing here is really researching and vetting the organizations you partner with to make sure that your values align and that they are credible and trustworthy.