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Striking a Balance Between Budgets and Beauty
Area Nonprofit Groups Are Learning to Increase Quality as Well as Quantity of Lower-Cost Housing
By Judith Evans
Washington Post Staff Writer
Saturday, December 14 1996; Page E01
The Washington Post

East of Logan Circle, the Victorian row houses on the 1100 block of O Street NW stand out. The brick fa\cades, some newly painted, carry the architectural workmanship of lavish ornamentation and massiveness associated with that period. There are long rectangular windows that jut out from one side of the houses. Inlaid brick has been molded into a crescent shape above one door and stone resembling a crown adorns the turret of another.

Few people could tell from the outside that these renovated town houses and an adjacent apartment house recently were renovated by Manna Inc. The nonprofit group renovates older homes in the District, mostly in the Shaw neighborhood, then sells them to low- to moderate-income buyers.

The Logan Court project, as Manna has called it, provides decent, low- and moderate-cost housing ranging from $58,200 to $170,300, to working-class families who have found it increasingly difficult to save enough money for the down payment on a home. The six-year project also reflects the time-consuming and complex process that nonprofits such as Manna must navigate to complete such housing in communities throughout the Washington area.

Over the past decade, nonprofit housing groups increasingly have had to fill the void left by the Department of Housing and Urban Development as the federal agency moved away from directly constructing affordable housing. Plagued by scandals and mismanagement in its own housing programs, HUD now acts as a conduit, funneling grants and loans to nonprofits that are charged with the responsibility for making the homes a reality.

As nonprofits take on more projects, the groups steadily have improved their ability to develop housing that is inexpensive. But they also exhibit a quality better than many of their critics, including prospective buyers and neighbors near their projects, imagined would be the case. Manna and other nonprofits, such as Jubilee Housing Inc. and Washington Innercity Self Help, now are steeped in the intricacies involved in renovating properties. These experiences range from effectively estimating the project's costs to the design of homes so that they will sell.

Nonprofits are learning, said Bill Duncan, director of Rehab Work Group, a division of the Enterprise Foundation in Columbia, which offers technical assistance to nonprofit housing groups in 16 cities nationwide. They "have limited resources and are always faced with trying to find a balance between the functional requirements for a decent place to live and high aesthetic curb appeal."

Duncan and other housing experts are quick to note that the increased quality of low-cost housing has partly been forced by communities that instituted design standards after seeing the stick-like quality of homes built in the 1970s. New local and federal laws, such as the law requiring disclosure of lead-based paint in residential buildings, also have played a role.

"The whole aim is to create sustainable housing production and community revitalization," Duncan said.

But the process is never that simple, as Manna has discovered while building or rehabilitating nearly 475 units that it has sold to low- and moderate-income buyers over the past 15 years. Unlike many nonprofits nationwide, Manna has in-house architectural, development, construction and marketing staffs to handle its projects. The construction crew handles most rehab work, except for mechanical and electrical systems.

Manna tries to get its architectural staff involved in projects once its development unit begins considering a site. In a project the group designed near LeDroit Park, around Fourth and U streets NW, the design staff originally considered dividing the town houses into 20 units. However, after considerable community concerns about density, the group will instead build 10 units.

While the $1.3 million project won't yield as many units as Manna would have liked, the group believes it is important as part of its effort to provide housing, particularly on vacant lots that often depress neighbors because they serve as magnets for loitering. The homes, which are slated for completion in the spring, will cost more because of the lower density: an estimated $130,000 each.

Still Manna's in-house design staff helps keep a project's total cost down by accounting for 3.5 percent to 6 percent of the project's budget, compared with 8 percent to 10 percent of construction costs that an outside architectural firm may charge for similar services.

"We're able to turn around faster because we design the buildings," said Carl M. Skooglund, Manna's staff architect. "We've established and created our own process so we can get down to the nitty-gritty quickly."

But some nonprofits don't generate enough work annually to have a full-time architectural staff. Those groups must look for cost savings while renovating a project. Washington Innercity Self Help (WISH), which works with tenants to buy and convert their deteriorating apartments into limited equity cooperatives, focuses heavily on acquiring sites as cheaply as possible, said Martha Davis, the group's executive director.

"The city codes, plus the condition [of the housing], requires that you do a lot that is expensive to do for dilapidated buildings," Davis said. "We haven't been able to come up with brilliant renovation cost-cutting schemes."

WISH is working with residents to transform a 34-unit building on Chappin Street NW into limited equity cooperatives, where owners only reap small profits should they sell their units. The group is working with residents to acquire the building through a lawsuit since its owner has been cited for housing code violations.

Then the WISH staff seeks as many funding sources as possible to carry out the project, Davis said. Some housing experts argue that there are more sources of money available to develop affordable housing, but competition remains stiff among the countless organizations vying for those funds.

Five separate funding sources were brought together to complete the $2.9 million renovation to the 1425 T Street Cooperative. Lenders' Efforts for Nonprofit Development, a consortium of lenders, provided permanent and construction financing. Other sources included HUD and the D.C. government.

Being able to secure low-cost land is making it possible for RPJ Housing Development Inc. to build 16 condominiums in Alexandria, near the intersection of Duke Street and Interstate 395, said Tory Laughlin Taylor, the nonprofit's senior project manager. Signet Bank Corp. donated the parcel to the group to develop affordable housing.

The units, which soon will be completed, will cost $114,000 to $130,000. Buyers are eligible for $25,000 second mortgages with no interest and 3 percent loans from the Virginia Housing and Development Authority.

Inside the condos, the designers adhered to a strict layout pattern so that all kitchens and bathrooms are stacked on top of each other. As a result, the group can save on the amount of piping necessary for the project as well as the labor to install it. "It was a ticklish project because of the site," Taylor said.

Jubilee Housing, which renovates apartment buildings, has taken a slightly different approach in dealing with tight budgets. The nonprofit has chosen to do modest renovations upfront and created reserves for repairs that may need to be done later.

"What it ends up being is a moderate renovation," said Bob Boulter, Jubilee's executive director. "If we borrow less money now, it helps keep the rents low. But at the same time, you have to make sure there are adequate reserves and the ability to raise funds when the repairs are needed."

Residents take an active role in the building's management even though they are renters, not owners. At each of its properties, Jubilee appoints several residents to the nonprofit corporation that oversees the building.

"They are our eyes and ears out there," Boulter said. "If there is a trust relationship between residents and management, you get excellent direct input. You can't buy that. When you have informed residents who have grown in their ability to carry responsibility, their involvement in making decisions is going to be reality-based."

The opinions of residents often can result in changing a project's design. Residents at Livingston Manor in Southeast played a pivotal role in whether money should be spent to wire each apartment so that every room could have a window air-conditioning unit. The apartment's board decided to save the money and put ceiling fans in certain rooms, Boulter said.

In another case, residents at a 44-unit apartment building called Howard Hill in Southeast agreed to demolish structurally unsafe balconies on 16 apartments because they couldn't afford the cost of repairs. When Jubilee secured the building's permanent financing, it was able to borrow an additional $50,000 to replace the balconies. However, residents were asked to donate their time to build the railings that would go around the patios on the ground floor because of a lack of money to complete the task.

"In the early stages of working with residents, we are almost painfully honest about the limits about what we're able to accomplish," Boulter said. "Just like any family, we say here's the money, so think about priorities right from the beginning."

Sometimes the market will dictate the design a nonprofit takes on a project, said Eric Colbert, owner of the ar\chitecture firm that bears his name and does work for some of the District's larger affordable housing groups.

Colbert is working with Jubilee to renovate an 800-unit apartment building on East Capitol Street and Benning Road. Taking into account the shortage of housing with large-sized units, the nonprofit wants to cut the overall number of units to 460 so it can create more two- and three-bedroom units.

"There is a shift for two reasons," Colbert said. "There is the need for bigger units, but nonprofits and local governments also have a tendency to want to reduce density of the whole property."

Manna's staff has encountered similar situations. The group recently moved to enlarge kitchens in the properties for sale to meet the demands of prospective buyers who want more space. There also have been debates on whether to put double vanities in bathrooms or dishwashers in kitchens. For some of its buyers, mostly single women, adding a dishwasher is more than a convenience, some designers argued.

"Over the years we've had the perpetual struggle of adding amenities while keeping the price down," said Da\na Haden, Manna's design supervisor and an architect. "You ask the questions of what's appropriate. Just like the regular market, you look at whether the cost will be offset in a faster sale."

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