Many of you who are reading this are either building or working at one of our luxurious apartment communities where the focus is on providing the highest level of service to, and of course, getting an appropriate rent from our residents. At the same time, I know many of you are aware of our company’s long involvement and commitment to affordable housing, but I worry that not everyone in the company is, and it’s important to me that you are. Not only that, I think we should all celebrate our commitment to affordable housing!
I personally got into the housing business because of my belief that everyone in our country is entitled to decent and affordable housing. Before Rick Mostyn, John Slidell, Bernie Lubcher and I created The Bozzuto Group, the four of us worked at another company focusing to a large degree on affordable and mixed-income housing. In fact, before forming Bozzuto, something in the order of 5,500 of the apartment homes we developed, built and managed were created using some form of government program to benefit people of limited income.
Once we formed Bozzuto, we were one of the first companies in the state to use the Low-Income Housing Tax Credit program to build a project, Silverwood Farm, which we still own and manage down in Prince Frederick, Maryland. Shortly after completing that community, we recognized that the best way for us to be involved with affordable housing was to joint venture with non-profit groups, in situations where we bring our development, construction, and management expertise and financial capability and they bring their knowledge of and relationship with the local community. Among the first communities we created this way was the St. Paul Senior Living Apartments in Capitol Heights, Maryland. Over the years, we have built many communities in partnership with non-profits and continue to do so.
Why should you care about this? Well, you’ve all read about “income inequality.” In many respects, we also have a great degree of “housing inequality” in our country. The housing inequality I refer to here is primarily one of price: far too many people in our country pay more than thirty percent—some even fifty percent—of their income for housing. It is hard to feel that your home is your “sanctuary” when it costs you so much that you can’t afford to eat. It is through the creation of affordable housing that we at Bozzuto, and as citizens, can help address this housing inequality.
But, affordable housing can’t be built by the private sector alone. As Toby and I often say, the cost of a brick or a two-by-four doesn’t change depending on whether it’s being used for the home of a rich man or a poor man. The government needs to provide the assistance in order for the private and non-profit sector to produce housing that people of lower-incomes can afford. Today, the federal government provides this assistance primarily through the same Low-Income Housing Tax Credit program mentioned earlier. The program is far more complicated than it should be and certainly too complicated to explain here. It is sufficient to say that there is never enough funding to meet the need. Compounding this, state and especially local governments continue to add charges (for everything from egregious permit fees to—perhaps appropriate—environmental regulations) that increase the cost of all housing.
In fact, the National Multifamily Housing Commission (NMHC) and National Association of Home Builders (NAHB) have both estimated that almost a third of the cost of a home or apartment today is associated with government regulation. Despite these difficulties, our company will continue to work with non-profits and government agencies to help alleviate this housing problem. Affordable housing is not all we do. It is, however, an important part of what we do. When we say we create sanctuary for all, we mean all.Learn more about Tom Bozzuto