Affordable Veteran Housing
“Housing instability (measured as concern over being able to pay rent or a mortgage) is also associated with suicide. In one study, Veterans with past-year housing instability were six times as likely as those who did not experience housing instability to report suicidal ideation.” - U.S. Department of Veterans Affairs
Introduction:
I often see problems and solutions through my lens as a Realtor. The Ninja Recruiting concept is a perfect example, where I modified business practices I use to attract and retain customers and applied them to membership.
In 2018 I had another idea on how to blend my knowledge of real estate and my role in the VFW. As a new Post Commander I noticed we had $100k in a CD earning the Post a few hundred dollars a year. A very safe and passive form of income but not enough to really grow. Believing that real estate has proven time and time again to generate generational wealth I suggested to the membership that the Post purchase a small condo and rent it to a veteran in need.
Hunger and Homelessness Awareness Week, November 17-23
The Birth of an Idea
Working with the Post Quartermaster, we contacted Volunteers of America to learn about the Veteran Affairs Supportive Housing (VASH) program and how VOA matches landlords to veterans looking for housing. Based on the current voucher amounts that were offered in Denver the QM and I identified a one bedroom condo in Denver that was listed for under $100,000 (I know, different times, right?).
Based on the voucher rate, if the Post were to purchase that condo outright, after taxes, insurance, and HOA fees, the Post was in line to cashflow $200-300/month. That's based on the same amount invested in the savings account.
Not only would the dollar return be greater, that money would also be used to help a veteran.
Now that we had a plan, we brought this idea to the membership during a monthly meeting.
Lets Talk About Leverage
At the meeting where I introduced the idea of becoming landlords to the Post membership, a relatively new member to the Post rose to be recognized. It just so happened that this member previously worked at the Colorado Housing and Finance Authority (CHFA) and suggested instead of buying one unit with cash, we utilize our funds as a downpayment and purchase an entire building!
As a residential Realtor, this is the primary way most of my clients bought their own home, by leveraging their cash-on-hand to secure a mortgage, using the property as collateral. The problem, as I saw it, was that the Post didn't have a credit score or any of the traditional documents a lender typically needed to approve a client of mine for a home loan.
That is where this member's expertise came in, as he explained the concept of a "non-recourse" loan where the Post, nor none of the officers, would be held liable if the loan were to default.
So, through his connections at CHFA, he arranged a meeting where Post leadership presented our idea. Now, instead of purchasing a single unit, to help a single veteran, we had identified a three building apartment complex with a total of 12 rental units to exponentially increase our impact.
Not only would we be able to help more veterans find stable housing, we'd also hire a veteran-owned property management company to run the complex. CHFA loved the idea, and so did the membership.
Fly in the Ointment
While the membership approved the plan to move forward in purchasing this apartment complex, as we entered the due diligence phase of the process the CHFA underwriters raised some concerns. CHFA leadership was fully behind this project, not only for the financial benefits but it was going to be a newsworthy story they could tell.
Unfortunately, the underwriters are the ones with the final say and when they crunched the numbers, if we ended up with two unoccupied units simultaneously, they felt the risk was too high that the Post would not be able to make the mortgage payments.
Granted, this was true, per the pro forma, but we also knew there was a shortage of affordable housing units in the Denver market and there were more than enough veterans that qualified for HUD-VASH but couldn't find landlords to accept their vouchers. Practically speaking, filling all the units was not going to be an issue. We just couldn't get the underwriters to agree, and the project fell apart.
Soon the pandemic would table this idea entirely, but a positive takeaway from this experience was a suggestion from the CHFA leadership: try again, but come back bigger next time!
A New Direction
While the pandemic was great for my business, the rapid increase in home prices only exacerbated the lack of affordable housing in Denver, and throughout the country. I think it is safe to say that homelessness has become the most visible social condition in all of our communities, big or small.
While visiting mountain Posts or those in the plains, homelessness was constantly on display. Even though you can't tell visually who among the homeless are veterans, the stats indicate that we are overrepresented among the homeless population, and I started to formulate a new approach to finding a solution.
I didn't want to duplicate the efforts of homeless shelters, or get in the way of groups that provide transitional housing. Instead, my mind kept coming back to ways to enhance the HUD-VASH program, primarily by increasing the housing stock.
In collaboration with the current Department Quartermaster (Jesse Eastburn, who is also my campaign Chairman) we came up with the idea to build affordable housing rather than acquiring affordable housing. As CHFA said, we needed to go bigger in our thinking.
The Way Forward
We've all heard complaints from Posts about the lack of participation. It usually goes hand-in-hand with a lack of new or younger members. Posts that have been around for 75+ years are simply forced to close their doors, often leaving a hole in the fabric of that community.
Similarly, these Posts often own their buildings outright as well as the land it sits on. In typical fashion, when a Department takes ownership of these assets the assets are sold, with the money going into the Department coffers.
What if, instead of allowing that Post to close, they were offered a lifeline? A new mission? Something that taps directly into the #StillServing ethos that we know resonates with the post 9/11 veteran.
What I've been working on for the last year is a concept that will be scaleable and replicable. A plan that can help breath new life into a Post, or a plan a Department can execute when a Post goes under and leaves the Department a building and a piece of property.
I live in a community that used to be the airport. All around the Denver area large abandoned warehouses are being redeveloped into vibrant retail space with little shops and restaurants. Why can't a VFW do something similar?
Coincidentally, I was introduced to Houses For Warriors and learned about their founder's vision to build a Warrior Campus. HFW currently runs a transitional housing program but Andrew is looking to build the same type of affordable housing units as me and Jesse.
Meanwhile, a local Post contacted me to seek my input about converting a 2-acre parcel of land they own, which is currently being run as an RV storage lot, into tiny homes. Instead, I introduced HFW to the Post and there have been several discussions between them about collaborating on a 50 unit apartment building on top of commercial space.
If this project comes to fruition, not only will the rents collected (primarily through VASH) provide a reliable income stream, but the wrap around services the veteran tenants will require means there will constantly be community service projects on the Post property.
Of course, the big question comes down to funding. I've been working with the VISN-19 homelessness director, speaking with national leaders from Volunteers of America, getting ideas and suggestions from developers, and working on a blueprint for success.
Once I crack this nut I will share this idea throughout our organization, with the dream that the VFW could someday become the single largest provider of veteran housing across the nation.
In the meantime, check out Andrew's story below. It is inspirational and I have to imagine there are Andrews all around us. Seek them out and find out how you can have an immediate impact in your community.
