Say that you are an organization that has a great idea for an affordable housing project, what would be your first step to bring this project to life? Conducting a feasibility study is an essential part of the development process and can allow your organization to make a Go or No Go decision before moving forward. You can learn more about how a feasibility study relates to that decision here.
But how do you conduct a feasibility study?
Vision, Priorities, and Need
One of the first things that you should determine as an organization is your project’s visions, priorities and needs. This can include goals around target tenants, community supports, depth of affordability, energy efficiency targets, or targets directly related to your organization’s mission. By setting these goals, you can find whether or not your potential project will ultimately fit your needs and expectations as an organization. Although setting goals is important, it is also critical to prioritize your most essential targets. It is key to a successful project to set realistic goals to create a viable project. Your organization’s needs and wants are not the only priorities to consider. Understanding the market and the community’s need for the type of development you are proposing ensures that the project that you create will find tenants and will bolster the larger community. A needs assessment is an important step required to verify your project plan and vision. A needs assessment considers the price of the unit, the intended population it will serve, and the location of the site.
Project Site and Concept
Your next step is evaluating your site. If you don’t already have a potential site identified, creating a list of site criteria can be useful in your land search process. To evaluate your site, you will need to consider what type of structure can be built there. This comes down to two things, the planning and the architecture. Most cities and towns will have pre-approved uses for the site identified through the zoning. This will indicate what is already allowed on the site in terms of use, height, and scale. At this point in the process a massing, or the general shape and size, of the building will be created to reasonably see what could fit on the site. This will allow you to estimate how many units can be built. It will also be at this point that any additional features like commercial or community space, gardens or parking, or supplementary structures would be accounted for.
Partnerships and Financial Viability
Determining the financial viability of your project is the most important step in the feasibility process. Using the project need, site information, and building concept, you can establish your capital costs and funding sources. This can help you proceed confidently to the next stage of your project. But often your project will not pencil out the very first time you create the project budget. The iterative process of adjusting the project concept and updating your financials is an important step to determining feasibility. Sometimes, partnerships are required to make the project work. Partnerships, be they legal agreements or general community support, can sometimes help bridge the financial gap for project development. But they add complexity to a project that shouldn’t be overlooked. The key to a successful partnership is often compromise which might mean having to give up some of your project targets or goals.
Conclusion and Next Steps
The final requirement of a feasibility study is to outline the main conclusions and direct the next steps for the project. The conclusion should identify if the project would be considered feasible and if the recommendation of the report is to move forward or to wait until environmental conditions favour the project more. Then concrete next steps should be outlined in order to keep the project moving forward. This will not only help prompt a decision from the stakeholders but also ensure the ability to act swiftly once a go- or no-go decision is made.