Once a Board of Directors gives the “go” decision to explore the feasibility of an affordable housing project, the staff or steering committee in charge will need to consider how to hire consultants in order to bring their project to life.
In feasibility and design development, the principal consultants will likely be the architect, planner and project manager. In construction, the project team will need a construction manager or a contractor (who typically hires the subtrades for the project), and the architect will typically hire their own respective subconsultants for the project (various engineers, landscape architects, etc.).
Within the housing sector, developers and consultants usually have long-standing relationships with companies and contractors that they have built trust with over time, and make recommendations based on their experiences. It’s all about who you know.
If a nonprofit organization new to the sector is interested in undertaking a housing project, it can seem daunting to try to identify who to work with – especially if the nonprofit has limited capital, capacity, and/or knowledge of development. It is easy, and justified, to feel concerned about working with a developer, land owner, or project manager who may not understand some of these limitations.
Does this sound like you? Below are some considerations to hopefully get you started.
Clarify your mission, vision and values
Once you have clarified the mission and vision of your project, and the values that guide both the project and the work you do, seek consultants who have alignment with you. You may be able to find this information on a website or social media, or through asking someone through email or over the phone. Consider:
- Have they worked on any projects with similar missions to yours? (For example, they may have worked on projects of similar size, or projects that aim to house a similar target demographic)
- What drives the work that they do, and does that align with your own values?
While it is not essential for complete alignment in values, or even partial alignment, the project team will be working closely together; it is ideal to work with consultants that will not only build your project, but also believe in it.
Understand what makes affordable housing development different than typical real estate development
Project teams with experience in affordable housing development will know that they need to balance government requirements, market demands, and the mission of the provider, to produce affordable housing that is high in quality and lasts in the long-term.
Government funding programs have very specific requirements – for example, a specific number of units that must meet their definition of affordable, a minimum debt coverage ratio, or accessibility/energy efficiency guidelines. A project team that has familiarity with government funding programs will likely integrate these requirements in the design from the beginning, and understand which design elements are non-negotiable.
Another consideration is that there is often reliance on securing government funding in order to make payments to consultants, which can delay project schedules or other timelines. A project team who understands this reality could potentially be more flexible if these situations are to arise during the development process, and make accommodations for cashflow as needed. Government funding also has various funding reporting requirements (for funding draws, or energy efficiency reporting) which will require the timely provision of adequate documentation to support the reporting, in order to receive the funding itself. An ability to acquire documentation and complete reporting is essential for project success.
Ask for recommendations from people you trust
Utilize the relationships in your personal and professional networks that you already trust and ask them to share their experiences with their consultants. Do you have a friend or family member who works in the sector? Have you worked with your municipal planning department, who might know of a company or contractor that has worked on projects similar to yours (or what you envision)? If not, can you contact them? Are you aware of a project management team that you can already trust, that might be able to provide recommendations in your area?
Know which questions to ask during your CM selection process: Construction
The above information would apply to choose consultants during feasibility, design development and construction. Now we are going to focus mostly on the construction phase of a project.
Below is some key information you may want to receive in writing in order to select a Construction Manager (CM), whether you are releasing an open RFP (open to the public), closed RFP (send to a select few) or sole sourcing. Keep in mind that these are only recommendations (and come from an Ontario-bias), and also may not apply to all projects.
- Experience and qualifications, specifically with nonprofit and publicly-funded housing projects, and with the specific type of project you are imagining (as mentioned above)
- An understanding of the project. Did they review your mission, vision and objectives?
- All information related to the logistics of the project: a proposed project schedule, a project work plan, overview of estimating and quality control, ability to meet insurance requirements, etc.
- References, and resumes of key personnel likely to be involved in the project
- Include any other standard information that you would include in an RFP
Once you have received the proposals, you might also want to ask the top picks you are considering to come in for an interview. One of the most important determinations you can make during this process is: is this CM someone you can work with? It is much easier to answer this question in-person than in a written submission.
Do they seem collaborative, open to changes, and demonstrate a willingness to provide value to the project instead of simply building a building?
- Do they seem willing to communicate transparently about cash flows, and willing to build a payment schedule that allows for flexibility with government funding requirements and potential delays?
Alternatively, ask a CM to take you for a site tour of an existing site. Pay attention to the dynamics of the team on the site, and the organization/cleanliness of the site as well. How do the contractors respond to the CM? If a prime consultant such as an architect is present, how do the CM and architect interact with each other?
Finally, keep note of any green and/or red flags during any of these processes (a written RFP, interview or a site visit). Advice from our Director of Real Estate and Construction, Adrian: pay more attention to your red flags than your green ones, and follow your gut instincts. Construction is almost never fast, you will be working with your consultants for years to come so it is important that everyone is well aligned, gets along, and supports the goals of the project.
How a CM (typically!) chooses their subtrades
One final important thing to know! As mentioned earlier, your architect and CM will typically be responsible for enlisting the subconsultants and subtrades needed for your project.
The CM will almost always be responsible for doing the tendering process for choosing the subtrades, and making a recommendation for their preferred subtrade to the Project Manager (PM) and client (the nonprofit housing provider in the context of this blog). It is important that client preferences are made known as early as possible in the process, if you have any!
If there is a discrepancy between the opinions of the CM and the PM, the PM typically takes the lead in sorting out the recommendation that will go to the client, unless the client wishes to be a part of those conversations. This all depends on the dynamic of the project team.
Once a recommendation is finalized, the client signature is usually needed on the bid summary (the document that states the recommendation and includes all of the bids) and the CM takes over from there.
Looking for more reassurance?
Hopefully the above information offers you enough to get started, but we know it’s not always that easy! Gaps in capacity and knowledge of development in the affordable (nonprofit/community) housing sector are a very real barrier.
Cahdco’s Toolbox+ offers programming and resources that could help build confidence. We encourage you to visit our Toolbox+ page on our website, where you’ll find information about:
- Frameworks, a video series about high-level affordable housing topics
- Blueprints, an intensive 10-week program that guides participants through essential development concepts and offers templates to navigate the feasibility phase of a project
- Structures, an intensive 10-week program that guides participants through essential knowledge of construction
- Foundations, an intensive 10-week program that supports organizations needing to build their organizational capacity through walking participants through an organizational readiness assessment and development strategy
You’ll also find information about our workshops, upcoming webinars and events, and other blog posts and resources on our website.