When most people think about affordable and workforce housing, they're likely to envision the outside of an apartment building. Brick and mortar might go up first, but for housing developers, the devil is in the details. For every unit built, they still need everything from appliances to internet services, and those costs can add up, not just in capital, but in the time it takes to find the best products and services at the best prices.
As part of Housing Partnership Network's (HPN) peer exchange, this barrier to building the best in affordable housing emerged as a theme among a number of HPN's members, all leaders in affordable housing development across the US. Group purchasing organizations often favor larger-scale developers, and HPN members were particularly interested in accessing sustainable, green, and energy-efficient products and services, and being able to purchase from local vendors when they could. The challenge was being able to meet their own high expectations for their properties without overspending in time or money.
The solution was a natural fit. HPN had already launched, based on a similar exchange among members years earlier, a procurement venture called HPN Direct, which was shuttered when it didn't prove out as the right model. Using the learnings from that experience, HPN ran the model back through its Innovation Lab to find a better way. And, in 2015, 19 HPN members invested $4.5 million in seed money to launch HPN Select - a strategic purchasing alliance offering streamlined procurement that lets members get back to focusing on their missions. Select aims to add value and capacity by providing customized procurement strategies and management, and offering a dynamic portfolio of discounted products and services to HPN members.
“For POAH communities, the HPN Select program gave us access to competitive pricing across the many geographies where we work, but it also helped us to make our site purchasing consistent across our portfolio, which has brought benefits to our organization as well” said Patricia L. Belden, President, POAH Communities.
Every dollar or minute we help a member save, is an investment in the community.Mark Vernon CEO, HPN Select
Since its launch, HPN and the Select team, joined by CEO Mark Vernon in August 2016, have driven the concept through the business startup journey. From bringing UK-based Improva on board to manage the complexity of product and service procurement, to developing its key point of difference for members, customized strategy and management based on a shared mission of creating quality affordable housing across the US.
"We're providing more than smart procurement strategy and access to money saving contracts," Vernon said about the socially-minded business. "Our hope is that every service we provide gives our members the chance to turn around and do more for their residents. Every dollar or minute we help a member save, is an investment in the community."
With the Select business up and running, they're poised for growth in their third year, adding new contracts on a regular basis, selling services to HPN members, and exploring opportunities to build additional business sustainability outside of HPN's membership.