As we commemorate HPN’s 30th anniversary and I reflect on my 25 years as President and CEO , I am tremendously proud of and humbled by the advances of our Network. In these challenging times, our member organizations are stronger and more impactful than ever. Members have become a vital and integral part of our social delivery system, helping communities address the affordable housing crisis and the ever-widening opportunity and racial wealth gap, and providing emergency front line responses to the pandemic. HPN’s value in facilitating practitioner-driven peer exchange, policy advocacy, and innovation within our Network of high-performing nonprofits has never been more apparent. Although our virtual collaboration has been powerful and effective, we are all eager to convene in Pittsburgh June 8-10 for our first in-person member meeting in two years.
Our anniversary year is one of transition for myself and HPN. I will be stepping down as the founding CEO effective July 1. The board recently announced that Robin Hughes, current President & CEO of Abode Communities, will take the helm this summer. I deeply appreciate the strong support and acknowledgement I have received from members, partners, and funders since my retirement announcement . And I am excited and hopeful about the uniformly affirmative response to Robin’s selection as HPN’s next leader. Under her stewardship I am confident HPN will continue to be a creative and powerful platform to advance collaboration, innovation, and mission impact of our organizations and sector.
In the coming months, I will work closely with Robin, our board, and executive team to ensure a smooth transition. I will also continue my virtual listening tour with member CEOs to learn first-hand their greatest challenges, opportunities, and innovations in this rapidly changing environment. Through more than 70 conversations over the past year, I have been inspired by the remarkable commitment, ingenuity, and effectiveness of our Network’s leaders. As our nation’s communities continue grappling with the pandemic, economic recovery, and racial reckoning, our members are rising to the challenge.
Key themes have emerged from these CEO conversations which will shape our work together going forward:
The Need has Intensified and Deepened: The housing crisis is deepening everywhere, with increasing supply shortages, widening affordability gaps, and greater homelessness. The pandemic has exposed long-standing vulnerabilities that have become more acute. Although short-term emergency assistance has been helpful, members witness many people in their communities facing growing housing displacement and reduced employment opportunities. In response, members are sharpening focus on housing stability and devising new strategies to address the evolving short- and long-term needs of their residents and customers. Becoming a Larger Part of the Delivery System: CEOs almost universally report that their organizations are having their biggest production years ever – including housing development and finance – and are expanding into new lines of business. Members are playing an increasing and important role in the social delivery system by partnering with federal, state, and local government to deploy resources serving people and businesses, including emergency rental assistance and PPP loans. Some members believe these experiences represent a growing opportunity to partner proactively with government entities to deliver resources more effectively than traditional vehicles. Alleviating Supply Constraints: Nonprofit developers continue to struggle to compete against for-profit, market rate developers to acquire land, preserve and rehabilitate properties, and win new deals. Members are exploring new strategies, such as adaptive reuse of hotels and other commercial properties or collaborating to acquire HUD-owned notes to expand homeownership opportunities. This requires access to new subsidy resources from state and local government (e.g., through the American Rescue Plan and CARES Act), longer-term operating support (particularly for supportive housing), and private equity. Supportive Housing and Resident Services: The pandemic has brought unique challenges and special urgency to providers and developers of supportive housing, which is a key and growing business line for so many of our organizations. In particular, members are exploring how best to support and shelter families experiencing homelessness, the appropriate mix of residents in affordable housing, staffing ratios, and strategies to fund and provide communities access to high-quality services. More broadly, members whose mission and portfolio require strong resident services support are experimenting with hybrid and virtual modalities, building upon innovative models for service delivery developed during the pandemic. Flexible Capital for our Asset Class: Access to flexible, low-cost capital – both public and nonsubsidized sources – remains critical to the success of the sector. Raising and scaling capital at the enterprise level, building net assets, and exploring new capital strategies remain top of mind. To scale both their multifamily and single-family businesses, members are seeking to raise longer-term private equity for their organizations that is priced to better reflect the low-risk and volatility of their business model and performance. A number of our leading CDFIs and developers are pioneering rated general obligation bonds for flexible, low-cost, long-term debt. Next Generation Talent: Confronting unprecedented staff shortages, the evolving remote and hybrid workplace, and a continued focus on equity and inclusion, talent management is another top priority for member organizations. Creating pathways and ladders of opportunity – particularly for people of color – across the full spectrum of hiring, recruitment, and retention has never been more important. Members have expressed strong interest in creating a network-wide approach through partnerships with educational institutions that can help our sector leverage its social enterprise brand and attractive career opportunities to recruit the next generation of talent needed to expand and diversify our organizations. Racial Equity as a Framework: Members are strongly committed to enhancing our individual and collective impact through a network-wide framework to promote racial equity and justice. Our organizations are focused on increasing the diversity of their staff and boards, evaluating their business practices, and expanding homeownership initiatives to close the racial wealth gap. The commitment to racial equity has been demonstrated by the significant, and long overdue, increase in Black and brown CEOs among the Network’s members. In the last two years, 70% of the 20 new CEOs hired by member boards are people of color, bringing total HPN representation to more than 30%.A Network of Community Builders: The response to COVID-19 as well as the racial reckoning following the George Floyd murder and protests have reminded us of our roots as community builders. Members are deepening their partnerships with community-based organizations led by people of color, and are exploring ways to create greater accountability and engagement with their customers, residents, and community partners. We face the dual challenge of scaling housing production and preservation, while building partnerships that center our work on local community leaders and organizations.
Looking back, looking ahead
Last year was a busy and productive one for HPN, particularly for our social enterprises. We sold our group purchasing organization, HPN Select, to a mission-aligned company that will enhance the procurement services and value delivered to our members. We entered into an exciting new partnership with Lincoln Avenue Capital that brings $250M of equity investment and a stronger operating platform to scale the HPN-sponsored REIT and preserve more workforce housing in 2022. Our CDFI, the Housing Partnership Fund, had its strongest year, more than doubling its lending to members compared to 2020 and receiving nearly $30M in new capital commitments by year end. This summer, HPN will spin off Develop Detroit to independent management and full membership in the Network, making good on our promise to the City of Detroit and its civic partners to sponsor and incubate a high-capacity, sustainable and independent nonprofit development company.
With stronger capitalization and exciting new partners, HPN is deeply engaged with our member leadership to address the big challenges and opportunities ahead. As always, we will do this through collective action, bold innovation, and social entrepreneurship. I look forward to working with you all over the coming months as I finish my tenure. It will be wonderful to see many of you in Pittsburgh, roll up our sleeves and collaborate in person, once again, and celebrate the exciting transition to Robin’s new leadership of HPN.