Ten years ago in October 2005, a determined group of Housing Partnership Network (HPN) members and staff commandeered an RV in Fort Myers, Florida to make the difficult journey to New Orleans. The city was still virtually inaccessible in the immediate aftermath of Hurricane Katrina. Our nationwide network had jumped into action after the storm with HPN members providing temporary shelter to thousands of evacuees in member-owned housing developments throughout the country. The goal of the RV reconnaissance trip was to meet with community and civic leaders as well as members in the region to determine if there was a way we could go beyond emergency assistance to play a more systemic and long-term role in the region’s redevelopment effort.
AN IDEA IS BORN
From these initial meetings, the strategy and leadership emerged to form the Gulf Coast Housing Partnership (GCHP). Our aim was to create an independent nonprofit—modeled after the best practices and learning of HPN members from around the country—to permanently fill the gap in the region for a high-capacity, mission-based developer capable of helping local partners rebuild after Katrina. Given the urgency of the situation, we had to move boldly and quickly. The membership and board discussed and approved the GCHP strategy at its December meeting, and the company was launched in January 2006.
A decade later, we now celebrate GCHP’s remarkable accomplishments. Under the dynamic leadership of President and CEO Kathy Laborde, and its skilled and dedicated staff and board, GCHP has developed or rehabilitated over 2,200 affordable homes and more than 132,000 square feet of commercial space. These properties address a wide range of housing and community revitalization needs, including renovation of affordable apartments, mixed-income new construction, homeownership, and supportive housing. This development has been carried out in partnership with more than 53 local organizations, ranging from church-based and social service agencies, to major private and public sector institutions. Through this work, GCHP has spurred the revitalization of the Central City neighborhood of New Orleans and Mid City in Baton Rouge, and has more recently expanded its impact in Mississippi, Alabama and now Texas.
During that initial exploratory visit in October 2005, HPN met Kathy, then an independent real estate consultant and developer, while waiting in line for food at Cracker Barrel, one of the few restaurants open for business. As we continued to make our rounds in New Orleans on this and subsequent visits, Kathy’s name kept surfacing as the one developer who enjoyed the trust and confidence of all the key stakeholders we met. Kathy’s reputation for performance and integrity, her strong experience running a bank CDC, and subsequent role as a private developer, made her the go-to real estate consultant of choice for affordable housing development. Although intrigued by HPN’s vision of an entrepreneurial nonprofit, Kathy was initially skeptical about whether such an organization could operate in a business-like and scaled fashion given the poor track record of neighborhood-based CDCs in New Orleans and Baton Rouge. However, the more Kathy learned about HPN and our members, it became clear that we shared a similar approach to social entrepreneurship, and that Kathy herself was a social entrepreneur par excellence.
Fortunately, Kathy was also very practical and had the business savvy to insist on a streamlined organizational structure, rather than the more complicated model we initially proposed. Together, we built a nimble, partnership-based nonprofit that reflected our shared values and business philosophy. From the outset, our strategy was to create permanent, flexible and scalable development capacity in New Orleans and the Gulf by building a sustainable, high-performing organization. HPN made an initial $2 million investment, worked with Enterprise Community Partners to secure a $2 million subordinate loan, and leveraged the combined funds to obtain a $14 million line of credit from Fannie Mae. Other key partners included the John D. and Catherine T. MacArthur Foundation, the Ford Foundation, Freddie Mac, and NeighborWorks America. From this strong position, GCHP has significantly expanded its investor base to include 10 local and national foundations and financial institutions that provide $20 million of enterprise-level capital for predevelopment and acquisition financing.
Using these flexible resources, GCHP has developed affordable housing and commercial revitalization valued at more than $300 million. The unique partnership HPN forged with GCHP has enabled the organization to accelerate its growth to become a well-capitalized nonprofit with a balance sheet exceeding $128 million. Given this rapid growth trajectory, we achieved our goal of making GCHP fully independent in 2009. And we were delighted when GCHP decided to join HPN as a member organization. It has demonstrated the value and role HPN member nonprofits can play as the go-to partners for civic, community, nonprofit, and governmental organizations to carry out transformative housing and community development initiatives. GCHP is also a model in its own right for other cities such as Detroit looking to create the institutional capacity needed to address large-scale housing challenges. In 2007, Fast Company honored HPN with its Social Capitalist Award, citing and profiling our work launching GCHP.
SOCIAL ENTERPRISE IN ACTION
As a social enterprise, GCHP also has delivered very strong financial returns. The return on equity for the initial $2 million investment—if measured simply from GCHP’s net income results over its nine years of operation—exceeds 13 percent annually. Though HPN chose to limit its return in order to reinvest proceeds to capitalize GCHP, the financial strength of this enterprise is a powerful example of how HPN and our members can source and deploy impact investments to generate double bottom line results in terms of both financial performance and social value that achieve transformative impact.
HPN and GCHP have built a special relationship based on trust, mutual respect and collaboration that continues to grow. I served as chair of GCHP’s Board of Directors for the first five years and remain a director today. Kathy Laborde, who has engaged deeply in HPN’s network as both a peer and a partner, joined our board of directors and now chairs HPN’s Investment and Asset Management Committee.
A TEAM EFFORT
But the partnership and collaboration extends much deeper than this. Many organizations and executives in our network as well as an extraordinary group of local business and civic leaders have made key contributions. Roz Peychaud, former head of the Neighborhood Development Foundation, initially invited HPN to New Orleans and was a member of the founding board. Gus Dominguez and Rusty Sibley, then the senior executives of Greater Miami Neighborhoods, participated in the RV tour and provided a strong impetus to create GCHP based on their own experience in Florida recovering from Hurricane Andrew. Leslie Steen, who has served in leadership roles at the Community Preservation and Development Corporation (CPDC), HPN and now Wesley Housing, organized the initial New Orleans outreach and visit. Kate Monter Durban (Cleveland Housing Network), Phil Eide (HOPE Enterprise), Doug Smith (formerly of Rocky Mountain Communities), Annie Donovan (formerly of Capital Impact Partners and now Director of the CDFI Fund), and Fran Wagstaff (formerly of Mid-Peninsula Housing Coalition) have also served on the GCHP board. Chuck Wehrwein, former Mercy Housing and HPN executive staff (and current COO of NeighborWorks America), played a key role in the launch and organizational development. Matt Perrenod, former Chief Lending Officer and former Chief Innovation Officer at HPN, oversaw the initial project underwriting and financing.
We are deeply indebted to these housing experts and practitioners from around our network who joined with local leaders and partners to provide strong governance and strategic guidance for this collaborative enterprise. In particular, John Noland, Chairman of the Allstar Automotive Group and the premier proponent of affordable housing and community revitalization in Baton Rouge, has served on the board from the outset and recruited civic, business and philanthropic organizations to back GCHP. Ashton Ryan, CEO of First NBC Bank in New Orleans, who has been the most prominent and supportive long as one can remember, also helped found the organization and now serves as the GCHP board chair.
On behalf of the members, staff and board of HPN, we salute GCHP’s first ten years of achievement and thank all the partners, funders and leaders whose collective work made this extraordinary story a reality. We also extend our deep gratitude and appreciation to Kathy Laborde whose leadership made this all possible.
"GCHP has developed affordable housing and commercial revitalization valued at more than $300 million"