This spring, a budding crop of real estate professionals tackled the nation’s affordable housing crisis as they did battle in the inaugural Corcoran Case Competition. Out of an initial 120 entrants on 28 teams, one team of three Boston College students pitched a residential redevelopment plan that survived two rounds of expert judging to garner the $5,000 top prize, sponsored by the Carroll School’s Joseph E. Corcoran Center for Real Estate and Urban Action.
The housing problem is acute, alarmingly so in the region that Boston College calls home—the average Massachusetts family cannot afford the average Massachusetts home. But there are tools for developers who want to build homes within reach of the middle and working classes. One is the low-income housing tax credit (LIHTC), which Corcoran Center Executive Director Neil McCullagh hoped to educate students about through the case competition. Since 1986, this federal tax credit, administered by states, has generated two million housing units for households making up to 60 percent of their area’s median income. (In booming markets like Boston’s, that means a salary in the $60,000 range.)
On March 22, the Corcoran Center released the case to the 28 teams who signed up last fall. Based on a real-life request for proposals issued by the Boston Housing Authority, the case focused on an 80,000-square-foot parcel of the Gallivan Boulevard Public Housing Development in Mattapan, near the border with Dorchester.
Donning the hats of developers, the students had to devise a housing complex consisting of 80 units with the right mix of one-, two-, and three-bedroom apartments, meeting the needs of the community as far as they could glean from online research and two (real) letters to the city from neighborhood associations. They had to include green space and meeting space in their proposals, and even address Mattapan’s historically poor access to public transit.
And they had five days to do it.
“Some long nights,” said Phil Giordano ’21 of the hours of research and spreadsheet work he put in with his partners, Ryan Horning ’21 and Greyson Cohen, MCAS’21. The trio took the name Golden Eagle Development Group.
“One of the biggest challenges was calculating the debts, funding sources [e.g., LIHTC], and cash flows,” said Horning.
Indeed, at the competition’s kickoff in November, panelist Karen Kelleher, MCAS’90, of Local Initiatives Support Corp. Boston had told students that financing affordable housing often feels like “a math problem that doesn’t work.”
Just nine teams managed to come in under the deadline. On March 28, a panel of judges reviewed the submissions in order to whittle the field down further, to three finalists. The judges were Rodger L. Brown, Jr., MCAS’77, managing director of real estate development at Preservation of Affordable Housing; Bernie Husser ’81, managing member at BPH Investment Company LLC; and Dayna Hutchins, LSOE’96, LAW’05, partner at Holland & Knight LLP.
That morning, while taking a brief break from reviewing submissions, Husser said the judges were looking for proposals that understood that the financial feasibility of a project is paramount. “You have to make sure the numbers hold together,” Husser said.
The math problem is worth solving, noted Brown. “It’s a huge need,” he said of housing affordability, “and it’s not going to get any better in the near future. So we need some talent, people who can bring smarts and a sense of mission.”
And Then There Were Three
The judges selected the final three teams, which included Golden Eagle. On March 29, the students worked with experts to tweak and hone their pitches. Then on March 30, they donned business suits and made oral and visual presentations to a new round of judges in a small lecture hall in Fulton. The judges were Joseph J. Corcoran, president of the Joseph J. Corcoran Company; Jeff Goldstein, executive vice president and COO & director of real estate for Boston Capital; and Kathy Millhouse, managing director at Citigroup.
With 15 minutes to present and 15 minutes to answer questions, each team pitched variations on a multistory apartment building that incorporated community meeting space, green space, parking, security features, and amenities such as partnerships with local banks to bring financial advising workshops to residents. All demonstrated that they’d studied the Mattapan community and thought about how to meet its needs, and each project featured some distinctive elements.
For example, Golden Eagle imagined bike storage, a key fob security system, floor-to-ceiling storage units hidden behind panels in the residential units, and a partnership with Carney Hospital to provide flu shots and other health services.
Arabella Housing Group—finance major Drew Boland ’19 along with Morrissey seniors Jesse Rascon, Jorge Mejia, Austin Tarullo, and Allison Choi—envisioned a communal space focused on empowerment, from inspirational slogans on the walls to skills workshops led by the Job Training Alliance.
DWG Development Group—Michael Davidson, Joseph Gatti, and Michael Warren, all CSOM’21—proposed that one apartment be rented at a discount to a young teacher, who could provide after-school tutoring, and another apartment be set aside for a police officer, whose presence would bolster safety in the complex.
The students’ education continued even during the Q&A, at times prompting some quick thinking. Corcoran mentioned that the resources Arabella proposed would best be coordinated by a full-time staffer, which wasn’t included in their accounting. Later, in answer to a question about how the team would spend its developer fee, Mejia answered: “Invest it back into the project to hire a residential resource coordinator.”
“Good answer,” said Corcoran.
“I was going to say ‘Pay off my student loans,’” muttered Tarullo to chuckles.
“A Better Place to Live”
In their final questions, the judges asked the presenters to shed their fictive developer personae and share what they’d learned as students. The scope of the housing crisis and the importance of the LIHTC were big takeaways, but there was more. Speaking for the Golden Eagle team, Cohen said, “We realized that anything you build has an impact on the neighborhood around it. So make it a better place to live—a place people want to live in, and that also helps boost the economic value of the properties.”
Horning added: “The importance of building the right team,” making the project fit the market and, of course, staying on budget.
The students as well as the alumni real estate professionals in attendance then filed into the Fulton Honors Library for sandwiches while the judges deliberated. At last, the judges appeared and Goldstein announced their verdict: Golden Eagle was the winner; Arabella claimed second place, and DWG third.
Did the experience turn any of the students into potential affordable housing developers? Most certainly, said Giordano, who this summer will intern at MassHousing, the state’s quasi-public agency devoted to financing affordable housing.
Boland, too, said the competition sparked an interest in the field. “The Gallivan proposal humanized the housing issue,” he said. “It was inspiring to work to improve the lives of people I would never meet. Being able to do that on a day-to-day basis as a career would be incredibly rewarding.”
Patrick L. Kennedy ’99 is a writer in Boston.
Photo of Gallivan Boulevard Public Housing Development © 2013 Google
Case competition photography by Rose Lincoln for Boston College