DOING YOUR DUE DILIGENCE…AFFORDABLE HOUSING STYLE
Making sure that we know, understand and trust that a site is reasonably developable is critical for any project. This is what we call ‘doing your Due Diligence’. In the world of affordable housing, with the myriad of agreements, financing partners, time constraints and local and state (not to mention housing advocate) requirements – doing the Due … is a must.
For the issue of affordable housing specifically, often the properties can have plenty of challenges, therefore, addressing site and local conditions and tasks quickly and completely is a sure way to get the best start on a project.
Affordable housing comes in all shapes, sizes and locations. It can be the case that identified parcels are in areas that are in and of themselves challenging. Towns, according to their “Fair Share” mandate may have identified locations for this housing in undeveloped or underdeveloped areas, which can be ripe with site, utility, permitting, environmental and/or historic or cultural constraints and considerations.
PS&S has found that the best path to a development project is a multi-step approach that analyzes and designs the land and site conditions first and walk through the process together hand-in-hand so that the client/developer can make calculated GO/NO GO decisions with reliable advice from their professionals. Ideally …. All decisions are a GO … Realistically, it’s better to spend a dollar today so as not to waste hundreds of thousands tomorrow on sites that just don’t make sense.
Basic steps of this type of due diligence include initial site investigation and an assessment of the site’s feasibility for acquisition. Of course, this is the true first step. A well-priced parcel is no bargain if it’s not developable. Normally this includes some level of conceptual planning and design, understanding pro forma considerations, mapping out the requirements of the project and comparing that with regulatory permitting that may be needed.
While not always necessary, don’t skimp on preliminary environmental reviews and evaluations. Heavily wooded sites can be indicative of wetlands or nearby streams. Previously developed and now cleared sites may contain pre-existing environmental conditions. Money is well spent early in the process by engaging the professionals needed to complete a Phase One/Preliminary Site Assessment for the property. With this in hand, the GO/NO GO decision will always be a clearer one.
Meetings with local officials are also an important step. Here is where we learn what the town wants and needs and will find acceptable. It is generally best to have the conversations and make your needs and intentions known. There is always the possibility of a battle, but better to know going in than after we’re too far down the road to turn back. Local officials are also our best source of information as it relates to professionals, consultants, approval process and protocol, local (and regional) infrastructure, and on and off-site improvements that may be required or requested.
A good check-list for due diligence should include, at a minimum, the following items:
- Constraint Mapping
- Conceptual Land Plan Review
- Engineering Feasibility
- Phase I/Preliminary Site Assessment
- Wetland Delineation and Stream Top of Bank Delineation
Depending on the site, it may be worthwhile to also consider a “Cultural Resource” due diligence look at the site. This should not be an expensive service but worth the effort to ensure that the proposed project and site are suitable as it relates to the State or Federal Historic Preservation delineation and/or requirements.
Affordable housing is here to stay. Some will say its growing and we are challenged to develop new products that will fit into our communities, cities and neighborhoods.
Relationship to transit, access to services and efficient, well-designed sites and buildings will set the stage for cost effective developments. Don’t underestimate the housing that’s needed for our aging parents, millennial children, students, special needs friends and family members and neighbors.
Doing the Due Diligence will guide the process so that the decision to move forward is a well calculated one, based on site specific conditions and facts. This information will also set the stage for a project that will be properly budgeted, well timed and executable with minimal interruptions and additional cost requests.