Abstract:
This case study examines the business model of the Preservation of Affordable Housing, Inc., (POAH) and its applicability to nonprofit housing providers. POAH is one of the premier socially conscious low-income housing developers and owners in the United States. Its primary mission is to purchase large, multi-family properties and refinance them for long-term affordability. As of 2010, POAH has rescued and refinanced more than 4,900 units of affordable rental housing in eight states and the District of Columbia. Since its founding in 2001, POAH has been unique among preservation owners not only for its business model--which attends closely to the bottom line of every transaction--but also for its commitment to policy and regulatory reform affecting a range of housing affordability issues. This case invites the readers to explore many dimensions of organizational strategy for nonprofit housing companies. In the world of nonprofits POAH is unusual in many ways including: its origins, as it was formed in order to complete an acquisition of a significant subsidized low-income housing portfolio; its organizational structure, which combines for-profit and nonprofit companies; its financial model which emphasizes returning profits to the company and increasing cash flow as opposed to developer fees and especially property management fees; its ability to influence government officials to modify regulatory policies to suit the needs of nonprofit housing groups. Finally, the case explores the larger importance of POAH for the low-income housing field.
Learning Objective:
This case invites readers to consider the crucial question whether the innovative strategies and attributes that make POAH a successful housing organization can be duplicated by other nonprofit housing developers.
