Lizbeth Heyer is the person responsible for achieving JCHE’s aggressive real estate goals. We sat down with her to hear her unique perspective on JCHE’s real estate strategy and value.
What is JCHE’s strategic vision for real estate and how does it fit in with the organization’s plans?
One of the aims in JCHE’s strategic plan is to “expand our reach,” which includes increasing the number of apartments we can offer to our traditional population of low-income older adults AND expanding to include other seniors who do not have great options in the current marketplace. There are many seniors who earn just a little too much to qualify for our government-subsidized housing, but not enough to afford supportive housing that’s market rate. Our big picture vision is that we want to double the size of our real estate portfolio – by which we mean the number of apartments we have to offer – in the next 10-15 years. That’s an aggressive goal, but an important one because of what we anticipate will be the future demographics and social need.
Why aren’t we satisfied with simply serving our current residents well?
Serving existing residents well will always be our #1 priority. But they often tell us about their friends who wish they could move out of less program-rich housing and into JCHE. We’re an organization that envisions itself as part of a whole social system and an organization that really cares about the needs of the community. We’re trying to be part of the comprehensive public policy response to the shifting demographics and how our communities serve our changing population. In addition, if we create appropriate economies of scale, we may be able to generate additional private resources and spread efficiencies in a way that enhances the offerings for current as well as future residents.
Can you be more specific about the shifting demographics?
The increase in the numbers of seniors is going to be dramatic in the next 10+ years. Together with that, as people are living longer and needing to have more support and resources, more and more people are going to be economically stressed, especially in this region where the housing market is so expensive. Housing is such a significant cost that people are going to sacrifice food and other basic daily needs just to keep a roof over their head. And that’s going to accelerate their aging and intensify their healthcare needs.
Is there a difference in how JCHE approaches real estate because of its nonprofit status?
Yes, definitely. As a 50-year old organization, many of our properties could easily stop being affordable and convert to market-rate. Instead, we’re now refinancing in a way that modernizes but preserves all of the affordability while leveraging a fair amount of financial value out of our existing assets. The wonderful thing about being a nonprofit – and why I think the work we do is so important – is that we can take that tremendous asset value and reinvest it to further advance our mission. Nonprofit organizations like ours protect the public investment because the institution reinvests right back into the mission and the mission serves the public good.
What types of projects are currently underway?
We have essentially two categories of work underway right now. The first is to refinance and modernize our existing properties. We’re restructuring the financing, taking the equity out, and reinvesting that in modernizing our buildings – updating everything so that it’s ready for another 30 years of useful life. This means new roofs, updated building envelopes, new windows, new wiring, new plumbing, sustainability investments, new kitchens, and bathrooms. And one of the things we’re most proud of is we’re upgrading old apartments with universal design and accessibility features to make sure our residents can remain in their homes as long as possible.
What are the specific modernization projects?
We’ll be getting started soon with renovations at Golda Meir House in Newton and Genesis House in Brighton. We just finished modernizing Ulin House in Brighton and before that, we finished Leventhal House, also in Brighton. These projects take about two to four years.
What are the specific challenges of renovating properties where residents are living?
There comes a time in any building when it’s time to modernize. The disruption and the impact of living through a rehab can be difficult. So, we do it very sensitively and we have a phenomenal staff who put residents’ needs and interests first. Depending on the scope of work, we look at whether it’s possible to do it with residents still living in their apartments or whether it’s necessary – and perhaps in a lot of ways less disruptive – to have them move temporarily out of their apartments. It’s difficult any way you approach it, so we work really carefully as a team, with our contractors, our designers, and all of our staff, to pick the best scope and the best process that does right by the resources, the building, and the residents.
You said there are two categories of work. What’s the second one?
The other exciting area is new construction. Our department is responsible for bricks-and-mortar and the financing of our real estate, but we’re also responsible for thinking creatively about how we serve people and looking forward to where the needs are going with aging baby boomers, ensuring that our real estate development is highly innovative and responsive to future needs.
Can you talk about the specific development projects that are underway or envisioned?
The first is 132 Chestnut Hill Avenue, next to our Brighton campus. We’ve been designated by the City of Boston to redevelop that site and received funding from the city to support its exciting program. We are currently working to get funding from the state and hope to begin construction in the spring of 2017. It’s going to be 62 new affordable apartments in a market where the need is very high. The building will be physically connected via a bridge to the rest of our Brighton campus, so the residents will be able to access all of our programs and supports and social programs. Plus, there’s about 3,500 square feet of retail space envisioned for the ground floor. We’re thinking of ways to use that space to activate connections between our campus and the greater Chestnut Hill Avenue community.
What else is on tap?
We hope to build an expansion to the Golda Meir House in Newton on a city-owned parcel that abuts Golda. The site has a decommissioned water tower that the city is going to be taking down and then we hope making available for development. There is so much need in Greater-Boston for supported housing that seniors can afford, and this is a tremendous opportunity to expand in our own back yard. There’s nothing definite at this point, but it’s a pretty reasonable hope right now.
We also have an executed development agreement with Congregation Kehillath Israel in Coolidge Corner in Brookline to develop affordable senior housing with ground floor retail space on the site of the Epstein building, which currently houses their social hall and a preschool program. They’re redeveloping the social hall in another location on their site and they’re moving the preschool. It’s an amazing opportunity to build in a vibrant village center where our residents can easily walk to services and amenities. We also plan to collaborate with the Brookline Senior Center and Hebrew Senior Life which have housing and programs right around the corner. We’re at the very beginning of our public permitting process, but if all goes well, we’ll be in construction in late 2018 or early 2019.
What else is happening?
We have a collaboration ongoing with the Treehouse Foundation, working to replicate a project they built 12 years ago in Easthampton, MA. The program concept is to create a multi-generational community that provides affordable housing to families who adopt children out of the foster care system, along with seniors wanting to support these families. We have been actively looking for a site and have three or four sites of high interest that are in various phases of conversation and possibility.
Does all of this put us on track to meet the goal of doubling our portfolio in 10-15 years?
There’s more we need to do. Real estate development is a complex, multiyear process. You’re always building a pipeline because it typically takes four to six years for a project to come to fruition, and sometimes even longer. We have a phenomenal team working on this. And we’re very lucky to have very supportive board members helping us with the many balls we have in the air at the same time. The work is challenging, but it’s extremely rewarding.