Bridging Sectors: Partnerships Between Nonprofits and Private Developers
In recent years, partnerships between nonprofits and private developers to develop affordable housing have become a topic of increasing interest. Through a review of current literature and interviews with housing thought leaders, nonprofits, private developers, affordable housing capital sources and others, this paper seeks to explore multifamily rental housing development partnerships. More specifically, research identifies attributes critical to these partnerships, and the economic, social and political drivers to both partnerships and the subsequent negotiated partnerships terms.
This paper concludes that there is a broad range of negotiated partnership terms between nonprofits and private developers. However, across all these relationships, both nonprofits and private developers prioritize two partnership terms: development fee profits, and degree of involvement and oversight. Further, research reveals while there are many different drivers shaping the decision to partner and subsequent partnership conditions, there are two key determinants: development experience and knowledge, and financial factors. Finally, while not all partnerships are beneficial, under the appropriate conditions, partnerships have the potential to not only build nonprofit capacity but also address some of our nation's affordable housing challenges.