Home Sweet Home

By:Lee Rasizer Issue: Conscious Capitalism Section: Jewel Of Collaboration

Affinity Homes

Home Sweet Home

Anyone who has witnessed a magician tear apart a dollar bill only to watch as the currency suddenly appears whole has a sense of how Larry Lipman operates.

A self-described “serial entrepreneur,” Lipman’s latest venture in the building sector, under the umbrella of The Affinity Corporation Inc., on the surface is seemingly scattered in multiple directions.

It’s actually the byproduct of tearing apart the underpinnings of the affordable housing sector and recasting it as a whole entity with the greater good in mind.

The construction of affordable, system-engineered housing serves as the foundational piece of Lipman’s venture but it also branches off into divergent areas such as bridging the achievement gap in low to middle-class individuals; community and economic development aimed at helping blue-collar workers achieving first-time home ownership, adult training and apprenticeship programs, and the green movement.

That big-picture thinking in the end will make that buck, not by hocus pocus, but using this clearly-defined blueprint with an altruistic bent.

“It’s about reaching and touching people,” Lipman explained about his company, for which he serves as President and CEO. “Money takes care of itself if you do the good thing. I don’t want anybody to be confused and not understand that we’re about making money. But first and foremost, we’re interested in improving quality of life and humanitarianism.”

we’re about making money. But first and foremost, we’re interested in improving quality of life and humanitarianism.”

Affinity’s philosophy isn’t as a builder or developer per se but as an organization that supports the stewards of the community.

The company works with municipalities, non-profits, faith-based organizations and community development companies that may have the political clout and ability to attract grants and funding in order to create community economic development but perhaps lack the capacity to pull all the parts together. “Our whole premise is relationships,” he said.

Sensitivity to the needs of low-income homebuyers; taking steps necessary to assure those families remain within those structures, including access to health care and other core services in the surrounding areas; providing access to the opportunity ladder and even employing individuals in those communities to construct homes all were “passionate principles” drawing Dr. Samuel B. Little to join Lipman’s redevelopment efforts.

Little has spent nearly three decades working in the government and public housing arena on neighborhood solutions, including a dozen years as Associate Deputy Director at the Housing Authority of Baltimore City and five more as Executive Director of the Office of Resident Services at the District of Columbia Housing Authority in the nation’s capital. He’s put his clout and international relationships behind Lipman’s company and now serves as its Executive VP for Global Business Development.

“I have spent a good number of years in the public sector as an administrator of housing programs that sought to transform blighted developments into neighborhoods of choice, especially for first-time homeowners,” Little said. “The best models of development integrate the physical and community support services in the approach to rebuilding neighborhoods. I’ve seen project after project fail miserably because the design omitted the needs of families. In too many instances, communities reverted back to the debilitating conditions that required redevelopment in the first place."

“What was very attractive to me was it was a well thought out strategy that reflected passion for people that not only wanted to empower individuals but strengthen families and improve the overall landscape of communities,” he added. “I think it’s rather unique in the way it’s done.”

Lipman’s underlying passion for this project initially stemmed from his involvement with real estate and rental properties nearly six years ago in Denver, Colo. He found himself trying to create opportunities for lower-income families, supporting their efforts to build credit and eventually owning property through shared-equity type contracts.

But he quickly discovered during that time that many of these same clients struggled with missed payments, problems with budgeting, lack of upkeep and other issues, and this frustrated him.

Those feelings were compounded by the unscrupulous dealings he’d seen from other folks in the rental sector whose sole purpose he viewed as profit-minded and whose actions landed countless tenants on the street.

Lipman’s mother having served as a social worker was steeped in his consciousness as well. He wanted lower-income people empowered to improve themselves and not just be beneficiaries of welfare and other social programs.

“I looked at affordable housing in the truest sense of the word and said, ‘This can be fixed and improved,’” Lipman said.

Yet there were myriad other issues to tackle. His link with a local builder that bought land and built low-cost “McMansions” demonstrated first-hand that technology wasn’t being fully utilized to efficiently build these affordable homes.

Lipman’s subsequent fact-finding mission around the country, beginning in 2006, and incorporating visits to hundreds of community housing development organizations, uncovered countless tales of speculative construction projects with little payoff for the non-profits that sank thousands of dollars into hiring contractors.

Like Lipman’s experience, Little listened to countless tales of projects failing to materialize after months and perhaps years of time and effort.

The solution Lipman envisioned would be multi-layered.

His company would provide cradle-to-grave project services, integrating the steps necessary to plan, organize, finance and build single dwellings to entire neighborhoods. That would mean encompassing such chores as feasibility studies to soil analysis in preparation of sites to aiding with grant writing and connections with the Federal Home Loan Bank, all while non-profits maintained control of the projects.

Those ventures would encompass unique, multi-product housing solutions to meet specific needs in specific locations, ranging from apartments and condominiums to single and multi-family residences to low-income housing, row houses, townhouses and multi-story mixed-use dwellings.

“Often times in development projects, entities focus on one part of the country or a particular housing type,” Little noted. “But Larry’s whole concept was to be responsive to the housing needs globally, in different parts of the country and with a multiplicity of housing types. Many housing projects will have traditional or what I call low-income housing that doesn’t reflect the architectural value of the broader neighborhood. But with the multiple building designs, Larry’s able to do housing across the country and he’s taken time to understand the needs of the African-American, Latino and Indian communities and can incorporate different architectural styles. It gives him an additional trust that he’s responsible to the needs of broader society.”

The acquisition of a well-established Dayton, Ohio, manufacturing plant specializing in engineered housing meant that such projects not only would match together perfectly on site at a lower fixed cost than traditional stick building but saved time by preparing the homes off-site during site preparation. The structures could be built much more cost effectively too, since union wages tied to federal funding didn’t apply because of the off-site construction. And the units could be transported to a multi state area, affecting economies on a regional scale while paring the cost of each contract item.

Lipman currently touts construction time at two-thirds of conventional building methods and costs $10-$15 less per square foot.

His company is planning manufacturing hubs in six different regions spanning the Midwest, Northeast, Gulf Coast, Southeast, Southwest and Texas. Each will be designed to fulfill private and public construction contracts within a 400-mile radius of those plants.

“If you can reduce the price of the land, reduce the price of the infrastructure, reduce the cost of the building and the carry or delivery costs, you make a home much less expensive. It’s not hard to do,” Lipman said. “You just have to put some thought into it.”

The energy efficiency of these homes, based on Housing and Urban Development guidelines that link median income to the appropriate level of mortgage costs, could help assure families weren’t taking on an expense they couldn’t sustain by giving them more home for their money. All Affinity homes are Energy Star rated and can be built to any Energy and Environmental Design green standard.

Affinity recently applied for a grant in Ohio for a plant that will run on solar energy, which would rank it among the state’s first such factories. The company’s energy division also is working with scientists on using a solar roof rather than panels atop a structure as part of future designs, with an eye towards selling some of the electricity collected back to the grid.

“It’s improving communities by doing better projects,” Lipman maintained.

But the item that truly differentiates Lipman’s master plan is an education component. A substantial piece to the competitive grant process for non-profits seeking to obtain grants from the Federal Home Loan Bank or government entails providing an empowerment program for the demographic they serve. Mentoring the steps necessary to move from rental properties to home ownership, discussing the accompanying economic growth needed to make the jump, and providing advice on budgeting, credit counseling and mortgages, are handled by many such organizations, with the financial backing of cities and counties.

Lipman, though, saw another potential side of empowerment from his own personal prism that could be added. Growing up in Delaware, he was a solid A and B student in elementary school until moving to middle school, as he put it, “on the other side of the tracks.” Suddenly, his grades dipped sharply. His self-esteem tanked. It was initially attributed to emotional issues due to moving until a therapist advised his family nothing was wrong.

“It haunted me until a few years ago when I figured it out,” he admitted.

What he discovered is that the foundational curriculum he was supposed to know at his new school differed from his previous institution, causing an educational or achievement gap. The answer, in his view, was as simple as finding what he’d missed and getting him back to a level playing field with the rest of the students.

Lipman investigated the issue further and discovered an educational tool started in South Africa, now on five continents and U.S. based, designed to bridge those gaps. He saw it as a powerful means at lifting up those disenfranchised or let down by the public school system in the communities his company will serve.

An offshoot of his parent company, Affinity Learning, now is a licensed provider of the EDUSS educational remediation tool. It diagnoses foundational gaps from first grade all the way to the adult level and provides a prescriptive learning plan to bring students back to a level playing field in math, english and phonics. Lipman has made the product available for licensed teachers to not only work with families but also made sure community centers, faith-based organizations and public housing projects have access.

By assisting people to attain higher levels of educational proficiency, Affinity views itself as investing in the continuing growth of the people within communities. “I thought, what a great way to couple housing, economics and community with education,” he said.

Singapore-based investors, Solvators Inc., agreed. The company has made a $20 million capital investment so that the $43 million worth of projects Lipman has contracted and pending will get off the ground. The workload includes six townhomes for a casino workforce in Lawrenceburg, Ind. and a senior assisted living facility in Ann Arbor, Mich.

Affinity also is deep into negotiations for a 1,200-unit ecotourism project in Mississippi, a 100-acre redevelopment project in Trenton, N.J. and also is focusing on Indian reservation housing needs that HUD says may include as many as 200,000 units.

His investors eventually want to replicate his model throughout Asia, Africa, Latin America and Eastern Europe. The plan is to export management but not own plants or equipment overseas. Little’s contacts abroad with ambassadors, diplomatic staff and foreign business leaders should be a key component in those efforts.

“Almost everybody is working with me because I’ve touched something in their heart,” Lipman said. “Habitat for Humanity did the same thing – found a way to help people and provide something they normally wouldn’t be able to do on their own.”

Lipman admitted the road to this point has been “difficult” and included people telling him that they weren’t really interested in the humanitarian side of his vision, only finances.

He’s gone through business partners, even invested his life savings. Yet the humanitarian side of this crisis pushed him forward.

“I wanted to do better (financially) but over time it became … ‘Someone’s got to do something about this. This is horrible.’ I wanted to help some people improve their lives, get into a home and not get taken. But it evolved into community economic development… and being part of a ‘new definition,’” Lipman explained. “Cities don’t want to just slap houses up anymore. They want to create real communities. That’s what it’s really evolved into.”

Lee Rasizer has spent more than two decades in professional journalism, working for major U.S. newspapers. He is currently a freelance writer and editor based in Littleton, CO, and can be reached at FHomer@aol.com.