On the Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments hosted by Kent Fai He, real estate developer and housing authority turnaround specialist George Gager reveals the real reasons adaptive reuse conversions fail and how he saved a Public Housing Authority "PHA" from losing thousands of units to a property tax auction.
George Gager has put together deals for over 20,000 units across 41 cities and helped 160+ housing authorities over 25 years. In this episode, he walks through a series of real conversion projects: a cracker factory turned into the first multi-story parking garage in the United States, a seven-story Denney Tag manufacturing plant converted to senior housing, a rural egg processing facility, a firehouse, and an elementary school.
He pinpoints exactly what went wrong in each one and why. He also breaks down the step-by-step process his team used to rescue a PHA that had accumulated over $100 million in debt it could not service and was weeks away from having roughly 1,000 units of public housing and 1,200 Section 8 units sold at county property tax auction. Every mistake in this episode was preventable. Every lesson is applicable today.
Common Questions This Podcast Episode Answers:
What types of buildings can be converted to affordable housing?
Buildings that have been successfully converted to AH include former factories, firehouses, egg processing facilities, schools, and offices. The key factor is structural durability: masonry and steel-frame buildings are the strongest candidates.
What are the biggest mistakes developers make in adaptive reuse conversions?
George Gager identifies four recurring mistakes: over-rehabbing with finishes that AH rents can't support, choosing locations with no retail or transit access, failing to fully assess mechanical systems before acquisition, and building too few units to support on-site staff for senior or handicapped housing.
Are elementary schools good candidates for conversion to AH?
Elementary school classrooms are a natural fit in terms of square footage at 450 to 600 square feet, they match a standard efficiency or one-bedroom apartment. Pre-World War II hallways are often 12 to 14 feet wide, and existing classroom plumbing can anchor kitchen and bathroom additions. The challenges are the large common spaces (gymnasiums, cafeterias, athletic fields) that are expensive to maintain and difficult to monetize, and mechanical systems that typically require full replacement.
What happens when a housing authority can't pay its property taxes?
Failure to pay property taxes can result in the county auctioning PHA's properties quickly. In the Pennsylvania case George describes, approximately 1,000 units of public housing and 1,200 Section 8 units were weeks away from a property tax auction when his team arrived. His first move was to go to the county director personally, commit to a turnaround plan, and get the sale postponed.
How do you restructure AH loans when a project is losing money?
George's approach was to go directly to construction lenders and offer a structured alternative to foreclosure: a lower-interest permanent loan in exchange for equity ownership of the property, plus a written HUD commitment for Section 8 vouchers covering roughly one-third of units. That guaranteed income stream changed the lender's risk calculus entirely.
How do you turn around a failing housing authority?
George's turnaround process follows a clear sequence: read every file in the authority's records, stop the most immediate financial bleeding, hold a staff meeting and retain the existing team who hold the institutional knowledge, apply for any overlooked property tax exemptions, and then renegotiate individual project financing deal by deal.
Please follow George on LinkedIn and reach out to him via email: ggager@gmail.com
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Disclaimer: This content is for informational and entertainment purposes only. It is not legal, financial, investment, insurance, or tax advice. This is not an offer or solicitation for any investments. Always do your own research before making investment decisions.
00:00 Podcast Trailer
05:16 How Do You Know If a Building Conversion Will Have Demand for the Next 50 Years?
21:23 What Happens to an AH Project When a Developer Over-Rehabs It?
27:47 How Can Public Housing Authorities Collapse Financially
30:55 Are elementary schools good candidates for affordable housing conversion?
41:15 How George and his team turned around a failing Housing Authority
45:15 Stop a Housing Authority From Losing Its Properties to a Tax Auction
51:12 How to restructure loan when your development is losing money