On the Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments hosted by Kent Fai He, Michael Massie, Executive Vice President and Chief Development Officer at Jamboree Housing, walks through every stage of a perfect affordable housing deal and explains why the housing supply crisis is, at its core, a market efficiency problem.
Michael has spent more than 25 years in affordable housing. He joined Jamboree as employee #15 when the organization had ~4,000 units. Today, Jamboree has 160 employees, 11,000 units of affordable housing, and 28,000 Californians call a Jamboree development home. In this episode, Michael shares his three-pronged test for evaluating any opportunity: land, resources, and political will. He explains why the Low Income Housing Tax Credit (LIHTC) is a true public-private partnership, how utilities became the biggest wildcard in construction timelines, and why you have to manage risk and understand the story behind each line item on your pro-formas.
Common Questions This Podcast Episode Answers:
What is the Low Income Housing Tax Credit (LIHTC) and how does it fund affordable housing development?
The Low Income Housing Tax Credit is a federal credit allocated to states, which run competitive processes to award credits to qualifying developers. A nonprofit developer sells those credits to financial institutions with large tax obligations. The credits typically cover 35% to 70% of the total capital stack with upfront equity. The 9% program is oversubscribed 4 to 1 in CA, meaning one in four applications gets funded.
What does Jamboree Housing look for when evaluating a new development opportunity?
Jamboree uses a three-pronged test: does the city have land available, does it have resources to bring to the table, and is there genuine political will to approve and support affordable housing? Political will matters most because a city that treats affordable housing as a sound bite instead of a policy priority will stall any deal, regardless of how good the numbers look.
What is the biggest construction risk for affordable housing developers?
Utilities. The lack of certainty and transparency from utility companies is a consistent challenge across Michael's entire career. Developers have waited more than a year for utility connections, a delay that does not just affect the budget. It directly delays housing for people who are waiting to move in.
How did COVID-19 affect affordable housing development?
COVID created supply chain issues, labor shortages, and construction delays that affordable housing developers are still working through. Rent delinquencies were better than expected for Jamboree. The biggest impact was on construction timelines and costs. Jamboree's response was a return to fundamentals: stronger due diligence, earlier feasibility work, and a culture of accountability built into their strategic plan.
How does Jamboree Housing approach city relationships?
Jamboree does not show up and tell a city what it's going to build. The first call is always to city staff to ask: what are your housing needs and how can we help you solve them? That relationship, built over predevelopment, is what gives Jamboree credibility to secure entitlements, navigate political opposition, and be a community partner for the next 55 years.
Don't forget to check out Jamboree at: https://www.jamboreehousing.com/
You can follow Michael on Linkedin: https://www.linkedin.com/in/michael-massie-021b7113/
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
04:34 Michael's Background
15:33 Why Is Financing the Most Important Part of Development?
16:59 11,000+ Units Later... How Jamboree evaluates every line item of their financial analysis!
23:30 Why proper Asset Management needs to be part of your development plan!
29:47 How does the Perfect Affordable Housing Deal Start? The Three-Pronged Test Jamboree Uses to Evaluate Every Deal!
30:19 How Does Jamboree Build Relationships That Lasts (From 35+ Years of Experience!)?
36:34 Why Communities Oppose New Developments... & How A Experienced Developer Responds Collaboratively
40:16 Why Did Disneyland Fund Affordable Housing in Anaheim and What Does That Mean for Developers?
42:02 Why is building collaborative relationships with Cities SO Important?
42:52 What is the "Ideal Scenario" in the Tax Credit Application Process to Build Affordable Housing?
01:16:26 Why Is Affordable housing (i.e. lack of supply) Hard to Solve
01:18:58 Where/How to contact Michael?