Heading Home has a healthy track record for helping end homelessness in the region.
The nonprofit recently crunched its numbers and found out that nine out of every 10 previously homeless people they put in housing in the last seven have remained with a roof over their heads – whether in Heading Home’s apartments or elsewhere.
But just like the people it serves, Heading Home receives help as well. And commercial real estate professionals are some of the folks pitching in to lend a hand.
Tom Lorello
Title: Executive Director, Heading Home; Cambridge
Age: 52
Experience: 25 years
Q: You mentioned that volunteer help from people in the real estate industry is integral to achieving your mission. Can you talk more about that?
A: Affordable housing is essential for meeting our mission. But it always struck me as being a horrible idea to have social workers trying to develop housing. And it struck me especially because I didn’t know anything about it. I genuinely needed to have some expert advisors on my side. The real estate market is very complicated for someone that doesn’t have a real estate background.
Q: So where do commercial brokers and developers come in?
A: We have this real estate committee that is a real active, hard-working committee of architects, general contractors, developers, brokers – a whole range of people from the industry. So if we’re looking at buying a property, I send out an email to them and ask who can meet me at a particular location to look at the roof or the basement with me. Sometimes I have these pretty high-profile people, like Andy Hoar from CB Richard Ellis, and he has a suit on but he’s down in the basement with me somewhere in Dorchester with a flashlight knocking the cobwebs out of the way to help me assess if the building is structurally sound and if it’s a good deal for us. We have people helping me on how to structure the deal or how to do the negotiations. We could not develop property like we do without the expert advice of these people.
Q: How do you compete with private, deep-pocketed developers for the kinds of multifamily properties you acquire?
A: It’s a simple idea. We find ways of making housing affordable to the people that are homeless. But that’s actually very challenging to do, and we do it because the private market has a very hard time doing that. No one can make money on that niche rental market. So that’s why we’re in the business. We get rental subsidies and we rent apartments from the private market. But we’re also in the development business, so we’re always looking for properties that we can develop. We own 14 buildings now and we’re trying to get a little quicker at it. We’re now trying to develop a model to systematically identify properties and take them off the market quicker. We compete with private developers and that’s very difficult for us. Just last week we lost a property that we really wanted. Sometimes we have to tap into some public sources of funding or we have to privately fundraise it, and that takes time. A developer came in, paid cash and closed very quickly.
Q: Do you participate in private, on-the-market deals?
A: The easiest thing for us to do is just buy something as a private deal, because once you get into public money, there are regulations, there’s waiting, there’s red tape. We have reserves in place to help with a lot of things, like routine maintenance, or disaster funds so that we could continue operating if anything happened. But anything beyond the necessary amount of reserves and we start thinking about investing in property. We happened to get a pretty big gift last year and we were able to just go out and buy a new property with a conventional mortgage. But we don’t always have a couple million dollars lying around to do that. Like right now, we’re looking to develop some properties but we’ll probably have to tap into some public sources.
Q: What’s the average size of properties you purchase?
A: We’ll do six- to 12-unit apartment buildings. But the money works a little better when you get bigger, so we’re considering trying some larger projects in the future. But then you get into the issue of creating these projects of homeless people. I’m not sure you want to put 40 homeless families together in one spot. What we’re thinking about now is mixed-use, maybe partnering with developers, getting into a 40- or 50-unit development, but we’re only managing 10 or 15 of them. It still meets the spirit of fitting into the neighborhood.
Five Facts About Heading Home:
- There are 1,200 more families eligible for and seeking shelter beds than there is space in the commonwealth.
- On any given night in Greater Boston, more than 7,000 people are homeless, including 3,000 children.
- Tom Lorello began his work with the homeless more than 20 years ago as a mental health clinician working on the streets.
- Heading Home has created a total of 270 permanent and affordable housing units in Greater Boston.
- Last year, Heading Home served more than 2,500 homeless families and individuals in Greater Boston.
