Public-private partnerships, known as P3s, are where governments and the private sector work together to deliver services. City land can be used, along with government subsidies, to encourage a developer to include affordable housing as part of their development’s offering.

P3s are paving the way for affordable housing

Including affordable housing in mixed-used developments is becoming immensely popular. And it’s not just the typical development with retail on the ground floor and multifamily units above. Buildings like libraries are now being designed with affordable housing as part of the building’s make-up. The benefits of including a neighborhood hub like a library into an affordable housing unit are abundant: the building, with an attractive ground floor, also offers programming such as student drop-in centers or adult learning classes, of which residents can easily take part.

Neighborhood hubs

Evergreen Real Estate Group has two-such new developments in Chicago. David Block, director of development for the company states in the Chicago Tribune:

“A lot of times the first floor is underutilized in a residential building. You’ll put a mailroom and a property management office there or sometimes a fitness room,” he said. “Whereas if you get a library in there, every inch of that ground floor is active and public and inviting people in. I think it’s good urban design. I think it’s good land use. So I do hope that it’s a trend.”

A great example of a P3 in action is Empire State Development’s $260 million development in New York City’s Harlem Neighbourhood. With $4.5 million in grants, the former site of a parking garage will feature more than 170 affordable and supportive housing units, 70,000 square feet of office space, 90,000 square feet of retail, below-market space for two non-profit organizations, a conference center, as well as a new headquarters for National Urban League, New York’s first non-profit civil rights organization.

Adaptive reuse and repairs

Not all P3 projects are newly-built developments. Cities are actively looking to add to their affordable housing stock by finding innovative uses for existing buildings, through partnerships with for-profit developers, via adaptive reuse. This method not only keeps costs down as existing structures are given a new lease on life, but also nets huge benefits for the environment.

New York City is an example of a government tapping the private sector for collaborations to provide much-needed repairs to its aging affordable housing stock. As Mary Scott Nabers, President and CEO of Strategic Partnerships Inc. writes:

The New York City Housing Authority began a pilot program in 2014 that transferred management of six of its Section 8 housing developments to a P3. The agreement mandated that private-sector partners invest $80 million in renovations and repairs to the property. According to a study released [in June 2018], that P3 has led to quicker completion of much-needed repairs that the housing authority could not have provided. There has also been better tenant satisfaction. Odds are that this program will expand.

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