Seth Gellis of CPP East: How We Are Helping To Make Housing More Affordable

An Interview With Jason Hartman

Jason Hartman
Jun 28 · 21 min read

Build a team that is not afraid to challenge you. You do not want “YES” people on your team. You want people that can look at complex problems through different lenses so that collectively you can come up with the most elegant and efficient way to solve the problem. This also allows you to hire outside of the development world and train up. If an employee isn’t a “YES” person, they’ll ask why and learn and grow faster.

  • Refocus the housing industry on preserving and providing housing above all other public policy goals. It’s the most immediate need and will have lasting impacts. Housing is where stability starts, where communities are built and strengthened, where friendships start, where our elders receive care later in life, and where opportunity can replace crime for our youth.
  • Don’t lose sight of the workforce housing 80–120% AMI renter and owner. With new production generally being devoted to luxury housing, police, nurses, teachers, and others that generally fall into this workforce range are being left out. The cost to produce housing is only rising, and unfortunately that will continue to mean that housing will be produced for luxury renters, where the market supports it. There is a lack of quality housing for these individuals, causing them to pay a far greater percentage of their income on housing than they should. There are very few programs out there that serve this group and it’s an area where innovation is needed. We should put pressure on a tax credit program that aids in the preservation and creation of workforce housing as well.
  1. Build a team that is not afraid to fail. If you are afraid to fail, you will only take on projects that are like what you have done before and only work through issues in a manner consistent with your prior experiences. Being uncomfortable and having to think creates opportunities where others do not see them. Team members knowing that failure is acceptable, so long as we learn from our mistakes, gives them the comfort to challenge themselves and their colleagues in what we can accomplish and how we accomplish it. Being afraid to fail stifles you and your organization. Viewing failure through the lens of it being an opportunity to grow flips an organization’s mindset. You need to go into projects and look at new opportunities with an open mind. That’s not to say you shouldn’t mitigate risk to the extent you can, but ultimately you have to be confident in your reasons for why something will work and test those reasons. You do not want to become a ‘no’ organization. You want to be an organization that focuses on solving the “how can we” part of the easy “no.” CPP has developed strategies for entering new states as a result of the failures we have experienced. Although we have never not performed on a deal, we have learned from many. Through these experiences and continual process improvement, the team has implemented best practices off of lessons we’ve learned as we’ve adapted to each community we enter. We learn, grow, implement and improve. We constantly get better.
  2. Thrive in partnership. To be a national developer means constantly addressing the housing crisis in different cities, counties, and states. You won’t know all the answers, or even the best answer for the local community you are working in. It’s equally important to work with partners that have local experience and connections that can create efficiencies and mitigate risk while growing faster. A unique quality to CPP, which stems from our WNC heritage, is our strong view that partnership creates value rather than diluting it. When we enter a new community, typically our partners have already been there, either with local management expertise or by owning other communities. They know the pitfalls, who we need to talk to, how to get to them, and what concerns we need to address before we are even in a meeting together. We also benefit by constantly improving our documents with equity or debt and see what true market is for everyone rather than just for us. Our partnerships have allowed us to take on larger projects like Norman Towers, a $150M senior affordable housing community in New Jersey, while preserving and enhancing our balance sheet which affords us the ability to implement a national service plan, which is core to our values of focusing on people.
  3. Always do right by the people we work for, our residents. But also extend this to doing right by the people with whom we work with. It’s the people we work with that enable us to make the resident experiences as great as possible. Doing the right thing by our residents is more than an altruistic idea, it a bottom-line measure as well. Happy tenants reduce costs because they tend not to leave, are more likely to pay on time, treat their homes and communities better, and overall allow onsite staff to be more efficient. We create happy tenants by working with the best management companies and focusing on their experiences through measures like providing Wi-Fi and other amenities in our communities. In addition, our asset management teams stay focused on resident needs, and when we notice that there is a need, we look for ways to solve it. One example was providing jackets to the children that live in one of our communities in VA because we noticed that many didn’t have suitable, warm clothing during the winter. We went so far as to make sure they varied in type so that nobody would single them out for being a resident in an affordable housing community. For the people we work with, our constituent partners, their engagement and belief in our scale creates opportunities in underwriting and efficiencies in processing transactions that allow us to grow faster.
  4. Do not be afraid to challenge the status quo. Organizationally things need to change as you grow, as you learn and as you evolve. For example, we’ve asked, “does a deal start with the acquisitions team or the underwriting team?” In my view, underwriting leads when you are working on scale. So all projects feed into them for consistency and then acquisitions and project management can support that underwriting through our knowledge and expertise. Project management can mitigate risk and acquisitions can bring the deal home. Ultimately this allows us to leverage our partner relationships and fine tune the plan to be executed on that mitigates the most risk possible while providing the biggest benefit to the community that we can, while at the same time maximizing the benefit the broker can provide the seller in pricing and terms. Everybody wins.

Authority Magazine

In-depth Interviews with Authorities in Pop Culture, Business, Tech, Wellness, & Social Impact

Authority Magazine

In-depth Interviews with Authorities in Business, Pop Culture, Wellness, Social Impact, and Tech. We use interviews to draw out stories that are both empowering and actionable.

Jason Hartman

Written by

Author | Speaker | Financial Guru | Podcast Rockstar

Authority Magazine

In-depth Interviews with Authorities in Business, Pop Culture, Wellness, Social Impact, and Tech. We use interviews to draw out stories that are both empowering and actionable.