Prudent Business Operations In Non-Profit Housing?

scaffolding beside apartment tower
Repair photo by Les Chatfield is licensed under CC BY 2.0
Keeping up with building repairs is part of prudent business operations.

As a company, Joint Ownership Entity NYC (JOE NYC for short) doesn’t have a catchy name. You certainly wouldn’t guess that it works with non-profit housing providers in New York City. Nor, as an asset management company, does it have a catchy mission. Asset management is about making sure there’s enough cash flow from revenues to cover operating and capital costs. So what is it about JOE NYC that stands out?

First, it has an unusual ownership structure. It is owned by 11 non-profit housing organizations. Each organization shares ownership of units in its portfolio with JOE NYC. This allows JOE NYC to support the non-profit housing organizations to manage their day to day operations, complete capital repairs to aging buildings and even acquire new properties. As a group, each organization pays less for items than they would on their own.

Mortgage financing is a big cost for housing providers. As a member of JOE NYC, the borrowing risk is shared across a larger pool of units, which means a lower interest rate. Mortgage financing has attracted other non-profit housing providers to join JOE NYC. At founding in 2017, there were six members. Today there are 11.

It also has an unusual mission. JOE NYC eschews profit: it aims to provide non-market housing on a permanent basis to people with very low incomes. When buildings are added to the portfolio, the sitting tenants are not automatically evicted.

JOE NYC provides a forum to support its members, through the formal structure of regular board meetings. Agencies that might not have a reason to be in touch for months on end meet regularly. The benefit of combining their knowledge has surprised even the founding members. This includes strategies for managing during COVID-19, when, across the country, many tenants have lost income and many landlords are having difficulty meeting mortgage payments.

This article makes good reading for anyone who is skeptical about the potential for using business principles in a non-profit environment. It presents non-profit providers with interesting reasons and evidence to consider joining forces. It is a model for non-profit Board members and public decision makers to consider, especially where there are a number of housing providers with relatively small portfolios. You can read more about JOE NYC in Shelterforce: How Scaled Affordable Housing Asset Management Helps in the Time of COVID