4 Simple Lessons From a Housing Developer Who Redefined a Whole Industry
Every once in a while, an entrepreneur comes along and redefines an entire industry the way, say, Uber has redefined transportation. Then there is mixed-income, affordable and public housing, and Boston-based WinnCompanies.
Housing developer Arthur Winn, founder and principal of WinnCompanies, has spent more than 40 years revolutionizing the entire affordable housing industry, and today his company is the nation’s largest manager of affordable housing and privatized military housing.
The company’s 23-state management portfolio includes nearly 100,000 residential units, half of which are affordable; WinnCompanies also owns approximately 12,000 apartments in 11 states. Arthur Winn recalls how, 40 years ago, "affordable housing" was often synonymous with slum housing or projects like Cabrini-Green in Chicago. They were the breeding ground for extreme poverty, gang violence and lack of opportunity. And they typically segregated whole neighborhoods from the cities in which they had been built.
Winn, however, believed that successful affordable housing must be aesthetically pleasing to the community and professionally managed in a way that holds residents accountable to community norms.
“We all watched Arthur as he simultaneously designed his housing differently from the institutional character in vogue at the time,” says Marvin Siflinger, who held the two most powerful housing positions in Massachusetts for 34 years as director of the (federal) Department of Housing and Urban Development's New England region, and, later, executive director of the Massachusetts Housing Finance Agency.
“He created housing that was more congruent with the cities and towns in which he developed," Siflinger continued about Winn, "and the country’s largest management company of its kind centering on a close working relationship with its residents.”
I recently sat down with Winn to ask him one simple question: How do you redefine an entire industry? Here are his four simple principles, applicable to any entrepreneur:
1. Let the community set the bar.
In order to be welcomed into a community, the design and management of affordable housing must complement the neighborhood in which it is built. Winn saw affordable housing done badly and seized the opportunity to break the negative mold, with a new business model. For communities to support the development of affordable housing, Winn says, they must believe that the new housing will be superior or congruent with existing housing stock.
2. Establish a mission your customers share.
Winn says that redefining an industry is possible only when its customers -- in this case, the residents -- are invested in its success. Because affordable housing is in short supply, residents are invested in the reputation of the place where they live. And, by and large, the residents of properties managed by WinnCompanies take pride in their community because they are consistently treated with respect.
3. Create powerful advocates.
There is no such thing as low-cost housing. Affordable housing is a product of federal, state and local subsidies, as well as private financial institutions that see it as an investment. WinnCompanies has earned these stakeholders' support by consistently delivering award-winning work in the communities it serves by creating a culture whereby the firm has never defaulted on its debt and met or exceeded the expectations of its investment partners.
(Editor's note: Winn's record is not completely laudatory: In 2012, he pleaded guilty to a pair of misdemeanor crimes for $4,500 in illegal contributions to two Massachusetts U.S. representatives, Michael E. Capuano and Stephen F. Lynch. He was fined $100,000 for the campaign contributions he made allegedly to gain support for his ultimately failed Columbus Center development.)
4. Exceed customer expectations.
Affordable housing stakeholders include residents, town/city, state and federal government, bankers and investors. Winn says that if you want to redefine an industry, start with an approach that includes all the important stakeholders, then work diligently every day to make these stakeholders your top focus and to exceed their expectations.
From day one, WinnCompanies has promised a passion for excellence -- a commitment it keeps on every deal, whether the deal involves public, affordable mixed-income, military or market-rate housing. When you are only as good as your last project, Winn says, it’s just smart business to make sure each project is great.