This past spring, the Cornerstone Partnership’s CHIP Grantees convened to share ideas, challenges and advice about their experiences in providing stewardship services by contract to municipalities, developers and other organizations. Grantees offered a variety of services with activities ranging from pre-development and construction to post-purchase monitoring and enforcement.[i]
The way groups priced their services also varied considerably. Some groups offered hourly fee contracts where they were paid by the hour according to a fee schedule attached to the contract. Other groups offered base contracts that were lump sum and then either hourly or per transaction fees if the work exceeded a defined level of service. Another group preferred per unit contracts.
We asked each group to identify things that worked well and areas they found challenging. The groups advised:
- Do your homework up front before you set your price. This may include reviewing sample files before you bid or being prepared to do some digging to help complete otherwise incomplete files.
- Use a data management system like HomeKeeper to manage information and files. The groups described it as a great system to manage properties, clients, transactions and funding sources all in one place, and it can be shared with the entity with which you are contracting.
- Methodical setup and organized launch is key if you’re planning to manage an existing portfolio. Some groups recommended doing a file–by–file review and an organized upload to your data management system. They also suggested that the staff ultimately responsible for stewardship be the ones involved in the onboarding so they become familiar with the portfolio and its details as the launch is underway.
When asked about lessons learned, the groups offered this advice:
- Don’t undervalue the services you provide. If your client can’t afford full price, you can always discount and supplement with grant sources, but it’s important to show the full cost value up front.
- Know your partners. Their performance impacts your reputation, so don’t be afraid to walk away if they are not holding up their end of the deal.
- Look for ways to offset or reduce your client’s costs. It’s not unreasonable to charge fees to buyers, sellers or developers to help offset the cost of stewardship. And grant funds may be available in some areas.
- Set your activity-based pricing so clients pay for what they get. In other words, if you expect 10 resales per year but there are only five, the client only pays for five. Likewise, if there are 15, they pay for 15. And be clear about what is within your scope in terms of following up with non-compliant homeowners and what remains the responsibility of your client.
- It takes a long time to get up and going with a new jurisdiction. Be patient and plan accordingly!
Does your organization offer stewardship services? Is your organization considering offering stewardship services? Let us know if you have anything to share on this topic and/or if you have any questions. And if you want to learn more, check out this recent Cornerstone Partnership webinar to hear Hello Housing and the Long Island Housing Partnership share their experience about what works well, what pitfalls to avoid, and what to consider if you’re offering or seeking stewardship services.
[i] Detailed services offered included:
1) Program advocacy on behalf of sponsor; 2) Construction Monitoring; 3)Zoning and Approvals/Permits; 4) Funding Applications; 5) Homebuyer identification and qualification; 6) Wait list management; 7) Homebuyer education and workshops; 8) Underwriting and processing; 9) Initial sales and resales of below market rate units; 10)Pre and Post closing administration; 11) Monitoring of homeowner compliance with restrictions; 12)Down payment assistance program administration; 13) Rehab and emergency loan program management; 14) Marketing and outreach; 15)Program design and development; 16) Annual funder reporting