Cracking the Code in Affordable Housing Development

Laurel Street Residential

1. No Poverty 3. Good Health and Well-Being 10. Reduced Inequalities 11. Sustainable Cities and Communities

Overview

Dionne Nelson, founder of Laurel Street, believes that the launch of her company represented the perfect convergence of her educational background and professional careers. She landed, by chance, in a job with a residential real estate firm after completing business school and stints with a Wall Street investment firm, McKinsey Consulting, and New School. Her family had always owned a brokerage business and she began selling real estate while in high school. When offered the opportunity to oversee the affordable housing development arm of a large residential real estate firm she jumped at it. In that work, she found the perfect blend of commercial real estate market dynamics plus a model that accommodated low income renters.


Author

Rosalyn Allison-Jacobs

Rosalyn Allison-Jacobs

School

Case Western Reserve University - Weatherhead School of Management

Case Western Reserve University - Weatherhead School of Management

Professor

David Cooperrider

David Cooperrider

Innovation

With the Great Recession came the counterintuitive opportunity to spin off the affordable housing development arm of the firm as Laurel Street Residential. She assumed the contract with the US Department of Housing and Urban Development (HUD) for the wholesale redevelopment of Boulevard Homes, a former public housing community, as a mixed income neighborhood that included senior citizen housing and multi-family units; the construction of a child development center; an elementary school; and social supports for low-income families. The new development, Renaissance West Community Initiative (RWCI), became the first place-based, residential development project in Charlotte, NC to undertake a holistic, multigenerational approach to ending generational poverty by taking a “cradle-to-career” approach to supporting the developmental needs of every family member.

Since the completion of RWCI, LSR has expanded rapidly by combining creative financing for different types of projects with strategic partnerships with the City of Charlotte, churches, and social impact investors. This has enabled the firm to develop projects that are unique and specific to each location and consistent with locational goal.



Cracking the Code in Affordable Housing Development

Dionne Nelson, founder and owner of Laurel Street Residential. Renaissance West senior citizens residence.

Inspiration

Renaissance West Community Initiative (RWCI) replicated the very successful redevelopment model of the Villages at East Lake, executed by Tom Cousins and the East Lake Community Foundation in Atlanta, GA. With a 25-year track record of success in changing the life trajectory for low-income residents in mixed-income communities, East Lake Foundation serves as the “community quarterback” by operating programs, forging partnerships, and supporting other programs and services to transform place and outcomes. Consistent with that model, Laurel Street Residential developed RWCI to serve as the hub of essential community resources that enable residents to break the cycle of generational poverty within three generations.

Overall impact

Dionne Nelson likes to say that the work of affordable housing development “extends beyond “sticks and bricks; it’s about changing people’s lives.” With the development of RWCI, Laurel Street Residential created a fully-resourced neighborhood with opportunities for high quality, on-site childcare for ages birth-to-four; a new elementary school with an innovative curriculum designed to yield great academic outcomes among economically disadvantaged students; workforce development opportunities for parents; medical and mental health resources; and support from “life navigators.”

To date, Laurel Street has developed over 3600 units, of which approximately 3100 are affordable (at 30-60% of Area Median Income or AMI) and 500 are market rate. The business has since completed or launched six additional mixed income developments in North Carolina and Virginia. LSR currently has 19 active projects in the pipeline, which will yield approximately 2000 additional affordable housing units.


Business benefit

Beyond blazing trails as the first minority and woman-owned, mixed-income residential real estate developer in the State of North Carolina, Dionne Nelson – through Laurel Street Residential – has demonstrated that there is a successful, replicable model for developing quality affordable housing while yielding modest returns for investors. The success of LSR has since attracted more social impact investors and foundations willing to invest in addressing the affordable housing shortage. Laurel Street Residential has filled a void among developers willing to accept a smaller return in the interest of producing quality housing that is affordable.

Social and environmental benefit

The prevailing philosophy about addressing the needs of homeless and precariously housed individuals and families is “housing first”; unless and until housing can be stabilized for individuals and families, it is far more difficult to address the need for education, health and mental health needs, employment training and placement, and other supportive services. By creating affordable housing in high-opportunity areas, Laurel Street Residential is breaking the cycle of intergenerational poverty and reducing societal inequities that come with unsafe housing that is concentrated in segregated, high-poverty areas.

Interviews

Dionne Nelson, Founder and Owner

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Laurel Street Residential

Laurel Street Residential

Charlotte, North Carolina, US

Business Website: https://laurelstreetres.com/

Year Founded: 2011

Number of Employees: 11 to 50

The growing shortage of affordable housing has passed crisis levels in large and mid-sized cities across the United States. As the role of the federal government in the creation of affordable housing continues to devolve, the private sector—in partnership with state and local government and the nonprofit sectors—is increasingly stepping into the space of creating and preserving affordable housing.

Laurel Street Residential is a private, minority-owned, woman-owned for-profit residential real estate development firm committed to building quality, affordable, multi-family housing in high-opportunity areas. Through creative financing that combines private investments, tax credits, and public sector support, Laurel Street has filled a void in the creation of high-quality affordable housing using a financially sustainable model.