Rehabbing Old Houses into Affordable Housing
Trudi Sandmeier 0:00
Today on Save As…
Isabel Thornton 0:01
It’s the whole effect of that in a neighborhood when you have a blighted or vacant home and a home that has just not seen any reinvestment for decades; the outcome of that to the broader neighborhood is profound.
Trudi Sandmeier 0:22
Welcome to Save As: NextGen Heritage Conservation, an award winning podcast that glimpses the future of the field with graduate students from the University of Southern California. I’m Trudi Sandmeier.
Cindy Olnick 0:34
And I’m Cindy Olnick.
Trudi Sandmeier 0:35
So Cindy.
Cindy Olnick 0:37
Yes Trudi.
Trudi Sandmeier 0:39
Welcome back.
Cindy Olnick 0:40
Welcome back. Hello, hello to you, hello to our listeners. We hope you’ve enjoyed the Encore episodes with updates. We are back in the studio with some new episodes. And we are starting with perhaps the topic, if not one of the topics that is on everybody’s minds these days, which is the intersection of heritage conservation with affordable housing.
Trudi Sandmeier 1:06
So we have an affordable housing crisis in many of the urban areas in particular across the United States. And so our alumna Isabel Thornton is doing work to address this very issue and not here in California, but in fact, in Virginia.
Cindy Olnick 1:12
So you, you got on a train and went to Virginia, and talk to her or how did that how did that happen?
Trudi Sandmeier 1:28
Well, actually, not this time. Isabel is doing really interesting work in a Rust Belt community in Virginia, that, you know, has a very different economic climate than here in Los Angeles, and really is just a completely different place, but is where she grew up. And she has personal ties to the community. And it’s important to her. And so she’s been able to marry her interest in creating affordable housing with heritage conservation, which is just really a fantastic idea for a nonprofit that she started. She’s just doing all kinds of great work.
Cindy Olnick 2:14
That’s great. And, you know, at least here in LA, I don’t know, it seems like this housing this affordability crisis is so, I don’t want to say intractable, but it’s just so massive that it’s easy to get discouraged. So I think it’s really inspiring to see examples, like, you know, on the ground of how this is how they’re making this happen.
Trudi Sandmeier 2:38
Mm hmm.
Cindy Olnick 2:39
All right. Well, let’s get to it. Here is Trudi’s interview with Isabel Thornton.
Trudi Sandmeier 2:47
Welcome to Save As Isabel, and thank you for joining us. Maybe you can introduce yourself and just tell us a little bit about when you were at USC and when you graduated.
Isabel Thornton 2:57
Sure. Well, thank you for having me. My name is Isabel Thornton and I was Isabel Rutherford at USC. Gosh, I graduated I think in technically 2012. I was in the historic preservation program. And, I took a series of classes with the planning school as well, with a focus on sustainable cities and affordable housing.
Trudi Sandmeier 3:23
What got you interested in historic preservation in the first place?
Isabel Thornton 3:26
I think that interest goes back just to childhood, if you want to go that far. You know, going to house museums with my family, my parents both love history. My mom loved art history. I loved design as a kid too. I love designing spaces. But I took a summer program to see if I would be interested in applying to school to study architecture as an undergrad. And that summer program solidified for me that I didn’t want to be an architect. I’ve always loved historic architecture. And I was an architectural history major as an undergrad at UVA. Studying cities became something of a passion of mine too. I took a course as an undergrad called Cities in History, from Dell Upton, he was just incredible. The course was about the sort of layers of history within great world cities like Constantinople and looking at them as this sort of palimpsest of religion, architecture, different leaders, and all the things that shape a city. Then after college, I worked in interior design for a while. And while I was doing that, I realized my passion was still architectural history and how can I get back to that and started looking at graduate programs which led me to USC.
Trudi Sandmeier 4:57
Great, that’s our lucky break, for sure.
Isabel Thornton 5:00
It was mine, I was so thrilled to move to L.A. You know, as a teenager, I went to L.A. with my parents. I’m from Virginia, middle of nowhere. And we went to the Gamble House and this kind of tour through Pasadena because my dad loves Arts and Crafts architecture. And that was just this moment where I really fell in love with it. So to be able to go back there for school was so much fun for me.
Trudi Sandmeier 5:25
I think a lot of people think they know a little bit about L.A., and then they come here, and then they learn all kinds of interesting things that are very different than what you see on TV.
Isabel Thornton 5:34
For me, it just was unbelievable how varied it is. Whatever idea you think you have of it, it is not that thing. It is 87 other things on top of that, it’s just all of these micro climates, micro neighborhoods, and everybody coming from all over the world and putting their stamp on it. It’s just incredible.
Trudi Sandmeier 5:59
You know, I love L.A. So yeah, that’s very clear. So we’re gonna ask you to cast your mind back and tell us what was the title of your thesis and what was it about?
Isabel Thornton 6:11
The title was Defining the City of Gardens: the Conservation of Pasadena’s Bungalow Courts. Short answer is that it’s about the preservation of these amazing bungalow courts and Pasadena, the preservation efforts from I think, maybe late 70s 80s to present day, but the longer explanation is, it’s much more than just bungalow courts. It extended to a study of Pasadena as zoning and progressive efforts to create new housing, not just preserve older housing, that had the same courtyard feel that these bungalow courts had. Pasadena has the nickname the City of Gardens, largely, I think, because of these incredible courtyard apartments you see everywhere. When you’re going through the city it is the leading feature in both single family housing, boulevards and multifamily, they all lead with landscape. This progressive effort to lead with landscape was very intentional. And that’s how it’s created this image of the city.
Trudi Sandmeier 7:24
Your experience doing the research for your thesis actually kind of led you to your next step, which was what you did after you finished. What happened next?
Isabel Thornton 7:35
Ah, in the moment while I was studying these things, I was taking a lot of courses on sustainable cities with the Price School. Vinayak Bharne was one of my thesis advisors and he worked with Stefanos Polyzoides, who was one of the developers building a lot of the both new construction and preservation projects in Pasadena that I was studying. I was very passionate about all of these subjects and really excited. And I started working for an affordable housing developer in Los Angeles, a group called A Community of Friends. I was a paid intern with them on their developer side. So I was learning how to do low-income housing tax credit applications and things like that, and seeing how affordable housing gets built just fascinating.
(08:25) And while doing that really fascinated in how can you marry these two concepts of light density preservation that is preserving a regional vernacular and creating affordable housing opportunities at the same time? How can you do that, versus what a lot of affordable housing that I was seeing was this much higher density, multifamily new construction, that is both really needed, but also just stands out. And you know, it’s a dense apartment building and often gets a lot of NIMBY pushback. People don’t like affordable housing that is like a big new complex. But when you see it in a way that could be this kind of small scale, fits into a residential neighborhood quite seamlessly kind of model, and also is preserving something that’s not getting used at the same time, I saw that as something that could really reduce the stigma of affordable housing because it blends so seamlessly. And I saw that while I was studying my thesis in the work that Charles Loveman was doing with Heritage Housing Partners, and so part of my thesis was also studying his work, talking to him and interviewing him and I was just fascinated as a real lover of Green and Green that they had this Green and Green apartment complex that was going to be torn down, that they turned into affordable housing. I mean, that was just one of the coolest things for me to see that. I couldn’t even believe that you can just, you know, just get a Green and Green building and move right across, he moved it across town on a truck. It was just incredible. I was really inspired by his work.
Trudi Sandmeier 10:10
Sure.
Isabel Thornton 10:11
So when I moved back to Virginia, I got a job with an affordable housing developer about an hour from where I lived. And they were doing incredible work, a lot like the group I was working for in L.A. These kind of big multifamily, we call them LIHTC projects, Low Income Housing Tax Credits, and LIHTC projects require that they be, you know, probably a minimum of 20 units, more like between 40 and 80 is probably more average. So they’re these really large projects. And they brought me on because they were joining those credits with Historic Tax Credits, and I helped them do the Historic Tax Credit applications. And I was fascinated by okay, we can do both preservation and affordable housing and these projects. That’s exactly what I’m excited about. But it was still this large, multifamily, you know, big project each time and I found myself continuously attracted to something that could be a smaller scale, kind of like what Heritage Housing Partners was doing.
Trudi Sandmeier 11:20
Tell me a little bit about Roanoke.
Isabel Thornton 11:24
It was a boomtown in the 1890s through probably the 1920s. And then slowly kind of tapered off. Rail was a huge part of our industry for a long time. So when steam switched to diesel, I think, we had a big loss of industry. And we’ve had a lot of manufacturer changes in the ’50s and ’60s. So in the ’80s, when I was growing up, it was just not that exciting of a city to live in. I was like, get me out of here. And I moved to New York as soon as I graduated from college. It is fascinating to see now what is going on here is going on in many other cities, it’s had a real revitalization downtown. It’s had a real revitalization with the economy, we now have a more healthcare-focused economy. Our leading economic engine is our hospital system that serves a lot of rural and Appalachian parts of the state because we’re on the western side of Virginia. And there’s so many parts of Virginia and West Virginia that don’t have access to really high-quality medical care. So they all come to this area.
(12:34) So we have kind of a whole new identity in many ways. But we have a great regional vernacular. These beautiful homes Queen Anne, Victorian, folk Victorian homes were all built at the turn of the century. And Roanoke was one of the fastest-growing cities in the country. At that time, it was like the fifth fastest-growing city. So when it was exploding with population growth, it was at this time, that was just a beautiful moment to capture architecturally in time. So we have a lot of these beautiful older homes. And they are in these first-rung suburbs, you know, right outside of the downtown. When my husband and I decided to start a family, I didn’t think I could continue working with that long commute. And so I decided to start my own nonprofit that was a little closer to where we lived, and gave me a little bit more flexibility and my time.
Trudi Sandmeier 13:29
So what is the name of the nonprofit that you started?
Isabel Thornton 13:32
Its Restoration Housing.
Trudi Sandmeier 13:34
Well, that seems like a pretty straightforward name. So tell me a little bit about what your organization does.
Isabel Thornton 13:39
What I saw in the city that I live in, which is a lot of vacant, or deteriorated historic homes ini our historic neighborhoods, and there was a need there for preservation, but also a strong need for better quality affordable housing. There are a lot of people living in these houses, if they’re not vacant, but they were deteriorated, they were often owned in or still owned by slum lords and mismanaged and just really terrible living conditions, but quote, affordable. And so then what I wanted to do was come in and and try to revitalize some of these houses and create an affordable option that was a much higher quality. And so I got a crash course in how to do that I had no idea what I was doing. When I first started, I was like, I’m just going to use Historic Tax Credits, and we’ll figure out the rest. And so our first project has a fair amount of debt because of that. Since then, we have learned how to get grants that really help offset the costs. Most of the work that we do are in these neighborhoods that were built between the 1890s and 1920s. I would say almost all variations of Queen Anne or Victorian. And they are homes that when we had this loss of industry, and we also had a lot of changes to demographics, a lot of white flight and redlining that had people moving out of these neighborhoods, then slum lords came in and bought these houses at distressed prices and the ’50s and ’60s and ’70s. And then they never put any money back into them. They bought them and they held on to them as a real estate investment. And I’ve met some of these people have owned them since then, and still hold on to them now and don’t reinvest anything. They keep, sometimes the rents are very affordable, but the conditions that people live in are really substandard. It’s the whole effect of that in a neighborhood when you have a blighted or vacant home and a home that has just not seen any reinvestment for decades. The outcome of that to the broader neighborhood is profound. We see that in lowering property values, higher rates of crime, higher rates of vandalism. But you can just feel it, it makes it a less desirable place to be. And these were the neighborhoods where everybody wanted to be 100 years ago.
(16:12) We see what we’re doing is a tool for reinvestment and we’ve really made our mission is so much more about community reinvestment, and neighborhood-wide impact than it is about maybe one house necessarily. And the nice thing about being in the affordable housing world is that there are a lot of resources that can cover the hard costs of construction for affordable units, and not cover them entirely, but when we combine those with tax credits, and then we cobble together a bunch of other smaller foundation money and fundraise, and, you know, pull it all together, we usually can now fully subsidize the construction. And then we’re debt-free. So most of our projects are now debt-free. But the first two weren’t and I was learning. You can’t do it with just tax credits alone, and that’s why the other affordable housing developers often do a combination of LIHTC and historic. You can do it with historic alone for market rents. But if you’re trying to keep your rents affordable, then you really don’t want to have any debt at all. And these are still much smaller projects than what most developers around me are doing. We do like one house a year. They’re very intensive rehabs, they’re often houses that nobody else wants, have so much damage that they are, you know, condemned and have holes in the roof and water damage for you know, sometimes upwards of five, six, ten years. They’re kind of what a lot of people think are tear-downs, but we’ve managed to find resources to not tear them down, and then cover all those costs. Amazingly, there’s one grant in Virginia, just for stabilizing or, it says a stabilization and demolition grant, you either stabilize it or knock it down. And we used, that was really critical for us for one house, it was really close to falling down.
Trudi Sandmeier 17:07
So you are creating then, affordable rental housing?
Isabel Thornton 17:13
Yep, yep. So the federal credits require that it be income- producing. So that’s where we started saying we have to make it rental for five years. But t hen the more I did this, the more I realized that there was no one else developing affordable rental housing in Roanoke. There had been, I think, for so many years such a stigma against affordable housing, and affordable rental housing, because the model for so many decades was either the big public housing projects, or these bigger LIHTC projects, and neither of them are really welcome in most neighborhoods. And so when I first started heavily promoting affordable homeownership, and so there are nonprofits doing affordable homeownership, like Habitat, which is doing great work in Roanoke and everywhere, but there was nobody doing rental and there’s still a really strong need for affordable rental. In the neighborhoods we were working in, the one we’ve been working in the last few years, it’s just it’s 68% rental there. So you can try to put in more affordable homeownership opportunities and that does help the neighborhood a lot. But you can’t ignore that there’s still a large demographic there that wants affordable rental and needs better quality options.
(19:24) So we’ve just now become doubling down that yes, our model requires it but we also think there’s a really strong need that we’re trying to fill. And the city and a lot of people around us have, over the years we’ve seen really shifted out of that mindset that affordable homeownership was the only way to build back neighborhoods that needed revitalization. They’ve seen that really both together — rental and homeownership –are great and you know, we’re seeing a real shift towards essentially middle housing for light density for rental for homeownership for a little bit of everything, and for mixed-use that kind of just gives that dynamism to a city or to a neighborhood that otherwise would be missing if you just have all, you know, single-family homeowners.
Trudi Sandmeier 20:22
I’m sure many of our listeners watch HGTV, how is it different than what the home improvement shows are doing? What kind of work are you doing on these houses?
Isabel Thornton 20:33
Well, the first thing I would say is that I’m not swinging a hammer. I know some of the people out there on HGTV are the ones actually doing the demo themselves. And I commend them. I’m not opposed to that, but there’s so much work that goes into our projects, that is back office kind of hidden work that people don’t see. And our organization is actually going to turn ten years old next year. And we’re planning to kind of feature I think that and little vignettes, kind of talking about how we actually get these projects done because it is a little bit of a mystery, probably. It’s a lot of grant writing on the front end. I usually apply to several small foundations for pre-development money when we first think we found a property. But I mean, I guess even going back further than that, there’s a lot of driving around looking for derelict buildings, trying to seek an owner and we’ve got a lot of them, you know, the neighborhood we’re working in now has 18% vacancy, the housing stock is 18% vacant.
(21:35) And it’s wild. I mean, these beautiful homes, people want to live in these neighborhoods, too. It’s just that what happens when they get this far gone, and they need so much money to come back to life. They’re outside of a traditional market where a homeowner would come in and reinvest that money in themselves, because homeowners are always looking for a return on their investment. And they don’t think they can get that, they don’t think they can put in what needs to go in to make it livable, and then be able to resell it for that amount. So they end up just sitting vacant longer. But as a nonprofit, we’re able to put in significantly more than a homeowner would want to. We’re not looking for return on our investment and we’re getting these grants. So it really allows us to go in and then tackle these houses that people want to live in, but just you know, fall outside of box of, you know, feasibility for most homeowners. So yeah, there’s pre-development once we found a house, dollars that help us pay for all the architectural renderings and things like that, all the upfront costs. And often these houses sit vacant for about a year after we zero in on it as our next project. And between that point and when we start construction, it’s usually about a year. We then in that period are getting drawings. I did my own drawings when I first started out. And I then finally realized I needed to outsource them because I didn’t know what I was doing well enough. As the projects get bigger, and there’s more liability, I was, I’m not a trained architect. So we get drawings made, I work on the tax credit applications. And then we start to apply for larger construction grants.
(23:20) So we get grants from the state and the city. Typically, the city has Community Development Block grants that come through HUD that are targeted for revitalization. We use that funding. And we have also, we’re lucky we have access to Virginia Housing Trust Fund, that’s money that our governor sets aside for affordable housing that we were able to use as well. We get those grants lined up and the tax credits lined up and then it goes out for bid. And then we do the management of construction. We’ve used the same contractor for six out of seven of our projects. We just found someone we really like and who knows what he’s doing with tax credit work. He doesn’t make any shortcuts and the shortcuts can kill the tax credits. It’s a big deal so he really knows how to work with them where we need to be careful with windows and trim. We worked with one other contractor once that did not understand that and it did cost us quite a bit of money to fix. So we manage the construction but we’re not doing it ourselves. So really, no one would want to do a show about what we do because predominantly my work is writing grants and tax credit applications and then tax credit compliance and all of …
Trudi Sandmeier 24:43
That doesn’t make for good TV.
Isabel Thornton 24:45
No, it doesn’t but I love it.
Trudi Sandmeier 24:47
Yeah, which is great.
Isabel Thornton 24:49
So that side of our work is really fun for me but it’s not glamorous in any way. And then once the project is finished, it takes about a year to do, nine months usually often a little bit plus or minus, but we then own the project indefinitely, and we are the landlords as well. So I have several people on staff that manage the tenants and do property maintenance. It’s a big part of our mission to stay a good steward of the property. Because if we just restored it, and then left and sold it to someone else, you don’t really necessarily know if that will have a positive impact on the neighborhood or not. But to be able to know that will still be a good and dependable landlord is a big part of that neighborhood reinvestment.
Trudi Sandmeier 25:32
Absolutely, in terms of stability and predictability and just basic maintenance. That is not always a given.
Isabel Thornton 25:41
Yeah, we understand these old house costs. I think there are a lot of people that love old homes, but don’t like the surprises they give you. And we understand them and can anticipate for them and we have contingency funds for them. When we do these huge rehabs, you know, we’re updating everything so heavily. I mean, all new systems, all new roofs, that typically they’re in really pretty good shape property maintenance wise, you know, they’re a lot of older homes people might buy if they didn’t have an overhaul, you’re probably going to encounter a lot more issues than ours, to where we just did you know, a dramatic restoration
Trudi Sandmeier 26:19
Yeah, yeah, yeah. You started Restoration housing for almost 10 years ago now. And you’ve done how many projects in that period of time?
Isabel Thornton 26:30
We’ve done seven houses in nine years. It was averaging about one house a year, once we got off the ground, the first year was pretty slow. I was just getting the 501 (c) (3) started in a lot and I had my first child or that kind of thing. So I would say, yes, startup style. So we definitely did once we got going about one house a year.
Trudi Sandmeier 26:51
So now that you’ve been in business for almost ten years, what do you see, as some of your great successes as in your work?
Isabel Thornton 27:01
Hmmm. Each project has its own story. And each project I feel very gratified by after it finishes. And often I’m very stressed at the very end. And then one of my colleagues puts a little video together of the before and afters. And they are, for me, very gratifying, in the end to see the juxtaposition of the house and all the hard work that went into it and all the hard work our contractor did. But it’s just so many people that come together to make these things happen. I feel very proud of that. Each project brings that satisfaction at the end. So success is not a monetary success. It is seeing, you know, these images that are really moving, hearing stories from neighbors.
Trudi Sandmeier 27:56
Oh, that must be amazing.
Isabel Thornton 27:58
I was talking to someone at the city of Roanoke. And he said, I just moved to Southeast, because I saw what you all did there. And I didn’t think I wanted to live there, but I saw that you could fix these houses up. And so my wife and I are fixing up a house and living there too.
Trudi Sandmeier 28:14
That must have been an amazing moment for you.
Isabel Thornton 28:17
One of the best things I could hear I think just to hear that there’s this, you kind of know it intuitively that there are ripple effects when you reinvest in a neighborhood. But just to hear it really directly attributed even to what we were doing was wonderful.
Trudi Sandmeier 28:31
This model of small-scale, affordable housing creation is something that I’m sure many communities are interested in duplicating and replicating. Are you talking to lots of folks who are doing this around the country?
Isabel Thornton 28:51
I think a lot of cities especially on the East Coast have a lot of similar situations to Roanoke with this Rust Belt, post-industrial city that’s lost a lot of economy over the years and have these older homes and they’re so far gone they need more reinvestment than a typical homeowner. So, parts of Ohio really mimic what we have going on here. Danville, which is a small city south of us in Virginia has a very similar housing stock, we’ve met and talked to their city leaders. We give them a lot of ideas that I think they’re inspired by, but one of the biggest roadblocks for them adopting our model is that I have the in house capability of doing Historic Tax Credits that you need to have in-house otherwise it becomes cost prohibitive. The juice isn’t worth the squeeze essentially when you’re talking about these small scale houses. My experience learning this in graduate school may be the only reason why we can make that work. So really, because of my education at USC because of you all I can do this. If you want to replicate this model, go hire somebody out of graduate school that knows how to write tax credits, because the applications, that’s really the hardest part, I think.
Trudi Sandmeier 30:12
Okay, you heard it here, people. Yeah, there’s good advice from someone who’s in the field. Well, this has been a fascinating conversation, Isabel, thank you so much for joining us on Save As and we’re looking forward to learning all about what the big 10th anniversary plans are coming around the corner.
Isabel Thornton 30:33
If anybody wants to follow us, you can go to our website: restorationhousing.org. Our videos are on there, all our updates, and you can sign up for our newsletter too which just gives you monthly updates and what we’re up to.
Trudi Sandmeier 30:46
All right, terrific. So thanks again.
Isabel Thornton 30:49
Thank you so much for having me. And I’m honored. I loved my time at USC and I was I was thrilled to be asked to join you all.
Cindy Olnick 31:01
Well, Trudi, thank you for talking with Isabel and bringing us these great examples of how she is making affordable housing work. Without you know, throwing away all the great buildings we already have.
Trudi Sandmeier 31:14
This is one of these episodes that you really should take a minute, listener, and go look at the episode page.
Cindy Olnick 31:20
And where can they find the episode page?
Trudi Sandmeier 31:22
On saveas.place. There are pictures of these houses, before and afters. Little videos about what they’ve done with the people who are living there. It’s just super inspiring, and really exciting.
Cindy Olnick 31:38
Wow.
Trudi Sandmeier 31:40
Tune in next time for another new episode coming your way.
Cindy Olnick 31:44
Yes, and please subscribe if you haven’t already, so you don’t miss it.
All right. Thanks so much for joining us for this episode of Save As. For photos and shownotes visit our website at saveas.place. And if you haven’t already, please subscribe. Tell a friend maybe leave us a review. If it’s good.
Trudi Sandmeier 32:12
Today’s episode was produced by Willa Seidenberg and me. Our original theme music is by Steven Conley with additional music by Tom Davies. Save As is a production of the Heritage Conservation program in the School of Architecture at the University of Southern California.
