Talking Heads, Jeffrey Woda, Co-Owner/Principal, The Woda Group, Inc., Managing Growth in Your Company
By Darryl Hicks
10 min read
Jeffrey Woda grew up in rural eastern Ohio, separated from Wheeling, WV by the Ohio River, the son and grandson of homebuilding contractors. He left the area to become a CPA and was employed for a time by Ernst and Young, working with construction companies, financial institutions and other corporate entities.
He returned to Ohio in 1990 and co-founded The Woda Group, Inc. (TWG) with his business partner David Cooper. Together, they built TWG into one of the largest and most successful affordable housing development companies in the United States. TWG currently manages a portfolio that exceeds 12,000 housing units in rural, suburban and urban settings across 14 states in the Midwest, Mid-Atlantic and the Southeast.
While some developers specialize in one or two types of housing, TWG does many things very well—senior housing, family housing, veterans housing, historic rehabilitation, new construction and mixed income, to name a few. The company’s success can also be attributed to a strategic move made ten years ago to move beyond rural areas and focus on developing affordable housing in urban markets.
The company has grown so much that Woda and Cooper devised a new strategy for managing their housing portfolio last year. TCA sat down with Woda to discuss that new strategy and other factors that have contributed to his success.
Tax Credit Advisor: Your company recently announced that it would be moving its corporate headquarters to Columbus, OH because you need more space to expand your workforce. What factors are contributing to your company’s growth?
Jeffrey Woda: We expanded our footprint and added more states to the list where we want to develop—affordable housing. Also, being a vertically integrated company and doing everything from design and development to construction and property management—enables us to continually grow.
TCA: You recently reorganized your housing portfolio into four “super regions” and appointed regional vice presidents who oversee that part of the company. How did that strategy develop and how has it worked thus far?
JW: Late last year, we examined our housing portfolio and property management company and concluded that our team was overtaxed. We had to prepare our company for its next growth spurt. Historically, we developed smaller properties, but a 40-unit property takes as much time to manage as one with 100 units. Our systems were such that we had people trying to work on tasks for every property in the portfolio and it became too much. So we figured out a way to divide the portfolio up. When you look at us geographically it makes sense to break us into these super regions. Our regional vice presidents now concentrate on smaller portfolios, build teams that can manage the same properties year after year and develop a familiarity with them, and dig into the nuts and bolts, analyze each property, figure out all of the outliers and how to correct them. We also envision these same people becoming experts with the state QAPs (Qualified Allocation Plans) and housing programs within their regions.
TCA: You develop affordable housing in rural and urban markets. Do you manage these properties any differently and did this influence how you created the super regions?
JW: Prior to the capital markets meltdown in 2007-2008, we did a lot of rural and small-city developments. Then we noticed the demographics start to shift and households migrating towards larger urban markets. My co-owner, David Cooper, and I felt we needed to change the complexion of our organization if we wanted to keep growing over the long-term. We started looking at ways we could enter more urban markets that we had never developed in. That was a conscious shift that we made for the company eight to ten years ago and it has really paid off. As you know, there has been a lot of pent-up demand and a demographic shift toward larger markets. We are seeing the fruits of those efforts. We have a lot of urban developments that have either just come online or are under construction.
TCA: How many people do you employ within each super region and what administrative processes have you established to ensure the proper oversight of your portfolio?
JW: Each VP has an operational team that includes accounting personnel, home office operational staff and infrastructure staff at each of the sites, including service techs, community managers, district managers and regional managers. They have anywhere from 40 to 70 FTEs (full-time equivalents) working for them.
TCA: Woda Group does a lot of different things: historic rehabilitation, senior housing, family housing, veterans housing, mixed income. How do manage such a diverse operation? Do you have staff who focus on each of these areas?
JW: We are an affordable, multi-integrated company. Almost everything we do has an affordable ingredient to it, whether we are using nine percent credits, four percent credits, or some other affordable loan in our financing stack. Within the affordable component, we have different product types and special needs that we include in that affordable product. So in many instances, if we are creating an affordable product that has a special needs component that falls outside of our expertise, we will go out into the market and find a partner that is an experienced service provider with those skills. For instance, we just developed a property that’s one of the first permanent supportive housing developments in Ohio in a rural area. With permanent supportive housing, in addition to individual homes for residents, we are also addressing specific ongoing needs to enable them to enjoy a safe, comfortable and independent living situation. We are the housing experts. We manage the property. But in the case of the rural Ohio property I mentioned we partnered with a local organization—the Community Action Commission of Fayette County—that has operated supportive housing in that market for 20 years. The Executive Director, Bambi Baughn, and her staff know the population and the services that are needed, such as transportation or access to healthcare, addiction counseling, employment assistance, meal services and other social services. They either offer those services directly to the residents or link the residents to the services. They also facilitate group social activities and family gatherings. Their role in the partnership is providing that support for the special needs that are included in our housing development. Our expertise is developing the housing, putting the financing together and then managing the property according to tax credit guidelines and doing the things we need to do to stay compliant. We don’t claim to be an all-knowing service provider that knows every population and what they need. We find partners that can help the residents and assist them with whatever challenges they have.
TCA: What amenities offered by The Woda Group distinguish you from other developers/property owners?
JW: There is no single amenity that works across everything. As we put together an amenity package, we examine our portfolio and figure out what amenities are worth the dollars being invested, that are getting used and providing value to our residents, and then figuring out how to make them better. It may also depend on research that partners, like I described earlier, have obtained. If we are developing a community for a specific population, we will ask our partners what services and/or amenities make the most sense and provide the most value. Years ago, internet access was considered an amenity. Today, if you don’t provide internet, it’s the equivalent of not providing electricity. So amenities are a very fluid item. As the affordable housing market evolves, so too will amenities. Our job is to figure out what amenities residents need today and how we can provide them. For example, we have embraced green technology and adopted LEED, Enterprise Green and EarthCraft standards at many of our properties. Our residents enjoy energy efficient housing units that keep their utility costs at the lowest possible amounts.
TCA: Based on the press releases I saw on your web- site, you have done a lot of work recently in Kentucky. How do you identify potential markets – either rural or urban – and where in the Midwest are you seeing the greatest demand for housing?
JW: When we started out, we developed housing in Ohio and West Virginia. Over time, we expanded geographically into areas that bordered those two states. After that, we grew by having personnel join us who had experience in the states that we added. You mentioned Kentucky. We have been developing in Kentucky for a long time, but I would chalk up our recent successes to Tammy Stansbury, who came from Kentucky Housing Corporation. As her career was winding down there, she approached us about joining our organization on the development side. Many of our development personnel worked either at the state housing agencies or for other developers. We don’t believe in taking a development officer in Columbus, OH and asking him or her to go to X state and find new business. That’s a long learning curve. We are successful because we employ people who understand the QAP process in the states that we develop. The LIHTC may be a federal program, but each state’s QAP process varies, and some greatly.
TCA: You mentioned LEED earlier. Many of your properties are LEED certified. Is this something you try to attain for all of your deals, or just certain project types? Besides the potential cost savings, what other benefits do you see from “green” technology?
JW: When we did our first LEED property, we did so because we were incentivized by some QAP years ago when we didn’t know much about it. Fast forward, now we understand the concepts and the benefits LEED offers residents. We do not always go through the expense of getting LEED certified, but the standards themselves have become part of our design and build specifications, because we see the value. It’s expensive to get LEED certified. Expenses that don’t go toward the actual building or the economics of the development we see as wasteful. If we are paying a consultant to check all of the boxes and gather all of the data, or spending dollars for a specific designation, those are things that we could do. But in some cases we’d rather save on those administrative costs. We feel we are better stewards of the resources for that particular development. Many of our properties have also earned Enterprise Green or EarthCraft designations, and we are in the midst of building properties with Passive House designs in Ohio and Pennsylvania. We’re also developing a Net Zero Ready site in Georgia. We see developing energy-efficient, sustainable communities as something we do that’s beneficial to our residents, and also for the wider communities and future generations on our planet.
TCA: As we speak, the debate over tax reform has begun in Congress. Are you at all worried about how this will impact your company’s future?
JW: We have developed affordable housing since 1990. We have seen a lot of issues arise over the years that have “threatened” the affordable housing industry. Here we are, we’re still developing affordable housing. We still have a program that makes a lot of sense. My partner David and I feel that no matter what the outcome is, our legislators know that a public/private partnership developing affordable housing is the best alternative to any of the programs that have ever been enacted. The end result (of tax reform) may be different from what we have been used to, or exactly what we are doing today, but that’s something that sets us apart from the industry. We’re very nimble. Whatever program Washington comes up with to meet that need, we’ll be ready. If necessary, we will change our business models, so that we can continue to provide a great product for our affordable households.
Story Contact:
Jeff Woda
jwoda@wodagroup.com
614-641-2300
