Marketing Advice from Experienced Affordable Housing Developers

NSP at Homeport - A Critical Mass Strategy in Columbus Ohio

After decades of steady decline, the “North of Broad” neighborhood in Columbus, Ohio is regaining its status as a vibrant place to live. This increased interest is due in part to the targeted revitalization plan adopted by Homeport Homeownership.

“North of Broad” refers to an area along North 21st Street that is north of Broad Street. This area – which includes 200 or so households along Long Street, North 20th, North 21st and North 22nd Streets – has a rich history of African American culture and music. During the 1930s, ’40s and ’50s, the neighborhood had many jazz clubs and African American run businesses and was the hub of the African American community. Unfortunately, decline began in the 1960s, after Interstate 71 was built, which cut directly through downtown and isolated many neighborhoods such as this one. Vacant homes came onto the market and many were turned into poor-quality rental properties. Buildings were torn down, and fires destroyed others. It was a classic story of a strong neighborhood that weakened over the course of many years for a variety of reasons.

In 2004, Homeport began its homeownership program, which includes real estate development, and in an effort to have a large and demonstrable impact began focusing on one distressed block in the North of Broad neighborhood. By this time, the area had numerous vacant lots, nuisance properties and homes owned by the city land bank – and only 12 homeowners on the first target block. Still, the neighborhood’s rich heritage was evident, so Homeport began a targeted revitalization effort.

Funding during the first few years was provided by Community Development Block Grants, the HOME program, Home Again Bond Funds and other sources. When Neighborhood Stabilization Program (NSP) funds came along in 2010 (federal funds from HUD to help stabilize communities struggling with foreclosure and abandonment), Homeport was able to easily tie them to the project’s goals of increasing affordability and stabilizing neighborhoods.

Recent Developments

Homeport’s NSP projects are all single-family detached homes with 1,300 to 1,500 square feet. All homes have full basements, and most have three bedrooms and two bathrooms. Most projects are new construction because many existing properties in the neighborhood were not salvageable.

Homeport worked with an architect to make sure the construction plans fit neatly into the neighborhood’s existing architecture. Nine single-family detached homes were built with NSP1 funds, and three more were made possible by NSP2 funds. Homeport also used NSP1 funds to build a condo development with seven newly constructed townhomes. One duplex rehab in the same condo development was funded by NSP2 dollars. Homeport is seeking additional NSP funds to focus on the next block to the west.

Marketing the Neighborhood, Marketing the Homes

Homeport does not reach out to a particular “target” market, but instead markets the overall neighborhood. In the beginning, staff contacted residents currently living in or associated with the community to see if they were interested in buying a Homeport home. This was effective, but Homeport ultimately knew that it would need to extend its reach beyond local residents to sell all of the available homes. Staff also knew that the homes would not sell unless Homeport also “sold” the neighborhood. To do that required dispelling misperceptions and focusing on the areas many attractive features – North of Broad needed to be rebranded.

The Message

Homeport created marketing messages that played up the 1930s and ’40s jazz theme, using taglines such as “Cool digs, right down town” and “Jazzed up homes in a grand old neighborhood.” A new logo was developed that played off that same jazzy theme: a penguin in a tuxedo. This identifiable character drew attention to the neighborhood and helped give it a new persona. All marketing materials include a tagline and the logo and bright, modern colors to give a positive and exciting impression.

The Website

Homeport’s active website (homeportohio.org) is kept up-to-date and has detailed information on Homeport homes and programs. Having a current and comprehensive website allows Homeport to push the web address in much of its marketing, instead of having to intensively market each specific program and each specific home for sale; the simple take-away message is Homeport’s web address. Interested individuals then turn to the website to find out more about program specifics. Marketing materials include direct mail and post cards, and Homeport also promotes its message on coffee sleeves through local coffee shops.

Creative Ideas

One of Homeport’s creative strategies for “selling” the neighborhood involved a coupon with discounts to local businesses (pizza shops, coffee shops, etc.). Homeport initiated this idea by reaching out to local business owners and asking them to participate. Six businesses agreed to offer 15 percent off coupons on their products. The coupons are available at all Homeport homes (residents can pick them up during open houses or individual tours) and can be used by anyone. The coupon strategy has been very successful: both local residents and visitors are using them, which is getting them to move about the neighborhood and check out local shops. Business owners appreciate the opportunity to promote both the neighborhood and their businesses.

Marketing NSP Homes

When publicizing NSP construction projects, Homeport focuses on the green and energy efficient features of the homes such as insulation, windows, ENERGY STAR fixtures, sophisticated air ventilation systems and green certified materials. These technologies and green features can add as much as 25 percent to the cost of construction, and the benefits aren’t always fully understood by potential home purchasers. Homeport hired a technical consultant to develop training videos on how to market the Homeport homes, and is also working on a series of videos demonstrating how to “sell” the energy efficiency features. Homeport also created a demonstration home that serves as a training and promotional tool.

Homeport Training Videos:
Homeport Training Video 1.2
Homeport Training Video 2.2
Homeport Training Video 3.2
Homeport Training Video 4.2
Homeport Training Video 5.2

The Demonstration Home

Homeport’s “demonstration home” is used to raise awareness regarding the green features in NSP homes, but is also a tool for promoting the neighborhood. By offering tours of the demonstration home, Homeport helps homebuyers and others to understand the green components and how to fully maximize the benefits. The home also serves as a community meeting place. Local school and advocacy groups, neighborhood alliances and others can use the space for meetings and events. This provides an opportunity to demonstrate Homeport’s green building strategies, plus brings people to the neighborhood that would otherwise not be there. People visiting the demonstration home often make referrals to potential clients.

Marketing the Condos

Homeport’s NSP condo project involved a more targeted marketing approach. For these units, Homeport reached out through local university publications and campus newsletters to inform professors, graduate students and others employed by the university of this nearby opportunity. Homeport has reached out to Ohio State University and also plans to work with the local community college and local art school to market the condos.

Supporting Other Neighborhood Efforts

As part of its overall neighborhood revitalization strategy, Homeport teamed up with a historic theater in the neighborhood that had a vacant storefront. Homeport now pays the utilities for the space and has established an art gallery there. The gallery features local artists on a six-week rotation, plus presents information on Homeport programs and homes for sale. Volunteers operate the art gallery Thursday through Sunday, and local businesses and nonprofits host occasional happy hours and other events in the space. The gallery has been successful in drawing visitors to the neighborhood.

The Marketing Team

Homeport’s marketing team (two staff and one volunteer in the home office) and homeownership team (eight staff and two volunteers) meet once a month to look at ways to improve marketing strategies. The homeownership department meets every other week to discuss NSP, and marketing is consistently a focus. Homeport also works closely with a real estate agent who holds all of the North of Broad listings. This Realtor lives in the neighborhood, is a business owner and comes to the table with a unique perspective. He is a valuable resource for selling NSP units.

Market Research

Homeport conducted studies to validate its North of Broad project, which focused on the housing component but not specific target markets. The market research provided information on the location of available homes, affordability and local housing needs. Homeport knew that the best initial target group would be residents already living in the neighborhood, but also knew that the homes would sell themselves once perception of the neighborhood changed.

Financing NSP Homes

Huntington National Bank created a mortgage product specifically for Homeport buyers. The product provides a 30-year, fixed-rate, portfolio loan with no private mortgage insurance, and allows buyer credit scores as low as 580. The monthly payment varies but can be as low as $500. This program has been successful – 17 buyers in the North of Broad neighborhood have used the product (11 were NSP homes) – and the program is now offered to other community development corporations in Central Ohio.

NSP home buyers are also eligible for a subsidy in the form of a soft second mortgage, and most purchasers take advantage of it. Restrictive covenants require purchasers using the soft second funding to live in the home and not rent it, and to repay the full amount if they sell the property before the end of the covenant. The length of the restrictions is tied to the amount of financing: five years for less than $15,000; ten years for $15,000 to $30,000, and 15 years for more than $30,000. After this term has ended, the subsidy is fully forgivable.

Pricing Strategy

Homeport’s pricing strategy for homes in the North of Broad neighborhood is a little different than in other neighborhoods. Because its goal was to make a noticeable positive impact on the area with a critical mass of homes clustered together, Homeport essentially had to create the market. At first, Homeport could not use comparable sales from other neighborhoods because the homes would have been priced either too low or too high. Instead, Homeport considered what local buyers could afford and qualify for by looking at income levels and credit profiles. Of course, construction costs were also taken into account, but the local buyers’ capacity was considered first. The first homes were priced in the $125,000 range.

Now, appraised values in the neighborhood are slowly increasing, showing that the market is getting stronger and that Homeport’s strategy is working. Newly developed homes in the neighborhood are now priced in the $140,000 range. Homeport is considering how to keep homes affordable as revitalization improves the neighborhood. Generally, Homeport does not lower prices and instead offers a subsidy (the second mortgage) to cover any gaps in affordability.

Homeport’s pricing strategy has been successful and has created a stable market in which buyers feel comfortable investing. Over the past few years, many neighborhoods saw decreases in home values, but appraisals in the North of Broad neighborhood remained steady. By starting in the $125,000 range, Homeport was able to accommodate buyers below 80 percent of the area median income. The gradual increase demonstrated that homebuyers earning up to 120 percent of the area median income also wanted to invest in that neighborhood. Attracting mixed-income buyers supports Homeport’s desire to create long-term, sustainable neighborhoods that are not solely dependent on subsidies to grow and thrive.

Evaluating Marketing Strategies

Homeport applies an informal process to evaluate its marketing strategies based on effectiveness and feedback from clients and homebuyers. Working with experienced real estate agents is also a key component in building an effective marketing campaign: their knowledge and expertise about marketing proves to be cost-efficient and effective. The homeownership team also discusses what’s working and what’s not during regular staff meetings. Some strategies were dropped because they appeared to be ineffective, such as running commercials on the local cable network, advertising on billboards and sending mass mailers. Staff members pay close attention to the feedback they receive from clients and homebuyers and discuss these issues regularly, which helps them to make marketing decisions.

Lessons Learned

  • When working in a distressed area, efforts to rebrand and sell the neighborhood are a must. Create a strong and consistent message that portrays the neighborhood in a positive light. Create an identifiable logo that is fun and attractive. For Homeport, the penguin logo and jazzy theme were a big hit. Be creative and try something new. Even if your marketing focuses mostly on homes, be sure to demonstrate the positive attributes of the entire neighborhood.
  • Develop strong partnerships. Work with a good builder who is invested in the neighborhood, connect with a real estate agent who’s invested and passionate about the program, and partner with lenders who care about the community and have mortgage products that work with your program. If local lenders do not have such loan products, ask them to develop one. It is much easier to work with lenders who understand NSP and are willing to offer financing that complements your program.
  • Develop a user-friendly website that provides comprehensive program and housing development details, then promote the web address in all marketing materials. A clear and simple marketing message (like “cool digs, right down town”) is what the public will remember, and pushing the website is an effective way to market all programs. Be sure, however, that your website information is kept up to date and that program information is easy to find.
  • Identify creative ways to get exposure; indirect contact goes a long way in developing a referral relationship. Word of mouth marketing is always successful, so embrace different strategies to get the word out. Host educational events in the neighborhood and make the program visible. Make connections with other groups that can help promote the neighborhood. Facilitate activities that mobilize residents and get people moving around the community. Host press events and support other programs working in the neighborhood as well.

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