The Board of Trustees at Enterprise Community Partners announced last week that it has appointed Terri L. Ludwig as the new president and CEO of the firm, effective Jan. 1, 2011. Ludwig succeeds Doris Koo, who had been serving as president and CEO since 2007, with the intention to serve in the role for a three- to five-year period.
Ludwig, an executive vice president and chief operating officer at Enterprise since 2009, has 25 years of experience in investment banking and nonprofit leadership, including a position from 2002 to 2009 as the president of the Merrill Lynch Community Development Co., where she led the community development initiative, committed more than $2 billion in loans and investments, and launched a successful social investment platform for Merrill Lynch’s private clients. Ludwig is an appointee to the U.S. Department of the Treasury Advisory Board for Community Development and Financial Institutions as well as the co-chair of the board of ACCION USA, the largest non-profit micro lender in the United States.
Between all of those responsibilities, and getting a handle on the leadership reins at Enterprise, Ludwig sat down with Multifamily Executive senior editor Chris Wood this week for her first interview as Enterprise's CEO-elect.
MFE: What will be the top action items on your agenda for Enterprise heading into 2011?
LUDWIG: One of the benefits of stepping in right now is that we have a five-year strategic plan that takes us through 2013, so my priorities and top agenda items will be very much related to that. In addition, I’ve been fortunate to have been working on the Enterprise Strategic Horizons project over the past year, looking at the industry over the long range and trying to determine what the industry needs to look like in order to deliver bigger numbers of units. In the capital space, our priority is to continue to bring capital in a big way directly to communities and then also expand some of the financing tools that we are using. To that end, one of my personal objectives is to see that we are diversifying our capital sources. For example, we are just in the process of launching the Enterprise Community IMPACT note, which is an opportunity for individuals to get involved in our work by purchasing a note and earn a return on that investment vehicle.
MFE: How critical is green in the day-to-day operations and long-term strategic vision at Enterprise?
LUDWIG: We continue to be extremely focused on sustainability. We have put a stake in the ground and stepped out and said that we will green all of our affordable housing by 2020. So we are striving to green everything that we touch as well as introduce systems that ensure environmental sustainability is continued in what we do as a practice. We do that for the preservation of the units as well as to lower operating costs for both owners and residents. Some of our business units are hitting 100 percent in terms of characterizing all of their initiatives as green, and all of our business units are at least over 25 percent in terms of meeting our Enterprise Green Communities criteria. We’re making very good progress towards that goal.
MFE: Enterprise has always taken a lead role in forging new affordable housing policy. What are some of the policy initiatives that you are likely to champion as CEO?
LUDWIG: I just testified on Community Reinvestment Act (CRA) reform and also sat in on the Future of Housing conference discussing among other things the future of the GSEs. The biggest challenge facing the affordable housing sector right now is the availability of capital. The Low Income Housing Tax Credit (LIHTC) has been so fundamentally important to the production of affordable units, and we know that the market was nowhere near what it was several years ago. We are seeing some non-traditional players return to the market, but there is still a backlog and gaps in financing, so the degradation in capital availability is affecting production in a pretty dramatic way. How do you get that capital back in play? Our "A Call to Invest in Our Neighborhoods" (ACTION) campaign is a coalition of more than 200 supporters across the country that are pushing for legislative results to reinvigorate LIHTC. That is a critical campaign for us.
MFE: How will changes to the CRA induce broader investment into affordable housing?
LUDWIG: I came from running Merrill Lynch’s community development group, and I’ve seen firsthand how CRA regulations attract the private flow of capital and what a great set of incentives CRA can be for a very productive capital flow. As we look ahead for CRA (and we’re glad regulators are interested in testimony and a dialogue), we think the creation of a CRA community development test to more accurately capture the impact of banks on production outcomes is important, but also we want to look at assessment areas and how those can be revamped to avoid credit deserts. How we adapt regulations to reflect today’s banking industry and create the right set of incentives is super important to us.
MFE: Has the recession helped or hurt the affordable housing sector?
LUDWIG: I’m definitely one who always looks for the silver lining, but there’s not a lot of silver when it comes to the impact of the recession on affordable housing. The Census just reported that one in seven working-age Americans is living below the poverty line—that’s 43 million people, which is a really significant uptick. With that kind of data, you can imagine the continued growing need for affordable housing. You are seeing housing climb up [in social awareness] as the No. 1 issue for families, and awareness is important, but only if it leads to solutions. People see vacant buildings and think there is this huge supply of housing and greater affordability than ever before, but in low- to moderate-income areas, things are much more challenging than they have been, and all of the data we are looking at says that people are spending an ever increasing percentage of their income on rent.