After graduating from Kansas State University in 1975, R. Lee Harris joined Cohen-Esrey Real Estate Services, and he’s been there ever since.
Now as president and CEO of the Overland Park, Kan.–based firm, Harris leads a family of companies involved in affordable housing development, tax credit syndication, apartment management, and construction. The firm’s affordable housing division has developed or acquired over 50 affordable housing properties with over 4,000 units.
Harris also is an author and a frequent speaker at industry conferences. You can catch him next at AHF Live, Nov. 18-20 in Chicago, where he’ll be participating on the State of the Industry Power Panel as well as moderating sessions on debt financing trends and operating and growing a successful development company.
How did you get started in the affordable housing business?
I became involved in opening and managing several Department of Housing and Urban Development Sec. 221(d)4 and Sec. 236 apartment properties with Sec. 8 rent subsidies in the 1970s. I also was involved in the management of a couple of early Sec. 42 properties as well. Then we launched our affordable housing development unit in 2004.
What is one of the more unusual or interesting deals you are currently working on?
Along with a partner, we’re converting a large historic mill in North Carolina into affordable housing, and we’re launching the renovation of an historic junior high school in western Kansas. We’ve also converted historic hospitals, warehouses, mercantile buildings, hotels, dormitories, and a grocery store.
What’s a recent move you’ve made that other developers can learn from?
In this environment of severe cost-containment, we are deep into working with a modular apartment manufacturer to find a prototype that will reduce overall hard and soft costs. This housing is constructed in much more durable fashion than in the past and is extremely energy efficient. Gone are the days of the mobile home look. We haven’t launched a project yet utilizing modular construction but expect to do so with the next wave of development.
If you could add any amenity at a development, what would it be?
We’ve been adding community gardens to several of our properties and making it a part of all new and renovated developments. We’re modeling after a property we own in Amarillo, Texas, where we created a community garden that is cultivated by the residents. They eventually harvest the crops they grow and contribute the excess to the local food bank.
Why affordable housing matters:
There are many reasons why affordable housing matters. One such reason involves economic development. There are communities across this country where their economic engines are in overdrive. And yet, it’s extremely difficult to deliver new apartments at rental rates that people can afford—especially in smaller towns. The low-income housing tax credit program helps provide the housing that is needed by a large segment of the workforce that helps communities keep growing.
What was your first job?
I worked as a custodian one summer at my church when I was in the seventh grade and was paid $.6667 per hour. I guess the minister must have heard from a higher power that he didn’t need to pay the minimum wage of $1.25 per hour.
If you weren’t a developer, what would you be?
Venture capitalist—in fact, we have a venture capital unit that invests in early-stage animal health, human health, and agribusiness companies.
When you have an afternoon or a day off, where would we find you?
I participate in a formal mentoring program and work with several business owners who are growing their businesses. I meet with them regularly and help them develop and implement their strategies.
What’s your favorite sports team to cheer for?
My alma mater—the Kansas State Wildcats.
What’s ahead for you and Cohen-Esrey in 2016?
Our affordable housing unit is moving forward with a
combination of new construction, acquisition/rehab, and historic renovation
projects utilizing 9% and 4% credits. We’ve added several new development
directors during 2015 and will be working on projects in 10 states during 2016.
We also have a market-rate acquisition unit that has been acquiring Class B
apartments in communities across 30 states. We’re targeting the purchase of
4,000 units next year.