Tom Tomaszewski is president of The Annex Group, an Indianapolis-based firm that primarily develops affordable and workforce housing. He also serves as chair of the National Association of Home Builder’s Multifamily Council, which represents the interests of builders, developers, owners and managers of all types of multifamily housing. Tomaszewski shares with MFE how he is advocating for the industry and what’s ahead for The Annex Group.
What are the main issues NAHB is tackling this year around multifamily?
In my opinion, NAHB excels at advocating for our industry and housing in general, providing accurate and well-prepared economic reports specifically related to housing, assisting with new code preparation, and educating professionals in our industry. Some of the top issues related to multifamily housing specifically that we are focusing on include advocating for the Affordable Housing Credit Improvement Act, addressing rapidly increasing insurance costs, and fighting regulatory barriers at all levels of government, including rent control.
What are your priorities as chair of NAHB’s Multifamily Council?
My main priority is the sharing of ideas and solutions to the problems we face among our peers and, in many cases, friendly competitors. It is imperative that we discuss our industry and how we can improve it. NAHB has been extremely beneficial for us in creating partnerships and implementing strategies we learn from our peers. Additionally, the access we have to our legislators and industry professionals demonstrates the power of the NAHB. I aim to build on these strengths during my tenure.
What is the biggest headwind you’re facing as a developer today?
The cost of capital in the current high-risk environment has made things difficult for everyone in our industry. We are deeply entrenched in various niches within multifamily housing, particularly affordable housing and projects created through the use of the low-income housing tax credit and public bond activity. Given that we have underbuilt housing for over a decade, the supply of affordable housing has never been more constrained.
We have found support from various state and local resources that we incorporate into our deals. In many cases, our capital stack involves over five or six different sources. We are also active in the P3 student housing market, which uses a similar financing mechanism involving public bond activity. By staying in these niches and leveraging several financial partners with whom we have built long-standing relationships, we have consistently closed deals where others have been unable to.
Additionally, since we are vertically integrated—we build, manage, and own our properties—we can create efficiencies and utilize strategies that other developers cannot.
What is in The Annex Group’s pipeline this year?
We have already started two large affordable housing projects this year in Des Moines, Iowa, and Wichita, Kansas. We are on schedule to close an additional five or six large new construction affordable housing projects across the country, along with one new construction P3 student housing project in Memphis, Tennessee. All these projects will be constructed by our internal general contractor. We expect to complete almost $200 million worth of construction in 2024, and we are on schedule for our largest pipeline in 2025 thanks to our strong development teams.
Tell me about a development that you recently completed.
The Annex of Bozeman, a workforce housing community in Bozeman, Montana, was recently completed. This project just won the Energy Excellence Award from the Green Building Initiative’s Green Globes Project of the Year awards program. I'm really proud of how we've prioritized sustainability and green design in our plans, and this community exemplifies that commitment.
How have you changed the messaging around your housing communities?
Our messaging has remained fairly consistent over time and largely mirrors the industry. However, one notable change is the introduction of the term “impact housing.” This isn’t an industry term, but we’ve created it as a category for all our housing types to ensure we never lose focus on our company’s mission: making a positive impact on the people who live in and work on our communities. If we don’t have data showing that a community is truly needed and will positively impact the surrounding area, we won’t build.
We also prioritize working in communities that welcome us. In many cases, this makes the difference in getting a project completed. When we are welcomed and bring everyone to the table, we usually find a way to get a project done.
The Annex Group has delved into property management. What are you doing to create positive resident experiences?
We strive to make our communities as inclusive and welcoming as possible. Creating a sense of community among residents is important to us because it enhances their overall living experience. We want people to feel at home in their units and among their neighbors. To foster this, we organize social events and gatherings to help bolster that sense of community.
I’m particularly proud of the effort that goes into our Community Impact Plans for affordable housing communities. These plans provide residents with more than just housing; they offer various forms of support and resources. It is extremely important to us that we act as a catalyst for positive change within our communities and their surroundings.
We aim to create a positive impact on the people who live, work, and are involved in our communities. By managing our own properties, we believe we have the best ability to achieve this. I am very proud of our on-site teams and what they are creating.
Favorite outdoor amenity to add to your communities?
Any amenity designed to create community is my favorite. This may be a playground, a dog park, walking trails, or an outdoor grilling area. I'm most excited about the amenities people can utilize together. I also value dog parks and the ability for our residents to have pets. I have two boxers at home who are very important family members, so I understand the importance of pet-friendly amenities.