A person's faith tends to shape their beliefs and influence their actions both personally and professionally. Such is the case for Ken Sauder, who, since growing up under the Mennonite faith, has felt he should serve his fellow man.
"My goal in life has always been to try in some pragmatic way make the world a better place to live," Sauder said. "I know that's vague ... and I know people say 'there goes a nonprofit again,'" but he's always been fascinated with nonprofits, in particular those associated with affordable housing.
Today Sauder is president of San Diego-based Wakeland Housing and Development Corp., a 501C3 nonprofit that has developed, acquired and rehabilitated more than 5,000 units of affordable housing in San Diego County and Northern California.
"Ken has taken Wakeland and really developed it to where it's one of the leading nonprofit affordable housing development companies (in the county)," said Tom Scott, executive director of the San Diego Housing Federation, of which Sauder is president of the board of directors.
While his focus is now on affordable opportunities in California, his beginnings in the nonprofit housing industry date back to the mid-1970s when he worked with the founder of Habitat for Humanity in Zaire, now the Democratic Republic of the Congo, aiding locals in building simple living structures.
Following that he worked with nonprofits in the Dominican Republic, served as Habitat for Humanity coordinator in Latin America and the Caribbean, and was first director of the Tijuana-San Diego Habitat for Humanity. Still motivated to remain in the affordable housing and nonprofit arena, he became the founding executive director of Wakeland in 1999 -- the founder was Steve Cupps, who made the loan to Sauder. "We wanted an organization that was just focused on affordable housing," he said, adding very few nonprofits have this as their sole focus.
Initially starting out slow, the company teamed with for-profits partners when doing its first affordable projects -- both of which were in San Diego -- Stratton (312 units) and Canyon Rim (504 units). Since then the company has teamed with Fairfield Residential LLC and Related Cos. of California, while at the same time developing its own projects in San Diego County.
"We're very careful about who we choose as business partners," he said, adding the company has said 'no' to many for-profit developers' offers.
While the company is similar to any for-profit developer when looking for land to build on, it differs from market-rate builders in that it must line up multiple sources of funding far in advance of the project reaching completion.
Funding sources include tax credits from the California tax credit allocation committee, tax exempt bonds from the California debt limit allocation committee, private bank loans, local jurisdictional money, money set aside by redevelopment agencies and Proposition 46 funds, which are running out.
"It takes a year or longer to put the funding together," he said. "The key to making that happen (getting enough funding) is finding the right project or deal," that meets the criteria of the funding source.
One common criterion is the funding source requiring that rents for the units remain stable for 55 years or longer despite surrounding housing appreciations. Typically the rent per month for units at Wakeland's developments range from $400 or $500 to $900, with 90 percent of the units falling within the range of 30 to 60 percent of the average median income. Most of the company's units are multifamily attached rental apartments or condominiums.
Once tax credits or tax-exempt bonds are received, the company sells them to equity investors, who then pool funds from corporations who want tax credits. The equity investor then gives Wakeland part of the money for the project and the corporations receive 10 years of tax credits (write-offs) to their bottom line.
"It requires a tremendous amount of staff time and coordination to put all that together in terms of making it happen," Sauder said, adding that having a board of directors that is comprised of industry experts as well as bankers on staff is key to solidifying funding sources and meeting regulatory agreements.
While the company has received approval from varying funding sources, that's not to say those approved projects don't receive community scrutiny. Typically the company receives concern from homeowners who believe the presence of affordable housing nearby will affect the value of their home negatively.
"There's been study after study that has shown that is simply not true," Sauder argues, adding that the company maintains all their properties as well as any market rate to help ensure surrounding housing's appreciation will not be affected by the presence of affordable units.
Possible upcoming affordable projects for the company may include a 72-to-74-unit project downtown, which they are currently discussing with Centre City Development Corp., and a 40-unit project in Chula Vista.
As for Sauder's immediate future, it appears to be with Wakeland, as his motivation to develop affordable housing remains as strong when living in Zaire.
"That's (developing affordable housing) his life's work, it's something he really believes in," Scott said.