Wednesday, June 27, 2012

Achieving Excellence in Affordable Housing

Stacey Epperson
By Stacey Epperson
President & CEO of Next Step Network
Some of you may have read my recent interview in Forbes, and I’d like to give a little background on the transformation I talk about there. Less than five years ago, I was the executive director of Frontier Housing in northeastern Kentucky, and one of manufactured housing’s worst critics. I adamantly disliked the industry, from its perceived shady dealers to its poor quality materials, and actively steered residents away from purchasing its homes. So when counselors began to tell me that those in need of affordable housing often opted for manufactured units, I refused to listen. When colleagues told me that they struggled to build more homes than the number manufactured housing dealers shipped into the county, I refused to listen. When my own staff admitted to living in manufactured homes or using them for temporary housing, I still refused to listen. It was not until Frontier’s housing production began to slip that I finally confronted the situation: the manufactured housing industry represented a worthy opponent, and Frontier would need to rethink its tactics in order to compete.

Phyllis Kelly outside her new home with Stacey Epperson
Phyllis Kelly, Isonville, Kentucky, one of the first to
join Frontier’s mobile home replacement program-and
a big influence on my transformation. Read more.
Source: Next Step Network, LLC
My transformation was guided by NeighborWorks America’s executive leadership program, Achieving Excellence in Community Development (AE). During the first week, the class examined the case of a nonprofit that could not compete with local loan sharks that offered quality choices along with less complicated rules and quicker results. I came to a staggering realization: the manufactured dealers were the loan sharks in the story. Frontier was treating clients as a unified group, not as customers with individual preferences. An exciting question soon emerged from the subsequent discussion: what if manufactured housing was the solution, not the problem?

Returning to Frontier with the AE focus on honesty and performance-driven change, I began to move away from old ways of thinking and critically assess the situation. I set an AE performance challenge for Frontier to triple the number of customers served while cutting production time in half and maintaining a loan delinquency rate below 5%. To meet this challenge, I restructured Frontier to run more efficiently and effectively, assigning staff to cross-department teams that made the best use of their strengths and encouraging them to adopt a unified commitment to measurable results.

New manufactured home built to meet Energy Star standards
Next Step® manufactured home built
to meet Energy Star standards
Source: Next Step Network, LLC
When I went public with the performance challenge, I did not receive an encouraging response; in fact, many individuals cautioned me to “not go there” and that while “modular housing was ok, I should stay out of the manufactured field.” Although I remained confident that I was on the right path, I had also learned from the AE program to pay attention to the criticism and to constantly seek out new opportunities for growth. So, we made changes and then we changed again. By listening to the voices of dissent and continuing conversations with those in the field, I learned of Warren Buffet’s purchase of Clayton Homes and realized that, in lieu of competing with the manufactured housing industry, Frontier could align with it. We eventually teamed up with Clayton Homes to become Kentucky’s first nonprofit dealer of manufactured housing.

In the end we met our goals, and even exceeded them. We tripled total housing production and our loan fund while cutting in half the time needed to get clients into a new home. Further, we have worked to improve the image of the manufactured housing industry, and encouraged other nonprofits to form similar partnerships. We've also established the Next Step® Network in 2010, a social venture that mobilizes a national network of nonprofits to provide affordable housing solutions tailored to the needs of their communities.

Gibson husband, wife and two children in their new home
Gibson Family, Morgan County, Kentucky.
With help from Frontier, they replaced
their deteriorating 1-bedroom mobile home
with a 4-bedroom, Energy Star certified
manufactured home. Read more.
Source: Frontier Housing, Inc
I credit Achieving Excellence for helping me challenge my own ideas about the manufactured housing industry and prompting me to restructure my organization. The program also opened my mind to the partnerships that have propelled Frontier and the Next Step Network to a new level of service. With the support of groups like CFED, I’ve been able to expand our efforts even further. Our program has not only been a success for us as an organization, but for families who’ve benefitted from having exceptionally good, viable, green housing at prices that would otherwise have been unaffordable.

For more information, please contact us:
Office: 502.992.9417
Twitter: @NextStepUS
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