Patrick Doran is the director of finance at Humanities Foundation, a nonprofit developer established in 1992 to help tackle the shortage of affordable and workforce housing in Charleston, South Carolina. It’s a considerable challenge: some 42% of the city’s households devote more than 30% of their income to housing expenses, according to a 2022 report from the City of Charleston. And in majority Black neighborhoods, such “cost-burdened” households represent an even greater share of the population.
In the years since its founding, Humanities Foundation has extended its reach across South Carolina and beyond, while providing a growing range of supportive services to complement its affordable housing offerings. A sixth-generation native of Charleston, Doran sat down recently with Lument to discuss the work—and impact—of Humanities Foundation.
Lument: Please tell us a little bit about the history and mission of Humanities Foundation.
Doran: Our mission is to develop the highest quality affordable and workforce housing possible, to serve the communities in which we work through affordability, education, and assistance, and to advocate for healthy neighborhoods everywhere.
Humanities Foundation was started by Bob and Tracy Doran in 1992. Before that, they had been working for the James Doran Company, a family-run, real estate investment and development firm that developed shopping centers, single-family homes, and the like. During that pre-1992 period, Bob and Tracy also donated their development services to help build the first single-room occupancy apartments in Charleston. That experience made them realize that the city urgently needed a nonprofit with strong development expertise. Soon after, Humanities Foundation was born.
Humanities Foundation celebrated its 30th anniversary last year. Can you share some achievements that you’re especially proud of?
Over the years, we’ve built more than 2,500 apartments for low- to moderate-income individuals and families. I’m very proud of that. And we specialize in environmentally sustainable housing that fits into the fabric of local neighborhoods, which is also very important.
Today, Humanities Foundation operates not only in South Carolina, but also in Virginia, Georgia, and Louisiana. Our current portfolio includes 26 apartment communities, at a total development cost of more than $350 million. In the process, we’ve utilized $160 million in low-income housing tax credits.
For example, Archer School Apartments, our latest project in Charleston’s Eastside neighborhood, is expected to lease up in the spring of 2024. The development is a rehabilitation and expansion of a historic school that served African-American students during segregation. After it was decommissioned, it sat empty for years. When it opens, Archer School Apartments will offer 89 studio, one-bedroom, and two-bedroom apartments for seniors with incomes below 80% of the area median income.
In addition to affordable housing, Humanities Foundation also focuses on workforce housing. How does the Magnolia 61 property in Charleston advance your mission in this area?
Workforce housing is really the forgotten middle in many American cities. Our research and experience on the ground confirmed that there wasn’t much workforce housing on the market in Charleston. Magnolia 61 is one of the oldest properties in our portfolio and it needed major renovation. The rents there were set at 50% area median income; we went to the state agency and requested rental increases but didn’t get anywhere with that. We then decided to go through a qualified contract. This allowed us to renovate the property, while also maintaining very low vacancy, staying within our mission of maintaining affordability and providing renovated units with new amenities.
Can you describe your experience working with Lument to obtain financing for Magnolia 61?
Working with the right lender is extremely important. They are the ones telling the story of the property to the agencies; everyone on the lending team must know your deal from head to toe, too. Before partnering with Lument, we had been trying to close a 221 (d)(4) HUD loan. This was a two-year process that presented considerable costs and other challenges. Eventually, we decided to move on and find a new lender. When we began working with Tom Dixon at Lument, things moved fast and smoothly. We hit all our deadlines and got the $5 million-plus loan that we needed, which closed in 90 days. Tom and his team did a great job from start to finish: It was really a breath of fresh air after what we had been through.
Humanities Foundation takes a holistic approach to helping the communities it serves. What other services do you provide?
One such program is ShelterNet, which provides emergency housing assistance. Since 1995, we’ve helped more than 50,000 people avoid eviction or loss of essential utility services. ShelterNet does this by paying one-time costs, such as rental/utility deposits, overdue rent, and mortgage payments. During COVID-19, ShelterNet accessed more than $2 million in funding through the CARES Act to assist people who lost their jobs due to the pandemic. It continues to link available resources to both our residents and the wider community.
In 2014, we also created Marketplace, a free food-delivery program, to help address food insecurity. Marketplace has distributed over five million pounds of perishable and nonperishable food to communities in South Carolina, Georgia, and Virginia. In addition, we partner with other organizations to offer a range of services to our residents, including health screenings, flu shots, health education, telemedicine, transportation, after-school and summer programs, and community gardens.
At the end of the day, everything we’re doing has the goal of helping our tenants and their neighbors live healthier, happier lives. As such, we view our communities as stepping stones for people trying to get on their feet. And we pride ourselves in helping residents meet their goals in any way we can.
What is the current landscape for affordable housing in the states where you operate and how do you see it evolving over the next five years?
With interest rates where they are these days, many deals don’t pencil out like they used to. As rates come back down, we’ll continue to look into purchasing existing deals. As I mentioned, we’re currently in Georgia, Louisiana, Virginia, and South Carolina, and the nuances of the affordable housing landscape vary considerably from state to state. Developing affordable housing in South Carolina, for instance, has become more challenging over the past few years due to changes to the state’s tax credit law, as well as a competitive bond cap application process.
Fortunately, we have a strong relationship with the city of Charleston; with their funding assistance, we were able to close our biggest transaction to date, which was the $42 million renovation to create the Archer School Apartments that I referenced earlier. Still, changes made to the application process and oversight in South Carolina will likely make it harder in the future to secure private funding for affordable housing. Moving forward, we hope there’s going to be more funding available from the city and state to help pick up the slack.
What is Humanities Foundation’s vision for the next 30 years?
Our vision is to continue to grow the foundation’s reach and impact. We’re excited to have the chance to develop many more affordable housing projects in the states that we’re currently in, as well as to expand into new states in the coming decades. We also want to continue to expand our existing resident services programs. Across our portfolio, we’ve built deep relationships with the communities that we develop in—continuing to nurture these relationships is essential to our mission.