Joshua Haston on Affordable Housing Development
Joshua Haston shares how LDG Development is expanding opportunity through affordable, workforce-focused housing—and why equitable neighborhoods are essential to Tennessee’s future.
About Joshua Haston
Joshua Haston is the Development Manager for LDG’s Tennessee office, guiding projects that create stable, opportunity-rich housing across the state. A Sparta native and former high school science teacher, Joshua’s passion for housing began in the classroom—where he saw how a student’s ZIP code shaped their ability to succeed. That experience led him to pursue Urban Planning and a career focused on building strong, equitable communities. Since joining LDG in 2018, he has led development efforts across Tennessee and serves on Nashville’s Industrial Development Board. His philosophy: we “love our neighbors through housing.”
About LDG Development
LDG Development is one of the nation’s largest affordable housing developers, with more than 28,000 apartment units across multiple states. Founded to meet the needs of working- and middle-income families, LDG uses the Low-Income Housing Tax Credit (LIHTC) program to create high-quality, attainable rental communities. In Tennessee, LDG manages over 1,200 apartments—most in Nashville—and typically builds 200-unit developments that cap rent at roughly 30% of a family’s income.
In partnership with the Urban League of Middle Tennessee, LDG offers workforce training, financial literacy, and community support programs that help residents build long-term stability.
-
Spencer: Josh Haston, Development Manager for LDG Development. Welcome to Signature Required.
Joshua: Thanks for the invite. Glad to be here.
Spencer: Josh, what is LDG development?
Joshua: So it's the initials of two of the principals, Lechner and Inger, and then G is group.
Joshua: Um, so it's, uh, it's a company headquartered in Louisville, Kentucky that, [00:01:00] um, started in 1994 and, uh, just fixing and flipping single family rentals in West Louisville. And in the early two thousands, um, the owners of the company jumped in to develop apartments. Um, and we've scaled that business, uh, from.
Joshua: The early days to more than 28,000 apartments, um, across the country. Uh, we have an office in Louisville where we're headquartered, obviously. Uh, I run our office in Tennessee, here in Nashville. Uh, we also have an office in Atlanta, Austin, and Dallas. Um, so across that portfolio, we're in more than nine or 10 states at this point.
Joshua: Um, and we develop apartments that, they're the spectrum. There are market rate apartments, there are mixed income apartments, but our bread and butter, uh, is, is, has been developing affordable housing, um, specifically using what is called the low income Housing Tax Credit program. That is a program invented in [00:02:00] 1986 under, uh, Ronald Reagan, uh, when he redid the, the, the tax tax code in 86.
Joshua: Um, and that is the largest producer of affordable housing nationwide in the country. And like I said, that is our bread and butter is using those programs to help build the housing that all of our communities need.
Spencer: Josh, when we talk to various people across the state of Tennessee and ask what they'd like to learn about mm-hmm.
Spencer: Or where their pain points are. Very consistently, the number one thing that we hear about is affordable housing. Mm-hmm. And we've experienced it at any price point. Yeah. No matter where you own or lease, you have seen huge increases. And if you already own a bunch of stuff, you kind of half celebrate that, but half know that you're gonna be paying it going forward.
Spencer: Yeah. And so there's a lot of ways to try to tackle this issue. You can [00:03:00] try to build more, you can try to change zoning, you can do a lot of different approaches, but it seems as though what you all are doing through apartments and targeting the, uh, kind of, I don't know the right way to say it, but on the bell curve, the most affordable side of the bell curve.
Spencer: Mm-hmm. Um. You're putting a lot of volume onto the market to say, we're going to get more spaces for people to be able to live. Is that a fair characterization?
Joshua: Yeah, I, I think that's fair. And, and, and what I would say is, is housing is just one of those markets that is broken. Uh, childcare is another, I mean, there's, there's so many things that we think of.
Joshua: Uh, if you, if you remember Adam Smith and economics, um, 1 0 1, it's like the market will solve these things. Well, that's not always the case, and housing is a prime example of that. So because of [00:04:00] these other issues with our society, we cannot produce housing, um, at a level. That most fe people can afford without having some sort of subsidy in it.
Joshua:
Spencer: will you put a pin in that? 'cause I, I wanna ask why. Mm-hmm.
Yeah. Because
Spencer: I'm such a free market capitalist in general. Yeah. Is that I really believe. In the dynamics of supply and demand. And sometimes it takes a while Yeah. For those two things to get balanced. But I do think you have a really valid point in that when you look historically at the cost of housing mm-hmm.
Spencer: It has increased meaningfully more than just inflation.
Yep.
Spencer: Uh, which shows that this is a structural problem with supply and demand. So I'd, I'd love to hear you sound like a smart guy. You talk like a smart guy. So why Josh? Why is it that subsidies are required? Yeah. Because in general I'm a guy that hates subsidies.
Spencer: Well, well,
Joshua: I mean, you did hint to it. It, it is [00:05:00] largely a supply and demand issue. Uh, that is a huge factor of it. Um, if, if we're not building enough price goes up, it's economy one or economics 1 0 1. Um, and we've seen over the past decade, Nashville has become, quote, the IT city, uh, and. And our housing prices have gone through the roof.
Joshua: Uh, what I would also say is a lot of that, uh, cost is not just, um, materials. It's not just, um, your interest rates. It's, it's also the regulations tied to it.
Joshua: Now, a lot of that is needed. Uh, if you think back to like, um, the triangle shirt factory and then you, if you remember your high school science or high school history classes, like so that a lot of that is building in fire codes and making sure that you're building a safe product. But then a lot of that is just, uh, some would argue maybe, uh, less so.
Joshua: And so there's been like some, some, uh, structural changes [00:06:00] on the regulatory side that hopefully will continue to filter through. Uh, most recently here in Nashville, they enacted some legislation that allowed for what is called Single stare. Uh, and so the hope is that you can produce, um. Um, more housing, um, in, in a, in a, in a development without having to ride two staircases.
Joshua: So, uh, things, things like that. So there, there are some, there are some code things. Um, and then a lot of it is just the cost of land, uh, the cost of infrastructure. So if, if, again, if you are producing, something that's in limited supply, it's gonna go up. We are not producing more land. We have a higher, value set to that land.
Joshua: And, and the way that these programs work, that specifically that we use, um, it is land is not considered an eligible basis. Um, so in our affordable housing, [00:07:00] Space. There are good costs and bad costs, meaning they are able to generate tax credits. Mm-hmm. So your two by fours, that's a good cost. You can, that is eligible for producing tax credits.
Joshua: Land cannot. And so if you look at this, this supply demand side of it, if we see land costs go up dramatically mm-hmm. And it's a bad cost. Meaning, meaning we can't generate tax credits from it. We have to find another way to fill that gap produced by the spike and increase of, of land costs. So some of that is rising rents, uh, which has also happened dramatically.
Joshua: And some of that may be other subsidies that the city or the state provides, which those have happened. Um, but again, you have to find ways to fill that gap. I think a lot of people have a mindset, and it's understandable that real [00:08:00] estate developers are these greedy, terrible people, and, and that is 100% not true.
Joshua: There are, are, I'm sure some bad apples out there, but by and large. Folks in the real estate development space are trying to make their community better and they are producing things and investing in the community and have a tremendous amount of risk signed to, signed to it. Because you're signing the, the loan on this large apartment complex.
Joshua: You're signing the loan on all this investor equity, you're signing, taking on a ton of risk. So a project might be 70, $80 million total development cost. You're on the hook for that. And so, um, you have to find a way to make that pencil and in the sense, just like a single family homeowner, they wanna have the big, the best house possible.
Joshua: The bank's gonna tell you, well, you don't make enough money to afford the mortgage for that house. The same thing is true for us if we, if we want to [00:09:00] build the best high quality apartment housing, but. Our tenants can only, our residents can only pay x number of dollars per unit, per month. Um, some add all that together that produces how much money we can pay for a mortgage.
Joshua: Mm-hmm. So if we're having to, um, fill, we have to fill that gap somehow.
Carli: I guess I'm just curious how you even go about that, because you guys are in 10 different states.
Carli: Mm-hmm. I would imagine we're focusing on Tennessee today, but Tennessee's very unique in what our housing market is doing and all of that. Mm-hmm. So how are you guys growing so rapidly in an environment that seems really complicated without a lot of upside? Like where, where are you finding that incentive?
Carli: 'cause I could say on one side. Okay. Clearly you care about this issue. Mm-hmm. And I know we're gonna get into your background and understand your why a little bit more. Yeah. So clearly you have a heart. To house families.
Yeah,
Carli: right. I can see that all over you. And I [00:10:00] would like to think that that goes up to the top right?
Carli: Absolutely. Of the company and that all of you have a heart for this, but then, you know, the economics capitalist side of me says, but what is making it profitable enough for you guys to keep going and grow from state to state to state?
Joshua: Great. Great question. Um, I would say a lot of people get into the affordable housing space.
Joshua: It's, you're talking about what's, what's our incentives, um, in the market rate space, meaning you're, you're not in income restricting your individual units. Um, a lot of the times the banks that finance those transactions, uh, will not allow you to have, um, x number of percentage of developer fee. So that might be four or 5% for a, an apartment complex.
Joshua: and. because of all the hurdles that we've talked about, all the strings attached to the government, uh, financing, um, they need to have a bigger incentive. Mm-hmm. And that incentive, uh, for [00:11:00] affordable housing, uh, specifically using the Litech program is about 15%. So it's a larger developer fee that does incentivize us.
Joshua: However, and this is a big, however, because of all those rapid cost increases that, um, we've seen in the past decade, um, that developer fee that we are, uh, entitled to receive through the programs. Actually gets lent back into the deal as a source of funds.
Spencer: So just for math, like if a project is $80 million, like you talked about before, the developer fee is gonna be $12 million on that 80, that would be a maximum that you all would be able to take?
Joshua: Uh, so not exactly, because there again, there's some costs that are considered eligible and ineligible. Okay. So a little bit less than that, but yes. So we would, we would, uh, an investor in those tax credits would say, Hey, LDG, you need to make X number of dollars of that developer fee. But because we. You, you can't make that mortgage payment.
Joshua: You need to defer a chunk of [00:12:00] that into the deal as a loan. Mm-hmm. To the deal itself. And so that payback period, uh, is tend, tends to be over 15 years. And so there's, you're making money. Mm-hmm. But you're making it over a longer period of time. Um, and then, uh, so that, that is the incentive structure is, is that fee.
Joshua: Uh, but it, it is over a longer time horizon. Whereas again, your market rate space tends to be in that four to five year period.
Carli: Lemme ask you this, so. The mayor calls you and says, we have a housing problem in this city. We'll say Nashville for today. You're like, you're right. Mm-hmm. There are so many people that don't have homes, so many kids that need a roof over their head that is stable, and they know that they can stay and afford it month over month.
Carli: Walk me through how you go about fixing this. Is this a five year project? Is this a 15 year project? If you're trying to build on average, I think I read it's 200 apartments in a mm-hmm. Space, right? Mm-hmm. Yeah. Does it start at the government level trying to find [00:13:00] the land on a bus route? What in layman's terms is kind of your phase one, phase two, phase three of these projects?
Joshua: That's a great question. I, I would say it's, it's, it's all of those things. It's not, and every project is, is a, essentially like a marriage. You're, you're, you're married to that, that site or that development until, until the end of time if you'll, yes. Um, and, uh, that. Development. Um, everyone is different. So, uh, a lot of times we will work with brokers to find a particular site.
Joshua: Uh, we will then meet tremendously, a lot of times with council members, um, to understand the support behind that development, educating the council members, educating the public. Uh, again, there's a lot of miseducation or, uh, miscommunication about what affordable housing is. So it's a lot of times correcting those stigmas that many times people think and like, realize.
Joshua: Oh. Yeah, that, that was [00:14:00] actually me when I was 10 years ago. Mm-hmm. Um, and so it's, it's correcting that misinformation. Um, and then while you're doing all that, you're also, uh, piecing together the entitlements, the zoning, um, and as well as the, we call it the capital stack, so the sources of funds that are used to make the development feasible.
Joshua: Uh, and then once that happens, hopefully that's within a year to two years, uh, that construction project kicks off once we close on a construction loan. So, so you
Carli: said it's about two to three years of,
Joshua: of
Carli: chatting, getting your ducks in a row. Nobody's seeing what's happening, but you're in talks.
Joshua: Oh, yeah.
Carli: And then maybe you start to build something.
Joshua: Correct. And then that construction process is, tends to be about two years, depending on how big it is, how, how much site work you need to do on the development. 'cause there's a lot of hills in Nashville, as you guys know. Um, and then to then you, you lease it up.
Joshua: So
Spencer: is it mostly raw land that you all are getting or do you occasionally 'cause [00:15:00] like if you're looking at other already existing apartment buildings and tearing down, then it's actually no real net positive in terms of additional capacity for the most part. But it is perhaps updating what, what do you generally see as the canvas?
Spencer: Yeah,
Joshua: it's again. All that depends. Yeah. On the particular site, uh, most of the developments that LDG has historically built have been greenfield. Uh, meaning? Meaning raw land. Raw land or a couple single family houses. Okay. That we've upended. Um, occasionally there, there will be like other commercial buildings on the site.
Joshua: Um, but again, going back to that land cost issue, it's very hard. Uh, and commercial land has increased dramatically. So how do we, how do we find a way to cover that, that land cost and there are programs that, uh, the city is working on, um, to help cover that cost.
Carli: Can you help me understand who you're building for?
Yeah.
Carli: Because are you building government housing? [00:16:00] Are you building for single families? Multifamily dwellings, multi generational dwellings? Like who is your target? Person that you're trying to help with these apartments?
Joshua: Yeah, so every development is different.
Joshua: Um, also every development is financed a different way. And so that financing often dictates what specific market demographic we are serving. But by and large, we are serving families. Um, so the bulk of our apartments tend to be two and three bedroom apartments. Um, if you go to the market rate space in that two bedroom apartment, might be 2200 bucks, but we're renting it for 14 or 1500 bucks.
Joshua: Um, and so you see that huge gap in, in what, what the market is providing versus what we're legally allowed to charge. I, I would also say there's a disconnect between when people say, oh, it's affordable housing, they, their mind goes back to what, what were the, the [00:17:00] projects from the 1950s and sixties? And that is absolutely not what we are building.
Joshua: Um, our. Our motto as a company is everyone deserves a quality place to live. And that definition of quality, uh, it, it trickles through everything that we do from how it looks, from the facade to how the programs that we're running inside the development interact with it. And, and that the ideas that you're de-stigmatizing everything that people think about when it's affordable housing.
Joshua: So the vast majority of our residents are responsible for a hundred percent of their rent. Meaning yes, it's discounted, but a lot of times the federal government is not paying a subsidy on top of that. Sometimes they do, uh, but those subsidies are few and far between and, and making those developments feasible.
Joshua: So, uh, just to provide some context, um, the, because of the dramatic increase in, in, um, incomes as well as, [00:18:00] uh, folks living in, uh, Nashville, we are. Required to lease to folks making 80% of area median income and below, um, the vast majority of those are rented to individuals and families making 60% income and below.
Spencer: So if median income for the area is. Just for round numbers, $60,000 and you have to lease to 80% of that, it'd be $48,000 would be their income, would be the threshold.
Joshua: So I do, I do wanna provide some more context to that because, um, if you think about Nashville as a whole, it's workforce. Um, we are not just looking at Nashville and Davidson County.
Joshua: We're looking at, they call it the Metropolitan Statistical area, sort of like the 10 county region. So we're talking about Wilson County, we're talking about Sumner County, Dixon County, Rutherford, Williamson. Um, and [00:19:00] so for a four. Person, household. The median income for this MSA is actually $114,000. Okay. So to provide, I'm gonna read off some stats here and I can provide this to you guys.
Spencer: And that's the household of everyone working under that roof, all combined together? Yes. That's their income.
Joshua: A household of of four is 114,000. So that could be, that's 100% median income. Um, so if we were to take that same threshold, so a four person household at 80% a MI, that is $91,840 a year. Mm-hmm. So that's two parents, two kids, that's mom and three kids, that's mom, dad, grandma, and a kid.
Joshua: Any, any way you get to that four person household, that means they're able to make $91,840 gross income per year. And if you look at Nashville's workforce. [00:20:00] They're not just living in Davidson County, they're living in the 10 county region. Sure. 72% of individuals make wages that would allow them to qualify for affordable housing.
Spencer: So if you're making 91 or less, you're gonna qualify
Joshua: depending on your household.
Spencer: Mm-hmm. Yeah. As long as it's a four person household. Correct. In that example there.
Joshua: Correct. Okay. So it's a, it's a huge population, but again, just to provide some more context, like that's majority of our teachers. Mm-hmm.
Joshua: Majority of our, our civil servants, 48% of Davidson County civil servants do not live in Davidson County. They can't afford it. Mm-hmm. How do we find teachers? How do we find policemen? How do we find firemen? How do we do all that if they can't afford a house? Uh, and so. Like to, again, I really wanna drill down [00:21:00] on this.
Joshua: Um, like I said, the, the vast majority of folks are at that 60% AMI and below. So if we're a 60% a MI, that four person is $68,880. If, if we, let's, let's say we decrease that and we do just a one person household, that's 48,000 like you said. Mm-hmm. Two person household, 55, 3 person household, 62. That is a tremendous amount of people in our community that live here that we know and love that we go to church with, that we went to school with, that we graduated with that, that are already here, but are struggling because we're not producing enough housing going back to your market.
Joshua: Mm-hmm. But also we're not communicating well enough. Um. To the folks that, that, that really need and are contributing to our society. So [00:22:00] we, we complain a lot as a community about the cost of goods rising up. Well, if you're a small business owner, how are you supposed to allow people to, to come here?
Joshua: Mm-hmm. You're, as a small business owner, you're having a tremendous hard time finding employees without what, without raising their wages. Mm-hmm. So if you don't raise their wages, they're not gonna come work for you. And we think about all the things that we, like. I, I go to a lot of community meetings and time and time again, I hear, I want more restaurants, I want more retail, I want more, more, more.
Joshua: And the question that I have to ask people is, who do you think works there? Who, why do you think your latte is six bucks versus 15 bucks?
Why,
Joshua: why, why do musicians love to come to Nashville? [00:23:00] All those folks don't make the wages that, that they, you think that they make. So the vast majority of our service industry, which is a huge chunk of Nashville's economy, they're making that 30 and 40% of area median income.
Mm-hmm.
Joshua: It is extremely, extremely difficult to provide housing in a, in a way that would support that demographic. And, and, and again, I wanna provide some context here. So, 30% a MI one person household is $24,120. Two person household, $27,570. A three person household, 31 thou, that is most of our service industry that we cannot provide housing for, that we don't have subsidies for to backfill that.
Joshua: So that is the largest need in our city is providing at [00:24:00] that 30% a MI, that it is economically infeasible to provide for, without much more subsidy than what you currently budget for in our state and local budgets as well as our federal budgets.
Spencer: So I just wanna round out the subsidy aspect of this too, because.
Spencer: A lot of times when you see subsidies introduced. Mm-hmm. Exactly the opposite of what you hope for happens, where you know, if you say, Hey, you know you're gonna get a $2,000 check to use towards a vehicle, all of a sudden vehicle prices magically go up by $2,000. Yeah. And it doesn't at all. Yeah. Increase the affordability.
Spencer: It sounds like, if I'm understanding this correctly, that the subsidies that are received here is, it's not that you all are receiving a check from the government to make up the difference of, okay, market rent is 2200, you're charging 1400, so here's a check for $800 in [00:25:00] cash. It sounds like the subsidies that you all are getting are on the tax side, which is giving you all a meaningfully lower tax burden on the income that you make, which effectively offers.
Spencer: A higher take home income, uh, is that thought of correctly?
Joshua: So not exactly. Okay. I'm, I'm gonna, there's a couple different ways that you're, uh, I'm gonna correct there. Okay. Um, so doesn't matter what that person's income is, we're never gonna rent that $2,200 or, or, or whatever. We are always relegated to charge what HUD say, says we can charge.
Joshua: Okay. Um, so even if there is a subsidy involved, it's only going up to that, whatever 30% of that household's income is at that specific unit set aside. So, to provide an example, if there was a subsidy, let's, [00:26:00] let's just say, um, let's just say we are setting aside a unit, um, that we wanted to rent to, uh. It was income restricted at 60% a MI, but a household has a voucher.
Joshua: They are paying whatever they can pay under that voucher, and the government steps in and pays that. The, the delta between whatever that 60% a MI rent is and whatever they have. So if that 60% a MI rent for a one bedroom apartment is $1,200, but they can only afford to pay, um, $600, that $600 gap is filled by that housing voucher.
Joshua: It is never going to go above that $1,200.
Spencer: Okay. Okay. So does that come from the federal government?
Joshua: It depends. Okay. Um, most of those subsidies are federal, [00:27:00] um, and most of those, uh, subsidies are, uh, or s. Some, some cities, not Nashville, uh, have a lot of other federal, or have a lot of other subsidy programs that are paid for via taxes, uh, that, that folks will write off.
Joshua: Um, so we're, we're getting really, really, really into the weeds here. I hear. Yeah. Um, but I don't want people to think that, like, again, this is not developers just pocketing subsidy. Yeah. This is all filtering through to pay a mortgage. Yeah. So it, it's again, not greedy developers here. I, and that's why I
Spencer: think it's important to get into the weeds is like I mm-hmm.
Spencer: I think I always have such a heart of a teacher. Mm-hmm. And I wanna make sure that when people look at this. They come at it with the Right, yeah. Heart posture.
Joshua: Totally.
Spencer: And that's why I appreciate the links that you're going through to [00:28:00] explain it and then help guide me where I'm wrong on some different things and say, here's actually how this functions.
Spencer: Mm-hmm. Um, and that's really helpful. Yeah. To just hear the parameters that you're under are, in some cases, federal guidelines, in some cases, state guidelines, but there's a pretty finite understanding of what money you can make. Yeah,
Joshua: exactly.
Spencer: And I think that that's also a helpful piece is that. The parameters that you can profit are set.
Spencer: Yeah. Um, and it's not as if you found a way to be able to squeeze some more blood out of a turnip that you all could, you know, increase your margins by 50%. Correct. Because then you're outta compliance with the program and the whole thing blows up on you
Joshua: e Exactly. And, and what I would also say is we're, [00:29:00] we're balancing what we know that the community wants.
Joshua: So, um, any developer could, as long as they're meeting the code requirements, could they call it value engineer? Meaning save money on x, y, Z construction costs, uh, to skimp down and maintain compliance, but potentially put that money in their pocket and then that is not what majority of folks in the litech space or the affordable housing space do.
Joshua: Largely because the, the pipeline, uh, the ownership, the compliance regulations that you talked about require us to stay in the deal longer. So if you go to a market rate developer, oftentimes they're building to a lesser quality behind the walls. Then what an affordable developer is doing, because they're hold period that their investors have, is much shorter.
Joshua: So for, for example, going back to, um, any market rate department, [00:30:00] most of the time they're gonna get attract investors that on a five year horizon. So I gonna say, okay, Mr. Investor, I'll promise you a 15% return on your money, or 20% whatever the nu the numbers that they promise. And they're gonna put that money invested in the project, have that same timeline, build it over two years, and then as soon as it's leased up.
Joshua: So you've got a five year horizon as soon as it's leased up. Eventually just sell it to, uh, some insurance company, Prudential, you name it, they're gonna, they're gonna sell it off. And because they have that short hold period, that means that they don't often have to build that extremely high quality where they say, you know what?
Joshua: I can, I can, instead of having a a two by six wall, I can have a two by four wall. Instead of having this additional sound matting beneath our floor, I'm gonna have a, a, a different sound matting. And that's because they can save that money and they can juice their [00:31:00] returns. They're not having
Carli: to fix it.
Carli: Exactly. When people are complaining that they can hear the baby crying above them. Exactly.
Joshua: And so we're, we are building it to a higher quality from the get go to save money on the backend as, as, as you're, uh, throughout the life of the property, because again, you're not making as much money on the rents to pay for those capital expenses throughout the life of the project.
Joshua: Hmm.
Carli: You know, Spence and I both had experiences being in apartments as young kids. I was, my parents got divorced when I was really young, and so my mom and dad both had to figure out housing independently. Oh my gosh. And then share custody of me. Yeah. And so I remember these different places and I cared more about does it have a, a pool in the community?
Carli: Is there a playground nearby? But now that I'm a parent, I'm thinking about all the numbers they had to crunch.
Yeah. And
Carli: they never let me see them sweat.
Yeah.
Carli: But I remember some of these spaces and how tricky it was and we would clean it together on Saturdays. But how [00:32:00] tricky it must have been
Oh yeah.
Carli: For them. So with this Heart four, that single parent trying to make a transition with a little kid in tow or whatever people's circumstance might be, how do people find your housing? Because you're saying it is higher quality than some of these, like more bargain rate. Mm. Developer led, perhaps, um, entities.
Carli: How do people qualify or know if they qualify and try to even get in Yeah. To this limited number of units?
Joshua: Yeah. Great question. I mean, all of that information is properly advertised on all of our websites.
Joshua: it is, it is a tricky process too because we oftentimes are having to, uh, because of all the compliance tied to this, we, we can't just willy-nilly, rent to every person off the street in the sense that we have to verify looking at their W2, looking at their, their past rental history, looking at all these things that.
Joshua: You're, you're truly making the money that you say you're making. Mm-hmm. You're not, um, quote, a [00:33:00] welfare queen that sometimes gets thrown at our field. And you, you are making the money that you say you can pay the rent and, um, you, you truly need this. And so, I, I really empathize with what you're talking about.
Joshua: Our, your, your, your own history. That's what we see in our, our current residence. Mm-hmm. Like we see across our portfolio in most apartments, we're averaging 2.2 children per apartment. Sure. So you go to any one of our apartments at 3 30, 4 o'clock, you see five bus close of kids hop off. Yeah. And, and that's really what drives us is, is making sure that, you know, if mom is, instead of spending 2200 a month, she's paying.
Joshua: 1500, she's taking that additional $700 that they, she can then buy that pair of tennis shoes. So Johnny can go to basketball practice or the school notebooks or investing in her own, um, like, [00:34:00] uh, education certificate after programs so that she can move up the socioeconomic ladder. I mean, we see that happening in our own properties.
Joshua: Uh, and I think what's oftentimes a success of the program that doesn't get communicated enough, uh, I try to communicate it is, is if folks are living in our properties for five years and they don't want to, I failed. If, if we haven't helped them improve their credit score, like improve their budgeting, improve their, uh, child's performance in reading, I'm, I'm not doing my job well enough, and by and large.
Joshua: We don't see that happening. We see people doing all those things. We see each of our properties producing homeowners. Granted, a lot of those homeowners can't afford to buy a house in Nashville. Mm-hmm. But they're producing generational equity coming out of apartments, so they are improving themselves.
Hmm.
Carli: So I hear you talking about these wraparound [00:35:00] programs mm-hmm. That you're doing for these families. Is that something that's unique to each specific project or site, or is that just a companywide policy that you have a bank of, not a true bank, but like a bank of resources that people can then go get?
Carli: How are you improving these things?
Joshua: Yeah, that's, that's a, that's a great question. I would say that goes back to our motto. Everyone deserves a quality place to live. And, and again, quality is not just sticks and bricks. Um, so we are budgeting in our operating expenses. To provide those services. Um, every property looks different.
Joshua: Um, the amount of money that a property could be making to support those services looks different, but there's also nonprofits out there that we partner with that, uh, provide those services as well. So, um, it, it looks different on every property and every market even as well. Um, so for example, um, in two of our markets in Dallas and in Louisville, [00:36:00] uh, we, we partnered with the Bezos Academy and you can imagine who's behind that.
Joshua: Um, and our agreement with them was, if we build this space for you, you will operate it. And so what we did is we fundraised and built, uh, in Louisville, I think it's three Bezos academies, which is a pre-K Montessori program, year round. And we leased it to the Bezos Academy for a dollar and they provide year round services to those folks where if, if you go into most communities, it's, it's not unheard of to hear daycare, childcare being 400 bucks a week per kid.
Joshua: Our folks cannot afford that. Most people cannot afford that. And so what our partnership with them looked like is now these kids have at least one meal a day, have [00:37:00] year round childcare that are as the top quality, the best not. I mean, that's part of why Jeff Bezos was so successful. He attributes that to his Montessori program that his mom was able to get him into.
Joshua: Um, and, and that's very lucky because now not only is all that happening, but mom has money. To invest in herself to save, and she's able to better the life for her kids in the future in the long term. And so again, there's, there's that hope that you're using that, um, throughout, in any, any other development.
Spencer: Josh, just one other curiosity aspect of it. Do you all also deal with the on the ground leasing, like the administrative side of it? Uh, 'cause I know there's some developers that say, Hey, we're great at building, but we are not good at tenant management and all, especially in this case, the complexity that comes through that.
Spencer: Is that something that y'all [00:38:00] use a third party for or do y'all do that in-house? Uh,
Joshua: so I always say it depends on the market. Uh, we do have our own property management company here in Tennessee. We do have a third party property manager. So for all of our Texas properties, we have, um. Our own company that manages those.
Joshua: And then in, in soon to be in our Kentucky markets, that company will manage those. So about half of our portfolio is self-managed with the other half being, uh, using the local boots on the ground. Property manager. That is the best. Uh, in that market.
Spencer: So Josh, you've had to take a personal backseat to explaining, uh, really where we started this whole podcast is what it is that you do, and it's been super helpful to understand educationally.
Spencer: And so I really would like to hear some of where your heart originated in this, because you've climbed the ladder to be responsible for this market for a big business that is developing a lot of apartments. [00:39:00] And I have to imagine, uh, that you get plenty of phone calls, uh, from, uh, kind of high powered private equity and venture capital that would love to be able to snap you up through, uh, the ranks there.
Spencer: So maybe just talk us through a little bit of your origin story and some of why you have a heart for what you do. Because as Carli talked about earlier, to sit across from you, it's pretty obvious that you really do care.
Joshua: Yeah, I, I, I do get calls a lot of. For double and triple my salary and, and, um, it's, it's, those offers are sometimes tempting because this business is very difficult.
Joshua: Yeah. Um, uh, but what I would say is I started out, um, I did a program in college called Young Life. Um, if you're familiar, it'd say I, I, I tend to explain it as like a Christian, big brothers big sisters, if you will. Um, and so that's when I first saw how broken our public school system was. And I said, oh man, [00:40:00] okay, I've gotta do something about this.
Joshua: And so I interviewed for a program called Teach for America. And that program, um, for those that may not know as, um. It, it sends folks of non-education backgrounds and to, um, oftentimes underfunded schools. Um, so I had a bachelor's of science degree to not have an education degree, um, but came to teaching with a different mindset.
Joshua: Um, and I was in rural Louisiana teaching all things science. So despite being my first year teaching, I was the science chair in this school, kind of shows you how broken that school system was. And, um, I had multiple preps in my spring semester of my first year of teaching. I had two courses of chemistry and one course of environmental science.
Joshua: And, and my one course of chemistry, they had a grade point [00:41:00] average of, uh, 70 and the other one had a grade point average of 85. And I said. What's going on here? I'm not doing anything different at eight o'clock versus 10 30. It's the same material, teaching it the same way, the same presentation. So I pulled the addresses of the poor performing course and they all lived in the same neighborhood and drove the neighborhood.
Joshua: And it was very obvious to me at that point why their performance was lacking, um, that neighborhood fit all the stereotypes that you think of, of Louisiana, um, uh, low income areas. And, uh, it just so happened that at that same time that I taught those two courses in my environmental science course, I was teaching a unit on urban planning, which as a 22-year-old, I had no idea that that was a thing.
Joshua: Uh, so I naive, 22-year-old Josh said. Well, maybe I can have a better impact if I'm helping Johnny and Susie's [00:42:00] mom, um, have a better house or have a better job or something on that economic development front. Um, and so it was from there that I went to Urban Planning School at Georgia Tech and um, from there my wife and I moved here to Nashville where she went to Vandy Law and I jumped straight into the affordable housing sector.
Carli: Hmm. I love that story. I think it really humanizes the housing problem. Yeah. Because we talk, hear a lot about literacy. We talk here a lot about, um, feeding people. Yeah. Like the food deserts in Nashville. Oh my gosh. Now the housing issues. And I think there is a temptation when you talk about these segmented issues to think that they are more cut and dry.
Carli: Just build houses, build apartments, and then people can live there and we will solve the problem. Yeah. And really that humanizes the problem to help us understand. Yeah, it is so layered. Yeah. It is so multifaceted. It has everything to do. Hunger and literacy and housing are completely [00:43:00] related. Oh, yeah. In every way.
Carli: And you can't attack this from one angle. You have to attack it from every angle. Yeah.
Joshua: Yeah. Housing is what the planning community would call a wicked problem. Um, and in the sense that you attack it one way, it causes three other problems over here. Uh, kind of like the Greek hydra, you can chop its head off and three more problems, uh, raise.
Joshua: So, uh, yeah, it, it, it's all connected. And so we try in our work to get as creative as possible to address many of these wicked problems as possible.
Spencer: Josh, how we end each podcast is I have three short fill in the blank sentences . For you to either fill in with a word or a short phrase that you think completes the thought. Okay.
Spencer: Okay. Got it. All right. You ready? Mm-hmm. All right. Number one, a lesson I've learned from building communities is blank.
Joshua: A lesson I've learned from building communities is that housing is economic development [00:44:00] that helps everyone involved. Um, stretching from the teacher that needs housing to the business owner, that needs employees to, um, that the single mother that also needs a, a roof for her children.
Joshua: Hmm.
Spencer: It's the economic bedrock. Of a community. Correct? Yeah. Number two, a moment that made me proud of our work at LDG was blank. Man,
Joshua: that's a tough one. A moment that made me f proud, uh, from LDG is, is driving by one of our developments, uh, when the school bus lets off and just seeing kids that have a stable place to live, uh, for as long as we're housing them.
Spencer: That's one of the cool things I have to imagine about your role is that you get to drive by and see the product of your work truly having come out of the ground. Yeah. I mean a lot of people do work that is meaningful but is entirely [00:45:00] digital and that's a cool experience. Yeah. To be able to see that.
Joshua: Yes.
Spencer: And number three, one thing I wish more people understood about affordable housing is blank.
Joshua: One thing I wish people understood about affordable housing is that you know, people personally and love people personally that qualify to live in affordable housing. Hmm.
Spencer: Josh, I really appreciate your time on the podcast today. This is a very charged topic and a lot of people have a lot of ideas about what it takes to fix it, and what Carli and I often see from guests that are actually fixing things that are doing more than just talking about it is that they've had a personal [00:46:00] journey where the Lord has been working in their life far earlier than when they needed the burdening on their heart.
Spencer: And it's true in your story too, where you have had a lot of opportunity and reason to go and do things that make a lot more money or have more prestige, and you may pursue some of those things in the future, but the service that you have done and that you've taken the time to be able to educate us and our listeners here, is really appreciated and really special.
Spencer: Um, there's a big educational gap around housing, and you heard it from me today just trying to figure out, you know, from someone that traditionally, if you said Spencer Subsidy's good, subsidy's, bad. Right. My general answer is gonna be subsidies bad, because that's the context that I bring in. Mm. But it's [00:47:00] really helpful to be able to learn about the details and the ways that I still may come away from this saying, you know what?
Spencer: We could do less subsidies if the regulation was 36% rather than 46%. But I also don't think that I'd sit here and say. This is a market that needs to be subsidy free. Mm-hmm. I mean, I think the economics that you have done a great job of teaching us here today say that this is a, you know, multiple decade if not century problem mm-hmm.
Spencer: That is now coming home to roost. Yeah. And so I just wanna say thank you for your heart posture in this, uh, the time that you've taken to really learn and teach us here. Uh, and you're another good example of why Tennessee is doing some special things. And, uh, we are very happy to have you amongst our ranks.
Joshua: Oh, thank you. And, uh, I, there's, there's a whole army of, of affordable housing advocates that, uh, [00:48:00] love the community and are pouring into it just as much as, as we are. And so we're proud to be part of that group. Hmm.
Spencer: Thank you,
Spencer: Josh Hasten, development manager for LDG Development. They build tens of thousands of apartments all across the United States, targeted towards the lowest income in general as it relates to community. It's directly addressing housing affordability. And I woke up prior to this podcast just thinking about the time that I was in an apartment as a young kid.
Spencer: My dad just had a horrible business outcome that just about bankrupted the family and we spent some time. And I have great [00:49:00] memories from being in an apartment, and I remember we lived in an apartment that was on a really steep hill, and I rolled a snowball that was probably about, maybe slightly smaller than a bowling ball.
Spencer: And by the time that ball made it to the bottom of the hill, which was the window of someone else's apartment in the community, I'm telling you that was a boulder. It had grown to no joke, like the size of a small car, and by some miracle it did not break that window or the side of her whole house. But I just remember those stories and the experiences and so many people that only upon looking at life now.
Spencer: Do I realize the stories that were going on in that community that I had no [00:50:00] ability to contextualize then, but the importance of apartments and affordable housing for people wherever they're at in the story is something that definitely left a fingerprint on my life.
Carli: Yeah, and I think. Your dad is one of the hardest working creative business people I've met, and that was a season in y'all's family that I think he would've never chosen for that to happen for y'all.
Carli: But I darn if it wasn't one of the more formative moments, the way you talk to me in your life now too, of teaching you about business and how to learn from going backwards and how that can catapult you forward. Um, it is really hard to be an entrepreneur without moments of setback.
Carli: And I think one thing I'll take away from this podcast that I'm really grateful he said, is All of us know and love people. That qualify for affordable housing? [00:51:00] I don't care. I mean, we're sitting here right now in Williamson County and I would think a lot of people would look to their left and their right and think, this doesn't impact me.
Carli: This isn't an issue. But it is. It impacts the people we love, the people we go to church with. It might impact us one day. It has you and I in our childhood and who knows if it will again. Um, but to not have the humility, I guess, to realize if it hasn't impacted you, it probably will or it certainly will.
Carli: Someone you know and love. We need to take this seriously and do something in our community. I think that's important. I think that's a stewardship issue for everyone in the community to come alongside and say, Hey, how we treat the workforce that fuels Nashville, Tennessee, which is the engine of tourism in Middle Tennessee.
Carli: How we treat our workforce, how we treat people when they're down, how we treat people, when they need to pivot from one part of life to [00:52:00] another really defines who we are as a society, and that takes us straight back to affordable housing.
Spencer: Yeah. He used a good phrase that housing is essentially the economic bedrock.
Spencer: It is the core of our service industry, of retail, of any service that we kind of take for granted. Sure. You don't have those things unless you are able to house. The members that are necessary to work in those places. And you don't think about how the centerpiece of a community's ability to function really begins with its housing, and sometimes it's easier to point to education.
Spencer: But he even pointed that part out that the educational results [00:53:00] that he was seeing in a very impoverished community in Louisiana, that probably the best teacher that they had still wasn't enough to overcome the housing situation that was going on for those kids.
