How Nonprofit Developers Build More Affordable Housing (and Win Competitive RFPs)

Featuring: Rochelle Mills, CEO of Innovative Housing Opportunities

Hook + Intro

On The Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments hosted by Kent Fai He, we sat down with Rochelle Mills, President and CEO of Innovative Housing Opportunities (IHO), to unpack how nonprofit developers are reshaping California’s housing landscape, and how they’re partnering with private developers to bring deeply affordable projects to life.

Rochelle has led IHO for over a decade, guiding the creation of inclusive, community-driven developments across Southern California. Her insights go beyond financing, she explains how mission-based development can align with for-profit goals to create projects that are both financially feasible and socially impactful.

This episode is essential for developers, policymakers, and advocates who want to understand how nonprofit partnerships can unlock funding, win competitive RFPs, and deliver the kind of housing California desperately needs.

Why Nonprofit Developers Are Critical to Affordable Housing

Rochelle explained that nonprofit developers often play a crucial role in filling gaps that the private market can’t or won’t address.

“Our job as nonprofit developers isn’t just to build units,” she said. “It’s to build community. That means listening, collaborating, and creating spaces that uplift people long after we cut the ribbon.”

Nonprofits like IHO often:

• Acquire land through public agency RFPs or underutilized assets.

• Leverage funding layers like LIHTC, HOME, and CDBG to reduce debt.

• Engage residents and cities early, ensuring developments serve real needs.
  

The result is permanent affordability, where rents remain accessible for generations instead of resetting every few decades.

How Nonprofit Developers Partner with For-Profit Developers to Win RFPs

Kent asked Rochelle how nonprofits and for-profits can work together without losing sight of their missions or margins. Rochelle’s response was simple: “By aligning values and responsibilities.”

“The public sector wants collaboration. Nonprofits bring mission and community trust, while for-profits bring scale and efficiency. Together, they’re stronger in RFP competitions.”

Here’s how these partnerships typically work:

1. Nonprofits lead on community engagement and long-term affordability compliance.
   

2. For-profits handle design, financing, and construction logistics.
   

3. Both entities share risk and credit, ensuring transparency with lenders and municipalities.
   

The outcome is a more competitive RFP proposal that checks every box: mission alignment, financial feasibility, and community support.

Rochelle described one project where this approach led to a $25 million award for a mixed-use affordable housing development that’s now home to dozens of working families and seniors.

“When a for-profit developer joins forces with a nonprofit, you’re telling the city, ‘We’re serious about this community.’ And that wins points every time.”

How Environmental and Site Issues Impact Affordable Housing Development

Every developer knows that site conditions can make or break a project. Rochelle shared that environmental due diligence often uncovers unexpected challenges but the right team can turn obstacles into opportunities.

Common Issues Nonprofits Face:

• Brownfields or soil contamination requiring cleanup.
  

• Flood zones that increase construction costs.
  

• Adjacent industrial uses that trigger mitigation requirements.
  

“Environmental issues aren’t deal killers,” Rochelle explained. “They’re puzzles. You just have to know which tools grants, consultants, or design changes will solve them.”

She cited EPA Brownfield Grants and State Cleanup Funds as critical resources for nonprofits, especially when pursuing older urban infill sites.

The key is to identify problems early ideally during predevelopment or due diligence so that remediation costs can be layered into financing rather than cutting into equity.

Why RFPs Favor Partnerships That Prioritize Community

Municipal RFPs (Requests for Proposals) often prioritize developers who demonstrate deep local ties and measurable community outcomes.

“Cities want partners they can trust,” Rochelle said. “They don’t want to chase you down ten years later to make sure you’re doing what you promised.”

Winning teams usually include:

• A nonprofit developer to provide long-term stewardship.
  

• A private partner to ensure execution and financial strength.
  

• A service provider (like a workforce training or mental health nonprofit) to deliver wraparound support.
  

This triangular partnership model often scores highest in competitive RFPs, especially when combined with resident engagement plans and economic mobility programs.

“We’ve learned that residents don’t just need affordable housing they need opportunities,” Rochelle said. “When you bake that into your proposal, it shows you’re thinking long-term.”

Real-Life Case Study: Building a 47-Unit Affordable Project in SoCal

Rochelle shared an inside look at one of IHO’s recent projects: a 47-unit affordable housing development in Southern California designed for working families and seniors.

Funding Breakdown:

• 9% Low-Income Housing Tax Credits (LIHTC)
  

• HOME funds
  

• CDBG grants
  

• Permanent loan from a mission-driven bank
  

• Philanthropic gap funding
  

Despite pandemic delays, IHO navigated shifting costs by leaning on strong partnerships with its GC, architect, and local housing department.

“When the lumber crisis hit, our GC locked in pricing early because we built trust,” Rochelle explained. “That saved us hundreds of thousands.”

The project now serves as a model for how nonprofits can deliver financially stable, socially impactful housing, even amid volatile markets.

Key Insights & Frameworks

• Partnerships win RFPs. Cities favor proposals that combine nonprofit mission with for-profit efficiency.
  

• Environmental challenges require creativity. Grants and design flexibility can turn contaminated or constrained sites into viable projects.
  

• Transparency builds trust. Honest communication with funders, cities, and residents protects your reputation and funding pipeline.
  

• Mission and margin can coexist. Successful projects balance long-term affordability with financial sustainability.
  

• Strong relationships are a developer’s greatest asset. Collaboration across sectors drives housing solutions faster than competition ever could.
  
  

Best Quotes from Rochelle Mills

“Our job as nonprofit developers isn’t just to build units. It’s to build community.”

“Cities want partners they can trust and trust is earned through collaboration.”

“Environmental issues aren’t deal killers. They’re puzzles waiting for the right solution.”

“Partnerships between nonprofits and for-profits are the future of affordable housing.”

“When you align mission and profit, everybody wins the city, the developer, and most importantly, the residents.”

Common Questions About Nonprofit Development Partnerships

Q1. Why do cities prefer nonprofits in affordable housing RFPs?
Nonprofits provide long-term stewardship, community engagement, and compliance qualities that ensure a project’s success beyond construction.

Q2. How can for-profit developers partner with nonprofits?
Start by identifying mission alignment. The nonprofit can serve as the qualified applicant for funding while the for-profit brings construction expertise and financing.

Q3. How do nonprofits manage site contamination or brownfields?
Through early due diligence and strategic funding, including EPA or state remediation grants, combined with adaptive design.

Q4. What’s the biggest advantage of nonprofit partnerships?
Access to funding streams like tax credits and public grants that for-profits can’t access alone.

Q5. Can nonprofit developers make a profit?
Yes, but surplus revenue is reinvested into the organization’s mission funding maintenance, new projects, or resident programs.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments. Through conversations with leaders like Rochelle Mills, Kent helps developers, policymakers, and advocates learn how to create financially viable and mission-driven housing solutions.

To connect with Rochelle or explore her work, visit ihocommunities.org, email [email protected], or follow her on LinkedIn.

DM me @kentfaiheon IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.