How Cities Choose Developers: Pro Tips For Earning Affordable Housing Public-Private Partnerships │ Terri Davis-Merchant
How Cities Choose Developers: Lessons from Terri Davis-Merchant on Public-Private Partnerships
Why This Episode Matters
Affordable housing projects don’t get built without collaboration, and at the center of that collaboration are the cities deciding which developers to partner with. In this episode of the Affordable Housing & Real Estate Investing Podcast, Kent Fai He interviews Terri Davis-Merchant, Senior Program Director for Housing at Trinity Church Wall Street and former Director of Development Planning at NYC’s Department of Housing Preservation and Development.
Terri shares insider knowledge about how cities evaluate proposals, what makes developers stand out, and the mistakes to avoid when pursuing public-private partnerships (PPPs). For investors, developers, and advocates, this episode is like pulling back the curtain on a process most people never get to see.
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.
How do cities decide which developers to partner with for affordable housing?
Cities like New York issue Requests for Proposals (RFPs) to select developers for publicly owned land. Terri explained that the process is comprehensive and multidisciplinary:
City staff evaluate the number of units, community benefits, and the capital stack’s financial feasibility.
Proposals are reviewed by in-house experts across planning, development, finance, and service delivery.
Community context matters. A charter school might be valuable in one neighborhood but unnecessary in another.
The best developers demonstrate they’ve done their homework on local needs and show a financing plan that “pencils out” under scrutiny.
What role does community engagement play in winning city RFPs?
According to Terri, the biggest mistake developers make is failing to engage the community early. Cities look for partners who demonstrate humility and curiosity, not just flashy renderings.
Her team often held community engagement evenings where residents used maps and models to share input:
Need for streetlights near elevated trains.
Requests for grocery stores in food deserts.
Concerns about safety and public space design.
That feedback was written into the RFP itself, ensuring developers couldn’t say, “we didn’t know.” Strong proposals reflect both community priorities and developer expertise.
What makes a strong affordable housing proposal stand out?
Terri shared that winning proposals usually include:
Nonprofit or community-based partners embedded in the project team.
Thoughtful ground-floor uses like daycare centers or senior services.
Clear, realistic capital stacks reviewed by city financial analysts.
Zoning strategies that align with neighborhood plans and land-use policies.
In short, great developers don’t just maximize density, they create housing that makes sense for the site, the city, and the people who will live there.
What lessons can private developers learn from working with government?
Terri emphasized two realities:
Government can do a lot, but not everything. Developers must respect budget cycles, political pressures, and the sheer complexity of land use.
Partnerships thrive when both sides bring empathy. Developers who understand government constraints and still work collaboratively earn trust and long-term opportunities.
Key Insights from Terri Davis-Merchant
Community engagement is non-negotiable. Developers who walk neighborhoods, talk to residents, and involve local institutions stand out.
Every site is different. What works in Harlem may not work in Queens. Proposals must reflect neighborhood context.
Nonprofits add value. Cities want to see community-based organizations at the table.
Strong capital stacks win. Financing must withstand close review by city analysts.
Housing is about stability, not just units. Terri’s own upbringing in affordable housing shaped her perspective on why this work matters.
Best Quotes from Terri Davis-Merchant
“If you live in affordable housing, why can’t you live in someplace beautiful too?”
“Who knows the community better than the people who actually live there?”
“Government can do a lot, but it can’t do everything.”
“Affordable housing is about people having a place to live and grow.”
Common Questions Answered in This Episode
Q: What does a city look for in an affordable housing developer?
Cities want developers who combine financial strength, design excellence, and meaningful community partnerships.
Q: How can developers engage communities the right way?
By listening first. Walk the neighborhood, meet local leaders, and include resident priorities in your proposal.
Q: Why do some affordable housing proposals fail?
Common mistakes include ignoring community needs, overpromising on financing, or failing to align with zoning and land-use policy.
Q: Can smaller developers win city projects?
Yes. Teams that include nonprofits, faith-based groups, or minority/women-owned businesses often earn points in RFP evaluations.
Q: What role should government play in affordable housing?
Terri argues that government should take a stronger role, rather than relying solely on market incentives.
Final Thoughts
This episode shows that affordable housing is more than just buildings, it’s about people, policy, and partnerships. Terri Davis-Merchant’s career — from affordable housing law to NYC housing policy to philanthropy — demonstrates the many ways professionals can make an impact.
Kent Fai Heis an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments. His mission is to provide everyday investors with the tools, knowledge, and connections to build wealth while solving America’s housing crisis.
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.
