Sleek and Stylish, with City Vistas: Alum Tyler Grote Changes the Look of Affordable Housing

By Maggie Haslam / Aug 27, 2021 / Updated Sep 10, 2021

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MRED Alum Tyler Grote ('18) at Baltimore's 22 Light
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MRED Alum Tyler Grote ('18) at Baltimore's 22 Light.

The latest enclave to grace Baltimore’s downtown has a feature that separates it from the other beautiful, high-amenity apartment buildings that are sprouting up along the city’s Inner Harbor: it’s affordable. 22 Light, the modern $21.5 million conversion of a former 1900s-era whiskey plant, opened this summer two blocks from Baltimore’s bustling waterfront, offering 36 one-, two- and three-bedroom units for residents making 50% of the region’s median income. It is also the latest project for UMD alum Tyler Grote (MRED ‘18) and the development company Osprey Property Company, which has invested more than $164 million into Baltimore’s affordable housing stock, jumpstarting economic development in areas like West Baltimore and creating opportunity in sought-after Baltimore neighborhoods.  

“It really comes down to elevating the quality of housing by providing a real investment,” says Grote, who was named Vice President at Osprey in May. “Seeing the positive impact it can make, particularly in areas where there is such a great need, is really rewarding.” 

A Maryland native, Grote’s entry into real estate development was the outgrowth of an unconventional trajectory. After graduating from UMD with a bachelors in government and politics, which included a stint on Capitol Hill, he spent time working for both the Coalition for Smarter Growth and Smart Growth America. “I had initially leaned towards law school and, gladly, realized it wasn’t for me,” he said, “but I always had an interest in urban planning and revitalizing cities, which I think migrated me to a path in real estate.” A job in commercial real estate research at CoStar Group demonstrated how Grote could combine his interest in housing and neighborhood development with the financing that could make it a reality. Within six months, he was taking his first evening classes as part of Maryland’s Master of Real Estate Development.

Below, Grote talks about finding your passion, the numbers behind affordable housing and the importance of “knowing enough:”

Your work with Osprey is increasingly focused on providing transformational low-income housing in the Mid-Atlantic Region. What influenced that move? Historically, Osprey was engaged in retail and office development, but then the recession of ’08 hit and they found a niche in housing using the Low-Income Housing Tax Credit program. I think the original reason was because housing, especially affordable housing, is pretty recession-proof. But, over the years, Osprey started to develop a portfolio, and in the last five to six years, we have become the number-one developer in the state for securing tax credit projects awarded by the state’s housing department. No company—for profit or nonprofit—has been awarded as many tax credit projects. The Light Street project had just been awarded funding when I came aboard and it turned out to be a great opportunity for me to dive right in. I oversaw the construction side, lease-up and management and it was a really gratifying project.  

How do pick your properties? A lot of it has to do with the state guidelines, which changes based on what the administration is looking for; it could be that they are looking for senior affordable housing or projects in areas with more jobs and opportunities. We then go out and find a site or sites that check those boxes; the Light Street project is really cool on paper, but if it didn’t meet what the state is looking for, it would have been a waste of our time. Other developers will sometimes have a piece of property that they love and they’ll keep trying it until it fits; we go the other way around and find the site that works for what the state is trying to accomplish in that given year. And we’ve been really successful with that.

As a person keenly interested in building good communities, why is affordable housing important?  Oftentimes when people hear affordable housing they think Section 8 housing. But the reality couldn’t be further from that. So, the first thing we emphasize is that this program provides high-quality, market rate level housing—if you drive past any of our buildings, you wouldn’t know that the people living there are making 50% of the median income for the area. It is really workforce housing for people that might be working in a restaurant downtown or a maintenance job in an office building. These are hard-working people but they’re making $30-40,000 a year and need a place to live that’s not the outrageous $2,000 for a one-bedroom unit or a home that’s 60 miles away. And that’s the other piece; affordable housing opportunities need to be in places that are close to a person’s work, close to their families, close to good schools.

Osprey is also doing some work in West Baltimore where there is arguably an urgent need for good, affordable housing stock. Yes. It really comes down to elevating the quality of housing by providing a real investment. We have completed a number of rehabilitations of existing apartment communities, where we put $50,000 to 100,000 per unit into the building. We finished a project last year adjacent to Coppin State University that opened two weeks into the pandemic; we bought an old lumber mill and built 65 units of new construction; we have plans to bring in a food hall, because there are no great sit-down dining options in the area. That’s been positively received by the community. The aim is to provide safe, modern housing for people who live in West Baltimore and call it home.  

I’m currently working on the rehab of a large existing apartment building in West Baltimore; the idea of going into a neighborhood that desperately needs the investment and seeing the positive impact that it will make in 14 months when it’s complete, will be really rewarding.

What parts of the current landscape make it challenging to create more affordable housing in this region? What sort of measures do you see helping? More and more people from both sides of the political spectrum agree that there is a serious need for affordable housing for working class people. We’ve seen that in projects in Baltimore City but also in Calvert County where people tend to be more conservative. If you can get people around the negative connotations that can come with affordable housing and show the statistics, like how affordable housing can actually enhance home values, that helps a lot. But the cost of doing business right now everywhere is challenging; the lumber costs, the workforce cost and everything that goes into getting a project to come together just continue to go up. And that’s difficult if you’re trying to provide something that’s affordable, where you don’t need to charge high rent to make up for the high costs. It becomes a challenge, much more so than for market rate developers.

What’s the best piece of advice you’ve ever received? Know enough about everything to be dangerous. I think the biggest thing in my job as a developer is the need to be a jack of all trades. I am certainly not a construction guy, but I know basics and pricing and enough to represent the owner in meetings. I’m not a banking buy but I understand concepts of financial structures. I’m not a government guy but I understand what it takes to get things approved. Know enough about everything so that you can speak knowledgably, and if you don’t know the right answer, at least be able to ask the right questions.

What’s a habit, practice or strategy you learned in school that you still practice every day?  Organizational abilities. When I was in school it was all about organizing my schedule—I was taking two classes during the week while working full time and commuting from Baltimore to College Park. So, accommodation to make your checklist of items and learning how to budget my time was something I learned fast in school and it still serves me today.

What advice do you have for the next generation of real estate developers? A lot of people I went through the program with ended up in various fields, whether its economic development, banking or commercial real estate. I think you have to find the sector within real estate development that you’re passionate about. For me, it wasn’t necessarily about affordable housing, it was more multi-family housing and the idea of housing in general and building communities. I took that and looked for places that do multi-family work, and it just so happens that the one I landed with specializes in affordable housing and it’s a great fit for my passions.

What book, podcast, TV show or hobby saved your sanity during the pandemic? I went under contract to buy a house in February of 2020 and closed in March just as the pandemic hit. So, I found myself working from home and with more time to fix up the house and doing little projects.

 

 

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