Technology: Pronto Poses PropTech Solution For LIHTC

7 min read

The use of technology in real estate has become so common as to have a moniker: PropTech. Short for “property technology,” it describes how everything from cloud storage to artificial intelligence to smart infrastructure can streamline development, construction, management and the realty of homes.

Low Income Housing Tax Credits (LIHTCs) and other affordable home programs have trailed with PropTech. Whatever someone’s place is in the industry, they’re dealing with bureaucracy that goes beyond what’s required for market-rate units, and that forces engagement with physical paper and often buggy government websites.

One entrepreneur hoping to change this is Christine Wendell. CEO and co-founder (along with current COO K.C. Crosby) of Pronto Housing, Wendell’s firm provides software-as-a-solution to make LIHTC and other programs easier to navigate for tenants, property managers and owners. Pronto allows info to be uploaded to a digital platform, where it can more easily be viewed by government compliance agencies.

Wendell was recently profiled by Business Insider, and I followed up with a more in-depth Zoom interview. The conversation has been edited for conciseness and clarity.

Scott Beyer: How did you get interested in the idea to streamline the affordable housing process?

Christine Wendell: I’ve spent my career in commercial real estate, and most recently ran asset management for a small developer in New York, and oversaw a lease-up that had an affordable component. I was tracking my lease-up every week, and realized it was a really slow and opaque process. It wasn’t a demand-side issue—thousands of people applied to these units. It was a process issue—units were sitting vacant despite the fact that qualified applicants were ready to move in. I decided to be the person to solve that problem.

SB: Explain Pronto’s model. How does technology help with this problem?

CW: The traditional process of both applying to LIHTC properties and completing the annual recertification requirement is very manual. Residents are asked for basically every piece of personal identifiable information about their household composition, income and assets that you could think of—identification, birth certificate, child support court order, pay stubs, bank statements, Social Security income letters, public budget letters, etc. They provide these either in-person or over email, and someone manually goes through those documents, such as a compliance manager or property manager.

Pronto is like TurboTax in that it guides the resident through a questionnaire, which then prompts them to provide the documentation that’s relevant to their specific household. They can upload all their documentation, which means they can do it on their own schedule. Then on the property owner’s side, it streamlines intake of all that documentation, as well as filling out all the forms that are related to this certification and qualification process.

To give you some context, we’re working on a lease-up right now that has over 80 potential forms, so right now the traditional process would be that someone manually fills out those forms. With the Pronto platform, the residents’ answers auto-create the forms that are required, and then complete those forms. Then, they’re able to send them back for e-signature, and complete that full certification package.

SB: So when a manager receives those forms from the tenant, who do they submit them to and how does Pronto’s platform help with that?

CW: It depends on how that particular property owner has structured the way that they manage compliance, as well as the housing authority. There’s a regulatory agreement—which dictates the LIHTC—between the property and the local housing authority, depending on the state. For some states, it means they don’t have any oversight during the lease-up, and they just have an auditor come on site and select a certain number of certifications to review. For other states, during the lease-up process, the qualification packages must be approved before someone can move in. And then, in any situation with LIHTC, there is usually a syndicator who acts as an asset manager/broker…and the syndicator will have an oversight role, and review the certification packages as well.

SB: Have you had to work with agencies to have them accept the Pronto template?

CW: We have both our own Pronto-based LIHTC forms, and then also the platform is configurable if the property owner has their own forms, or if the local housing authority has their own forms. So we can just set it up based on whatever forms are required for that particular building.

SB: Aside from tenant-landlord relations in LIHTC projects, there’s lots of complexity during development, from winning credits to syndicating them to building relationships with financiers. Does Pronto deal with that end of LIHTC deals?

CW: Not currently. Our product is focused on the resident qualification right now. It is in our product roadmap, so stay tuned.

SB: How would that look?

CW: We haven’t fleshed it out yet. That being said, the core technology is having tenant inputs or property owner inputs that complete various forms. One place that we will explore is partnering with housing authorities; so if they have a bunch of forms that developers need to fill to qualify for LIHTC, we could have a partnership. There’s also building requirements, where you need all of that data aggregated to a report that goes to the housing authority annually. That’s something we’re exploring.

SB: What are the cost savings from Pronto?

CW: We estimate that a property owner can lease-up five times faster with the Pronto platform, or that a property manager could manage five times as many units. This is really critical, especially on the lease-up, so that you are reducing your operating loss and then hitting your lease-up targets to start collecting the tax credits.

SB: What affordable housing programs can Pronto be used for besides LIHTC?

CW: It’s configurable for any affordable housing programs. If there are forms that need to be filled, we can create the questionnaire that maps to those forms. The largest programs are LIHTC and project-based vouchers, so that’s what we see the most of, but if there are local programs—particularly because a lot of local programs follow LIHTC guidelines—they can even just use our baseline forms. But we will configure it based on whatever the requirements are of that specific agency.

SB: Assess the state of technology in the affordable housing industry, namely in government.

CW: We’re excited to see housing authorities embrace technology and innovation more. Specific places that would improve efficiency and resident experience would be 1) accepting e-signatures, and 2) online tools to share information, allowing coordination between different programs.

The Terner Center at UC-Berkeley had a report last year that said the average affordable housing property has over four different types of subsidy. Right now, those are all unique application processes that require lots of the same information. If regulatory agencies could use technology to coordinate those applications, it would result in shorter development or pre-development periods and more affordable housing units built sooner.

SB: If the average affordable project has four different subsidies, that means multiple levels of government. So I guess Pronto could create the template that would enable this cross-agency coordination?

CW: Yes. With our existing product, a property owner can manage the resident certifications that are for different regulatory agencies. Going forward, we’d love to do the same for the application side, for that pre-development piece with property owners.