Affordable Housing Merger

Participating Organizations

  • Champlain Housing Trust (formerly Lake Champlain Housing Development Corporation), Burlington, VT

Please note that all data below was derived from the collaboration's nomination for the Collaboration Prize. None of the submitted data were independently verified for accuracy.


Merger by which governance, programs and administrative functions have been combined but which may or may not have included the integration into a single corporate entity.
Economically Disadvantaged
  • Improve programmatic outcomes
  • Maximize financial resources
  • Better attract and retain highly qualified staff
  • Competition for funding, donors and/or clientele
  • High / increasing costs
  • Advancement of a shared goal
  • Board member(s)
  • Executive Director(s) / CEO(s) / President(s)
  • Funded initial exploration
  • Funded implementation
  • To draft the governing agreement or provide other legal advice
  • To facilitate negotiations or discussions that led to the formation of the collaboration
  • To advise on human resources,benefits,or compensation
  • To develop a business plan or strategic plan for the collaboration

Champlain Housing Trust was created by the merger of two housing non-profits: Burlington Community Land Trust (BCLT) and Lake Champlain Housing Development Corporation (LCHDC) in 2006. For 25 years we collaborated as needed sometimes sharing larger or risky and complex projects, and overall avoiding head-to-head competition or duplication. As time went on we were forced to diversify to meet the requirements of funders and communities that we served. The idea of merging or otherwise aligning had been floated over the years, but in 2005, following executive staff turnover at LCHDC, their board president called and initiated the idea of a formal collaboration or merger.

The longstanding partnership between us gave us a significant basis of trust. The two boards, led by a committee made up of 3 members and the two Directors and CFOs, committed first-and-foremost to our common mission and to the low income residents of our combined portfolio of homes (2,000 in all). When this committee recommended full merger as the best way to sustainably secure this mission each board unanimously agreed and directed staff to implement. LCHDC's Director was new to the field and open to BCLT’s Director being the CEO of the merged entity. BCLT was a membership organization with an elected board, a diversity of sources including local donors, an endowment, and foundation support, and member of key funding networks. As such BCLT’s corporate structure was maintained as the surviving corporation acquiring all of LCHDC’s assets and hiring their staff. LCHDC’s property management, compliance and financial systems were adopted. Seven members from each board, plus one new member formed CHT’s founding board.


One Executive Director / CEO / President

The management structure was jointly developed by executive staff in the planning stage. Although the merger was technically an acquisition there were two key principles that drove the project: the first was to take what was best from each group, and the other was to create a new framework that was scaled for growth with state-of-the-art systems. LCHDC specialized in rental housing development, management and regulatory compliance, and BCLT in community development (mixed-use-including rental, historic rehab, non-profit facilities) and homeownership. The new organizational chart eliminated LCHDC/BCLT divisions and created departments by function with clear lines of accountability from staff to board. The biggest and most important leap in this process was the creation of new positions to match the new scale (combined totals of 80 employees, $41 million in annual activity and over $200 million in restricted assets) as follows: an Executive team of CEO, COO and CFO, with COO overseeing departments of homeownership, real estate development, rental property management, community relations and co-ops; we added a full-time Human Resource function, and a full-time IT technician.

The new structure strengthened accountability, service delivery and staff support resulting in a net decrease in staff of 13% through staff turnover and departmental reorganizations. We achieved a vast improvement fiscal management, reporting and performance from top to bottom with each department managing to budget and the board receiving current financial reports for all lines of business monthly. We eliminated a deficit of $350,000 and have two affordable lines of credit from a local bank totaling $1.5M.


  • Zoning / development of physical (shared) space
  • Coordinating / merging / integrating operations
  • Raising funds or integrating fund development to support the collaboration
  • Coordination / integration of programs & services

While to be expected, skilled staff took the opportunity of change to explore other employment, and others could not function and needed to be terminated. This created the impression externally that we were falling apart. While the capacity gap and loss of institutional memory did create short term challenges, the departures were overwhelmingly the right ones. The vacancies allowed us to hire people with a better match of skills for the new organization and also to recast positions ultimately achieving considerable downsizing without cutting services (only 3 funding related layoffs since 2005). We hired consultants to fill key functions and searched diligently for the right candidates. This allowed us not to rush into filling positions or settling and provided impartial perspectives on a range of practical matters. Another challenge was a lack of funding for the costs of merger, and a slowdown in revenue-generating activities like project development and fundraising while we internally focused. Our strong balance sheet allowed us to use an operating line of credit to bridge this period. The full efficiencies and new corporate identity and culture were not realized until January 2009 when we moved core staff into our new LEED building in downtown Burlington and relocated all of our northwest functions into St. Albans’ city center.


  • Financial savings - Consolidation of management / administration
  • Financial savings - Coordination / consolidation of programming
  • Human resources - Increased access to technical expertise (e.g. HR, Finance, IT)
  • Greater ability for each partner to focus on core competency - Greater ability to allocate resources to areas of need
  • Collaboration has served as a model for others
  • Greater range / variety of services/programs offered

An important outcome was demonstrated when the economy crashed. Our department heads had learned how to remake their program/service delivery systems and to adopt new methods and tools to do so. Staff adapted quickly to the downturn boosting our rental production pipeline with new sources and local investors, shifting homeownership to grant-funded delinquency counseling, and securing new mortgage and loan products in a severely constricted credit environment. We are thriving as many in our field fail for lack of credit, investment and the cheap capital needed to serve our low and very low income constituents. CHT has met the mission goal of the merger by preserving its portfolio and continuing to grow in spite of this historic economic crash. In addition to building 40 new units annually we are improving our older portfolio through refinance and repair, improving energy efficiency and cash-flow to preserve affordability and housing quality at a rate of 75-100 units a year. Our homeownership model earned us a United Nations World Habitat Award in 2008 due to our social, financial and environmental sustainability. We’ve also met the goal of creating a scalable organization as evidenced by our ability to expand services while reducing FTEs by 13% through the new structure and systems.


CHT has been tapped by four national networks to present on our merger (2 past, 2 upcoming) and we field inquiries from all over the country as our sector absorbs the losses of the crash. We didn’t foresee the crash, but a recognized a continued retraction in resources, and didn’t want to wait until we were too crippled to succeed. Now groups need to move even more quickly and decisively and we share the benefit of out experience. Currently we are advising two potential mergers just in Vermont. Much of our experience, including legal product, is directly transferable saving time and money. Our lessons about personnel reorganization, systems analysis and conversion, portfolio assessment and repair, and management of community relations through change are replicable throughout the sector. We are an example of how to strengthen local non-profits and their delivery systems which are especially critical in rural America.

Efficiencies Achieved

As reported in our initial application our goal for the merger was to create one stronger organization that would, at a minimum maintain to the highest standards the valuable affordable housing that we had each developed. To that end we committed to taking the best of each organization and restructuring what didn’t work to create something new and better than the sum of our parts. The result has become an organization that wasn’t just able to survive, but one that would to thrive and grow and achieve new levels of excellence in all areas.

We have done this in spite of an economic collapse that froze capital markets for all housing production, seriously weakened local economy and significant state budget cuts that put low income renters and homeowners further at risk. We have achieved:
* a strong balance sheet and net operating cash;
* a robust pipeline of 320 units in various stages of production;
* better housing quality in 12% of our rental portfolio though an infusion of new rehab;
* an active, representative board growing our capital endowment and annual operating funds through active fundraising;
* a fledgling Community Development Finance Institution to expand our lending products;
* a leadership role implementing new innovative energy investments;

We have achieved this success in concert was made possible because of a complete overhaul of every program and an overall reorganization that allowed us to reduce our FTEs by 13%. At the same time, an investment in new IT systems, training and full time IT staffer has helped achieve and sustain efficiencies. Executive support by the CAO/HR to all supervisors for hiring, firing, job restructuring and performance evaluation has been crucial to developing a confidant and nimble leadership team able to meet ongoing staffing, budget and performance challenges – as well as the external factors that we cannot control but must adapt to.

Property Management (PM) has added 191 apartments to the portfolio without adding staff by gaining efficiencies and committing to community-based property management. This has reduced impact of scale to residents by giving managers complete leadership of their portfolio with an assigned maintenance crew. At the same time, we handed over management of properties (165 apartments) that were out of our target area to nonprofits serving that region.

PM has 4.5 fewer FTEs even with the addition of a new asset management position that has been invaluable to portfolio improvement, risk management and financial accountability, as well as a capital projects team to implement the rehabs on our aging portfolio. One hundred eighty-two properties with expired subsidies and financing are in the process of or have been completely rehabilitated including energy conserving retrofits, and temporary relocation of residents. Another three properties identified as non performing have turned around with infusion of grant capital won through a competitive process, and another four are on deck for this year. We now have the capacity to manage to an annual gross rent potential of $18MM, and identify those properties that are not meeting goals, understand why and access internal and external resources to fix them.

Prior to merger one group had the large rental portfolio (1,200 to 350), and the other had membership in a national network (NeighborWorks) that provided training and certification in asset management along with operating and capital grants for groups that performed in this area. By merging, we brought these available resources to this larger rental portfolio, providing more security to more tenants.

Our HomeOwnership Centers (HOC), which did lay off 3 FTEs in 2006 – and through other efficiencies and program changes saved $400,000 right out of the box – has also performed at a higher level. In fact, subsequent reorganization resulted in a further reduction of 1.5 FTEs. In spite of the economic crash, our two centers have sold 188 shared equity homes to low-income buyers, an average of 47 per year. We averaged 43 per year over the previous three years, during the boom of the real estate market.

We also converted a 32-unit rental property to 24 shared equity and eight market rate in a one-of-a-kind wealth creating initiative that resulted from the merger of rental and homeownership capacities. We have made over 300 low-interest loans and counseled nearly 900 households per year for home purchase, foreclosure prevention and homeownership preservation. A direct result of the department’s fiscal and programmatic nimbleness is how quickly they adapted to the downturn in this market securing new federal counseling funds, ARRA acquisition and repair funds to turn foreclosed homes in to affordable homeownership (15 currently), shifting to meet the need even as they lost longstanding capacity and capital grants from state agencies.

Just as we committed to excellence and growth in all program areas in our merger we also committed to being an employer of choice, with market competitive compensation and to paying a livable wage (one area where we exceed market). This has been a cornerstone for our success. Prior to merger each smaller group not only lacked key capacities to make jobs more satisfying we also could not compete as an employer with two statewide housing agencies in our region that had far better wage and benefit packages. We routinely invested in and trained new staff who moved on to our competitors for their careers.

Now people have career tracks and the educational and certification opportunities for advancement and can take pride in their work. This past year our turnover rate was 5%. This is very important to performance in this rural labor market.


As described in section F, our two groups collaborated over the years co-developing on large projects, supported each other and advocating generally for affordable housing. The LCHDC president contacted BCLT's ED and started the conversation. These two leaders exemplify the collegiality that existed between these two organizations that, over time had shared hires or recruited as board members each other’s employees and past employees. There was a lot of trust and shared history. Each board had high mission standards and put preservation of existing housing and related resources above institutional comfort. Following the recommendations of a joint committee the two boards unanimously agreed that merger was to be pursued. The importance of board buy-in cannot be overstated. This joint committee and executive staff developed all proposals for the full board for implementation starting with creating the founding board from the existing ones, changes to BCLT’s by-laws, and approval of a new organizational chart and new executive team.

The BCLT ED was chosen to be the new CEO early on, so while executives remained in other roles from LCHDC, even before merger there was one identified staff leader. The BCLT president was the board leader but he and the LCHDC chair worked as a team. In the first year of CHT the merged board undertook their own change process, culminating in a retreat and 3 year organizational strategic planning session that included a list of goals for board performance. Their diligence in seeing this though has resulted in a high performing board by every measure: active community outreach and fundraising; productive generative work and decision making at the board and committee levels; effective board meeting with nearly 100% attendance; a stable of nominees for vacancies and offices; complete array of appropriate board policies and well attended regular training and orientation. The CEO has been asked to present our experience in a number of different venues, including other organization’s board meeting and national conferences.

Perhaps the biggest contribution the board made was to remain unwavering in their commitment to a new organization with a new staffing structure, and the goal of self-sustaining programs and lines of business. They knew that immediate trimming was needed and that remaining employees would be challenged by structural changes that affected their job description, place in the hierarchy and supervisors. We got off to a good start. We funded and hired a new position of HR almost a year prior to merging and combined the two different benefit packages. A plan was developed to support staff through the transition and build morale including one-on-one meetings by the CEO with each staff person and quarterly full staff meetings where we communicated everything very openly and strove to motivate and reassure nervous and stressed workers. We developed good severance packages for departing staff. We involved the full staff along with the boards and members in the creation and selection of a new name and logo. The CEO became cheerleader in chief for a brighter future constantly driving people to embrace change.

Not everyone drank the Kool-Aid. In the first few months of CHT many former LCHDC leaders left abruptly. Others had to be asked to leave. At one point we had to stop to formally let people grieve what had ended. Leadership was so committed to looking ahead that we had skipped this essential stage for staff who had lost colleagues, their institutional identity, their home offices and cherished leaders. Partner agencies were surprisingly quick to declare that the merger failed and all the best people were gone. Even so, the departures were beneficial. The merger team of the board continued as an executive committee to support the CEO and didn’t flinch at these departures, supporting the CEO’s communication to other stakeholders and advocating for their support and patience. This was very valuable.

We engaged an outside consultant to help with restructuring PM and HOC and retained him to stand in temporarily as COO/CFO functions until we filled that position. He also recruited a colleague to temporarily lead our decimated PM department. Both did a lot of in-house training and capacity-building, involving the line staff in every change and new system proposed. It was not top down. The HOC staff conducted their own time management and systems review and provided the feedback that the consultant in turn exposed to them with suggested changes. It was painful but it reflected their reality: too many people accomplishing much less than was possible due to a gap in management, which was also the root of much stress which had been mistaken as overwork (and so over-staffing). They were facing a cliff funding-wise and had to face their choices. They did and they rebuilt together from there. HOC has the new leader that emerged in the initial reorganization and a mix of new and former employees.

Property managers learned to do their own budgets and discovered where properties were leaking money. Leadership for that department was hard to come by until an exceptional young member of the staff stepped up and said that she could do better than anyone we interviewed. We were able to give her that chance because by this time we had a strong COO/CFO in place and could also take advantage of our access to training and TA through NeighborWorks.

That first terrible year all was not bleak. We had the strongest community fundraising campaign in our history with 100% participation of board and staff. LCHDC had not done fundraising and this was a very big cultural shift for them and one that has taken continued – and rewarding effort at the board level.

This reorganization was not fully completed until we had brought together core functions into new headquarters two years after merger closing. That said, this approach to staffing our activities has been incorporated into our operating culture so that each staff vacancy is seen as an opportunity to re-examine structure and can lead to adjustments or reallocation of duties. For example we have combined the COO/CFO function and replaced the past CFO with a Finance Director who oversees his department and is a peer with department heads, better integrating financial services to programs and uniting operational leadership under one COO/CFO.

The initial methodology used implement the structure was creating an executive team (CEO, COO/CFO and CAO/HR) to lead, train and support department heads in departmental redesign as well as day-to-day operations and budget management. Neither founding group was sophisticated enough to do this. Now department heads create their budgets and manage to them. This discipline flows through the organization and has resulted in overall operating income going from a $550,000 deficit to net $250,000 in operating cash.

Also although we were very short-handed post-merger we jumped at the invitation to apply for the World Habitat Award even though it seemed a stretch just to find the time to apply. Just the news received a few months later that we were WHA finalists boosted staff and board morale tremendously. When the judges contacted us about a site visit everyone got involved in showing off our work – from the maintenance crews right up to executives. When our visitors arrived everyone was already standing a little taller and by the time they left we were very proud of our work. When it was announced that we won, even the most skeptical could see we had created a lasting organization. A year and half later, just settled in our new offices the staff came together to host a 6 day site study visit for 25 people from around the world. The result was exceptional. The program leaders and participants gave us the highest rating for the content and overall quality of the visit and related hospitality. We are very proud of the award and the innovative work that it recognizes. And we are most proud of having achieved our goal in creating CHT a truly vibrant organization that looks forward to its future accomplishments while providing the best of service to our residents, customers and communities.

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