The University of Maryland School of Public Policy, in partnership with the ACSIM Housing Division, conducts 2½-day educational programs for installations selected for housing privatization. These programs are designed to familiarize a cross cut of installation personnel with basic principles of private sector real estate development and to engage them in assisting the designated RCI team with planning and implementation.

PROGRAM CONTENT
The Military Housing Privatization Road Show can be conducted as a closed program targeted to military executives and housing officials involved with privatization only or as a collaborative session involving local community representatives, so that installation officials and local officials from government, schools, the Chamber of Commerce and so on are able to explore the ramifications of housing privatization together. The 2½ day program provides participants with:

• a full comprehension of the benefits of privatization;
• an appreciation from housing managers of the complexity of privatization implementation and long term management; and
• a realization of the need to develop/train a cadre of skilled professionals within the military who can work effectively with internal and external consultants; potential developers; partners; and owners and operators of housing and local communities.

A sample of the sessions and themes covered:

CLASS INTRODUCTIONS AND OUTCOMES DEFINITION: Participants seek to define what the appropriate outcome(s) would be for privatization, once the job is done. Working in teams, they derive and reconcile measures of success for privatization at their installation. General agreement about the nature of the outcome(s) sought will guide the approaches taken to achieve privatization. By the end of the session, participants will have a set of proposed outcomes to share with the RCI coordinator and the Garrison Commander.

RISK AND REWARD: DEVELOPER PERSPECTIVE: A successful multi-family developer discusses how the private sector evaluates risk, the returns in relation to risk as well as how the developer's mission differs from the Army's housing mission.

REAL ESTATE TRANSACTIONS AS PUBLIC/PRIVATE PARTNERSHIPS: This session teaches participants to understand what drives both the public and private partners and distinguish privatization from conventional government procurement. This class emphasizes the opportunities and pitfalls of bringing private sector real estate disciplines and techniques to the operation of military family housing and suggests methods for aligning incentives so that the final transaction works for both parties.

ROLE OF ECONOMIC INCENTIVE IN PRIVATE RENTAL HOUSING: Participants learn the determinants of apartment value that, in turn, determine the economic incentives of their future private sector partners. Understanding these economic incentives is the first step toward harnessing the power of economic incentives to accomplish the objectives of privatization. Participants explore the concepts of net operating income, debt service coverage, loan to value ratio, equity, and yield.

LONG-TERM ASSET MANAGEMENT ALIGNING THE INCENTIVES: This session is an overview of typical real estate performance measurements: earning power, financial strengths, physical condition, and compliance with affordability commitments. Using industry average data (IREM/NAA), participants learn how private asset managers monitor operations, resolve disputes about operating expenses, and select performance measurements.

GRADUATE STUDENT HOUSING CASE STUDY: As an introduction to the privatization process, students work through the privatization stages for 450 graduate student apartments situated on the University of Maryland campus. These units were privatized in 1992 and have had 12 years of operating experience. Parallels with and divergences from current military approaches will be explored.

LESSONS FROM THE PAST/INCENTIVES FOR THE FUTURE: Students learn the parameters for diagnosing housing stock and assess their inventories. They explore the experience of the last 30 years in the military and domestic sectors, in order to avoid common pitfalls in public private partnerships.

PERSPECTIVES ON PRIVATIZATION: This session is designed to enable participants to air their perspectives, seek common threads, and ensure that the challenges associated with successful privatization have been fully articulated. A clear focus on the problem that confronts the armed forces is an essential precursor to effective definition of appropriate outcomes.

STATE AND LOCAL GOVERNMENT-ISSUES AND OPPORTUNITIES: In this session, students learn about the numerous ways governances are organized at the state and local level. They also examine the sources of authority for governmental programming and decisions. The ramifications of new construction for local educational entities are discussed. Finally, they assess the importance of identifying and understanding local interfaces that affect privatization.

BROSTROM PARK AT FT. ORD, FT. HUNTER LEGITT AND BIRCHWOOD AT FT. WAINWRIGHT CASE STUDIES: These case studies illustrate how privatization transactions can be altered and how expectations change over time, with both positive and negative consequences for privatized housing.

DATES, LOCATION & COST

The dates for the 2007 Military Housing Privatization Road Shows are: April 24-26 (Fort Sill, OK) and May 22-24 (Fort Jackson, SC).