By Peter Osborne
FELTON — Three years ago, Danielle Smith was driving through Elkton, Maryland, when she saw something that caused her to hit her brakes: a father playing with his young son on a sad excuse for a playground, all faded plastic and neglect, in a low-income apartment complex that had clearly seen better days.
For Smith, who had spent years in commercial real estate finance working for publicly traded companies, something clicked. That fleeting moment crystallized what would become her mission: creating affordable apartment communities people could be proud to call home.
“That was really the inspiration behind starting the company,” says Smith, the 35-year-old founder and sole owner of Carson Development.
Fast forward to today, and that same Elkton property has come full circle. Danielle acquired it last July and has completed a substantial rehabilitation, including a brand-new playground and basketball court. It’s a poetic closing of the loop that represents everything her company stands for.
Before launching Carson Development, Smith had climbed the ladder to become director of finance for the publicly held Pennsylvania Real Estate Investment Trust, handling acquisitions, dispositions, and financing for regional malls. Prior to that, she managed similar functions for grocery and Walmart-anchored shopping centers for the Kronke Group in Missouri.
The pivot required new thinking, especially when it came to funding a startup in a capital-intensive industry. Her advice to aspiring entrepreneurs is blunt: “However long of a runway you think you need, double it and however much capital you think you need, quadruple it, and then just hang on and you’ll be okay.”
She learned this lesson the hard way. Her initial cash projections were off by about 400%, she admits with a laugh. “Everything, if I look back to 2021 and 2022, even where I thought our projects would be, I was very wrong,” she admits with a wry laugh.
Take something as seemingly straightforward as letters of credit. “I was used to working for an organization where you could just call the bank and get an unsecured letter of credit,” Smith explains. As a small business owner, however, she suddenly needed 100% security behind every financial instrument — cash reserves she hadn’t anticipated needing.
“Things that I didn’t think would require capital all of a sudden became very large and real numbers,” she says. “That was cash that I had never foreseen being required to complete a project.”
Smith didn’t jump in blind. She created a financial three-legged stool: personal savings, a personal line of credit, and term loans from friends and family who believed in her vision. For years before taking the plunge, she moonlighted as a student of the low-income tax credit program, squirreling away money.
“Prepare. And then when you make the leap, be in a hundred percent,” she advises aspiring entrepreneurs. “Commit yourself to that. Whether that’s time with your family or a lifestyle that you once had, there’s a lot of sacrifices that go into that.”
When she finally launched Carson Development in January 2021, one of her first priorities was building the right team. By May, she’d hired experienced multi-family developer Max Friedman.
The financial high wire act nearly came crashing down when her company was closing on its first Low-Income Housing Tax Credit project in Maryland. State officials raised concerns about Carson Development’s experience and qualifications, suggesting they bring in a more established developer as a partner.
“At that point, I am all in — hundreds of thousands of dollars in debt. I’ve maxed out my credit line. I haven’t paid myself in two years,” Smith recalls. “I remember feeling like I could not stomach the idea of everything that I had put into this and all the hard work that my team had put in and part of our fee or control going to someone who hadn’t done anything.”
That moment crystallized her realization that her risk tolerance was higher than most. “With small-business owners, I think sometimes people forget that you personally guarantee everything and there’s a risk that goes with that,” she says.
Fortunately, they were able to close as the sole developer, but the experience was humbling. During such challenging moments, she finds strength in her company’s namesake.
“The company is named after my 5-year-old son Carson,” she says, her expression softening. “And his name on the door is what gets me through those moments that you feel pretty defeated as a business owner.”
Her company isn’t a one-trick pony. Smith’s portfolio spans both affordable housing (serving populations at 80% or below of area median income) and what she calls “workforce housing” (serving those at 80-120% of area median income) across Delaware and Maryland. They’re juggling acquisition-rehab projects like the one in Elkton and ground-up construction like the Reese Apartments in Felton — two three-story garden-style buildings with 24 units each.
The Felton location wasn’t chosen randomly. Smith explains that Delaware State Housing Authority uses a points system for its competitive funding process and Felton sits squarely in what bureaucrats call an “area of opportunity” — essentially the state’s way of waving a flag saying “build here please.”
“We are a small company competing against more established development companies who have a lot more capital,” Smith explains. “I know that I cannot possibly fund land in some areas of New Castle County or parts of Sussex County. I would love to be able to develop in Eastern Sussex County; unfortunately we just aren’t quite there yet. But that’s not to say we won’t be there very soon.”
As a woman in a male-dominated industry, Smith has faced her share of assumptions. “The only time I really feel it is the first time I meet someone. They usually don’t realize that I own the company,” she says. “But once we start working together, it’s been pretty seamless.”
The confidence that now radiates from her didn’t materialize overnight. “First, I was very insecure about it, but now I’ve realized that that was something that was within me,” she reflects. “Being confident and knowing that we have a great team, we know what we’re doing, I deserve a seat at this table, and I’m not one to sit silently.”
What sets Smith’s approach apart from many developers is her personal involvement. She walks through every unit in properties her company acquires. She attends community events and participates in construction punch list walkthroughs.
Finding the sweet spot between big-picture vision and nitty-gritty execution remains her ongoing challenge. “We are very much still in the startup phase, and I find myself sometimes getting in the weeds,” Smith admits. “I have to remember that I need to delegate tasks and give my staff the space they need to do what they do best.”
She makes design decisions based on her own experiences as a mother, like adding washer-dryer hookups in units even when it increases costs without adding points in competitive state funding applications.
“I know we can’t afford washer-dryer in units. That is not going to happen in our budget,” Smith explains. “However, I can afford to put the hookups in the unit. I’m not receiving any points from the state on our competitive application, there was no advantage to doing that. It’s just increasing construction costs.”
But Smith isn’t driven by spreadsheet logic alone. “I remember having a young baby who in the middle of the night, onesies are coming off, and walking to a laundry facility just isn’t really practical.
“I want someone to be able to drive into one of our communities and not know it’s affordable housing,” she says.
The former finance executives has undergone her own internal renovation when it comes to defining success. “When I first started, I thought success would be defined by my balance sheet,” she says. “What I’ve learned is that it’s more through impact… seeing a family who was struggling to find housing and we’ve been able to house them in one of our communities or drastically increasing the quality of life for a family through our rehabs.
The impact has exceeded her expectations. “When I first started, I don’t think I realized just how much this would change the lives for certain people or just how much me putting the work in or putting the focus on a particular community can change that community,” she says.
Smith has been called “an unusually involved owner who cares a lot” — a badge she wears proudly. Carson sometimes joins her at work sites, donning his construction hard hat and helping clean his mom clean units with his mini-Swiffer.
As Carson Development continues to grow, Smith remains focused on investing in her team through compensation, education, and leadership. “Investing in your core team is, I think, the number one priority,” she says.
That impact has come full circle in Elkton, where a father and son (or mother and child) can now play on a brand-new playground — one built by a developer who saw not just dilapidated property, but a community worth investing in.
