Let’s change our mindset.

Eve Picker: Hey, everyone this is Eve Picker, and if you listen to this podcast series, you’re going to learn how to make some change. Thanks so much for joining us on this podcast. I’m Eve Picker, and my life revolves around cities, real estate, crowdfunding, and change. In this podcast series, we’ll be digging deep to discover how we can build better cities by building better buildings.

Eve Picker: Sandy Wiggins is my guest today. Sandy had an epiphany 25 years ago that has changed all of our lives. Then, he was a big-wig developer, having built millions of square feet of traditional buildings. Life was good, until one day, a friend showed him a small article on the impact that buildings had on the environment – the environment that Sandy loved so much. That conversation forever changed the direction of his life, and ours.

Eve Picker: 25 years later, Sandy has had a hand in building the US Green Building Council, in developing the LEED rating system, in developing over 60 LEED-rated commercial buildings, and the nation’s first Gold-certified homes. Sandy’s personal epiphany has impacted many lives.

Eve Picker: If you want to know more about Sandy after you’ve listened to this podcast, please visit EvePicker.com, where you’ll find links and other goodies on the show notes page, and where you can subscribe to my newsletter on all things real-estate impact.

Eve Picker: Sandy, just tell us a little bit about your background, and what path led you to where you are today.

Sandy Wiggins: Sure. Initially in my career, I followed a pretty traditional path in development, and construction; worked in both residential and commercial sectors; also did some institutional work, and spent the better part of two decades following that path, and actually worked all over the eastern United States on many different kinds of projects.

Sandy Wiggins: Then reached a point where I was the executive vice president of a firm that I helped build into a fairly large firm, and was feeling that something wasn’t right. I was working on a project in Philadelphia, where I lived at the time, and was out to lunch with the architect, who was a friend.

Sandy Wiggins: During our lunch conversation, he shared a tiny little article in an architectural magazine about the environmental impact of building, and buildings. I was kind of stunned by that. I’d been a passionate outdoors person, an environmentalist, my whole life, but had never connected that passion with what I did for a living.

Sandy Wiggins: It became an itch that I just couldn’t stop scratching. I wanted to understand it. On that project, we tried to do the best we could, but there was very little information available to help us.

Sandy Wiggins: I started to bring people together in the Philadelphia community, who were interested in having a conversation about that. We would meet informally once a month. There were a few architects, and other developers, a person from city government. That little group grew to maybe 15 or 20 people.

Sandy Wiggins: Then, I decided that we should actually launch a more formal effort, and started a non-profit in Philadelphia focused on greening the built environment. At the time, it was called the Delaware Valley Green Building Council. Today, it’s called Green Building United.

Sandy Wiggins: Through that platform, began to connect to other people around the country who were also thinking about these issues, which ultimately led me to the very nascent US Green Building Council. I became very involved in that, and the development of the LEED rating systems, and moving those out into the marketplace, and helping to build USGBC.

Eve Picker: That’s pretty spectacular.

Sandy Wiggins: Yeah, well, it was-

Eve Picker: How long did all of that take, from when you first saw the article to …?

Sandy Wiggins: Oh, so, when I first saw that article, I want to say it was 1993. USGBC began to form in the late ’90s. It was a very small community of people. LEED, the very first pilot version of LEED, was launched in 2000.

Sandy Wiggins: By 2007, we’d hit a tipping point, and LEED was becoming the standard for pretty much any what I would call Class-A building in the United States, and it was it was propagating around the world. It’d been adopted in China, and India and other countries. It moved very rapidly.

Eve Picker: Yeah, that is pretty fast.

Sandy Wiggins: Yeah.

Eve Picker: I tried using LEED on a renovation of an historic building in the early 2000s, and I gave up; at that time, it was not … It was really geared towards greenfield developments, which was kind of weird, when you think about this. It was just too hard for a small- not a huge project; a smaller project in an inner city. I think that’s changed, too, right?

It has changed a lot. There are now many versions of LEED that are designed to suit different kinds of projects. There’s LEED for neighborhood developments, and now there’s LEED for cities, and there’s the WELL Building Standard … There’s many other pathways that people can follow to help them develop green buildings, and green communities.

Eve Picker: Do you think those sorts of ratings are the answers, or building the socially responsible way, I suppose?

Sandy Wiggins: Are they the answers? No, they’re just a tool. First of all, from an environmental perspective … I’ve gone on, and become involved with net-zero energy projects, Living Building Challenge, and Living Community Challenge projects.

Sandy Wiggins: From an environmental perspective, LEED has been catalytic in terms of raising awareness in the industry. It certainly has had an incremental impact, in terms of the environmental impact of buildings, but it’s still just doing less bad. We need to do a whole lot better.

Sandy Wiggins: From a socially responsible perspective, LEED has really lacked in terms of addressing any issues of social equity. They’re starting to take pieces of that on. But Living Building Challenge, for example, has a very distinct focus on social equity, and social justice.

Sandy Wiggins: Still, the rating systems are just a tool. We fundamentally need to change the mindset that we’re operating from, in order to really address both the social, and environmental issues that we’re facing right now.

Eve Picker: Be sure to go to EvePicker.com, and sign up for my free educational newsletter about impact real-estate investing. You’ll be among the first to hear about new projects you can invest in. That’s EvePicker.com. Thanks so much.

Sandy Wiggins: One of the things that worries me is that LEED is a tool that’s just for one segment of society, one industry. Most people don’t know about it at all. I suppose they only get to know about it when they use the building.

Eve Picker: I really think for an understanding of what’s going on to filter into everyone’s minds, you have to speak in plain English, and many of these ratings, and words that we use are not plain English for most people. We’re kind of a long way from most people understanding what needs to happen.

Sandy Wiggins: I agree.

Eve Picker: Yeah, so … Well, that’s pretty amazing; that’s been a long time coming. What else do you think might be improved in the world of real-estate impact, even real-estate impact investing?

Sandy Wiggins: Great question. Talking about real-estate impact investing, the availability of capital creates so many possibilities that we aren’t taking advantage of. Frankly, it comes from the economic mindset that drives all of our behavior, which is fundamentally about eking out the maximum profit – financial profit – from every dollar that we invest. When I talk about a mindset shift, that’s really what I’m talking about.

Sandy Wiggins: We really need to- we need to stop externalizing the environmental, and social impacts of our investment decisions, and start looking at those investments in a much more holistic way to understand what are those environmental, and social impacts? How can we start to actually include them in our decision-making process about the return that we’re getting for the capital that we’re putting to work?

Sandy Wiggins: That fundamentally needs to change, and it is changing. There’s a growing community of impact, or mission investors who are thinking about these issues, and who aren’t willing to invest in anything, including real-estate projects, that are moving the needle in the wrong direction.

Eve Picker: Yeah, I’ve heard statistics now of as high as 85 percent of investors want to invest in some sort of socially responsible way in their portfolio. It’s a very big number now.

Sandy Wiggins: Yeah, it’s another sort of hockey stick.

Eve Picker: It really is, but I have to say, my disappointment with this, and I know that we’ve talked about this before … I have yet to see investors with really deep pockets invest in – let’s say credit investors, not necessarily investors with really deep pockets – but I think people are still quibbling about the return they’re going to get.

Eve Picker: They want a return, and they want social responsibility. They don’t seem yet ready to give up on the return. I think you’re working with, or seeing an elite group of people who are educated enough to understand that they have to give up something. I’m not seeing that yet.

Sandy Wiggins: Yeah … It’s difficult territory, and it’s slow, because the underlying paradigm that we all operate from creates this economic system that … This is very deep, Eve. It’s fundamentally about security, and survival.

Sandy Wiggins: We live in a system driven by these underlying beliefs, or paradigms that see us as separate from each other, separate from the environment, that give rise to – even though these aren’t conscious – the belief that resources are scarce; that I have to look out for myself. One of the fallouts of that is that there’s this hyper-focus on aggregating resources for myself, and maximizing financial return.

Sandy Wiggins: When we talk about investing in socially responsible, or sustainable communities, we need to be thinking about much more than just the built environment; we need to be thinking about the social systems in those communities. The built environment really has a huge impact in framing how those systems operate, so it’s all deeply intertwined.

Sandy Wiggins: Here’s what I see happening in the world, and this is nascent, and it’s going to … Hopefully, more and more people will get to this, but there are many people that are experiencing the perspective that we are deeply interconnected, and inextricably interconnected with each other, and with the natural environment, and that we need to be thinking about how our resources are deployed to support each other, as well as ourselves.

Sandy Wiggins: Things like co-housing is a great example of this. It’s a tiny little part of the development world. Co-housing started in Denmark 60 years ago, and first spread around Europe; now it’s happening in the United States, but it’s still quite …  There’s only maybe 300 co-housing communities in the US. There really it’s a pattern of development that is designed to support community, and connection to each other, and caring for each other. That’s where I think we have to go.

Eve Picker: I think that’s right, but I think that many of us have been let down by communities around us, over racial, and religious issues, and many other issues. It’s difficult to trust, given that, right? I suppose it’s not hard to understand why people feel they need to look after themselves first.

Sandy Wiggins: Yeah, no, it’s not. It’s completely understandable, because it’s just- it is wired into our system, but it’s not an absolute, I guess is what I would say. It’s based on a series of beliefs that have been built up over centuries, and particularly the last two centuries.

Sandy Wiggins: It’s difficult to change, but, honestly, from where I sit, having spent the last 20 years now deeply involved in environmental sustainability, social justice, from the perspective- much of that from the perspective of real-estate development, and impact investing, we have to change, or we’re not going to survive.

Eve Picker: What do you like best about the world of real-estate impact investing? What do you think it can do-  good things it can do?  I mean, I know … My small hope for Small Change is that we can list a project in a neighborhood, and people who live there can invest in it, and benefit not only from seeing that project built where they already own an asset – their own house – but that they can build wealth where they live, as well. That’s kind of my little piece of excitement about real-estate impact investing, but [cross talk]

Sandy Wiggins: -quite frankly, that excites me a lot, and, to me, it’s an important, and beautiful step in the direction that we need to take. When people invest in their own communities, when they …

Sandy Wiggins: In the dominant system that we’re all a part of, people put their money into mutual funds, and public equities. They are completely disconnected from their investment. It’s complex; it’s opaque, and disconnected, and it’s really strictly focused on short-term financial return.

Sandy Wiggins: What is needed is a shift to investment that is direct, transparent, personal, and grounded in a system of relationships. That’s, to me, what Small Change is doing- is creating in the real-estate industry.

Sandy Wiggins: If I put my money into a REIT, and the REIT’s investing in real-estate projects all over the country that I have no connection to, all I care about is the financial return. If I put my money into a building that’s going to house the local grocery store in my community, I drive by that store every day. I care about it.

Sandy Wiggins: It fundamentally changes my relationship to my investment. If that business gets in trouble, yes, I’m worried about my investment, but I also want that business to succeed, because I have a relationship to it. I don’t know if I’m answering your question [cross talk]

Eve Picker: -that’s the way I see to it, too. Are there any other direct-investment opportunities, or investment opportunities emerging that you think can help solve this problem of the relationship of you to the place you’re in, and the people around you?

Sandy Wiggins: Obviously, if you’re an accredited investor, and there are opportunities in your place to directly invest in real-estate projects in a more traditional sense, that’s helpful. That’s impact investing, if you’re working through this lens of local, and sustainable investment, but the system’s kind of wired to prevent us from doing that. Regulation Crowdfunding is like a first giant step into that space; although, as you know, it’s still really hard, and nascent.

Eve Picker: Yeah, it is really hard. I think we need a lot of investor education. I think there’s a lot of mistrust around it. Let’s move on to some other thoughts. I’m just wondering if you think there are any current trends in real-estate development that are important? You mentioned co-housing. We know that co-working has also really taken off as a way for people to share business spaces. I’m wondering what else is out there?

Sandy Wiggins: Co-housing, and co-working are great examples of new trends that I think really should be supported, and that there’s a pent-up demand for. I just find this in many of the different networks that I’m connected to, that there is a demand for product that isn’t being developed, because developers are generally trying to maximize return, or just don’t understand this emergent market.

Sandy Wiggins: Again, I can’t help but come back to the necessity to respond to what are now becoming environmental emergencies that we’re facing. I mean, climate change, or climate crisis – as people are starting to call it now – is Exhibit A. The development community needs to respond to that. Everybody needs to respond to it. Government needs to respond to it. The codes that govern development need to respond to it.

Sandy Wiggins: The development community needs to, and can respond to it … Net-zero energy development; things like the Living Building Challenge, and Living Community Challenge are stakes in the ground that are moving us in the right direction.

Sandy Wiggins: Frankly, I’ve worked on enough net-zero energy projects now to understand that we have all the technology we need to do this.  Not every building can be net-zero energy, independently, particularly in dense urban environments, when you’re dealing with multi-storied structures, but, when you start to look at whole communities, we can build net-zero energy communities. For me, there’s just no excuse for us not to be going there.

Eve Picker: Yeah. That’s actually really interesting. I haven’t been watching what’s been happening in the code world, but I still talk to developers who fuss about how many parking spaces they’re going to have. There are certainly requirements in the city I live in for parking; although they’re reduced in some places.

Eve Picker: I could imagine – build a net-zero-energy building, and provide bike racks for everyone, and is there really a need for parking at all? I think you’d get much better development. It would help the environment. It’ll be friendlier for the city. I just don’t- I don’t see that shift happening in most places yet. It’s a really big shift.

Sandy Wiggins: It is, and you’re right, it’s not happening in most places …  I happen to live in a city that’s really progressive in this regard – Washington DC. The zoning codes are changing; the building codes are changing. There’s a very robust, overarching … They call it the Sustainable DC Plan that’s driving this that is championed both by the Mayor, and City Council.

Sandy Wiggins: It is happening in places, and having been involved in movement building in the past, I see that as a really hopeful sign, because one of the things that needs to happen is that functional exemplars have to emerge, so that other people can say, “Okay, you can actually do this, and we can copy that.”

Eve Picker: Right.

Sandy Wiggins: San Francisco, and DC are two communities where that’s starting to happen-

Eve Picker: Right. Just a really great example: I’m looking at a smallish project in Pittsburgh, which is, we think, going to be 20-, or maybe a 30-unit building. Most of the first floor is going to be taken up with parking, because it’s required in the code.

Eve Picker: It’s an expensive use of the space. The building is very close to downtown. It’s flat. It’s bike-able. I would be thrilled if the city said to me, “Okay, give us a net-zero-energy building,  and we’ll eliminate the parking requirement.”

Sandy Wiggins: Right.

Sandy Wiggins: I don’t actually know the cost, but I’m going to guess that we’d end up maybe in the same place, and that would be- that’s a really good example of what I think ought to happen-

Sandy Wiggins: I agree.

Eve Picker: -but isn’t happening yet.

Sandy Wiggins: Here’s another … Again, for the development community, once you understand the importance of this, it really becomes your responsibility to become an advocate for it.

Sandy Wiggins: I will tell you that having, again, spent many years now working on projects that are kind of pushing the edge of what’s possible, in terms of particularly environmental sustainability, the hardest part is dealing with the regulatory environment.

Sandy Wiggins: I can’t tell you how many hours I’ve spent educating, and advocating with local agencies, state agencies, even the federal government, to enable the kind of development that really should be occurring.

Eve Picker: You don’t have to tell me. First of all, I have a funding portal, so you know what that means, right?

Sandy Wiggins: Yes, right.

Eve Picker: Secondly, I was the first loft developer in downtown Pittsburgh, at a time where, literally, a banker I went to said to me, “Aww, honey, no one’s gonna live there …”

Sandy Wiggins: Right. Yep.

Eve Picker: Yeah, it requires … It’s a lot of work, but it’s also a lot of fun making something change for the better.

Sandy Wiggins: Yeah, absolutely.

Eve Picker: Do you see any particular community engagement tools that could help, or have worked, or work well?

Sandy Wiggins: Another great question. What I’ve come to believe is that the most valuable asset that you have with any capital project is the attention of a large community of stakeholders around that project.

Sandy Wiggins: Whenever there’s development, whether it’s a single home, or a whole neighborhood, or a downtown high-rise building, there are lots of people who are interested in what’s going on. Many of them might be NIMBYs, but that attention is incredibly valuable. Using processes that take advantage of that attention to educate, and enroll, and build consensus about what’s going to happen is critically important.

Sandy Wiggins: Most of the projects that I get involved with, we use something called a dynamic-planning process, where we are really inviting all those stakeholders’ voices into the design, and development, including the people that are the alligators – the ones that want to come up, and kind of bite you in the backside – because their voices are important. You need to hear them, and understand them.

Sandy Wiggins: What I’ve found, consistently, is if they are treated with respect, and invited in, and heard, and you really spend the time to understand what’s driving their concern, or issue, that almost always, you can find a way to turn those alligators into advocates.

Eve Picker: That requires a lot of patience, I think.

Sandy Wiggins: It does, yep.

Eve Picker: What are you working on, today? What’s your project of the moment?

Sandy Wiggins: At the moment, I’ve got a … There’s a cluster of Living Building Challenge projects that I’ve been working on for a number of years, just outside of DC, in Maryland. It’s called the Potomac Watershed Study Center. That’s ongoing. We’re down to the final phase of that project, after almost a decade.

Sandy Wiggins: I am working on a Living Community Challenge project, in Yellow Springs, Ohio, with Antioch College. Again, it’s been many years, but we’ve been through a master-planning process, and if everything goes right, there’ll actually be a pilot phase constructed this year.

Sandy Wiggins: I’m working on some local projects in the DC market that are attempting to be net-zero energy and/or Living Building Challenge projects. Those are the real-estate projects I’m working on. I spend a lot of time working in the mission-investing space, too.

Eve Picker: Yeah, it’s pretty fabulous … I may yet come to you for advice on this little project in Pittsburgh, on how to tackle that idea. I’ve got three sign-off questions for you. What is the key factor that you believe makes a real-estate project impactful, or that makes a real-estate project impactful to you?

Sandy Wiggins: I would say the key factor that makes a real-estate project impactful-

Eve Picker: We’re looking at key factors.

Sandy Wiggins: Yeah, or factors. A number of things come up for me. One, that it really is environmentally responsive, and that is in terms of the kind of environmentally responsive things we talk about with sustainability, energy efficiency, water, things like that – that it’s environmentally responsive to the community that it’s in; that is really additive to the health, and vitality of the community that it’s a part of, and that it has successfully engaged the stakeholders around that project; not just the end users, but everybody is going to be impacted by it in ways that are satisfying, and that are actually building community. Those are the things that rise up for me.

Eve Picker: Okay, that’s a pretty big list, yeah?

Sandy Wiggins: Yes.

Eve Picker: Then, other than by raising money, in what ways can involving investors through crowdfunding benefit the impact real-estate developer?

Sandy Wiggins: Well, again, what comes up for me is this idea of attention. When an investor is investing in a true crowdfunding, in a project that they can see, touch, feel … It’s something that’s in their community, or a community that’s part of their universe, there’s an opportunity to build relationship for deep engagement, for education. That’s what comes up for me there.

Eve Picker: Okay. Then, this is a really big one, but how do you think real-estate development in the US can be improved?

Sandy Wiggins: Oh boy.

Eve Picker: I have ideas.

Sandy Wiggins: Yeah.

Eve Picker: There’s really so much bad real-estate development still going on that … I know that’s a really big question, but …

Sandy Wiggins: Yeah. It’s a huge question. It’s such a big question, I’m not sure how to answer it, other than at a very high level, and say it’s not about the money. It’s about giving people better lives.

Sandy Wiggins: If we approach it from that perspective, that’s the improvement that we need that every development project should be about improving the quality of people’s lives. That includes our relationship with the natural world. That’s how it has to be improved-

Eve Picker: I think that’s a great answer. I think maybe it’s a threatening, and overwhelming thought for a lot of people, but the way I like … When things are really big, I like to think about them in chunks.

Eve Picker: It’s not that a building has to solve everything, but it could tackle one or two things. If you’re just going to focus on making sure that the people who live in the building don’t have huge utility bills, that’s a start, right?

Sandy Wiggins: Right.

Eve Picker: It doesn’t have to solve everything. In any case, I really enjoyed talking to you, and I’m sure we’re going to talk again soon, Sandy.

Sandy Wiggins: All right, Eve, thanks.

Eve Picker: Thank you very much.

Sandy Wiggins: Yep. I’ve enjoyed it, too. Take care.

Eve Picker: Okay, goodbye.

Sandy Wiggins: Bye-bye.

Eve Picker: That was Sandy Wiggins. What a great conversation that was. I feel a little diminished beside Sandy’s extraordinary accomplishments. Sandy gave me three great takeaways.

Eve Picker: First, that the real-estate industry was waiting for guidance on environmental impact, evidenced by the speed with which the LEED rating system was adopted. Second, that there are lots of pathways that you can follow to build sustainably today, including LEED, the well-being standard, net-zero, and Passive House Standard. Third, addressing issues of social equity must come next. What did you learn?

Eve Picker: You can read more about Sandy on the show notes page for this podcast, at EvePicker.com. While you’re there, please consider signing up for my newsletter to find out more about how to make money in real estate, while making some change.

Eve Picker: Thank you so much for spending your time with Sandy, and I, today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.