Manufactured authenticity.

Eve Picker: [00:00:06] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich, or poor, beautiful, or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone.

Eve: [00:00:43] In real estate development, envisioning how future societies will live can often feel like masterminding a high-tech work of science fiction. Just outside of Houston, a new development of the future is emerging. But instead of flying cars and skyscraping utopias, this version of Tomorrowland has its roots firmly and sustainably planted in days gone by. Indigo, a 235-acre community, is being developed by Scott Snodgrass and his partner Clayton Garrett, both farmers. They have thoughtfully gone against the norm in every aspect of this project, focusing first and foremost on people and a human scale to encourage interaction. Downsized lots and homes, a working farm, the integration of small businesses, careful attention paid to embracing everyone all make this project one worth watching. You’ll want to listen in to learn more.

Eve: [00:01:54] Hi, Scott. It’s really nice to have you join me today.

Scott Snodgrass: [00:01:57] Thank you so much for having me. I’ve been a big fan of yours and the podcast, at least for the past couple of years, and so, excited to be able to join today.

Eve: [00:02:06] Oh thank you. You’ve been heard to say that in community development, envisioning how future societies will live can often feel like masterminding a high-tech work of science fiction. Why is that?

Scott: [00:02:21] Well, uh, we don’t really know what the future holds for how people are going to live, but I think that we have maybe 40,000 years or something of history with how people live. And certainly, in modern history, we have some great analogues to look back at and so, I think it’s really about learning with what we’ve done in the past, but then also applying the technological changes we’ve had to the future. We’re a little slow to adopt some technologies. I think it’s real easy to see technologies and think it’s the future. And these sexy technologies that are always being sold by some company for some high price and you have to sign up for their subscription, and they own all of your data and all that. And we’re a little wary of that. But I do think that as we look into the future, sometimes we are doing the same thing that a science fiction writer would do in imagining what the world’s going to be like in the future.

Eve: [00:03:16] That’s true. So, and you are a former farmer amongst other things. How does a former farmer become a real estate developer?

Scott: [00:03:24] It’s a great question. It’s the one that most people ask, right away off the start. But my business partner and I, we have a company called Agmenity, and it manages farms for master plan community developers, hospitals, school districts, cities and counties. And so, we had experience in agriculture and started that company as a service company to help incorporate agriculture into more real estate developments and have been doing that work since 2015. And we had, our first project is called Harvest Green. It’s here in Houston. The real estate developer was just a wonderful company and their general manager on the project, Shay Shafi, was just an incredibly generous guy. And he brought us into every single development meeting, you know, so every week or every two weeks for years. And sometimes…

Eve: [00:04:18] You caught the bug!

Scott: [00:04:19] Right. We were like, why are we here talking about engineering? And he said, well, hey, this whole like, agriculture in a community thing is relatively new in the modern framework. And so we want to make sure that we’re catching any of those conflict points. And so we got to see the behind the scenes. And we got to ask questions about, well, why are you making this decision and why are you making that decision? And Clayton and I, my business partner, we had always felt like what could be more impactful on someone’s life than the food they eat. Nothing, right? And then we saw this whole real estate development world and said, oh, wow. Like, real estate development actually has a lot to do with what food people eat and a whole host of other things. And so, this is also incredibly impactful work. So, we hired a COO at Agmenity who does a tremendous job, runs the company better than we ever did or could and is really leading that company in a growth throughout the country right now. And so, Clayton and I have been able to focus at Meristem Communities and put our energy there and really work on our first project, Indigo.

Eve: [00:05:23] And so Meristem Communities you launched with your partner. And how long ago was that?

Scott: [00:05:28] Now we just launched meristem in 2021. We owned a piece of property, um, that we had had a large-scale farm on, and we were starting to be surrounded by suburban development outside of Houston. And so, that farm was never going to grow to the full size of the property we had purchased, we realized. And so, we said, okay, well, what do we do with the rest of this property? And so, we had been walking alongside real estate developers and we said, well, let’s look at this. And we started talking to some folks about some mixed-use and sports parks and light industrial even. And none of it felt quite right. And then Covid hit, and everything stopped for a while. And then single-family real estate caught on fire, for good and for bad. And we said, okay, well, this is kind of our only option right now. And frankly, because of the demand that home builders had for lots at that time, it put us in a position where two farmers could become real estate developers because the home builders were so desperate for lots. And that was really the key that opened up financing and all the other agreements that we needed to get moving.

Eve: [00:06:38] Interesting. So, then I have to ask you, does this community differ from conventional urban plan communities? And if it does, how?

Scott: [00:06:48] Certainly for Houston, it is shockingly different, we discovered right away. Our conversations with our home builders weren’t easy, even though their demand for lots was so high. But, you know, we’ve done a number of things at Indigo that are different than the norm. You know, first off, we do have agriculture incorporated into the community. How could two farmers, you know, develop a community that didn’t have agriculture? So, we knew we had to do that, but we actually don’t find ourselves talking about it that much, related to Indigo. We see the big differences that we have are really our focus on walkability, and that means using homes that have their garages on alleys and the front doors either on the street or on a green space. And that was a very difficult framework for the Houston development world to understand. For whatever reason, Houston has just rarely had any alleys since the 50s or 60s. The city’s abandoned a lot of them in the urban core and master plan community developers just haven’t used them. And so, you know, we can easily travel around the country and see alley-loaded neighborhoods. You know, the traditional neighborhood design framework all around the country. Dallas even has a lot of it. And so, it was easy to go see it but we had a hard time getting our, our builders on board with doing that. So that was kind of the first hurdle and something we were doing that was very different. And then the second part of that was smaller…

Eve: [00:08:14] So actually let’s back up. So, the importance of alleys means that, you know, no driveways on the front, the front of the houses are really for people, not for cars and, and trash and cars are relegated to the alley. Right?

Scott: [00:08:29] Yeah. So, our tagline at Meristem Communities is places for people. And you know, we imagine a world where cars, corporations and capital are not the primary stakeholders. And those other three things are tools that humans can use to achieve their goals, but they’re not the primary stakeholders. And unfortunately, our real estate system, as you know and talk about all the time, is currently built for cars, corporations and capital. And so, we believe that it’s an important shift in the design framework as you’re designing a community to look at people first. So yes, garages on the back. That reduces our curb cuts and our conflict points for vehicles and for for driveways and sidewalks. Yeah.

Eve: [00:09:12] And people. Safer for kids.

Scott: [00:09:13] Yep. Safer for kids and all that. It allows us to have on-street parking and a lot more of it because we don’t have all of those curb cuts now, for the driveways. And it also means that when cars pull off of the road onto the alley, there’s a very limited number of cars on those alleys as well, because they serve small pockets of homes. And so even those spaces are relatively safe as well.

Eve: [00:09:35] That’s a really major urban planning feature, but I feel like I need to go back a step and ask you what your vision was. Like, what’s the overall vision for this community, and where did you draw inspiration from? Aside from the farm?

Scott: [00:09:51] And we have this conversation a lot too, like. Our PR team will ask, you know, what’s the theme of the community? And we keep coming back to it’s places for people. That really is the theme. You have to do everything. You can’t just pick one thing to do. And so, we’re incorporating agriculture into our development. We’re using alleys. We’re creating safer streets. Wherever our sidewalks cross the street we have a raised pedestrian crossing or a raised intersection table. We have narrower streets, we have on street parking, we have bulb-outs. We have all these things to create a safer environment for people and focus on that. And then we’ve also done the mixing of uses by having residential and retail and other commercial in the same space and, you know, bringing that into the neighborhood instead of pushing it out onto the major thoroughfare adjacent to our neighborhood and turning its back to the community, we’ve really brought that retail into the community and had it face the community and be really central there. And so, I think you have to do all those things. So, places for people really is the theme but then walkability and safe streets has to be an important part of that.

Eve: [00:11:00] So how big is this community? How many homes are we talking about? How many people?

Scott: [00:11:04] So we have 235 acres within the development. More than 60% of that is open space. So, we have a 25-acre lake. We have, you know, miles of walking trails and sidewalks and everything. And we also have these, we basically created a street grid and then took out every other street and made it a green space. And so, homes still front on those green spaces, and they’re served by the alleys in the back. So, we have a lot of open space there. We have, uh, 661 homes for sale. And then, and that’s a range of attached and detached and cottages and more traditional single-family homes for our market. And then we also have about 150 apartment units, but they’re distributed through a number of buildings. We have these mansion apartments that are six- and seven-unit apartments that just look like a banker’s house, that we’re putting on some of the green spaces. And then we have some, like, smaller 30-unit buildings of micro units that look like brownstones that are in what we call Indigo Commons, which is the real town center, mixed-use area of the neighborhood.

Eve: [00:12:17] And so you’re under construction, right?

Scott: [00:12:21] Correct.

Eve: [00:12:21] How far into this project are you? What percentage complete and how many people live there?

Scott: [00:12:27] So, we don’t have anyone living yet, but our section one, the model homes for the community are going to start construction here in just a few weeks. So, all of section one, which is a little more than a third of the community, all of the storm sewer, the sanitary sewer, water lines, all that’s in the water plant. And, you know, we built our own water plant and wastewater treatment plant because we didn’t have services in our area. And so, all of that is in and the paving starts this week. And so, they’re moving real quick for us. Hopefully the weather holds up for us and they’ll be out there pouring concrete for the next 30 days or so, and then we’ll have those first 265 lots available for sale. And I’ll tell you, we’ve been doing some really intentional, small-scale and intimate cultivation of the potential home buyers. And our home builders are saying the demand is intense and we believe that we’re going to sell out really quickly. So, we’re already getting section two ready. And construction for section two will start in just a few months here.

Eve: [00:13:28] And so, I have to ask how affordable are these homes?

Scott: [00:13:32] So, we are in the probably least affordable quadrant of the city. And again, partially that’s what allowed us as, you know, two simple farmers to deal. But also, what we’ve done is compare ourselves to the communities around us and if we wanted to push towards affordability, what could we do? Because Houston’s always been very affordable compared to the rest of the country but during Covid it changed quite a bit. And so, we’ve seen the same thing now where your firefighters, police officers, teachers, social workers can no longer, or anyone working in retail, can no longer afford to live even in the communities where they work. And it felt really wrong for a community to tell the people serving it they had to go somewhere else. That just felt inhuman. And so, we said, okay, we’ve got to find a way to solve for that problem. And so, one of the ways we did that was by pushing for smaller lot size, because we saw an opportunity where lots in Houston had become huge, you know, mostly in the 70s and 80s and 90s and that mostly that’s wasted space. People aren’t using those portions of their lots. So what we did was really densify our neighborhood, compared to the suburbs, you know, 3.2, 3.4, maybe four units per acre is the standard in the suburbs. I think we’re at almost eight units per acre. And then if you look at like, you know, net density in some smaller pockets in the neighborhood, we even flirt with 20 units per acre in our most dense areas. And so that’s a very different calculation. And that’s just on the first side.

Eve: [00:15:10] What were the zoning restrictions you have to contend with to get there?

Scott: [00:15:15] Most of our property was in the unincorporated county, and the county that we’re in has very little in the way of requirements for subdivisions or development. So, it’s kind of the wild, wild West out here.

Eve: [00:15:26] And that reminds me of, I don’t know if you ever used to play SimCity.

Scott: [00:15:29] Yeah, yeah.

Eve: [00:15:31] I just, you know, no restrictions.

Scott: [00:15:35] Yep.

Eve: [00:15:36] Insanity. Yeah.

Scott: [00:15:38] Yeah. So, then we, but we did have a portion of our property that was in the extraterritorial jurisdiction of the city of Richmond, which is our closest jurisdiction. We reached out to Richmond and said, hey, we’d love ultimately for our neighborhood to be a part of the city. So, we worked with them on a development agreement, and they have the right to annex our property in about ten years when we’re done with the development process. And that development agreement, so their, their minimum lot size was 6000ft², in the city of Richmond. And through our development agreement, we got that down.

Eve: [00:16:11] That’s a really huge.

Scott: [00:16:13] Right. Yeah. It’s big for the minimum. Right.

Eve: [00:16:15] Yes. Yeah,

Scott: [00:16:16] Maybe a maximum. It’d be okay. So, we worked with them and got that down to 2000ft², which is allowing us to do some cottage homes that are in that, like 950 to 1450 square footage range. That really serve, and that’s what we saw, was the suburbs of Houston have almost entirely been built for two parents with children families. There’s just so many homes built for that family formation, which in Texas is now like 20% of our family formation.

Eve: [00:16:49] Oh that’s really interesting.

Scott: [00:16:50] So the other 80% of family formations or household formations we’re just ignoring. People who want to live together, who aren’t married and have trouble with financing. You know, we have single parent families who affording a giant home like that can be really difficult. You know, all these different formations, you know, like couples who don’t want to have kids, which is more and more common today. And so, like, why are we only building these five-bedroom, you know, mini mansions in the suburbs? So, we shifted everything down on lot square footage and home square footage to create more of an ecosystem so that we’re providing homes for that wider range of people. And then especially wanted to do the aging in place concept where you could buy your first home in our neighborhood, you could rent here, then you can buy your first home in our neighborhood, and then you can size up your home as your family grows and size down as it doesn’t, as it shrinks and create all of that in one place for people.

Eve: [00:17:47] This is pretty challenging stuff that you’ve tackled for two farmers. First time real estate development. I have to ask, there’s a lot of infrastructure to put in place. How challenging was it to put the funds together for this project?

Scott: [00:18:01] I think we’re very persistent and we’re very persuasive. And then the market was really hot at that time. Like, we have the privilege of that and the privilege of both being white males, which does make a difference when you’re trying to get financing.

Eve: [00:18:15] Definitely.

Scott: [00:18:16] Absolutely. And then at the same time we were just willing to take no for an answer over and over again and go to the next person. And so we heard no, a bunch of times. We didn’t fit the traditional needs. You know, everybody understandably wanted a huge chunk of cash equity in the deal. And we didn’t have any money, we’re farmers, and we didn’t know anybody who was going to do that for us. And we didn’t want to go out and find an equity partner who would ultimately control the decision making. We wanted that to be us. So, we just kept working and working until we found a private lender that was willing to take on our deal, that was trying to move more into Texas. They had been developers in the past, which we really loved because they understood the development process. They’ve been very flexible. They are not very cheap. And I think that is the place that people need to get over that mental hurdle that, in our minds, we will pay for flexibility over and over and over again because it really brings resilience. When you lock yourself into this tiny little box of requirements and allow that lender or the bank to pull the rug out from under you whenever they decide to, that’s a tenuous place to be that we didn’t want to be. And so, we are happy to pay very high interest rates for very large sums of money for a long time in order to get the flexibility that we need. So, sure, we take a haircut in our profit at the end. And I think that’s what most people struggle with. But it does make our development more resilient.

Eve: [00:19:44] So you will have a working farm in this community?

Scott: [00:19:48] Yeah.

Eve: [00:19:48] How does that go?

Scott: [00:19:50] It’s 42 acres. And really, what most people will experience is the front three and a half acres, which are right at the entrance to the community, and it bumps right up into the town square area. And that’s the vegetable farm. So that’s where vegetables and flowers will be grown. That’s where people can go and buy some vegetables from the farm. They can take classes, they can interact with the farmers, maybe even have their own little plot to grow some vegetables in. And then the, on the back side of the property, the remainder of the farm is pasture and orchards. And so we will probably have laying hens, you know, hundreds and hundreds of laying hens and do egg production on the farm as well. And we’ll have some programming back there, but in a more limited basis that’ll mostly be a farmer’s work area on the back side of the farm.

Eve: [00:20:38] It sounds idyllic. And then also, where did you get your inspiration from for the architecture for the community, like, and what is the architecture like?

Scott: [00:20:48] We have a funny phrase we find ourselves using more and more, and that phrase is manufactured authenticity.

Eve: [00:20:54] Kind of like Disneyland, right?

Scott: [00:20:57] Yeah, in some ways. And there’s some parts of Disneyland that Disney did really well. Right? And really speak to people. There’s other parts of it that are cloying, I would say and, you know, are saccharine. But what we wanted to do, because we were developing what was just entirely farmland, not a single tree on our property, no structures at all. We felt like for people to feel like it was a place we needed to create some age, some patina on the community. So, we’ve done a few different things. You know, one, we went out and bought two 50-foot-tall live oak trees and had them planted at the property, and that was not cheap. But doing that, you know, at least makes it feel like something was here before. And then as we planned the architecture of our buildings, like the first commercial building we’re building is called the filling station. And so, it’s a little bit tongue in cheek that it was a 1930s Art Deco gas station. And then all of the decorations on it had been stripped off. It had been stripped back to its basic form, and it was no longer a gas station. It wasn’t serving cars now, now it’s serving people. So, it’s a general store, coffee, beer, wine, light breakfast and lunch options and then sells vegetables from the farm, eggs, pickles, jams and jellies, all that. And acts as the third place for the community to really activate at the beginning, where there’s cafe seating and it’s like, come hang out here, use the Wi-Fi, do whatever. So, the architecture of that building was really intentional, that it refers not only to an architectural style of the past, but also acts like it had been adaptive, reused, at some point in the future. And that goes all the way to like, choosing a polished concrete floor finish. You know, where do you incorporate some concrete block, like would have been in those buildings before so that you can see it, even if that’s not our modern construction method? So, there’s some touches to it that are Disney but what we’re hoping to do is really just give people that subconscious feeling of like, this isn’t a brand new whitewashed, you know, place. There’s some age here to, to help the community form in the beginning.

Eve: [00:23:11] And so how do you balance, like, modern amenities with this notion of small-town living?

Scott: [00:23:17] Part of that is actually doing your research on amenities and finding out what people want, and then looking at life cycle cost and value to the community. You know, in Houston, we’ve had an amenity arms race over the years, and people in other places in the country are shocked when they hear how low our association fees are compared to the amenities people get. Usually when I say we’re $1,700, they say, oh, $1,700 a month. That’s a that’s a little bit high. But we’ve seen numbers like that, and we say, no, $1,700 a year, is our cost. It’s shocking to people. And so, we wanted to, like we do with so many other things, go counterculture on that a little bit and say, what do people actually want? So, in Houston, every community has a pool, but those pools are only open three months a year. They cost millions of dollars to install, and they cost like a quarter million a year to staff and maintain. And so, we looked at that and said, okay, well, is there really the value? Like I have three elementary aged kids and we have eight pools we can go to in our neighborhood, which is ridiculous. But we go like 5 or 6 times a year. So, the amount of money that I’m paying in HOA fees towards that pool, it probably doesn’t calculate out to where it actually makes sense. And so we decided not to build a pool at Indigo.

Scott: [00:24:35] We have an amenity lake that is like a nature lake that you can swim in that we’re putting a dock on so if you want to swim, you can go there. But also, if you just desperately want to go to a pool, there are private pool clubs in the area, or you can go to a fitness center with a pool and those sorts of things. So, part of it was like getting rid of the big plays. In Houston these crystal lagoons have become all the rage, where people spend $10 million building a beach. You know, it’s an enormous pool, essentially. And we didn’t want to saddle our residents with that kind of debt. And we feel like with those big giant plays may get you a bunch of media coverage, but they’re really risky long term. So, we’ve downsized our amenities and done more of them and spread them out more throughout the community. So, it’s little things like a couple of bocce ball courts here and a natural children’s playground over here, and a small dog park over here, and a meditation maze over here, and some moving water and wind chimes over here. And really just spread those out and diffuse them throughout the community so that they’re more easily accessible. And that’s a part of the walkability. And they’re, I guess, maybe a little more equitably spread out throughout the community too, so that everyone has access to them, but not saddling the community with any specific, really large-scale debt.

Eve: [00:25:55] Yes, yeah. So, who will live there and where are they going to come from?

Scott: [00:25:59] So we did a lot of research at the beginning. We used a company called Kantar that has a giant database of demographics, looked at who lives in our area, which generation do they fall into? And then they even segment each generation by behavior. So, for example, there’s a millennial segment that’s a little more career-oriented, that’s a little more go, go, go. Then there’s another segment. So, I’m in that segment. My business partner Clayton’s in the other segment, which is a little more family oriented, a little more self-care oriented. And so, you know, it’s interesting to see the different segments and how they’re, how they want to live. So, my segment might be happier in a town home in an urban area. My business partner’s, you know, his segment might be a little bit more happy in a home, a smaller home, but with a little bit more of a lot around it and not attached. So, we did that research. Then we went out and looked at who’s in our area of those segments and then designed our home types for them. And then, we actually had 700 people answer a survey with questions about amenities and other things in our community and got amazing feedback from that that we incorporated into what we were doing. And then we took all of that to our home builders and said, here’s really what we want to see for the homes in this area. And we have architectural guidelines that control what they can build. We control the square footage band. We approve the elevations for the homes, what they look like on their facades and all of that. And then the goal is that once we get that done, we can hand it over to the homeowners’ association, and then the control can relax. And we want people to be able to have their own impact on what their home looks like.

Eve: [00:27:46] So how do baby boomers and seniors fit into your plan?

Scott: [00:27:51] Well, I mean, baby boomers are such a huge part of the population right now. And a lot of them, I’m sure everyone’s seen the articles are holding on to to larger homes and not moving out of them. And that’s creating a little bit of a scarcity for homes, for families that are growing. And I think one of the reasons is that they haven’t been given alternatives, other than the age qualified 55 and up communities and we’ve had conversations with a lot of people who don’t want to live in one of those.

Eve: [00:28:19] Me included.

Scott: [00:28:21] Right? They want to be around younger people and specifically probably even their families. And so, at Indigo, we’ve tried to design the community again, where it’s a complete community with opportunities for everyone. So, we looked at what are some good housing types for people who are downsizing, empty-nesters, aging populations. You know, there’s things like more one-story buildings, or if it’s a two-story, try to make sure your primary suites on the ground floor, and then looking at the the walkability for those homes as well. Mobility is different for every different person. But there’s some commonalities and so for people who are a little bit older, having a place to rest every 150ft or so is really critical. And so, we’ve tried to design our walking network so that there is both shade and places to stop and rest as you make your way from your home to the different places throughout the community.

Eve: [00:29:17] So what about cultural and racial diversity?

Scott: [00:29:21] Our county is the second most diverse county in the country after Queens, I think. And so, it is 25% white, 25% Black, 25% Hispanic, and 25% Asian. And the Asian population is incredibly diverse itself with a lot of Indian and Pakistani, Chinese and Vietnamese populations in our area. And so, we feel like, really fortunate to be in a place like that. Yet at the same time, the suburban neighborhoods can still be fairly white in our area. And so I think some of that is like the messaging that you present to the world when you’re asking people to come join you. So, we’ve been really intentional with our marketing team. And we took our entire design team, including marketing through some DEI workshops and learning about cultural differences and how we can approach things maybe differently with that, with cultural differences in mind. And that’s been, I think, really impactful so far in the narrative that we’re telling, making sure that our marketing materials are representative of the communities around us and the people that we are inviting to come join us. And then we’re even working on a home-buyer resources guide. Basically, if people come to try and buy a home in Indigo and are, either think they won’t qualify to buy the home or try and don’t qualify, we have some secondary resources that are designed to overcome the hurdles that people of color and women and other class distinctions have faced in real estate. I mean, I think real estate is in the top 2 or 3, you know, racist and classist…

[00:31:05] Oh yeah,

[00:31:06] Institutions that we have in the country easily. Right? I mean, the prison system.

Eve: [00:31:10] Maybe the top.

Scott: [00:31:11] Yeah. And so, we want to work against those things in every way that we can. And so, we actually are in the process of building out an equity framework for Indigo and looking at like, what are all the spheres of influence that we have and we’re targeting. So, we have eight strategies that we’re ultimately going to be targeting throughout the community for things that we can do to overcome historic barriers to either renting or real estate ownership.

Eve: [00:31:39] Wow! It sounds to me like farmers do a lot of research. You’re used to that. Yeah. So, what have been some of your biggest challenges and disappointments?

Scott: [00:31:49] Challenges and disappointments?

Eve: [00:31:50] Maybe none?

Scott: [00:31:52] Yeah. No, no, we’ve definitely had challenges. I mean, working with the city, everybody told us that our city was like the worst city to work with in Houston. That’s what the development world said. We found them to be great to work with. It just took a lot of work and time to get them convinced of what we were trying to say, but we brought data to them. You know, narrower streets. It’s the fire chiefs don’t like narrower streets because it restricts access, right? So, then we have conversations about, okay, but a narrower street means slower speeds and means less kids die when they get hit by cars. So let’s balance like, how many home fires do you have in your area? Not very many. Okay, well, maybe more kids are being hit by cars and we should balance that out. So, we just went with those things. It took longer than I think we expected, and I think we’d be a little faster next time. But I also think people need time to wrap their heads around things, and you have to give that to them. So that’s maybe one of the big challenges. And then, you know, there’s a bit of a regret, I’ll say, that in the design of the neighborhood, we didn’t like bleed the retail into the residential part more than we did.

Eve: [00:32:56] I was going to ask about that. What is the retail and where is it? Yeah.

Scott: [00:32:59] So, we have what we call Indigo Commons. It’s right next to the farm. It’s surrounded by the neighborhood. But I wish that, you know, we still have like a street as the dividing line between the mixed use and the residential. And I wish that we had been smarter and had retail on both sides of the street, I think, instead of. And so, take more of that corridor mindset than the block mindset when we were looking at land use. And so, that’s a big regret, is like pulling a few little neighborhood retail places, pulling a restaurant to like a busy corner somewhere in the residential section. I mean, all of our homes are within a seven-minute walk of the commons. So, it’s not like you’re that far away, but it still would be nice to have pulled a few things out. So, I think that’s one thing there. You know, definitely on the commercial side, there’s been some challenges. We have what we call our incremental retail buildings. So, we did the whole household formation conversation on the housing side. And we were getting like halfway through the planning of the mixed-use area. And then we said, wait a minute, we need to do the same thing for businesses that we did over there. What about the barbershop that just wants to have two seats and doesn’t need 2000ft²? Why should they be paying for 2000ft² if they don’t need it? So, we did the same thing and started downsizing and right-sizing. And you know, we’re farmers. We’ve known a lot of chefs in Houston because we sold to a lot of them over the years, and just saw too many extractive relationships between landlords and tenant restaurants, where restaurant gets a little bit of press for the chef having great food, and then all of a sudden, they get slammed and they’re just so busy for a month.

Scott: [00:34:40] And then the landlord says, you know what? Your lease is up in a couple months, we’re going to go ahead and double your rent for next year. And that restaurant may not even be making money. They just appear to be busy and got some press. And so, to fight that a little bit, we wanted to have some tenant-owned retail. And so, we’ve designed these incremental retail buildings. It’s an 800 square foot footprint, 2 or 3 stories. So, 1600 or 2400ft² maximum. The bottom floor has to be active retail. We need the foot traffic for those buildings. But then on the second and third floor, it could be more retail. It could be offices. You could live there. You could lease it out as an apartment, whatever you want to do. And we got that through our jurisdictions and approved. So, it is a little bit like a live/work unit in form. But what I’ll say on the live/work units is most of the places people have done those, they’ve been residences first and they’ve been financed as a residence and then just have the retail. We’ve designed ours to where they work with the Small Business Administration’s 504 and 7A loan programs where you can get a 25-year business mortgage on that property, and you can live there and work there or lease it out or whatever. So, we just wanted to provide a bunch of flexibility. And so, that was a little bit of a challenge to get people to wrap their head around. And even the market has taken a little bit, but now we’re really starting to see intense demand.

Eve: [00:36:03] Well wow! I’m really impressed. You guys clearly have thought about absolutely everything. I hope I get to see the community when it’s finished. Is there anything else you want to tell me? I feel like we’ve jumped around everywhere. I’m sure I’ve missed a lot.

Scott: [00:36:18] No, I mean, I think the encouragement I would give to other people working in the space, and you’ve had so many great guests on your podcast. I was actually just listening to my my good friend Jonathan Dodson, to his version, I think, take hope in the fact that there are a lot of people working in this direction right now, and it feels like the tide is shifting a little bit. And thanks in part to people like you, Eve, doing these great communications and, like, sharing this because otherwise, how would we know about all these other people working in these other cities in the same area that we are? And so, I think it’s really, really valuable. And people who are feeling alone in this work out there, reach out to the people on those, like, we’ve had great success connecting with other developers. And, I mean, we flew to Oklahoma City to meet Jonathan, you know, kind of on a whim and then have become really good friends. And so, I encourage people, even if you’re working in this area and you have questions to reach out to us. You know, find us on LinkedIn and reach out and we’ll be happy to chat.

Eve: [00:37:20] Well, this has been delightful. Thank you so much for joining me and spending time. And, um, I do want to know how it ends up.

Speaker3: [00:37:27] We hope to have you down to Houston.

Eve: [00:37:28] I’m a little bit jealous.

Scott: [00:37:31] Well, we’ll look forward to that.

Eve: [00:37:40] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. Please support this podcast and all the great work my guests do by sharing it with others, posting about it on social media, or leaving a rating and a review. To catch all the latest from me, you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing, head on over to smallchange.co where I spend most of my time. A special thanks to David Allardice for his excellent editing of this podcast and original music. And a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.