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It takes a village.

June 16, 2021

Charles Durrett is an architect often credited with introducing the concept of cohousing to the United States through his co-authored book, Cohousing: A Contemporary Approach to Housing Ourselves and more recently Cohousing Communities: Designing for High-Functioning Neighborhoods. Over a number of years, he has built a career around this idea – one he was introduced to as a student in Copenhagen. These Danish housing projects captured his imagination enough that he set about bringing this novel idea to the U.S.

Today, Charles oversees The Cohousing Company, which designs cohousing projects for many kinds of clients. A typical design includes densely packed cottages of 30 or so homes that form a ‘village,’ with a liberal sprinkling of communal areas and amenities, occupied by people who want to live co-operatively. The historical idea of planned communal ‘villages’ in the U.S. is not totally new – you have everything from worker housing to the freeform communes of the 1960s and 70s. But Charles has taken it further, inspired by the Danish model and adding in a dash of the principles of New Urbanism. Most interestingly, Charles describes himself as more of an anthropologist than an architect because every design begins with a deep dive into the psyche of the 30 families that plan to live together. Only once he understands how they want to live their lives, does he embark on the process of designing the physical place.

Charles has received numerous awards and regularly gives presentations on cohousing to interested citizen groups. He has spoken before the United States Congress and has lectured at many universities. His most recent book is A Solution to Homelessness in Your Town, about the Valley View Senior Housing project, built in 2019 in Napa County, CA. Charles lives in Nevada City, CA, in a community he and his office designed.

Insights and Inspirations

  • Cohousing is just a modern-day village.
  • Financing a cohousing project is easy. 70% of the homes are pre-sold and banks like that!
  • Contrary to expectations, over half of cohousing inhabitants are introverts.
  • Cohousing owners believe that their life will be easier if they live co-operatively. That’s the common thread.
  • To design cohousing one must be as much an anthropologist as an architect, making sure that what is designed serves the eventual occupants.
Read the podcast transcript here

Eve Picker: [00:00:13] Hi there, thanks for joining me on Rethink Real Estate. I’m on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. So I’m on a journey to find the most creative thinkers and doers out there. I’m not the only one who wants to rethink real estate. You can learn more about me at EvePicker.com or you can find me at SmallChange.co, a real estate crowdfunding platform with impact real estate investment opportunities open for investment right now. And if you want to support this podcast, please join me at Patreon.com/rethinkrealestate where there are special opportunities for my friends and followers.

Eve: [00:01:16] Today, I’m talking with Charles Durrett, an architect often credited with introducing the concept of cohousing to the United States. Charles has built his career around this idea, one he was introduced to as a college student in Copenhagen. These Danish villages captured his imagination. And so he set about bringing this novel idea home. Today, he oversees The Cohousing Company, which designs cohousing villages for a variety of clients. His designs are densely packed cottages of 30 or so homes that form a village with a liberal sprinkling of communal areas and amenities. They are occupied by people who believe their lives will be easier if they live together. You’ll want to listen in. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate to learn about special opportunities for my friends and followers and subscribe if you can.

Eve: [00:02:27] Good morning, Chuck. Thanks so much for joining me today.

Charles Durrett: [00:02:31] Well, top of the day. Thanks for having me.

Eve: [00:02:33] Very good. So, you’re known as a cohousing expert, and I wanted to start by having you explain what is cohousing?

Charles: [00:02:43] Oh, well, yes, cohousing is at some level, it’s a custom neighborhood. It’s very much for people who are quite motivated to live in a high functioning neighborhood. When I first discovered it, I met a woman in Denmark who said that her and her husband grew up in high functioning neighborhoods. And it was pretty much chance these days to find a neighborhood where people knew each other, cared about each other and supported each other. So cohousing has six fundamental components. One is that the future residents are very much a part of making it happen. And it turns out they’re better at making neighborhoods function than any bureaucrats, business people, bankers, builders, even architects, frankly. I’ve done about 55 cohousing now, and every time somebody says, Hey Chuck, why don’t you just design it? We’ll see if we like it. And I always say no, because with you we’ll do a much better job, and we’ll make a more high-functioning neighborhood. And that’s really been the case, no doubt about it. So, future residents extended common facilities, self-managed design that facilitates knowing each other over time, completely resident managed and no hierarchy of decision making.

Eve: [00:04:05] So what did you learn about cohousing?

Charles: [00:04:08] I learned, I went to the University of Copenhagen in 1980 and…

Eve: [00:04:12] Lucky you.

Charles: [00:04:13] You know, it was fantastic, actually. Really fantastic. And walking home from school one day, I just stopped, and I noticed as I was walking by single family houses, there was no life between the buildings, walking past apartments and apartment buildings. There was zero life. Condos, none. Assisted care, none. And then there was this one neighborhood that every single day that I walk by, when the weather was halfway decent, there would be people outside sitting at picnic tables talking to each other, kids running freely in and out of a building where it looked like nobody lived, but everybody lived. And that turned out to be the common house. And I just stopped and asked this young mother, hey, what’s going on here? in my broken Danish and she answered me in her perfect English that, yeah, this is a neighborhood that we made. And we made it so that we lived in an environment that we felt was not only healthy but sustainable over time. Anybody who hopes to make a single family house that is remotely sustainable is just putting lipstick on a pig, no doubt about it. I mean, we’ve got enough single family houses. We need to make villages now.

Eve: [00:05:26] So were there any cohousing projects at the time in the U.S.?

Charles: [00:05:31] Zero. We came back and made the first one and it was built and finished in 1991 in Davis, California, Muir Commons. Very much based on the Danish model and it’s elaborated on extensively in our book called Creating Cohousing, as well as another 200 other communities have been built since that first one was built in 1991.

Eve: [00:05:54] So how big was the first community?

Charles: [00:05:57] 26 houses and that’s about par for a new cohousing community, 26 to 30 houses. I mean enough people that everybody relates well with five or six others and turn into good friends and not so much that, not so much the consensus and other decision making and management becomes difficult at all.

Eve: [00:06:25] And architecturally, because you’re an architect, so what do these, what does a housing cohousing project look like? How does it differ from, you know, a regular neighborhood or an urban neighborhood or a suburb?

Charles: [00:06:40] Well, fundamentally, it’s quite different. You’ll notice when you walk in. I mean, it’s very much a modern-day village. And the Danes would say they’re not creating anything new. They’re just recreating what used to happen naturally. We now have to make very consciously and subconsciously we have to get our sleeves rolled up and make them happen. So, for example, imagine a typical suburban block and and now imagine when you drive on to that street with nice little porches and all the rest, that you everybody parks at the very end of the street and walks by all the other houses on their way home. That fundamentally changes the nature of a neighborhood basically where you see everyone, that’s germane in terms of knowing them and, you know, it plays a big role down the line. Now, imagine you take all the garage doors off of the front of the houses and you move the houses, oh, instead of a typical suburban neighborhood is about 110 feet doorknob to doorknob. And our houses range about 20 to 30 feet, doorknob to doorknob. And so now when you walk by, you can see the smile on the face of the person in their kitchen waving at you. And it’s simply the opposite of anonymous housing or spread out housing or even warehousing like a typical apartments are. And now imagine where that street used to be there are sandboxes and play cards and picnic tables and gardens. And that’s what a cohousing looks like, basically. Quite different.

Eve: [00:08:23] In addition to housing people in a friendly manner, there’s also sort of the urban design aspects of bringing activity to the street, that really part and parcel of it, of the sounds of it.

Charles: [00:08:37] Oh yeah. I mean, like to the tune of thousands of people hours per week. In a typical cohousing neighborhood, there’s thousands of people hours per week of communing basically with each other. How’s Johnny, I heard he wasn’t feeling well. Hey, I’m taking my kids to the zoo this weekend, are you interested? And if you were to walk down a typical single family house neighborhood, you’d probably find less than one hundred people hours a week of people communing. I mean, really barely extends past salutations, rarely passed salutations. So, but it does. And there are some fantastic neighborhoods in the U.S., but far too few. Probably runs much less than one percent. And then the common facilities play a big role. I live in a 34-unit cohousing and we have dinner in the common house available six nights a week for anybody who wants to make it. You sign up a couple of days in advance. But we usually have 30 to 40 people there a night, and there’s nothing like breaking bread together to enhance and sustain a sense of community. No doubt about it. I mean, it’s timeless.

Eve: [00:09:51] Interesting. So, was it hard to get the first one, the first project done?

Charles: [00:09:56] And by the way, we also have a childcare center on site, and we just have a lot of things in our neighborhood where, a music room, a lot of things that stitch us together. Was it difficult to get the first one done? Well, you know, people often ask us, you know, Chuck, or ask me is, is it the zoning codes that make it difficult? Is the bankers that make it difficult? And that has not been my experience. My experience has been very much it’s our culture that’s challenging, makes it challenging. We’re very much grown up on the shirttails of movie stars like John Wayne, who, by the way, has starred in more movies than any other actor or actress in American history at 126 films. So, that’s a lot of propaganda about pulling yourself up by the bootstraps, which is probably a big reason we have millions of homeless people in this country, is because that’s a myth that does not work. What does work is people helping people. We know that. I can imagine a community pulling you up by your bootstraps, but I cannot imagine you pull yourself up by the bootstraps. It is physically impossible. So, our culture is slowly but surely making a shift. And that’s great. The second cohousing community we finished in the U.S., hardly anybody was born in the U.S. Which is interesting and it’s largely because…

Eve: [00:11:23] That is interesting.

Charles: [00:11:23] Yeah, it’s largely because these are people from the Philippines, from Mexico and other places where it was obvious to them that community was fundamental to their quality of life. And so it was not a big culture shift. So…

Eve: [00:11:39] Perhaps also extended families which are in the community, right?

Charles: [00:11:44] And they were away from their extended family. So they were seeking other means to grow nearer to the people that lived around them.

Eve: [00:11:54] Really interesting. So, since you built the first project, have they evolved at all to suit U.S. culture?

Charles: [00:12:04] Yes, absolutely. I think U.S. culture is evolving as well. But the key thing about cohousing is it’s very much based on who that group of people are. I mean, I feel like I’m as much of an anthropologist as I am an architect. My job is day in and day out figuring out who this group of people is. How do they stitch their shifts together in general? What do they care about? Where are their values? What are their experiences? And I built two cohousing communities right across the street from each other and been quite different, actually. Because it’s very much designed to reflect the values of that group of people and fit like a glove, consequently. Some of them that we built today are almost exactly like the first one we built them, but more likely all of them in between have been quite different, quite, quite different. What is interesting is what are the constants? And the constants seem to be that the common denominator among all these thousands of people that now live in cohousing, the common denominator is they have one thing in common, and that is that they believe that their life will be easier, more convenient, more practical, more economical, more healthy, more interesting, more fun if they give cooperation with their neighbor the benefit of the doubt. And in other words, if we don’t cooperate on anything unless we consent to it. But consequently, we have one lawnmower for 34 houses. We have one swimming pool for 34 houses. We have one hot tub. We have hundreds of things we share. We have discovered that we can successfully share together.

Eve: [00:13:47] Have you ever done a survey on how many introverts versus extroverts we have in cohousing projects?

Charles: [00:13:54] That survey has been accomplished numerous times with surprising results. The general population is running about 60 percent extroverts and 40 percent introverts, and the cohousing population runs about 60 percent introverts and 40 percent extroverts.

Eve: [00:14:12] Oh, that’s really fascinating. Really fascinating because introverts get the energy by being alone, having a lot of alone times.

Charles: [00:14:21] Exactly, but on cohousing is very, very much designed to give you as much community as you want and as much privacy as you want.

Eve: [00:14:29] And I say that because I’m an introvert, so I know how I get my energy.

Charles: [00:14:33] Right. Sure.

Eve: [00:14:34] Interesting. It’s really interesting. So what’s the process like then? Walk me through the process to design a cohousing village.

Charles: [00:14:42] Okay, I will. And by the way, that is the one common denominator among not only every American but every European I’ve met. I’ve been to about 385 cohousing communities, the one common denominator is that these are people they distinctly want to balance between privacy and community as opposed to feeling like they have as much privacy as they want and as much privacy as they want. And cohousing, they want as much privacy as they want and as much community as they want as well.

Eve: [00:15:08] Interesting.

Charles: [00:15:09] That’s distinctive. The process. Well, typically, somebody has gotten a hold of our book called Creating Cohousing and or the book Senior Cohousing by myself or and Creating Cohousing was written with Kathryn McCamant and has a little study group in their town. And then those eight or nine people invite either Katie or I to come to that town. I’m actually getting on a plane on Thursday and going to Richmond, Virginia, and that’s typical. So then I’ll do a presentation, usually an hour or two. They usually have about 100 or 150 people show up. And from there they’ll have what’s called a Getting It Built Workshop for the 15 or 20 households that are motivated to proceed. And that’s two days of this is how this whole thing gets built. The residents play a big role in the development, and they figure out how to get everybody on board. Even those who come to the table who really can’t afford it. So, there’s some grant writing involved and such. And then after the getting built, let’s say there’s, where I live 25 houses at the Getting It Built Workshop. 21 households were at the next workshop, which is Site Designing. Where we do exercises to figure out how far we’re going to make the houses away from each other and all the rest. And then Common House Design Workshop a month later and then Private House Design Workshop a month later. And then we go through the design of the whole project. And then there’s bank financing that has to be procured and building permits. And while the buildings are being built, the group hammers out their management, how many days a week they’ll have dinner and all the rest and kind of goes like that. That sounds easy, but they take two to three years to pull off.

Eve: [00:17:15] Yeah, I’m sure. So, I have two really big questions. And one is about NIMBYism. What are the neighbors think when you build a village like this? And the second issue is how do they get financed?

Charles: [00:17:27] Yeah, question one, that is a really good question. I’m surprised rarely do people ask that. I guess most people don’t know what goes into getting a project built, and dealing with the neighbors is certainly one of the biggest hurdles.

Eve: [00:17:41] I know. I’m an architect by training and I used to work at a planning department, so, yeah, I’m pretty familiar.

Charles: [00:17:49] So and yeah. And it’s a workout. In 55 projects though, we’ve only had one stop by the neighbors, oddly enough. So we have a much better track record. But it has to do with the fact that, you know, you get two or three nursing moms up at the podium and asking the city counselors, why wouldn’t you approve this? I need this. In fact, I need it by September so my other kids can go to school, etc., etc. So, the human appeal really eclipses the normal “just say no to the developer” attitude. And the magic bullet really is being able to put 150 people in the room that are saying, why wouldn’t you build this project? You know, it’s just prejudices and all the wrong reasons. So, and especially today, with affordable housing being such a crisis in the U.S., we’re running into much less NIMBYs than we used to. And now I don’t have to fill the room of 150 people but more like 50 to 100 before the bureaucrats and the politicians say, hey, we just have to do this. But we had some absolutely miracle projects, right? Pulling a rabbit right out of the hat. Like, for example, Stillwater, Oklahoma, Vancouver, B.C., where we have bought with the group a single family house on a big lot and transformed it into 24 houses in one case.

Eve: [00:19:16] Oh, wow, that’s fantastic.

Charles: [00:19:18] 31 houses in another case. And we’re just doing that more and more. And it’s even getting better than that. We just have our first case right now in Auburn, California, where the county has come to us and said, Chuck, if you build a high functioning neighborhood on this property, we will give you this 4.6 acres. That’s very European. And it’s the first case in the U.S., some 30 years after we introduced it to the U.S. So.

Eve: [00:19:46] And what about financing and banks who are traditional?

Charles: [00:19:49] Yeah, they are. Well, there’s a couple of things that they really like about cohousing. The main one that they like is that the project is pre-sold, so we don’t start construction without 70 percent pre-sales. So compare that to a regular developer who’s now designing 30 units, but not one single pre-sell. So, they have to do this market study after market study. I know a woman developer who just spent 350,000 dollars on a market study to prove to the banks that her houses will sell. And we just spend zero money on the market study because they’re at the table and then not only at the table, but they put in their down payment to get the project built, which is 20 percent of the value of their house. So these are people with real skin in the game. If they walk, they also lose. So the market walks, they lose. And, you know, there’s nothing like getting a project approved. And when I meet with the bank the first time, I usually ask a couple of the residents to come. And, you know, everybody just says, hey, these are just people. I mean, you know, you got to get past all the prejudices about, you know, a village which could look like a commune under the wrong circumstances, but it never does. I mean, it’s far from a “commune”. There’s no guru, there’s no strident back to nature ideology. There’s just people who want to live lighter on the planet and live closer to other human beings. I mean, the banks themselves realize that they’ve been looking in the rearview mirror too much. You know, what sold last week.

Eve: [00:21:19] Exactly.

Charles: [00:21:20] They want to get past that.

Eve: [00:21:22] Yes. Yeah. So I’m getting the sense that you play a very large role in getting these projects off the ground because you go to the bank with them. You make sure that there’s enough people at hearings. So explain what your role is in a process like this with a community.

Charles: [00:21:42] Well, ostensibly, I’m the architect and however I’m an architect, I’m going to argue with a little bit of a mission and whatever the mission presents itself, I have to help solve. So, for example, nobody would publish our first book, which came out in 1988 and ended up selling 30,000 copies and just a couple of years. But, so we published it ourselves and sold 3,200 copies in the first six months and then another publisher picked it up. So, you know, sure we’ve run it up against too much skepticism, no doubt about it. America is an innovative land, but not socially. When it comes to social innovations you look to the Swedes, the Danes, the Finns and so many others, and so we barely know how to sustain a viable society. I mean, it’s clear. And so we just basically have to do whatever is necessary. I mean, I had to learn about publishing. I had to learn about kerning and letting and fonts and all the things that I formerly didn’t care about at all. So whatever presents itself, we have to embrace and get past that hurdle. So that’s our big problem.

Eve: [00:23:03] You’re a problem solver. So tell me, is there a typical cohousing project in terms of amenities and or are they all like, what sort of amenities to they have and how do they vary and why?

Charles: [00:23:16] Well, I’ll describe a couple. Where I live, we have a lovely common dining room. I mean, the acoustics have to be perfect from an architect point of view, a lovely super gourmet kitchen, much more gourmet than any of the private houses. I mean, there’s one very, very gourmet kitchen for 34 houses and then there’s 34 standard kitchens. We have a kids room where we have child care and after school and after dinner play, we have a lovely music room with a piano and we have lots of musicians there that teach the children after school music and you know, and then they do rehearsals at the local assisted care and recitals at the nursing care, et cetera, et cetera. We have, for sustainable reasons, 26 of the 34 houses use a single laundry because that’s the only place we can have recycled grey water and use 100 percent biodegradable detergent. We have two guest rooms, which means that, you know, the single family, the houses could be smaller. People didn’t need a third bedroom for potential guests. So, there you can, you can book them out up to two months, two weeks, a year. But most people, we don’t really pay attention to that. But that’s our goal. And they’re full all the time. We have a lovely sitting room with a fireplace with lots of men’s clubs and stuff like that happens in the evenings. And women’s knitting happens and quilt making happens on the weekends. And we have a lovely teen room, which is fantastic. We moved in with 21 seniors and 37 kids and the rest were adult parents. And you know, I went to the teen room one night and there were 21 teens there. Actually, only ten of them lived in the cohousing and they were having a slumber party on the outside deck there and it was midnight and I just popped in on them to see how everyone was doing. And I counted 21 kids. And then coincidentally, the next morning in the Sunday New York Times, I read that the safest thing you can do with your teenagers, because being a teenager in America is relatively dangerous, is to keep them at home and however they want to be where the action is. So you want to make the action in your neighborhood and basically keep them at home.

Eve: [00:25:50] Yeah, yeah.

Charles: [00:25:51] And so we have a great workshop. I mean, it’s fantastic. We can build, people build all kinds of stuff in the workshop, and people are learning from each other all the time. You know, the things are one thing, but really, they’re just all a format for us to learn from each other all the time. Some people like myself make homemade bread for dinner for the common dinners, and other people are learning how to make common homemade bread and all the rest. So, it’s all about what am I getting out of it? I hate to say it, but I think, and Ayn Rand was correct, and it’s all about me and yet, and so that’s the way it’s kind of set up. Everybody feels like they’re getting something out of it and therefore it just it just continues to grow that way.

Eve: [00:26:33] Interesting. So, you know, I know in the U.S., each state seems to have a cultural vibe of its own. And there’s some states where we’re more housing projects have been built than others.

Charles: [00:26:47] Oh, yes, for sure. And there are.

Eve: [00:26:50] That was a loaded question.

Charles: [00:26:51] That was a loaded question. California has by far the vast majority of cohousing because as Paul Ray, in his book, Cultural Creatives, points out, and he was our keynote speaker at one of our yearly conferences, as he points out, the people who move into cohousing are, in fact, cultural creatives because they don’t feel like they have to do what the parents did. It’s not interested in growing old like my parents did. They were wasted away in a big, dumb, single family house. And then they went off to assisted care and then they went up to nursing care. I’m not interested in growing up like my little brother did, where I had already left the house and my little brother was alone and forlorn and watching video games and social media all the time. I think there’s only like two or three residents in our 34 houses that even have a TV. TV is not a big part of growing up where we live. Running out the front door is and having races in the swimming pool and just goes on and on. I mean, I know I make it sound a little bit idyllic, because I feel that every time I walk home from work every day. But managing it is a workout, by consensus does make it a workout. The thing I love about cohousing more than anything else, above all, is how many people that live there that say the best part about living there, is I’ve learned how to get along with other people. I take these lessons to my church. I take these lessons to my school. I take these lessons to my work. And I know from my own experience, my daughter is 29 now, works for a Congresswoman in D.C., but she worked for the U.N. for four years and I just watched her go to Africa and introduce different concepts to different villages like clean cookstoves, so young girls weren’t walking in the middle of the night to go get firewood, etc. and Jesse simply knew how to help people get organized. She simply knew how to work with a lot of different people, both at the U.N. and in the villages. So, she had something to offer, and people wanted to listen to her because she knew how to get her proposal passed.

Eve: [00:29:02] So you’ve also written a book on housing the homeless. How does that tie into your cohousing work?

Charles: [00:29:09] Well, thank you for asking. There is a movement afoot called Housing First, and I fully respect it. It’s about getting a roof over people’s heads and then you can deal with their alcoholism and their mental illnesses and they’re just down and out situation. But I’m a big believer in community first because I’ve seen too many times now where I’ve built a homeless project like a five-story project in downtown San Francisco, where the residents currently make dinner for each other six nights a week again, and how community has played such a huge role. And they’re leveraging relationships to bettering their lives. I’m infinitely impressed with a project in Eugene, Oregon, called Opportunity Village, where they built 30 units for 8,000 dollars each, volunteer labor mostly, but with the homeless. And then after the volunteers left and the homeless were left to self-management with some help from some local elders, from various churches, all of the amazing things those guys did. First, they had trucked in water. They had porta potties trucked out. They didn’t have a kitchen, et cetera, et cetera. They built the trenches for the water, the sewer.

Eve: [00:30:32] Wow.

Charles: [00:30:32] Then the dining facilities. And then they put heat in the units because the first winter, they had no heat. These were just little tiny boxes. And one person was clever with getting some solar panels donated. And then they put in some batteries and then they were able to create some heat. Now all 30 of them have heat. I mean, I’m just astounded by how much cleverness out there is homeless. It’s just astounds me. Every time I organize a new project, some very wise people come to the table and given the right format, they can actually provide for each other immensely. And we’re so hellbent on victimizing those folks. I wish they would just move on that we don’t even embrace the potential there and help those people reach the potential. It’s very sad. So, yes, I do hope a lot of people get the book, A Solution To Homelessness In Your Town, because it’s to the extent that that book stays in circulation is to the extent that more will be built.

Eve: [00:31:40] Just changing text a little bit. Are there any current trends or innovations in real estate development that you believe are important for the future?

Charles: [00:31:48] Oh, there’s actually a lot, but I wouldn’t call them trends per say. I would call them innovations. And unfortunately, those innovations are sexy and interesting and yet don’t get the kind of traction that they need. I mean, the Congress for New Urbanism, for example, I mean, building towns that feel more urban instead of more suburban. No strict commercial, no boxes surrounded by a sea of asphalt, which is America everywhere. You know, if you drive through Spokane, Washington; Sacramento, California, it’s just parking lot after parking lot after boulevard after box in the middle of a pool of asphalt. So, however, the most distressing part of the whole thing is I don’t know what the percentage of last year. They were probably about 1.2 million houses built in America and by probably over a million were single family houses. And that’s the trend that we’re continuing on, simply because that’s the rearview mirror. You build out into the farmland. And if you build on the farmland, you won’t have any NIMBYs, as you alluded to earlier. If you build into the farmland, you won’t have any management issues because these people are not organized. It is the path of least resistance for the banks. If they sold last time, they’ll probably sell this time. It is the most deleterious solution that we could come up with for the planet or for us as healthy social beings. They say that our second responsibility as a species is to get along. The first responsibility is surviving, and that’s true for every species. But getting along is particularly important for our species. And if we don’t get along, we might not survive. So, it really feeds into priority number one. And yet if you put everybody in a box, equidistance, atomize, estranged they’re not going to know how to get along. That possibility will wane further. And I’m very concerned about the vast majority. So, it is it’s going to take more people. I’m mentoring as many young people as I can these days to become architect activists, because it turns out, just like the CNU, the architects are better than average activists.

Eve: [00:34:19] Yeah, I think that’s true. So what’s, final question, what’s next for you?

Charles: [00:34:25] Well, like I said, I’m getting on a plane and I’m going to Richmond. I’m working with the Chickahominy Indian Tribe, and I see that as the future. I mean, it kills me when I, when they first called me and said, you know, our old people are dying in nursing care and it’s as far away from our traditions as humanly possible. We have to figure out who we are and respond to that, not what the institutions are providing for us now. And so, this is going to be housing and a child care, nearby on the same property. Right? I mean, I’m going to have a super close. It’s going to be a village and I’m going to make it I’m going to make it reflect their needs, wants and desires as distinctly as possible. But I’m also going to challenge them a little bit to go back to their previous priorities so that we’re not hedging our bets. So, you know, I’m increasingly playing an activist role, but I only take the Chickahominy as far as they feel comfortable. But I’m taking the American population as far as they feel comfortable because I’m hellbent on getting these projects built, because I know it’s a better way to go. So there’ll be more activism in my future.

Eve: [00:35:40] I’m looking forward to it. I really enjoyed this conversation, and I can’t wait to visit one of your villages.

Charles: [00:35:46] Will you live in Pittsburgh, huh?

Eve: [00:35:49] I do.

Charles: [00:35:50] The closest one is Ithaca, New York. I don’t know. I don’t know where the closest one is to you.

Eve: [00:35:57] I’ll have to do a Google Search.

Charles: [00:35:59] But we need to get some more in PA, that’s for sure.

Eve: [00:36:01] We do, we do. Well, thank you so much.

Charles: [00:36:04] You’re welcome. Good. Thank you very much, Eve. Appreciate it.

Eve: [00:36:19] That was Charles Durrett. The historical idea of planned communal villages is not new. You have everything from worker housing, such as Pittsburgh’s Chatham Village, to the free form West Coast communes of the 1960s and 70s. But Charles has taken it a little further, adding in a dash of New Urbanism. Most interestingly, Charles describes himself as more of an anthropologist than an architect. Every design begins with a deep dive into the psyche of the 30 families that plan to live together. Only once he understands how they want to live their lives does he embark on the process of designing the physical place.

Eve: [00:37:10] You can find out more about this episode on the show notes page at EvePicker.com, or you can find other episodes you might have missed, or you can show your support at Patreon.com/rethinkrealestate, where you can learn about special opportunities for my friends and followers. A special thanks to David Allardice for his excellent editing of this podcast and original music. And 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.

Image courtesy of Charles Durrett, The Cohousing Company

Radical in its simplicity.

May 26, 2021

Beth Silverman is Executive Director of the Lotus Campaign, a nimble nonprofit startup focused on reducing homelessness.

What makes the Lotus Campaign especially interesting is its approach to putting a roof over a homeless family’s head. Instead of building ground up affordable homes, employing a bevy of subsidy financing, the Lotus Campaign is instead focusing on existing Class B apartment buildings, and on building partnership with Landlords. By offering a networked support system to ensure that each tenant succeeds, the Lotus Campaign has been able to house 300 families to date. Only 1 has been evicted – a resounding success and a testament to the program.  Even better, each placement has only cost an average of $800. 

This seems such a small price to pay to put a roof over someone’s head… 

Beth’s background lends itself to this feisty little startup. She has been chief of staff for Real Estate Transaction Services with the New York City Economic Development Corporation under Bloomberg, and led ULI’s Real Estate Advisory services, which gave her an inside look at the issues cities grapple with all over the world.

Insights and Inspirations

  • The Lotus Campaign is a spirited startup, experimenting to find solutions for homeless families.
  • Another 10 million families are expected to be homeless once the pandemic eviction moratorium ends.
  • Educating landlords is key. Perceptions around homelessness are the enemy.
  • Homelessness is a race issue. 75% of the homeless are people of color.
  • Beth’s BHAG is be put out of business, because they’ve scaled and taught others how to replicate the Lotus model.
Read the podcast transcript here

Eve Picker: [00:00:06] Hi there, thanks for joining me on Rethink Real Estate. I’m on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. So I’m on a journey to find the most creative thinkers and doers out there. I’m not the only one who wants to rethink real estate. You can learn more about me at EvePicker.com or you can find me at SmallChange.co, a real estate crowdfunding platform with impact real estate investment opportunities open for investment right now. And if you want to support this podcast, please join me at Patreon.com/rethinkrealestate where there are special opportunities for my friends and followers. Today I’m talking with Beth Silverman, executive director of the Lotus Campaign, a nimble non-profit startup focused on reducing homelessness. What makes the Lotus Campaign especially interesting is its approach to putting a roof over a homeless family’s head. Instead of building ground up affordable homes, employing a bevy of subsidy financing, the Lotus Campaign is instead focusing on existing Class B apartment buildings and on building partnerships with landlords. By offering a network support system to ensure that each tenant succeeds, the Lotus Campaign has been able to house 300 families to date. Only one person has been evicted, a resounding success and a testament to the program. Even better, each placement has only cost an average of 800 dollars. This seems such a small price to pay to put a roof over someone’s head. Beth’s background lends itself to this feisty little startup, she has been chief of staff for real estate transaction services for the New York City Economic Development Corporation under Bloomberg, and she’s led ULI’s Real Estate Advisory Services, which gave her an inside look at the issues cities grapple with all over the world. I’m going to learn a lot from Beth and so might you. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate to learn about special opportunities for my friends and followers and subscribe if you can.

Eve: [00:03:02] Hello, Beth. It’s been a few years since we talked, and I’m really excited to catch up.

Beth Silverman: [00:03:08] Great to be here, Eve.

Eve: [00:03:10] Yes, so I’ve been tracking the Lotus Campaign for a few years now, and I wanted you just to tell us the primary purpose and mission of the Lotus Campaign. And how did you get that name?

Beth: [00:03:24] Sure.

Eve: [00:03:24] Fill that in as well.

Beth: [00:03:26] So, Lotus Campaign is a non-profit startup dedicated to housing driven solutions for homelessness. And part of what makes us different from other approaches that are out there is the whole goal is how do we bring together the private real estate and investment communities alongside of the non-profit social service providers? Our whole mission, which sounds very simple but is more complex than you might think, is to open up access to housing. And we do that through a couple of different ways. But it’s really to open up access to market rate housing and to folks that are either at risk of experiencing homelessness or experiencing homelessness. And the name is really based off of the meaning behind the lotus flower. So, if you know anything about the mythology of the flower, you know, it’s been revered for generations by many different cultures, but it is a symbol of rebirth and renewal. And the flower submerges every night into pond mud and then in the morning blossoms into a beautiful flower. And we thought that was really a great metaphor for what we’re trying to do with Lotus and in general of both the perceptions of the challenge of homelessness and the hope needed to solve it.

Eve: [00:05:12] I think it’s a lovely name. So what is the actual program?

Beth: [00:05:17] So we have three different programs and they’re all tied to immediacy of impact. So our program, which is really connected to immediate impact, is a landlord participation program and that is pretty radical in its simplicity. What we’re doing is we’re bringing market rate landlords together with non-profit social service providers. And what we’re doing is Lotus is acting as the mediator between what are the risks that the real estate community has in renting to someone that has experienced homelessness. And what is all the friction that the non-profit sector has in finding housing for their clients? So we solve for that risk in two different ways. We do a bunch of economic mitigation and then we also solve for the perception risk. So, in terms of the economic mitigation, pretty much, we did a massive amount of interviews with private sector landlords and asked them why they would be hesitant to rent to someone that’s experienced homelessness. And we took all of their objections and then solved for them. So we use capital as a tool, right? So, we do things like offer a payment in lieu of security deposit. We pay for application fees, inspection fees, renters’ insurance for a year up front, we guarantee against loss of rent and tenant caused damages. And we also agree to reimburse any legal costs if someone needed to be evicted. So we’re really trying to hedge a potential landlord’s economic risks. And then in terms of the perception risks, we partner with high-capacity non=profits that provide ongoing support and services to a resident for the duration of their lease term. And what’s really cool about that program is the impact isn’t just getting someone into housing, it’s that that impact is, one, providing a stable home for someone in a neighborhood of opportunity. It’s also giving someone a year of a runway minimum to stability and self-sufficiency. It’s giving a resident or a family the opportunity to build credit while they’re there and get all of the supportive services they might need to potentially move on to housing on their own. So, what we’ve been able to do in that program in less than three years is house over 300 individuals and families at a cost of less than 800 dollars per person.

Eve: [00:08:15] Wow. So, let’s stop there a moment. So, you’re mitigating things that are sort of making landlords nervous and unwilling to rent to that group of people who is in danger of losing their homes or already have. So, what’s the biggest thing you heard in that survey that you took?

Beth: [00:08:36] I think the biggest concern, it wasn’t even necessarily the economic concerns. Those are so easy to solve. It’s how is the person being supported once they’re in housing? And what’s the mechanism there? Because property managers aren’t case managers. Right. And so, you know, the economic barriers are really easy to solve for. It’s finding the combination of the housing plus the services, which I think…

Eve: [00:09:06] So your partnership with the service providers is really critical.

Beth: [00:09:10] Yeah. And it’s a way to invest in existing systems that are great but need some new tools and need some roadblocks eliminated for them too.

Eve: [00:09:22] So who are the tenants, and do they come into this housing opportunity and leave in a better place or like what’s the result of this program, I suppose, is what I’m asking?

Beth: [00:09:35] Yeah, no, no, no. It’s a great question. I’m going to start taking you to fundraising meetings with me. You know, it’s all different folks. So we work with everyone from high functioning chronic. That’s someone that has experienced homelessness and living without shelter for a number of years, to folks that are at risk of becoming homeless. And I think that last category is really important, especially right now. Right? There’s some recent data about the number of renter households that are at risk of losing their housing once eviction moratoriums are lifted. And that number right now is 10 million people.

Eve: [00:10:19] Oh, my heavens.

Beth: [00:10:20] So we really feel strongly that you also have to stop the flow into the cycle of homelessness. And so in terms of what sort of impact can a program like this have on someone? We’ve had people graduate from the program and move into housing on their own. A big data point for us is the number of renewals we have. Another data point is someone graduating from the program and renewing on their own. But it really depends on where the person is starting from. And and I am a strong believer that someone working with one of our non-profit partners and walking into the door of a place that they feel safe living in and feel proud of, that’s a huge metric of success that just can help lead to lots of other things.

Eve: [00:11:17] What about evictions? How many of these three hundred tenants have gone bad or not been able to perform or have not been able to succeed?

Beth: [00:11:24] That’s a great question, Eve?

Eve: [00:11:26] Gone bad was a bad way to say that.

Beth: [00:11:29] Well, I like to always say don’t let perfection be the enemy of the good. So to date, you’ve have had one eviction and it’s always unfortunate that was a case of someone not following the requirements of the program they were in. It was never an issue with the landlord. To me, it’s a sign that the program works because our non-profit partner made the decision that that person was no longer a fit for the program. For whatever reasons we you know, they decided that. And as part of that, if they weren’t holding up their end of the bargain following the end of their lease term, they could no longer continue.

Eve: [00:12:15] How does that make you feel? One failure in amongst 300?

Beth: [00:12:21] Well, I think I’m a reformed perfectionist. And to me, that’s just a sign the program’s working, right?

Eve: [00:12:29] Yes.

Beth: [00:12:29] It’s not going to be a slam dunk.

Eve: [00:12:32] But it’s a pretty good safety net if those are the numbers.

Beth: [00:12:36] Yeah.

Eve: [00:12:36] And 800 dollars is extraordinary for what you do for these people. That’s amazing. So I’d love to stay with this program. I know you have two more to talk about, but I just want to ask a few more questions. So, the landlords that you have partnerships with, where are they and what do they look like and why did they decide to do this? Who are they?

Beth: [00:12:55] Yeah, no, great question. I mean, they are mostly Class B landlords, right? Some of them have Class A properties and more high end properties that are not fit for our program just based on the rents.

Eve: [00:13:11] What’s a Class B property for people who don’t know?

Beth: [00:13:15] Great question. So it might just be an older property that does not have the same amenities as a new building.

Eve: [00:13:25] So no roof deck. No shared gym. No swimming pool.

Beth: [00:13:29] No indoor swimming pool.

Eve: [00:13:31] But in good shape. Well looked after.

Beth: [00:13:35] Yeah. Yeah. And honestly, you know, where do they come from? Why do they want to be involved? I think really what the key to me has been with this, if you give the real estate community an easy path to say yes and participate, they’ll take it. I mean, I think folks, especially landlords and the property management community, they’re the front lines of understanding the housing affordability and homelessness crisis. So how do you give them a way that they can participate? That’s easy. As opposed to telling them they should do this, or they should do that. Or, you know, unless you do it this way, you can’t be a part of this.

Eve: [00:14:21] Interesting.

Beth: [00:14:21] And so we have a mix of landlords that participate with 10 units to a couple of hundred units. And a good piece of data for me is one of our newest landlords who started with us in July, just wrote me last week and said they want to expand their participation across their whole portfolio of properties. Going from 10 units in July to now 80 units. And to me, that’s a test that it’s working and that it’s it’s really just a great thing…

Eve: [00:15:01] Yeah.

Beth: [00:15:01] For them to be involved in in terms of being a community champion for some new ways to think about homelessness and housing.

Eve: [00:15:08] Oh, yeah. Pretty great. So another question is like, what are the neighbors thinking in these buildings, you know, NIMBYism, I think has been a downfall, right?

Beth: [00:15:18] Yeah, well, something I started to think a lot about on that front, having been yelled at for six years by community boards in New York City, is the idea of community courage. Right? And it’s not necessarily political will or NIMBYism. It’s the necessity of community courage to try new things and strengthen our communities. But the great question you asked, what do people think? What I like to say is, well, someone’s no longer homeless once they’ve moved in somewhere. So the whole key is for Lotus to kind of be the actor behind the scenes that provides the structure and the facilitation. But, you know, ideally, neighbors don’t know that they’re…

Eve: [00:16:04] Yeah, I don’t know when my neighbors came from last at all. So, yeah, it’s irrelevant. Right?

Beth: [00:16:10] Right.

Eve: [00:16:10] Interesting. So what cities are you in right now?

Beth: [00:16:15] So we’re currently in Charlotte, but we are working on scaling this year to another community and raising money to do that. Which is exciting because the whole idea behind Lotus is that we want to build a model that’s replicable and scalable. Housing affordability and homelessness are not challenges that are specific to any one community. They’re unique in some of their characteristics, but every community across the country is challenged by both of those issues. So, the idea is we’ll scale another pilot this year, test that scaling, and then the hope is that then we can expand where we’re operating and where we can’t go. Really teach communities how to do what we’re doing.

Eve: [00:17:05] Mm hmm. Fabulous. OK, so tell me about the other two programs now.

Beth: [00:17:10] Great. Yes, so the second program is geared towards addressing a shortage of high quality, safe and affordable workforce housing by investing in existing properties, using the same private investment strategies that are used in for-profit real estate development. So our acquisitions and investment program looks to leverage capital. So, to give you an example of this, we purchased our first multifamily property three months after we launched, which was both terrifying and exciting. And Lotus put in or I should say Lotus and Friends invested 300,000 dollars. We got…

Eve: [00:17:59] And you didn’t crowdfund it.

Beth: [00:18:02] We didn’t.

Eve: [00:18:05] I’m chastising you.

Beth: [00:18:07] We might have had we had more than 26 days.

Eve: [00:18:11] Oh yes. You need a little more time.

Beth: [00:18:12] There’s a funny story with a flaw in the title which we don’t have time for on this podcast. But a short amount of time to raise money. And we were able to partner with an impact investment fund out of Jonathan Rose’s investment arm. And so for our 300,000 dollars, we got an equity partner for about six million, got a traditional Freddie Mac loan for about 11 million. So, for our 300,000 dollars, we now have control of a 17-million-dollar asset for seven years. The investors are making a six percent cash return today and a 12 percent return over the life of the investment…

Eve: [00:18:59] That’s a really good return for impact investing.

Beth: [00:19:02] Yeah, we think so. We’re pretty proud of it.

Eve: [00:19:05] A really great return. Yeah.

Beth: [00:19:06] It’s a great capital stock. It’s not complicated, right?

Eve: [00:19:08] Yes.

Beth: [00:19:11] So what we do in projects that we invest in, 20 percent of the units in this property are set aside for our core mission, so, providing housing for folks experiencing homelessness. So, 20 percent of the units, that’s about 30 apartments are participants in our landlord participation program. And the rest is just market rate, workforce housing. So, the idea there is profit is a tool. You can do good and do well. And we don’t have to have all of these complicated layers to preserving free housing that’s affordable.

Eve: [00:19:51] So are the units that are available for homeless people less expensive than the workforce housing units? Is that how you’ve managed the income flow?

Beth: [00:20:02] The rent is slightly lower for those units, which does help keep them affordable to our non-profit partners, but not by much. But it is really the 80 percent workforce market rate units that are allowing us to make the rent of the other units more affordable.

Eve: [00:20:18] That’s what I figured, okay. Do you have any more of those projects planned?

Beth: [00:20:24] Yes, we’re right now doing some due diligence for another project. We’ll see how that goes, we’re knee deep in it. But the idea eventually, too, is that we have a pipeline of enough projects. We’re also helping with that next stage of housing, and we are offsetting the operations of the non-profit.

Eve: [00:20:47] Right, right.

Beth: [00:20:48] So this model doesn’t have to solely depend on philanthropic contributions. It can also have a revenue model where we’re getting either an asset management fee or a return on our investment.

Eve: [00:21:04] Yep, yep. And what’s the third program?

Beth: [00:21:07] Well, this is probably the most daunting, but I think one of the most critical is an education program. And it’s really how do we creatively raise awareness, bust myths around who’s homeless and why, and really share our model and then also help dispel some misperceptions about the economics of housing development. And a key goal of this work is really to build community support, encourage and get people to have a different type of dialogue about homelessness and housing. So how do we flip the script on these really difficult topics for people to get into?

Eve: [00:21:52] Mm hmm. It’s really interesting. You probably thought a lot about affordable or homeless housing solutions and why this one and how do you think it might scale 10 million more people? Families? Homelessness is super daunting.

Beth: [00:22:10] Yeah, well, what’s interesting is I actually, my background is in urban planning, but I’ve never worked in urban planning. I’ve always worked in equitable economic development and real estate. And when I was first talking to one of my co-founders, I just said, this is ridiculous. I don’t want anything to do with it. And then the more we started fleshing out what this could be and how it could be a new tool and bringing some imagination to a space that’s just heavy and fatigued, I said, you know what, this sounds more like a startup. This sounds this sounds more like testing new ideas and seeing how they land. And that sounds really exciting to me. And, you know, in many ways, I think Lotus is about abandoning the notion that there’s one way to solve a problem. I don’t think Lotus on by itself is going to solve homelessness alone. But as we know from increasing numbers of homelessness and housing insecurity, we need every tool in the toolkit. And so, what I love about what we’re trying to do with Lotus is it also represents the bright light of human possibility, because it’s about investing in players on the ground. It’s about investing in systems and trying to get rid of the friction that’s preventing those systems from being effective. And it’s about bringing a bigger tent together to solve problems. Right?

Eve: [00:23:52] Yeah.

Beth: [00:23:52] And if we think about homelessness, it’s really a barometer of social justice and the strength of our communities.

Eve: [00:24:00] Right. Right. So, what’s the biggest challenge you’ve had in building this startup? So many you can’t answer?

Beth: [00:24:09] Well, I always look at the challenges as opportunities for growth, too, but I think there is a lot of resistance at first to will this model work? Is it actually replicable? And now we’re in a place where we have a strong enough narrative of impact and proof of concept that we don’t get that question anymore. So now we get other questions. I think it’s also disarming people’s notions of what homelessness is and how we can start making a dent in it. I think it’s disarming people’s notions about who get to be allies and problem solvers together. As you probably are aware, there’s some interesting perceptions of the private sector if you’re in the public sector or the non-profit sector and vice versa. And in many ways, translating all of those worlds is a thing we do really well. And bringing those folks together who usually may not have the opportunity to be part of the same team.

Eve: [00:25:16] Um hmm.

Beth: [00:25:16] And I think, challenges, like any startup, is raising capital to do more pilots, right?

Eve: [00:25:25] Yes.

Beth: [00:25:25] We’re not at a level with our investments and acquisitions that that’s going to fund every next pilot. I don’t think this is a challenge, but I think it’s the opportunity of, how do we get people to feel connected to what we’re doing and see the impact it’s having. So that is creative storytelling and how we share what we’ve been able to do, the impact it has, and then why it all matters.

Eve: [00:25:53] Mm hmm. So, I have to ask, what role does racism play in homelessness? What are the demographics look like? I’m sure you’ve looked at this.

Beth: [00:26:02] It’s a great question. I think arguably they play a huge role. National stats show that the majority of people that experience homelessness are African American. With the data we collect in our program, the folks that we’ve been able to house, about 75 percent of those are African American. What we know about housing and real estate and land use law is that for a long time, it was actually used to segregate communities and discriminate. I think that’s no longer up for debate, which is is refreshing. And some of the challenges with the impacts of whether it was restrictive covenants, redlining, access to just the ability to buy a home. Right. And build equity,

Eve: [00:26:56] Access to capital.

Beth: [00:26:58] Yeah, it’s played a huge role. And the challenges we got to lean into, difficult conversations about structures and things that are still in place that have, whether intended or not, consequences.

Eve: [00:27:13] So what’s the big, hairy, audacious goal then for the Lotus Campaign?

Beth: [00:27:20] That’s a great, great question. You know, survival is a good goal, but I think…

Eve: [00:27:25] That’s not an audacious one.

Beth: [00:27:28] On a more aspirational note. I’d love to see us in a couple different communities in the next few years and really sharing having a blueprint to share our model with other people.

Eve: [00:27:41] That’s a very sensible goal. So I want to go back to your background, because I know you’ve had a really interesting career path. And I want to understand what led you here. So you have a degree and I can’t remember, planning?

Beth: [00:27:58] Yeah, well, undergrad, I did the design-your-own-major program.

Eve: [00:28:03] Oh.

Beth: [00:28:03] Which was great actually, but I created something that was probably would have in any other place, would have been in urban studies program and then went on to study city planning and economic development in Philadelphia, which was a great city to be learning about all of those things and forced myself to take finance classes while I was there so I could understand that language of real estate. I have never worked as an urban planner, which I find interesting, but I think most people that go into urban planning, it’s a great field of study for identifying problems and understanding how to create solutions.

Eve: [00:28:46] I met you when you were at the Urban Land Institute, which is a very large, what, 10,000 strong, more people? Real estate membership organization with lots of big, fat developers. So how did you get like, what’s your trajectory been like? How did you get to the Lotus Campaign?

Beth: [00:29:08] Yeah, great, great question. So, I think a good starting point with my path is in my early 20s, I was an outdoor guide. Which means I taught people how to feel safe and comfortable doing crazy stuff outside. Whether it was hiking, backpacking, rock climbing, sea kayaking, snowshoeing. But the whole key there was disarming people of their notions of what they thought something was, teaching them how to trust themselves and how to try something new. And hands down one of the most fun and one of my favorite jobs and have a great community of friends from those days. But the other thing with nature is, is that’s always been a refuge for me. That’s always been a part of community building for me. And I found myself in urban planning because I wanted to strengthen communities. So, I went to undergrad, there was no such thing as urban planning, at least not where I went. So, I did this design-your-own-major program that looked at essentially urban studies and economics and then decided, let me go on and study this and throw on economic development and went to grad school in Philadelphia. And I found myself, you know, in an interesting path, which is not linear, because I wanted to soak up as much experience as possible. But I think a thread that runs through all the jobs that I have is how do we strengthen our communities? And, you know, I worked in New York City when Mike Bloomberg was mayor, doing crazy real estate projects, trying to get things going during a recession when no one was building things, getting yelled at community board meetings, because I was the free therapy for that evening and trying to disarm people’s notions of what they thought something was. But Lotus, for me, was this opportunity to build something and create real change and get to do it nimbly and at ULI I had this great job where I got to travel all over the country and the world with teams of experts helping communities on complex land use and real estate issues. What that also showed me was where people were inspired and motivated in their careers, right. And what some of the characteristics were.

Eve: [00:31:59] And how some people aren’t motivated and inspired, right?

Beth: [00:32:03] Totally, totally. You know, I think a bunch of people wanted my job after they went on a roll. But also personally. Right, with homelessness and housing, if you’ve ever witnessed someone in your family have some sort of emergency, whether it’s an economic crisis, a medical crisis, a mental health crisis and how close to the edge people get. If they don’t have a support system, what happens? Right, and with Lotus, there are just so many people that fall into a cycle of homelessness because they don’t have a support network or they don’t have an emergency fund or a strong family network, whatever it might be. And I was just really attracted to the idea of I think we can do something here and let’s take the best principles from real estate. Let’s take the best principles from community building. Let’s test some things. And so now I found myself running a startup. But as I’ve mentioned earlier, I really think homelessness is a reflection of us. Right. And if we’re measuring our communities doing well, are they thriving or are they healthy? I think we have to look at that as one of the metrics and it’s a sobering reality because a lot of communities are not doing so well, so that’s a long way of saying, I think I’ve had I’ve had a non-linear path, but it’s always been about how do you usher in change and get people to join you and how do you do it in a way that helps create some sort of positive impact.

Eve: [00:34:00] So I would say it’s pretty courageous path. I don’t think there’s many people, I think a lot of people don’t know what to do about the homeless situation and don’t even know where to begin to help. And you’re sort of diving into one of the most difficult problems, housing problems to solve. It’s not even about affordable housing housing. It’s about any housing. Right?  It’s the roof over your head, so…

Beth: [00:34:29] Well, the other thing that keeps me motivated is no one else is doing this. And if we don’t do it, how are we going to get others to join us and how are we going to get someone else to do this? And I actually think about that a lot because I don’t think what we’re doing is rocket science, but it is radical in its simplicity and that makes it challenging for some people to understand.

Eve: [00:34:54] So when I met you, you were at ULI, and that’s a very different place where you are now. I mean, Urban Land Institute rights for our listeners.

Beth: [00:35:07] Right, and I was running a program called the Advisory Services Program, which you can think of as an in-house consulting arm that goes out with teams of multidisciplinary experts and works with communities on complicated land use and real estate challenges. So that might be a downtown vision challenge for Norman, Oklahoma, or that might be how do we think about transit-oriented development in Cape Town, South Africa? So that was a wild couple of years of getting to travel all over the country and internationally a little bit to see what challenges communities were facing and then also provide real, tangible strategic advice to them. And I think a big takeaway I had from that phase of my career is most communities have similar challenges as different as they might be.

Eve: [00:36:11] No, I sat on a few of those advisory committees, and I was always struck like small town, big city, same problems. Pretty amazing. Almost the same financial problems. The performers look the same. This was really quite striking.

Beth: [00:36:29] Yes.

Eve: [00:36:30] Same homeless problems, do you think?

Beth: [00:36:34] You know, maybe different scales, but I can, I can say that every single program I did, it was always a housing issue. Even if it was a panel about urban resilience, there was always a housing affordability issue that came up.

Eve: [00:36:50] So then of all of the things you’ve done, why this? Because you saw, you know, because housing loomed larger in your life or I mean, it’s a big leap from real estate to, you know, director of advisory services to running this non-profit, which is really, really stretching the limits of what’s possible, right?

Beth: [00:37:13] Yeah, I mean, I’m a doer, right? I’m impatient, I like to solve problems, and I saw this as an opportunity to work somewhere and lead something that could be really nimble and had the potential for massive impact and to build a new tool that could ideally help communities help individuals. And that’s what really attracted it, attracted me to the, to helping to start Lotus. I will tell you, I was not a housing expert when we started. And now I feel like I have a little more fluency. But again, all these things about building strong communities. How do we measure that in our communities? I think it also comes down to housing and folks’ access to housing and you know how we’re thinking about how the folks that are with the least resources…

Eve: [00:38:17] Right.

Beth: [00:38:18] How they’re able to be a part of the community. And I think I was just really attracted to, let’s try to make a dent in this thing that seems intractable.

Eve: [00:38:30] Yeah, well, I’m really excited to see where you go with this. And I’m ready to buy a building with you in Pittsburgh if you if we can get a Class B building.

Beth: [00:38:42] Okay.

Eve: [00:38:42] Because I really think it’s a what a great program. It’s really pretty fabulous. I can’t wait to see where you take it. Thank you so much for joining me.

Beth: [00:38:51] Thanks so much for having me, Eve.

Eve: [00:39:01] Radical in its simplicity. That’s how Beth Silverman thinks of the Lotus Campaign. This spirited little startup is growing quickly, experimenting with a variety of solutions to homelessness. Lessons I learned today? Another 10 million families are expected to be homeless once the pandemic eviction moratorium ends. Educating landlords is key. Perceptions around homelessness are the enemy. Homelessness is a race issue. 75 percent of the homeless are people of color. Ultimately, Beth’s big, hairy and audacious goal is to be put out of business because the Lotus Campaign has taught others how to replicate the Lotus model and they are no longer needed.

Eve: [00:39:57] You can find out more about this episode on the Show Notes page at EvePicker.com, or you can find other episodes you might have missed. Or you can show your support at Patreon.com/rethinkrealestate, where you can learn about special opportunities for my friends and followers. A special thanks to David Allardice for his excellent editing of this podcast and original music, and 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.

Image courtesy of Beth Silverman, the Lotus Campaign

Bridging the Gap.

May 24, 2021

“Even after retiring from the NFL, Seattle Seahawks players keep finding ways to give back to their community. Former offensive tackle Garry Gilliam and defensive tackle Jordan Hill, who have played football together for most of their lives, are uniting once again to create change in their hometown of Harrisburg, PA.” writes Samantha Sunseri for Yahoo Sports.

When Garry Gilliam retired from football, it was just the end of his first career. As a graduate with multiple degrees from Milton Hershey School and Penn State University, and with a thirst for knowledge and a passion to give back to his community, he launched a second career –  as founder and CEO of The Bridge. Not content with coaching youth football, his former colleague and good friend Jordan Hill also jumped on board as chief community officer.

With the Bridge they are building a ‘for-purpose’ real estate development company with the intention of acquiring unused properties such as malls, schools and warehouses and transforming them into inner-city mixed-use ‘eco villages’. Their focus is on cooperation, collaboration, and community. Sustainability will be achieved by residents being able to work, eat, learn, live, and play all in the same location. The first eco-village, in the former Bishop McDevitt High School, broke ground in late 2020 and they hope to open it to the public in 2022. The project will include affordable housing and spaces for entrepreneurs, entertainment, specialized learning and trade programs. Year-round food production is planned, using no-soil agricultural techniques such as hydroponics and aeroponics. 

The Bridge wants to address some of the challenges which many communities face and which have created systems of oppression for many Black Americans. They want to “span the tide…. that exists between the rich and the poor, the informed and the untaught, the entrepreneur and the everyday citizen.”

Listen to my interview with Garry Gilliam or read the original article here.

Images courtesy of The Bridge

Livable and Delightful.

May 19, 2021

A-P Hurd says that she can understand why people don’t like developers. “Most people don’t like change, and development is really visible,” she says. “Often, five or 10 years after something gets built, people really love it. But when you’re talking about replacing the familiar with the unknown, that’s hard for people. All we can do is what Garrison Keillor admonishes: “Be well, do good work and keep in touch.”

Born and raised in Ottawa, A-P’s career is smartly eclectic. Journalism, finance, software startup, and novelist are all part of her career path. Then she decided to go to graduate school to further her engineering skills, and found her way to sustainable and transit-oriented real estate development. Today she has SkipStone, where she works with clients like Sound Transit, the City of San Jose, Community Roots Housing and private developers bringing projects to market, sustainably. 

A-P has been a faculty member in the Runstad Real Estate Department at the University of Washington, and she co-authored The Carbon Efficient City (2012) with the U of W Press. She is on the boards of CityBldr, a technology company, and Blueline Group, an engineering design firm. She also served on the board of OneBuild – a modular construction company. Currently, A-P is a board member at the Downtown Seattle Association and serves on the board of the Pacific Real Estate Institute (PREI).

Insights and Inspirations

  • Livable and delightful is what all communities should aspire to be.
  • Really successful cities never have a finish line.
  • Expanding rail infrastructure into non-urban areas might be the next thing for A-P
  • Regulations squish innovation.
Read the podcast transcript here

Eve Picker: [00:00:15] Hi there. Thanks for joining me on Rethink Real Estate. I’m on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. So I’m on a journey to find the most creative thinkers and doers out there. I’m not the only one who wants to rethink real estate. You can learn more about me at EvePicker.com or you can find me at SmallChange.co, a real estate crowdfunding platform with impact real estate investment opportunities open for investment right now. And if you want to support this podcast, please join me at Patreon.com/rethinkrealestate where there are special opportunities for my friends and followers.

Eve: [00:01:16] AP Hurd says that she can understand why people don’t like developers. “Most people don’t like change, and development is really visible” she says. “Often five or 10 years after something gets built, people really love it. But when you’re talking about replacing the familiar with the unknown, that’s hard for people. All we can do is what Garrison Keillor admonishes: Be well, do good work and keep in touch.”

Eve: [00:02:02] Born and raised in Ottawa, AP’s career is smartly eclectic. Journalism, finance, software start-up and novelist are all part of her career path. Then she decided to go to graduate school to further her engineering skills and found her way to sustainable and transit oriented real estate development. Today, she has SkipStone where she works with clients like SAM Transit, the city of San Jose, community roots housing and private developers bringing projects to market sustainably. Share this podcast or go to Patreon.com/rethinkrealestate to learn about special opportunities for my friends and followers and subscribe if you can.

Eve: [00:03:03] Hello, AP, I’m really happy to talk to you today. I want to find out more about what you do. Welcome.

AP Hurd: [00:03:11] Thanks. I’m pleased to be here, Eve.

Eve: [00:03:13] And I think I’m most impressed that we share a tagline Build Better Cities. So SkipStone, your company, helps private, public and non-profit entities build better cities. And I wanted you to tell me a little bit more about what that means.

AP: [00:03:30] Sure. In answering this question might be helpful to go back a little bit to my history. So, my background is in operations and finance early in my career, but really spent the last 15 years working in real estate and development. And for about 10 years of the last 15, I worked for a company called Touchstone, which is a large regional developer in the Pacific Northwest and ran that company for a few years and then started my company, SkipStone, about three and a half years ago and pretty early into working as a developer, I became very interested in the idea that development happens a certain way because of a combination of where capital wants to invest and the regulatory framework that governs where it can invest. And the mental model that I have for this that I’ve talked about before is, you know, when you’re a kid and you have one of those playdough extruders…

Eve: [00:04:32] Oh yeah.

AP: [00:04:32] And you had a little tube and there’s a little thing, you can push through the tube and there’s little plates you can put on the front of the tube. So if you put a little star shaped plate and you push playdough through the tube, you get a little star shaped extrusion. And if you take out the star plate and you put a circle, then you get kind of a long tube extrusion. And if you put in a plate that has very, very tiny holes, you might push on the playdough thing and actually nothing comes through because the playdough is too viscous. And so the for me, this metaphor is interesting because I tend to think of the little plate that is across the front of the tube as the regulatory framework. It sort of governs what’s allowed and what’s not allowed and what can go through and what can’t go through. And then the playdough is actually the investment capital that flows to projects. And so, you know, if you’ve got a plate that’s got very tiny holes in it, you might be that’s a very that would correspond to a restrictive regulatory framework. And so you would have to push very, very hard and you’d only get a little bit of playdough to go in. And that would be the idea that if you’ve got a very restrictive regulatory framework, you might get less investment. And so, what all this is to say that in thinking about building better cities, I’ve become very interested early in my real estate career about how the regulatory framework interacts with large flows of institutional capital. And I’ve become interested in can you have a regulatory framework where the most profitable projects, so the ones that attract a lot of capital or playdough, the most profitable projects, are also the ones that align with the public interest? How can we get more investment into things that are good for people instead of just stopping investment into things that are bad for people? And so when I think about building better cities, I think about how we do both of those things. Have frameworks that let capital flow to things that serve the public interest. And I guess I would say I’m also really interested in that in the broad picture of sort of how do businesses, as a whole, get regulated. And so I’ve wound up working in areas like environmental policy and energy policy and housing policy and really trying to think at the local and state level about sort of how are we creating frameworks that can get us more of the things that our cities desperately need.

Eve: [00:07:12] So I have to ask the very big question, how close are we to frameworks that work well towards building better cities?

AP: [00:07:25] That’s a great question, Eve. I think there are several ways that you could evaluate that. One is, are our cities doing for us the things that cities need to do? And so, one of the reasons that people have always aggregated into cities or towns from much of human history isn’t because it’s prettier or nicer smelling. You think of the Middle Ages, but it’s because people can exchange things with others and particularly with others who are quite different from them. There is a pretty fundamental economic theory that the value of an exchange between two people is higher if they are more different from each other. If they have things to exchange that are more differentiated. And this is true if you’re exchanging a bolt of silk for some olive oil. But it’s also true if you pair up a lawyer and a computer programmer. If you have two computer programmers together, they might have some differences in their field and stimulate each other to think differently. But if you bring a lawyer and a computer programmer and a cook together, the kinds of things that they may be able to produce jointly are going to be more innovative and higher value. And so, to the extent that cities facilitate exchanges that drive value for people, I think cities are doing pretty well at serving a reasonable proportion of the people who live there. And that’s why across the world right now, we are seeing continued urbanization and continued in migration into cities pretty much across most countries of the world. The things that cities are not doing especially well right now, well, they have not in the last year done especially well, slowing transmission of Covid.

Eve: [00:09:24] That’s for sure.

AP: [00:09:25] They are not doing particularly well at moving people around in them as they grow past two or three million individuals in size, at least across much of the sprawling North America. They are not doing particularly well, and this is a related concept, at sheltering people in ways that are adequate and affordable, in a reasonable proximity to the jobs and interactions that are so important. So, I would say we’re doing OK. We’re still attracting people. But there are some very worrisome trends that threaten to tip the balance of cities, particularly large cities, not working so well for people.

Eve: [00:10:13] So, you know, this conversation is going to go in a different direction than I planned, but it’s sort of fascinating. So, you know, I always think that financial institutions actually have a very large say in which way the balance is going to tip even on small projects. Right. So, do financial institutions understand the need to innovate and do things a little differently?

AP: [00:10:47] That’s a good question, Eve. I think that the one of the things I’ve learned about the real estate industry is that people who control capital in real estate tend to be very risk averse. And so that makes it a very challenging industry to innovate. And I’ve wondered a lot like, why do we innovate better and faster and on quicker cycles for the companies that are making portable phone and tablet devices than we do on real estate? And I don’t think I know all the answers. But one thing that’s occurred to me is that if you’re a developer, maybe even more to the point, if you’re a major investor and certainly if you’re a contractor, you’re making in any given fiscal year, you’re making a few big bets. You’re not diversified across a ton of retail customers and you’re not diversified across a ton of customer relationships. And a lot of times those relationships are not long term because you’re buying or selling a building. So, they’re more transactional and you’re making some pretty big bets where any one bet could tip the company upside down. And that’s true as much for the investors as it is if you’re a contractor for a general contractor, your company might be working on two or three projects. And if for some reason the customer can’t pay you or you have a huge cost overrun that you have to absorb, that can also tip the supply chain upside down. So, I think that’s made all financial participants in real estate more risk averse and then consequently has made it quite difficult to innovate.

Eve: [00:12:38] Yes.

AP: [00:12:38] And certainly to innovate in ways that someone is not requiring of you. Now, just to provide a little more optimistic note. I think that also a lot of really exciting examples of people who participate in real estate and who are very focused on de-risking projects, providing a good return to investors and who also figure out how to innovate or build better cities or have a better street front experience or better designed building or contribute to the civic environment in a lot of ways. But when I see that happen, it seems to be more driven by the passion of the individuals.

Eve: [00:13:22] Yes.

AP: [00:13:22] And they’re doing it as an and, in addition to satisfying their investors as opposed to it being the path of least resistance where it’s really happening at scale. Does that make sense as a distinction?

Eve: [00:13:35] Oh yeah, it makes absolute sense. I mean, my crowdfunding platform, SmallChange.co is actually where we have the tagline Build Better Cities is actually trying to fill in that innovation gap for real estate at a very small level. So I think, I mean, I’m completely frustrated by the lack of innovation in large financial institutions, and I see it, the larger the project, the more complex the financing, the bigger the chance you’re going to you’re going to be stalled or stymied by someone who doesn’t really understand yet what you’re doing. The more you have to weigh your work your way up a ladder with a creative project, the less likely it is to happen. And I learned that really early on as a developer doing small projects. If I could find a loan officer in a bank who would basically be my ally in front of the loan committee, I had a much better chance than if I went to a larger bank, where the person I was talking to was six steps removed from the loan community. Right.

AP: [00:14:49] Um hmm.

Eve: [00:14:50] So, there’s a lot lost in translation. And it’s almost like we need the entire financial system to be educated on the value of innovation. Yeah.

AP: [00:15:05] Yeah, I mean, I think what you’re driving at Eve, is maybe even a more fundamental question that I think a lot of people have been asking over the past couple of years and what our corporations for? Right? And, yes, they have a fiduciary duty to their investors or shareholders. But do they have other duties? Do they have duties to their employees? Do they owe a standard of care to the places they operate in? And some people who are very sort of traditional economists might say, no, no, the duty of a corporation is to its shareholders. But we do accept that that’s not the case in its entirety because we have regulations now that prevent some kinds of pollution. So, we do in our legal framework, have some reflection that the duty of a company is also to not desecrate its environment. But I think that there are a lot of people, many of them much more articulate than me, who are starting to ask these questions of how corporations operate in the world. And if they are sort of the the primary entity of how we organize economically, do we need to have more clarity about sort of what their obligations are to to place and people? Because I’ll just say one more thing about this. Companies are not real. They’re a made-up construct to allow people to organize and transact with each other. And so just like money, they’re kind of a made-up convention, but that humans have come up with. And I just will say it would really be a shame if a made-up convention wound up not really serving the public interest. And I think there’s some question right now about the framework for corporations and whether on the balance they are serving the public interest adequately.

Eve: [00:17:16] Yeah, yeah. So, you know, if you can talk about this, who are your clients? And I’d love to know a bit about what you’re working on.

AP: [00:17:26] Sure. So, about half the work that I do is still really kind of traditional development advisory work. So, the company that I worked for before, Touchstone, all of our projects were transit oriented developments. And this is something in which I believe really strongly and I’m a pretty committed environmentalist and really have done a lot of work on climate change policy and energy policy. And one of the things I love about working in cities is that cities have a much lower carbon footprint per capita per inhabitant than any other land use patterns. So, cities are off to a good start, certainly in that respect, and in particular cities that have robust transit infrastructure, whether it’s rail or the much less sexy but very useful bus, cities that have those kinds of infrastructure do even better on their carbon footprint per inhabitant. So there is a ton of value to serve for the planet and economically, it turns out, to building along transit. And one of the ways that this manifests economically is if you build a house near transit, you can start out by just building a house for the person and not have to build a house for the car before you get to building the house for the person.

Eve: [00:18:52] Right.

AP: [00:18:52] So that the lower need for parking around transit has the potential to really positively impact housing pricing and access to housing. So, I’ve been really mostly focused in the world of TOD and thinking about how do we build transit oriented development that also creates great cities that people love. We don’t want to build know so efficiently around transit that suddenly it becomes inhospitable or it’s not a nice place to walk around because at the end of the day, you also need people to want to and choose to live there. But a lot of the work I do now is working with landowners and developers to bring projects to fruition around transit and to think about how to attract capital to those projects. And so really kind of all the levers, the entitlements, the outreach to the community, the project capitalization, the design and construction, and thinking about how to pull all those pieces together into a successful project financially, but one that is also accretive to the community around it. And so that’s about half my work and then the other half of my work is with public entities, cities, but also transit agencies that are trying to think about how to catalyze or bring transit to fruition. And for me, it’s really fun to wear these two hats because I’ve had such a long-standing interest in the policy frameworks that shape development and getting to work with municipalities and agencies that influence those policies. It really is a way to both get to pick what plate goes on the front of the playdough tube and to help push capital through it.

Eve: [00:20:43] So is there a project that you’ve worked on that’s come to fruition that best exemplifies what you do?

AP: [00:20:51] Well, I think one of the most interesting opportunities and I’ve had a chance to work on in the last few years is working with the regional transit agency in Puget Sound. It’s called Sound Transit, and it operates some of the buses, but also all of the light rail system. And a few years ago, I think three or four years ago, there was a bond measure passed or a referendum passed across the tri-county area, which is the three counties that encompass Seattle and the surrounding areas. That was to fund light rail expansion to the tune of about 52 billion dollars. I think it’s the largest transit measure that’s ever been passed by voters in the United States. And what that means is that we’re really expanding our rail infrastructure and sort of the backbone of it into some areas that are not as urban today. And the first reaction to that would be, well, if it’s not very urban, why are you building light rail? But if you go back and think of examples of very successful transit systems, when New York City built its subway as it was building, this is one hundred years ago, as it was building up into the areas that are now the Bronx, it was building into farmland.

Eve: [00:22:14] Yes.

AP: [00:22:14] And so there was there was even fewer people around the transit stations and the stations ultimately influenced the land use pattern. And so there can be some very significant advantages to building infrastructure early and then letting the land you shape around this. And the counter example of what isn’t so great as we’ve seen that in the United States with our freeway system is that a lot of times freeways got built and then they subsidize development around them and then the freeways got clogged up. And now you’ve got people who theoretically have access, but not during large swaths of the daytime. And so light rail expansion is pretty exciting. But it also raises the question of what kind of development is going to come up around some of these stations, particularly in places that, like I mentioned, are not not even close to being an urban land use pattern. And one of the things that has been particularly interesting to observe is that there is a large appetite for TOD, or transit-oriented development of the flavor that shows up on the cover of the ULI magazine. And when I say that, I say it a little bit tongue in cheek, but sort of seven story multifamily over retail with the cute little bakery in the ground floor.

Eve: [00:23:37] And it’s a podium building. Right?

AP: [00:23:40] Right. But also, with these very cute little businesses and eight stories high and no parking. And the reality is, if you’re starting off, whether it’s the fields of the Bronx or an industrial zone on the outside of Seattle, you’re not going to get the cute little croissant bakery on day one. And what’s been interesting is to have the conversation with people about really successful cities don’t have a finish line. It’s not like you put in light rail and you get this prototype of development and then you’re done and it never changes. And if that was to happen, it would quickly become a dying city because it would be full and it would never change. And so thinking about cities as living organisms that are never finished and that sort of build on themselves has given us a bit of a framework. And I say us, kind of collectively as a team and a group of thinkers, that it’s allowed us to ask the question of what comes first and then what comes next and are there phases to zoning and are there phases to development? And how do we think about even interim land uses or interim land use patterns? And for me, this was very interesting because I had previously developed in quite dense urban areas that were very kind of urbanized. And so looking at what is it take in a place that is not yet really a compact, mixed use land pattern. What does it take to get that wheel started? And it’s also sort of forced a reckoning of like we’re not going to be done with the first set of development. It’s going to change over time. And how do we put ourselves in a mindset of evolution rather than a mindset of just getting to some arbitrary finish line?

Eve: [00:25:43] So, you know, the other thing is I just interviewed a guest who described developers as pale and male and, um, and, you know, he said, you know, we end up with pale and male looking developments because that’s who’s driving them. So as a woman in real estate, which is still shamefully a tiny minority, how do you view that? And what are some of the challenges you’ve encountered because of your gender?

AP: [00:26:19] I was very fortunate to join a development company where the three founders were white and male, but they were incredibly supportive of my career and the career of the folks on the team. And we were able to build, you know, not what would be a diverse team by some standards, but a diverse team by real estate standards. And I think as I moved into leadership of the company, I believe strongly that people need to be able to bring their whole selves to work. They they need to not feel that there’s only a little slice of them that is accepted at work, but that they can be themselves at work in all of their glory and all of the different sides of their personality and aptitudes and passions. And that if people do that on a team, the team will be more successful. Not only will it have the benefit of more talents and aptitudes and passions, but that people will share of themselves and speak up about things that are important to them and about things they’re worried about and about risks that might be emerging. and the team will be more successful as a result. And so the company that I was in was very good. I think the founders laid a good foundation for people bringing their whole selves to work. And I really tried to perpetuate that. I, I think that within the industry as a whole, Seattle has a lot of women leaders in real estate, but I gather that’s a bit less common in other parts of the country.

Eve: [00:28:14] Yes, definitely.

AP: [00:28:16] So I would say that I’ve been very fortunate to be in a place where my gender is less of an anomaly. That being said, you know, I wouldn’t really be in real estate if I hadn’t experienced some very awkward situations. And one that comes to mind is at some point, that was when I was running Touchstone and a lender came to our office and wanted to sort of pitch the, us on a relationship with them. And we had a meeting in our conference room and there was a couple of men from this lender organization. And I had a couple of the folks on my team with me. And the lenders would only talk to the two men who worked for me.

Eve: [00:29:01] Oh, AP, I’ve had the same experience, exactly the same experience.

AP: [00:29:05] Yeah. Even when I asked them a question, they wouldn’t look at me when they answered, and they would only look at the folks who worked for me. And so, you do realize that people’s biases about who is making the decisions or who’s in charge can be pretty deep and pretty hard to overcome, even with evidence to the contrary.

Eve: [00:29:25] Yeah, I know. Pretty crazy, huh? So, you know, real estate has become a bit of a dirty word, too, or developers, should I say. So you know, but we, you and I, know that building better cities really requires developers. So how can you make people feel comfortable that real estate development is a solution that will help them have better places to live in?

AP: [00:29:52] I think two answers that come to mind to that question, Eve. The first one is when a site in a neighborhood is being redeveloped, almost regardless of what was there before, people feel a sense of loss at the thing that is going away. Even if it’s a parking lot, they feel a sense of loss. And I’ve thought a lot about why that is, because sometimes the new thing that’s being proposed is actually quite cool. And my conclusion is that people can only love what they know, and they can’t love something that they’ve never encountered. And so, there is something very natural psychologically about people experiencing the moment of redevelopment as a sense of loss, even if 10 years down the road, they love the new things so much that they can’t imagine it ever going away. But I think that creates an obligation to us as developers to try to make the new thing lovable and delightful so that even if the community has a sense of loss at the moment of redevelopment, that they eventually are made whole again and that they love the new thing that came into their neighborhood. So that’s the first answer is we probably can keep as developers through our efforts, giving people new things to love. And the love will eventually catch up. But we shouldn’t fault people for feeling a sense of loss when they don’t know the new thing yet. And then the second answer is maybe a little less positive about human psychology. And it’s this. I think that when neighborhoods are redeveloping, there is a current of conversation that inevitably comes up that is about is it consistent with neighborhood character? Are we preserving neighborhood character? And I think it’s an interesting question to ask, but it’s rarely balanced against the question of are we making room for everyone who is an immigrant to our cities, who wants to have a chance at economic opportunity? And I think neighborhood character in at its worst can wind up being a foil for people to keep others out who are not like them in the name of some lovely sentimental concept. That’s not to say that developers shouldn’t do a good job and build beautiful buildings, because that’s the first part of what I was saying. But I do think that sometimes people who want to stop development, they want to seem like good liberals. And certainly San Francisco has their share of these. But at the same time, like these good liberals are preventing really decent people who want a crack at economic opportunity from having space in their city. And when we don’t make space for other people, we are doing them harm because cities are where economic opportunity resides in this country today. And it is not just a sin of omission to not make space for those people, but it is a sin of commission. And so, I think that sometimes disliking development can be a way for good liberals to make this idea of making space into the bogeyman. Like I don’t like what those developers did, but really what they mean is they don’t like that it’s hard to make space for others. And make no mistake, it is hard to make change and make space for others. But it is so imperative that in this country we figure out how to do that.

Eve: [00:33:45] Yeah, I agree. So I mean, I think that would have been, I suppose, my third point, and that is that some people take easily to change and other people have a very hard time with it. And I remember someone showing me a bell curve with Prada at one end and, you know, a farmer at the other. And at the top of the curve was Walmart or Target. You know, when when that thing has been accepted into the the mainstream. And like, you know, I probably am at the Prada end and or maybe a little bit further up. Right. I can’t really afford Prada. But at the other end is probably my husband who doesn’t really, like, change. He like things being the same. And so I think that that’s, you know, you’re going to have a whole range of people to deal with who, who can move with the times or not, I suppose.

AP: [00:34:46] Yeah. I mean, our cities are the way they are because of a lot of historic framework, some of which are pretty ugly. And redlining is at the top of the list. But there are a lot of structural things built into our land use pattern that are fundamentally about excluding other people. And so, I think we do have an imperative to change because the way we have been is not just.

Eve: [00:35:16] Yeah, I agree. So I’m going to shift gears a bit and ask you about what innovation are you watching that you might think about in future projects or that you think is essential to watch?

AP: [00:35:29] I’d love to say mass timber because I’m working on a mass timber project, but that also feels incredibly clichéd because everybody is working on  mass timber project these days, it seems like. You know, here’s one that is a little weird. If I am going back to this concept, we talked a lot about very suburban neighborhoods or even sort of industrial or undeveloped exurban areas that are urbanizing because of transit. I become very interested in the idea of grouping surface parking so that you can have compact development and buy compact, I mean, two or three story apartments that come right up to the street or row houses with a shared backyard, but that none of the structures that house people would have parking in them, the parking would be sort of getting together either a street parking or angle parking on the street or in a parking lot at the end of the block. And the advantage of ganging together the street, sorry, ganging together the parking, the surface parking is people then have a place to put their car during the period where they need a car because the neighborhood is transitioning, but the parking being aggregated in one place as surface parking, also allows it to be potentially shared with other buildings as it’s not needed so much, or maybe even in the very long term, redeveloped if it’s not needed at all.

Eve: [00:37:04] I love that idea.

AP: [00:37:04] And I have not seen that many places that are doing this. But I am having more and more conversations with cities who are starting to explore this and starting to understand that their right of way or the street is an asset that can be used for lots of things, including maybe having some parking for a period of time until it’s needed less. And that the city’s using the right of way in such a way can help stimulate development and sort of the nascent stages of urbanization around the station. So to me, that’s a really exciting idea.

Eve: [00:37:39] Oh, yeah. And it goes further because if you have a four-lane road, eventually you hope you can reduce the size of the road and that frees up even more land, right? So you get rid of cars.

AP: [00:37:51] Yeah. I don’t know if you need to totally get rid of them, but they’re useful. If you need to go to the Petco and get a hundred-pound bag of dog food, but you certainly don’t need them quite as much as we use them. I did an interesting project a couple of years ago with a community in North Seattle. This was really a grassroots community project that was funded by research and environmental organization called the Bullet Foundation in Seattle. And we took a right-of-way that was really underutilized in a neighborhood that didn’t have a lot of public space. And we created a way to close it during certain periods and also to narrow it and put in community gardens. And we painted the street and we had festivals and what was really sort of a block and a half of city street came to take a much more park like function, but a park that was really active and that gave people a destination to gather within the neighborhood during the summer. And so, it’s made me think a lot about that sort of 20 or 23 percent of of city space that is the right of way. And what are all the public purposes we can put it to?

Eve: [00:39:05] Yes. So, one last question for you. What’s your big, hairy, audacious goal?

AP: [00:39:13] I think that one of the things that I am most focused on and sort of the arc of my life is making the difference that I can on climate change, and it probably is a hairy, audacious goal because there are so many headwinds. We have a system of living and commerce and interacting with each other that depends tremendously on fossil fuel use. And so, it’s very, very hard to change those patterns. I have done work lobbying and on sort of carbon taxes and regulatory frameworks for energy use. And in addition to that, I think maybe the more promising, I’ve written a book about this, the more promising strategy is probably to give people a better way that they love more and to to delight people with an option that is more carbon efficient. And that’s probably the root of my interest in cities, because I think cities can bring people opportunity and they can also bring freedom and joy and not just economic opportunity, but sort of opportunity to live your potential and be your best self, and they provide a lot of flexibility for people to grow into their identities. And so, I think those kinds of things do bring joy. And if we can shape cities so that they continue to lower the carbon footprint per capita, but in ways that people embrace because it’s better than the old way, that maybe seems like the biggest potential for change. And I feel like I can only do a small part of that. But it’s a very exciting place to work.

Eve: [00:41:24] Well, thank you very much for the conversation. I love your upbeat take on real estate and especially the idea of delighting people. That’s a great way of looking at it. I can’t wait to see what comes next.

AP: [00:41:37] Thanks a lot, Eve. It was a pleasure talking with you.

Eve: [00:41:47] That was AP Hurd. Her mantra these days is livable and delightful. An inquiring and eclectic background led AP to where she is today, an in-demand consultant solving very large real estate challenges, all focused on sustainability. Not a straight path, but a very rewarding one. You can find out more about this episode on the Show Notes page at EvePicker.com, or you can find other episodes you might have missed, or you can show your support at Patreon.com/rethinkrealestate, where you can learn about special opportunities for my friends and followers. A special thanks to David Allardice for his excellent editing of this podcast and original music. And 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.

Image courtesy of Touchstone

Know your price.

May 12, 2021

Andre Perry is a senior fellow with the Metropolitan Policy Program at Brookings and a scholar-in-residence at American University. He writes for The Hechinger Report, and has been published by The Nation, The New York Times and The Washington Post. Last year, Andre put out a new book based on his work: Know Your Price: Valuing Black Lives and Property in America’s Black Cities, which explores urban development in cities across the country, and how it has so often failed Black communities.

This story is also a personal one. Andre talks about growing up in the Pittsburgh region, in the township of Wilkinsburg. He has described how he has watched over the years as this community remains stagnated, and without meaningful investment, while neighboring areas experience remarkable economic revivals.

Andre began his career focused on education, but his work has expanded to examine the myriad ways government policies have ‘created housing, education, and wealth disparities’ that continue to disadvantageously impact minority communities in urban metro areas. Andre has written on subjects as diverse as infrastructure, how our children are driving climate action, student debt cancellation, access to fertility treatments, and supporting Black businesses. He also served as the Founding Dean at the College of Urban Education, at Davenport University in Grand Rapids, an institution he helped to plan and launch.

Insights and Inspirations

  • Institutionalized racism creates an ‘unconscious bias,’ where we are willing to blame the people who have been marginalized rather than the policies that made it possible. And so, we recycle discrimination over and over and over. If we don’t see the problem, we have no incentive to change it.
  • Andre found that in neighborhoods where the share of Black population was 50 percent or higher, homes were underpriced by 23 percent, or $48,000 per home … $156 billion in lost equity.
  • These communities should have access to the same information, data, research, and ideas as corporations, cities and state governments … so they can come to the table empowered.
  • We need to create a culture of inclusion where all people are valued, and to do this we need innovations. We need new mortgage products. We need new appraising systems. We need new tax assessment systems.
Read the podcast transcript here

Eve Picker: [00:00:10] Hi there, thanks for joining me on Rethink Real Estate. I’m on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. So I’m on a journey to find the most creative thinkers and doers out there. I’m not the only one who wants to rethink real estate. You can learn more about me at EvePicker.com or you can find me at SmallChange.co, a real estate crowdfunding platform with impact real estate investment opportunities open for investment right now. And if you want to support this podcast, please join me at Patreon.com/rethinkrealestate, where there are special opportunities for my friends and followers. Today, I’m talking with Andre Perry, a senior fellow at Brookings in Washington, D.C. Andre is also a scholar in residence at American University, a columnist for The Hechinger Report, and he writes for the Nation. But what really drives Andre is the seemingless impossible divide between blacks and whites in this country. He is focused in his recent work on the multiple issues impacting minority communities in urban metro areas. And he has authored a book, published in 2020, called Know Your Price, Valuing Black Lives and Property in America’s Black Cities. In his work at gathering data for the book in black majority cities across the country, Andre found that homes in black neighborhoods where the share of population was 50 percent or higher were valued at about half as much as white neighborhoods. Andre further refined the data by taking into account education, crime, walkability and other key neighborhood factors. And still, he found that homes in black majority neighborhoods were underpriced by 23 percent, or about 48,000 dollars per home. That’s 156 billion in lost equity. And Andre knows we have to fix that. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate to learn about special opportunities for my friends and followers and subscribe if you can.

Eve: [00:03:18] Hello, Andre, and I’m just really delighted to have this opportunity to talk to you.

Andre Perry: [00:03:22] Well, thanks for having me. I’m looking forward to the conversation.

Eve: [00:03:26] Great. There’s lots to talk about. You’ve thought and written about multiple issues impacting minority communities and urban metro areas and most recently in your book, Know Your Price, Value in Black Lives and Property in America’s Black Cities. So, first of all, I wanted to ask you, because I’ve also read other things that you’ve written, and I’d like to know what you mean by the term unconscious bias.

Andre: [00:03:54] Well, unconscious bias is when you act without thinking. It’s essentially the responding to a narrative that we generally know and accept. It’s like when people say the American dream, we all have an idea about what that means, and we respond to it. But when it comes to Black Americans, we also have an idea in our head that if anything goes wrong, we blame Black people. And so without thinking, without batting an eye, if there are problems in Black neighborhoods, we say, oh, it must be the character of the residents. It must be crime. It must be something else. We never look at policy implications or we don’t look at policy makers behavior. So for me, when I talk about unconscious bias, I generally refer to how we assume that Black people are the problem when considering the issues in Black neighborhoods and cities.

Eve: [00:05:09] Right. So what’s been the overall impact of this unconscious bias and what’s the impact today? I mean,

Andre: [00:05:17] You know, we talk a lot about unconscious bias, but at its heart is really just plain discrimination.

Eve: [00:05:24] Emotion, yeah.

Andre: [00:05:24] Like that. You know, it’s when you talk about, for instance, redlining. It was the practice of the federally backed Homeowners Loan Corporation in the 30s and throughout to the 70s, the practice of saying that Black neighborhoods were too hazardous or or they weren’t worthy of low interest loans to help develop those those areas. But it was predicated on this, the effort to isolate Black people in communities.

Eve: [00:06:00] Wasn’t that conscious bias rather than unconscious bias?

Andre: [00:06:03] Yeah, I mean, but it was also just fueled by this belief that Black people and white people should not live together. And there was a conscious effort to bring that belief into policy. And so, you know, I you know, I talk a little bit about conscious bias in my work, but the source of a lot of our implicit or tacit assumptions are racist policy. Conscious, conscious, racist policy. And so we can’t let policy off the hook for our behaviors. I tend to blame policy, not people. I just I find it more useful to get at the root for me. And that’s policy. And that, for me, represents that conscious effort to suppress Black people based on a hierarchy of human values.

Eve: [00:07:08] Right. Yeah, that’s, I think, very conscious and really disturbing. But, you know, I have to wonder about all the unconscious bias out there that just perpetuates things a little longer, makes it a little harder to get where we need to go.

Andre: [00:07:23] You know, a lot of my work, I look at home values. What anchors the book Know Your Price is a housing study we did a few years back where we looked at the average price of homes in areas where the share of the Black population is 50 percent or higher and compared them to areas where the share of the Black population is less than a percent. And we controlled for education, crime, walkability, all those fancy Zillow metrics. And what we found is that homes in Black neighborhoods are underpriced by 23 percent, about 48,000 per home. Cumulatively, that’s 156 billion in lost equity. That’s the money people use to lift themselves up by their proverbial bootstraps. It’s the money municipalities use to fund everything from education to infrastructure to policing. But, you know, there’s a way to interpret that 23 percent difference. Again, we controlled for education, we controlled for crime. And certainly, crime and education mattered. They lower price, but that there’s still a gap. And it’s almost as if people, when they see Black neighborhoods, they see twice as much crime than there actually is. They see worse education than there actually is. So there is a perceptual issue here. That when evaluating or assessing taxes, when appraising homes or any kind of subjective task is at hand, people lean on these tropes of Black neighborhoods. And and so there is something psychological in nature that’s reducing the value in Black neighborhoods in ways that it shouldn’t. So there is something there when you’re talking about unconscious bias.

Eve: [00:09:36] So as you mentioned, this bias spills over into investment and who has wealth and who does not. And, you know, as a real estate developer, I’ve certainly seen how it works with appraisals because, you know, banks will lend based on appraisals and appraisals in existing neighborhoods have a certain value. And if they’re already devalued, what’s going to disrupt that and raise the value? You know, it’s just a huge dilemma.

Andre: [00:10:06] Yeah. You know, the price comparison model is an example of structural racism. I mean, a good example of structural racism. So, as you mentioned, when an appraiser has to find a comparable home and they stay in the neighborhood, that’s already been discriminated against, you’re essentially just recycling discrimination over and over and over.

Eve: [00:10:27] Exactly. So how do you disrupt that?

Andre: [00:10:30] Oh, so one, you can you don’t necessarily have to stay in the neighborhood for finding comparables. I mean, what’s interesting is like for our data, we looked at the entire metro area and compared homes with similar social circumstances. So you can find, using big data, you can find homes in areas that have similar educational levels, similar crime levels, all those different things. And you don’t necessarily have to compare it to another home in the same neighborhood.

Eve: [00:11:07] Yeah, but then you’re dealing with an industry that’s used to doing that. So really, the disruption has to come with the entire banking and appraisal industry. How do you make them look elsewhere? Like what prompts? You know, I was one of the first loft builders in Pittsburgh and I went through this myself because there were no comparables. And so I talked to appraisers about like, well, you know, look at that project. It’s not in the same neighborhood, but it’s offering a similar product. And they did. You know, they had to because it was the beginning of something new and there wasn’t anything else to look at. But when you have, you know, five other houses that have sold in a neighborhood, like Wilkinsburg, where I know you grew up or Garfield and that’s the easiest go-to, how do you disrupt that behavior?

Andre: [00:11:57] Yeah, but I think you said a word that is really relevant to the conversation. You make them.

Eve: [00:12:05] Ahhhh.

Andre: [00:12:06] You know, one thing I learned about this protest movement over the last few years, but really culminating in the summer of 2020 is that people do have power. This is a power issue. And the same way we created a culture of exclusion, we can create a culture of inclusion where people are valued, all people are valued. And we need innovations, no question. We need new mortgage products. We need new appraising systems. We need new tax assessment systems, and we should open ourselves up to that. But clearly, people in various industries aren’t going to do that themselves. They’re going to have to be backed into it. So I encourage communities to mobilize, organize and fight back. The typical thing that has incited structural change in the United States, it’s litigation.

Eve: [00:13:14] Right, right.

Andre: [00:13:14] So that is a tool. But I also just think that we are going to have to pressure banks and appraisal, the various industries in housing to take new approaches. Because those approaches are the tools that reify discrimination in this country, and it goes beyond appraisals and lending. You’re talking about zoning structures as well.

Eve: [00:13:47] Yes. Yes.

Andre: [00:13:47] You know, you’re talking about building.

Eve: [00:13:50] My backyard. Yeah.

Andre: [00:13:52] Yeah, exactly. And so there’s all these structures that maintain exclusion and bias. And we need to demand change in all of those structures. So and that’s where, you know, for my book, Know Your Price, there’s a theme, there’s you know, I want people to demand their proper value. And it’s not going to come because someone else says this is what it should be worth or, it’s going to come by people from places like Wilkinsburg, Homewood, Garfield, demanding their proper value.

Eve: [00:14:37] Right.

Andre: [00:14:37] And so for me, it’s, you said the word make. Yeah, that’s what it’s going to take.

Eve: [00:14:43] Yeah, I think you’re probably right. So the interesting thing is also, you know, there are developers who, developer it isn’t always a bad word, who really want to work in these neighborhoods. And they can’t because of this entire sort of pricing structure becomes impossible. It doesn’t matter if you build a house in Wilkinsburg or Garfield or downtown, the construction costs are going to be the same. Right?

Andre: [00:15:09] Yeah.

Eve: [00:15:09] But the market’s really different. So that is a huge problem. But also, I’ve always been really sort of irritated and puzzled by the affordable housing market, which almost demands a product that looks the same. So, I think when you talk about value, you know, good design, different design, innovative products can bring a different value as well. And I don’t think people think about that very much. You can drive down a street in Pittsburgh and, you know when you’re on a street which has affordable housing because it all looks the same.

Andre: [00:15:44] Yeah.

Eve: [00:15:46] It’s bad branding, right?

Andre: [00:15:47] Exactly. And I’m not a real estate person in the sense I’m not a practitioner. I’m a researcher. But I’ve been saying, hey, there needs to be innovation in the actual end products that we put up. You know, we’ve got to show how diverse products can look and serve diverse communities. We’ve got to have innovation in lending and in ownership. Like we need new cooperative models. We need new everything from credit scoring systems to zoning ordinances. But I will say this, that at some point you need more capital directed in the right way.

Eve: [00:16:37] Yes.

Andre: [00:16:38] And so for me, it’s also about understanding the role the federal government has to play in creating inclusive communities. Because remember, it was the federal government largely that created the problem we’re in today. They, instead of distributing resources equitably in the 30s, 40s, 50s, 60s, they distributed resources to help communities, to build up communities and wealth, really among white residents and not Black. So, the same approach as we used in the 30s, 40s, 50s to help people build up communities, we can use today. But when it comes to Black people, we don’t want to give Black residents low interest loans and grants and down payment assistance. And and we don’t want to reward developers for actually creating inclusive homes and facilities. We then hide behind the sort of, you can’t create any kind of race based program that’s reverse discrimination. But the reality is, if you really create some type of equitable strategy, you almost have to target your investments towards people who have been disenfranchised or injured by past policy.

Eve: [00:18:09] Right.

Andre: [00:18:10] And it happens to be Black people and we should not shy away from that. And then it happens to be in places that you have significant Black populations, not completely all Black people in Wilkinsburg or Homewood or Garfield, but those are the places we need to find a way to direct capital to and in ways that just makes sense.

Eve: [00:18:33] Yes, yes.

Andre: [00:18:34] And there’s this reticence to drive capital based on need. And until we solve for that, it’s going to be hard to really do what we need to do.

Eve: [00:18:48] So you’ve also talked about the devaluation of Black owned homes, and I want to hear a little bit more about that. How how did you calculate that?

Andre: [00:18:57] At the core, you know, I’m from Wilkinsburg and I come back home all the time,

Eve: [00:19:02] We should explain to people who are listening to this, because we have listeners all over the country, maybe even the world. So, Wilkinsburg is actually a beautiful neighborhood town on the outskirts of Pittsburgh that has amazing architectural building stock and has just sort of stagnated and leaned in really poor condition for a very long time, presumably because it is predominantly a Black demographic. Is that a good explanation?

Andre: [00:19:34] Yeah. And it’s you know, growing up in Wilkinsburg, I really didn’t know the difference between Wilkinsburg and Pittsburgh, because Wilkinsburg is a Black majority municipality borough surrounded by Pittsburgh on three sides.

Eve: [00:19:49] Oh, I didn’t know that actually. Yeah.

Andre: [00:19:51] Yeah. And the people generally were the same. I mean, in the parts of Pittsburgh that it was adjacent to was Black. Wilkinsburg was majority Black. It had thriving commercial corridor, and it had all the quote unquote assets that you would look for when considering to develop a place. It’s close to downtown, close to the university. It has its own highway. It had parks. It has everything.

Eve: [00:20:22] There’s even a busway stop there.

Andre: [00:20:24] Busway. I mean, there’s…

Eve: [00:20:26] Like ten minutes to downtown. It’s amazing.

Andre: [00:20:28] I mean, it has literally everything you would want. But when U.S. Steel left town or downsized considerably, white residents moved, leaving a majority Black population and investment just stopped. And in any situation, I mean other situations, if you said if that area had majority white people in it, there would be no question there will be development there, because, as you mentioned, housing stock was excellent. You had a thriving commercial corridor.

Eve: [00:21:07] Yeah, the main street’s lovely.

Andre: [00:21:09] Exactly. You had everything there. And so, when I go back home, it is like stupefying to look at why isn’t investment coming? And right next door in Pittsburgh, which similar situation in terms of access to transportation, great housing, universities nearby, commercial corridor. But there was a decision to bring Google into town. And Google could have landed in Wilkinsburg. They chose Pittsburgh. And I talk a lot about bias in bias out. And so, in the planning for Google to come to Pittsburgh. To site itself in a former Nabisco factory where Black people used to live around. All the planning was essentially with white people. And if you look at that part of Pittsburgh now, it’s thriving, it’s booming. It has restaurants, shops,

Eve: [00:22:18] It’s actually gentrified, which is a little shocking.

Andre: [00:22:21] But you don’t see Black people.

Eve: [00:22:23] No, I know that. You know, I did a couple of developments in East Liberty before Google came along. And the last thing in the world I wanted to see was that neighborhood gentrify.

Andre: [00:22:36] Yeah.

Eve: [00:22:37] And I was absolutely shocked to see it happen over the period of probably 18 months. It went from Black people on the street to what looked like people visiting from the suburbs. I don’t know how else to say it, but it was it was actually shocking to watch. It was like for one moment in time, it was a great mixed, diverse neighborhood and then it was over. How can you, like, stop it right there, you know, when it’s at the great, mixed, diverse neighborhood point?

Andre: [00:23:06] But that’s why we need more housing policy connected to our economic development policy.

Eve: [00:23:15] Yep.

Andre: [00:23:16] And oftentimes they’re running on parallel tracks, never to touch. And it, my belief that some of that is intentional. That there are many people who don’t want to see Black people around a new development. And so, when you plan with all or mostly all white people with the muckety mucks of places like Pittsburgh and not include others in your development, you get what you get. And so I always say that. The developments really reflect who’s involved. Now, and it’s difficult because when you’re talking about planners and architects and economic development folks, largely white crowds and so…

Eve: [00:24:08] Also, largely white male crowd.

Andre: [00:24:11] Yes, that’s right.

Eve: [00:24:12] I want to point that out because I’ve been the only female in the room for a long time.

Andre: [00:24:16] Exactly. Very. A lot of testosterone in the room.

Eve: [00:24:21] Yes.

Andre: [00:24:22] Right. Lots of it. And so, and then people look up when the project started to go, why does it look pale and male? Because the planners were pale and male, you know? So you have to be very intentional about making sure people are included in any kind of development. And so, whether you are in Pittsburgh or Philly or Birmingham or Detroit or Baltimore, you just have to be very deliberate about including people. And we have to make every effort to concretize inclusion into policy. You know, I wrote something not that long ago that talked about, on the federal government side, that we need equity scoring system. This, just the way we score legislation against its potential impacts on the budget. We should score policies and practices on its potential impact on Black and brown communities. And so, when you’re developing a project, you’ve got to demonstrate how is this going to boost employment? How it’s going to boost ownership? How are Black people going to share in the prosperity? If you don’t see a clear path, then we should not greenlight these projects.

Eve: [00:25:42] Yeah.

Andre: [00:25:43] Not only must we build a culture that supports inclusion. That culture must build policy to protect for inclusion.

Eve: [00:25:56] Right. So, in your book, you also talk about wanting to give Black communities and home-owners information to stand on to empower them. But how do you do that? I’ve been involved in community meetings in neighborhoods like Garfield and it’s excruciatingly difficult. Do you want to explain what you’re doing? You are faced with a crowd of people, some of whom are just trying to get by. And as a small developer, it’s just it’s you want to do the right thing. It’s just really hard to know how to do it.

Andre: [00:26:32] Yeah, but this is why we need to really work with community members. It’s a lot easier when you’re of the community. When people recognize you as a member of a particular community. So when I come back to Wilkinsburg, although I’ve been fairly distant for most of my professional career, when I go back, people go, oh, Andre, he’s down with us. He believes in us.

Eve: [00:26:56] They trust you.

Andre: [00:26:57] They trust me.

Eve: [00:26:58] Right.

Andre: [00:26:59] And so when I talk with developers, I see, you know, a lot of this work and it’s hard work. But you got to think of yourself as becoming a member of a community first, because when you’re a member of a community, it’s so much easier to communicate. It’s so much easier to share the benefits and the trade-offs. And it’s so much easier to be honest. And so one of the reasons why I wrote Know Your Price, it’s a policy book, but it’s there’s a lot of stories in there, personal narrative, biographies. Because one of the goals of the book was to introduce this idea of devaluation, not making it a policy wonky type of thing, but really explain it through the lived experience. And when you run through the lived experience, keep, it resonates with community members. So that was my goal of the book. But it’s something that everyone should take on. They should see themselves as becoming a member of a community because communication becomes so much easier.

Eve: [00:28:20] Interesting. So, I also want to shift to your partnership with Ashoka. The Brookings Ashoka Partnership, and explain what you’re trying to accomplish there. And also, what Ashoka, I know a little bit about Ashoka, but not a lot. So it would be great to hear something about this.

Andre: [00:28:38] Ashoka is a social entrepreneurship organization that really tries to incubate or incentivize systems changing ideas. So, if you have an idea that will change some system, they fund or incentivize through these through fellowships or competitions to find interesting and innovative approaches to solving problems. So, when I presented this issue of housing devaluation, someone from the Ashoka organization reached out and said, hey, this is the kind of problem that requires a systems changing idea. So, after a year worth of planning and discussion, we landed on a competition, a challenge, competition of sorts. Collaborative competition, I should say. That we’re looking for innovations that will find those systems changing ideas that will solve for housing devaluation. So, if you are out there and we’re going to have a million dollars’ worth of prize money that we’re going to use as incentive. So we’ll be giving away different prizes totaling a million dollars to people who may have new zoning ordinances they want to put forth. New credit scoring systems. New cooperative ownership models. If you have a solution, we want to hear about it. All you have to do is Google Ashoka Brookings Collaborative Challenge and you’ll get all the information. But it was my way of really saying, hey, how can we incentivize people who are proximate to the problem to solve for this issue? And so we launched it a few months ago, but people can start enrolling in the competition in the summer. Right now, we’re just simply mapping ideas, looking for different approaches and so we can then categorize them. But people will be able to join in this collaborative challenge starting this summer.

Eve: [00:31:09] That sounds really fabulous.

Andre: [00:31:11] Yeah, it’s fab because, you know, when you work in a think tank, I’m a senior fellow at Brookings. We’re good with identifying problems, sometimes not as good as identifying solutions. So, this is really my effort to say, hey, here are some solutions that will be community driven. Not coming from up high, from somebody in D.C. These are solutions driven by community members. And so that’s the whole point.

Eve: [00:31:46] So if you could imagine the country 10 years from now, how would you like to see it changed?

Andre: [00:31:53] I want to see a country in which there’s a culture that supports reparative strategies. You know that I want to see these kind of policy changes come from a change in culture. For so long we’ve created a culture of exclusion and that led to everything from redlining to exclusionary zoning to employment discrimination. All these things are supported by an exclusive culture. I want to see 10 years from now a culture that supports reparations, inclusionary zoning, other policies that repair the damage that was caused by discrimination. And that’s going to take people who are talking about repair, talking about inclusion, talking about the value of diversity, and if we do this enough, we can shift the culture. And so that’s what I want to see.

Eve: [00:33:07] I’ve thought about this a lot. And I think for me, it’s I’d love to see a culture of trust. And that would probably only be built after everything you’ve said. But the mistrust is really, I think, stopping us moving forward really big time. And so, I’d love to live in this country and not feel like I’m mistrusted because I’m white or not feel like I might mistrust someone because they’re Black. That would be a really lovely thing. Don’t you think?

Andre: [00:33:40] Oh yeah. I mean, you know, that’s certainly core.

Eve: [00:33:44] Yes.

Andre: [00:33:44] We really don’t trust each other.

Eve: [00:33:47] No, I think that’s …

Andre: [00:33:47] As you know, developing trust is a process.

Eve: [00:33:51] It certainly is.

Andre: [00:33:52] I think if we are willing to put ourselves in that process, then we can gain trust. It is achievable to be a trusting, loving reparative culture.

Eve: [00:34:07] So what’s next for you? Final question.

Andre: [00:34:10] Oh, man, I’m I have this Ashoka Brookings Collaborative Challenge. I have reports coming up. But, you know, I’m going to continue to fight for justice using research as my main tool and engage in places with places like Pittsburgh, Wilkinsburg. And just go deeper with my analysis and look for solutions. So, more of the same. Yeah. So, you know, obviously we keep updating our research. We keep finding new insights, but I’m going to keep pressing on fighting for justice.

Eve: [00:35:06] Well, I can’t wait to see what else you do. And I’m certainly going to keep an eye on that Ashoka challenge. It sounds really interesting. Thank you so much for spending time with me today.

Andre: [00:35:16] Hey, thanks for having me.

Eve: [00:35:35] That was Andre Perry, a senior fellow at the Brookings Institute. Andre grew up in Wilkinsburg on the outskirts of Pittsburgh. Once a diverse and thriving neighborhood and now a poor majority Black neighborhood. On his trips home, he can’t help but notice that East Liberty, an adjacent neighborhood and home to Google, is thriving. Meanwhile, Wilkinsburg seems stuck in time. There has been no investment there in decades, and this speaks to the data he has found. Black neighborhoods are valued at 23 percent less than white ones. In Andre’s perfect world, which he is working towards, they’ll be valued the same. You can find out more about this episode on the show notes page at EvePicker.com, or you can find other episodes you might have missed. Or you can show your support at Patreon.com/rethinkrealestate, where you can learn about special opportunities for my friends and followers. A special thanks to David Allardice for his excellent editing of this podcast and original music. And 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.

Image courtesy of Andre Perry/Brookings

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