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Everything old is new again.

Daniel Dus lives and breathes solar. After college, he moved into real estate, got an MBA and then leapt head first into the energy industry. Today, Daniel heads the North American Renewables division for Adani, an Indian multinational group that has one of the largest solar portfolios, globally.

But his heart is equally someplace else –  in the Berkshires. That’s where he grew up and that is where he is planning his next act. The Berkshires, in western Massachusetts, a vacation and cultural destination, has an amazing inventory of luxury estates dating from the 1800s up to the early 1900s. But many of them now stand dramatically underutilized. Daniel and his team at Shared Estates want to develop these estates for the shared economy, bringing them within reach of the middle class. Plus, they will make all the projects carbon-neutral, through sustainable practices and carbon offsets.

Previously, Daniel worked for Dynamic Energy (with a focus on greenfield development, community solar and shared renewables), Safari Energy, and Martifer Solar (where he was responsible for over 1,200 solar clients under leases, power purchase agreements, community solar projects). He also helped found Solairo Energy, working on turnkey solar and wind generation projects. He is a certified solar designer, and holds over 50 certificates in energy hedging, grid infrastructure and emerging energy technologies.

Insights and Inspirations

  • Luxury estates like this can really only be fully utilized in the shared economy. And they are by no means only in New England. Hint. Hint.
  • These unique projects can only be done affordably in rural areas, and these are communities in growing need of economic support.
  • Banks do not want to lend in rural areas.
  • Every one of their properties contributes a percent of income to a local nonprofit, further benefiting the community.
  • Why not make it (or any project) carbon-neutral?

Information and Links

  • Daniel and his team are crowdfunding equity for their next shared estate, The Freeman Berkshires, at Small Change. And anyone over the age of 18 can invest. Check it out!
  • Vote Solar is a national advocacy group working on solar energy issues at the local level.
  • Daniel renovated The Playhouse, originally built by George Westinghouse, and the first place in the world powered by AC electricity. Now it’s the number one estate to stay in on VBRO.
Read the podcast transcript here

Eve Picker: [00:00:11] Hi there. Thanks so much for joining me today for the latest episode of Impact Real Estate Investing. My guest today is Daniel Dus. While Daniel has forged a career taking him to the top of the solar industry class, his heart is someplace else, in the Berkshires. That’s where he grew up and that’s where he’s planning his next act. The Berkshires, Massachusetts, is rich with travel destinations and has an amazing inventory of luxury estates dating back to the 1800s. As industry collapsed, so did the use of these estates. Many of them stand dramatically underutilized today. And that’s where Daniel and his team come in. You’ll want to hear how Daniel is planning to reposition these estates for the sharing economy. Be sure to go to EvePicker.com, to find out more about Daniel on the show notes page for this episode. And be sure to sign up for my newsletter, so you can access information about impact real estate investing, and get the latest news about the exciting projects on my crowdfunding platform, Small Change.

Eve: [00:01:42] Hello, Daniel. Thanks so much for joining me today.

Daniel Dus: [00:01:44] Thank you, Eve. Great to be here.

Eve: [00:01:46] So, your career has been in the solar industry, and I would love to start by just hearing what you’ve accomplished in your career.

Daniel: [00:01:56] Yes. 15 years in solar now. I’ve had the pleasure of helping create and build some of the largest solar companies and projects in the solar space, in the United States, over the last 15 years. Currently, with a company, when I joined, had just completed its first solar project, and it’s recently ranked the largest solar company in the world with 15.4 Gigawatts of operating and contracted projects.

Eve: [00:02:25] Oh, wow.

Daniel: [00:02:26] So, seeing growth like that in the space, which is really focused on carbon, SOx and NOx, emissions reductions, is really, really been exciting – to see the industry go from almost nothing 15 years ago, to now solar is number one in energy in terms of new, installed capacity year over year. So, just that transition, rapid transition, has been exciting to be a part of.

Eve: [00:02:52] Yeah, I’ll say. So, what’s your background? How did you get into the solar industry?

Daniel: [00:02:58] Actually came into solar out of a focus on real estate. I spent a few years developing real estate along the East Coast U.S., and that’s where I was exposed to the trades, financially structuring projects, and ended up selling those assets, but it, this was right in the middle of the financial crisis. Nothing really made sense. Went back to get an MBA and launched my first solar company out of the Drexel business incubator, so … and the rest, as they say, is history.

Eve: [00:03:30] Oh, very good. So, that brings us back to where you are today. Because I’ve gotten to know you for an entirely different reason. And that’s your new company that you’re starting up, called Shared Estates. So, why the name Shared Estates? Tell me a little bit about that.

Daniel: [00:03:45] We fell upon it as an exemplification of our primary objective, or one of our primary objectives, which is to bring these beautiful, historic, storied estates that in the past have primarily been in the hands of the wealthiest U.S. families, and bring those into the reach of the middle class. In many cases, our properties will cost less per person than a standard hotel room would, but with significantly different benefits and amenities. So, we really want the community to enjoy these spaces, use these spaces. One of the really fun things about the business is seeing families and friends create memories in these spaces. So, it’s a major driver for us.

Eve: [00:04:30] Basically, buying and repurposing enormous luxury estates, and sharing them in the shared economy.

Daniel: [00:04:39] Yeah, that’s exactly right. And our geographic focus offers quite a few of these properties. The Berkshires of western Massachusetts, also known as inland Newport, often, was developed in the 1800-1900s. Many of the wealthiest families built these estates there. They called them ‘country cottages,’ but these are often multi-100 acre, often over 10,000 square foot properties. And there’s not as much of a market for these properties as single family, second or third homes today as there was then. And they often end up being very underutilized. I mean, talk about an underutilized asset. Often, they may be used a couple of weeks a year, a few weeks a year, by these families. And so, we’re taking those estates and we’re putting them into the shared economy where they can be much, much more accessible both to the local community, as well as to the tourist economy there.

Eve: [00:05:35] That’s really interesting. How did you come up, upon this idea? Like, it’s an unusual take on a real estate company.

Daniel: [00:05:41] It’s a good question. I wish that I could say that I analyzed the market, that I did a bunch of market data research and saw that large group, short-term rentals was a rapidly growing subset of the short-term vacation rental market, and the broader tourism market. But that’s not the case. I fell into it entirely. I was living in Manhattan and purchased a property in the Berkshires, which is where I was born and raised, and originally was going to use it for weekends, myself, and went through a deep rehabilitation process, and ended up taking a job in Philadelphia, so moved a little too far away to really use it for myself. And I put it on HomeAway VRBO, originally at, I think, $350 per night. And I figured if it rented 20, 25 percent of the time that it would cover its own mortgage and that would be a win. Well, it booked so much in the first 72 hours that I had to raise the price multiple times, and it now books for well over a $1000 dollars a night, and books 65, 70 percent occupancy. So, it’s just such a phenomenal project that it really opened my eyes through the process of developing and listing the property to this underserved market, right? There are very few, if any, large-format, short-term rentals in urban areas, because if they existed they’d be exceedingly expensive. But, in rural America, there are a lot of these properties that are beautiful and really underutilized today. So, it, really fell into it.

Eve: [00:07:18] Was that first property the Playhouse?

Daniel: [00:07:20] Yeah, that’s right. So, the Playhouse is a great example. It was originally built by George Westinghouse in the late 1800s. It was the first place in the world ever powered by AC electricity. He built an AC microgrid there to test what was really the theory of Tesla and the products being developed by Westinghouse and Stanley. So, we know that President McKinley, Tesla, Stanley, Lord Kelvin all visited the property. Westinghouse in the late 1800s had an electric boat; he had an electric car he drove around the property. It was really a leading point of innovation at the time. And this particular structure was called the Playhouse because he built it as a gymnasium, basically, for his children. 7000 square feet. He had a bowling alley in the building …

Eve: [00:08:13] Wow.

Daniel: [00:08:13] … and he later converted it into a theater space, for when his kids were getting older, and entertained there. So, it’s a beautiful open floor plan building …

Eve: [00:08:25] Yeh, I’ve seen photos of it. It’s stunning. It’s beautiful.

Daniel: [00:08:27] Yeah. And it was, when we took it, our architect told us that it was structurally failed. It was literally ready to fall over, and required a lot of structural work to maintain the open floor plan and to make it structurally sound. But in the process, we created a space that has really resonated with folks, where they can bring groups of families, family and friends, and enjoy each other and celebrate each other – weddings, anniversaries, birthday parties and other small gatherings like that.

Eve: [00:08:56] I think you told me that it was ranked number one, or is ranked number one place to stay.

Daniel: [00:09:03] That’s right. Yep. It, on YVRBO, it quickly shot up to the most-booked, most-reviewed property out of over 500 properties listed in the county on VRBO.

Eve: [00:09:13] That’s amazing. That’s a great story.

Daniel: [00:09:16] It was. It was. You know, I love the space. I love the property. It means a lot to me and I love that folks get to make memories there.

Eve: [00:09:26] So, how does this fit in with your solar background?

Daniel: [00:09:32] Yeah, it’s a, it’s a good question and one I get often. Solar development, financing and construction is very similar to real estate development, financing and structuring. You’re talking about zoning approvals, you’re talking about geotechnical studies. If you’re doing any ground work, you’re talking about structuring projects for financing, financial modeling. You’re talking about construction and ownership and operation and optimization of assets. It’s all exactly the same in both industries. It just is that the asset itself is slightly different, but a lot of overlap there. I’m a Stanford-certified project manager, Villanova-certified Six Sigma, and that’s because developing processes for execution of these projects is really at the core of these businesses. So, I think there’s just a ton of overlap.

Eve: [00:10:24] Yeah, but I suppose I’m also wondering, what of your love for the energy industry are you going to bring to these properties, because they weren’t built that way?

Daniel: [00:10:34] Yup. That’s exactly right. And Shared Estates is also, to a large extent, a conduit for investment in a carbon neutral and sustainable asset. That’s, all of our properties will be carbon neutral, offset by either on-site or off-site renewable energy projects, which we’re very excited about. And so, we will bring that attribute to all of our properties.

Eve: [00:11:02] And I think probably some other features that I’ve heard about, but we’ll go into that later. So, In the Berkshires, which you seem to be focusing on, how many underutilized estates are there?

Daniel: [00:11:14] There are a surprising number of them. Again, it was over the span of over 100 years of this economy developing and building, but also had an industrial heyday, itself. General Electric had a major presence there, thousands of jobs. So, there are dozens and dozens and dozens of these estates, in varying states. Some of them are really in rough shape, frankly. These historic properties really need dramatic investment to help bring them up into today’s standards, with IT infrastructure, you know, sometimes structural upgrades, definitely bringing back their former glory and beauty. So, everything from landscaping to paint, new fixtures, etc, is all really critical for these properties. And we try to do that and maintain historic elements of them, as well. So, at the Playhouse, for example, we retained the original Westinghouse lighting fixtures from the 1890s.

Eve: [00:12:14] Oh, lovely.

Daniel: [00:12:14] And so, we do our best to keep the historic elements of the properties. But there are a remarkable number of these in the Berkshires. And frankly, nationally, there are a lot of large, rural farmhouses that are not in their heyday today that could use deep renovations, and other properties that really are, I think, historic to America and deserve to be rehabilitated and brought into the shared economy, which in my opinion, is one of the best possible uses for them.

Eve: [00:12:45] If I want to rent one of your estates how will it compare to holding a gathering in a traditional local venue like a hotel, just price-wise.

Daniel: [00:12:55] In my opinion, this is the core to our ultimate success. The macroeconomics of our properties versus the alternative. There’s kind of no comparison in my mind. Our properties will often be less per person than a standard hotel room would be, but our properties will have … in the next project we’re doing, we’ll have 40 acres of private space, it’ll have a dedicated pond, docks. It’ll have a five-acre vineyard, greenhouses, multiple living spaces, multiple dining rooms, multiple quiet spaces, an office, library. All for your own private use with yourself, your friends and your family. You just have to get a group of family and friends to travel with you. But, in terms of the amenities, there’s just no comparison. These are the most luxurious possible properties. And with the right group of friends and family, on a per person basis, they could be less than a holiday.

Eve: [00:13:52] That’s amazing.

Daniel: [00:13:54] Yes.

Eve: [00:13:54] So, this is really the shared economy in a very different way.

Daniel: [00:13:58] That’s right.

Eve: [00:13:59] So, you have the Playhouse under your belt. You said, you mentioned the next property. You want to tell us a little bit about that one?

Daniel: [00:14:06] Sure. Yeah. We are calling it the Freeman Berkshires. So the Freeman is currently an 11,300 square foot brick mansion on about 40 acres, with a private pond, tennis court. We are going to deeply renovate, rehabilitate this property, new fixtures, new paint, add some square footage, hopefully.  We’re going to install a 500 square foot English-style greenhouse and extensive gardens, five acres of vineyard, and in-ground pool, and really bring this into 2020. Modern IT infrastructure. Games rooms and a virtual gaming room, so that there’s something for all generations. The name, the Freeman Berkshires comes from a local woman, Elizabeth Freeman. She was the first African-American slave to sue and win her freedom under the Massachusetts constitution. And she was abused at the hands of her, quote unquote, Master’s wife. And so, the property will be a tribute to her. We’ll be installing a sculpture garden by local artists in tribute to Elizabeth and her story. And we’ll be donating a percent of profits to the Elizabeth Freeman Center, a local nonprofit that’s been operating since the 1970s, serving battered and abused victims of assault and sexual assault. And so, we’re very excited, and that local nonprofit engagement is part of every property that we’ve done and will do. The Playhouse contributed to St. Jude’s, Sierra Club and the local Humane Society on a recurring basis. So, we’re very excited about the Freeman Center contract and we’ll be closing imminently here in the next weeks. And so, we can’t wait to get started on it.

Eve: [00:15:54] So, tell me a little bit about financing. I mean, I have been hearing over the last few months the difficulty that people are having financing anything unusual in the real estate market. And this is definitely unusual.

Daniel: [00:16:08] Yeah. And in fact, our biggest challenge, Eve, is that these are rural projects. They’re all in rural America. And what I didn’t realize before going to the market the first time, a couple of years ago, for commercial financing in rural America is that many banks will simply not finance projects in rural United States. They’re very focused on urban areas, suburban areas. Commercial lenders like to invest in New York, Manhattan, Philadelphia. They basically red-line rural America, and in places like the Berkshires that really need economic development, that’s a real problem.

Eve: [00:16:47] Did they just come out and say we don’t lend in rural America.

Daniel: [00:16:52] Yeah. I have had dozen of lenders simply say, you know, we do not invest in rural properties. Which …

Eve: [00:17:00] Wow.

Daniel: [00:17:00] It’s kind of like red-lining. Right? I mean, I can’t think of any other …

Eve: [00:17:06] Yes.

Daniel: [00:17:06] … comparison. So, it was pretty shocking, frankly. The local banks are fantastic and supportive, but they often have relatively modest caps on the amount of capital that they can contribute. And so, the value of Small Change really shines here in its ability to help bring capital into places like this, and frankly, to offer the ability of the local community to invest. As you know, traditionally, only accredited investors can invest in GP/LP-type structures like ours, and that’s highly limiting, you know. The local community is not, on average, worth a million or more dollars, but they’re the ones that, they deal with the tourist economy every day, they often work in the tourist economy, and so, they should be able to benefit from that economic activity.

Eve: [00:17:53] So how are you financing this project if you don’t have the bank? How do you do it?

Daniel: [00:17:57] Yeah, this project is particularly unique. We’ve obtained seller financing for a large portion of the acquisition cost, actually 95 percent of the acquisition cost, allowing us to focus our equity on the rehabilitation and upgrade of the property and aesthetic improvements. And we will be conducting a Small Change raise. So, we’re excited.

Eve: [00:18:20] Yes, we’re excited, too. So, but how long did it take you to negotiate the seller financing? That’s not an easy thing to accomplish.

Daniel: [00:18:28] It was almost a year, Eve.

Eve: [00:18:29] Wow.

Daniel: [00:18:29] Of what it was about 11 months of back and forth, and educating the seller on us, what we’ve done, what we plan to do …

Eve: [00:18:38] Wow.

Daniel: [00:18:38] … and ultimately reached a deal that we’re really happy with and I think they’re happy with, too.

Eve: [00:18:43] So, tenacious must be your middle name.

Daniel: [00:18:47] You have to keep that deals, right …

Eve: [00:18:49] Yeh, yeh, yeh.

Daniel: [00:18:49] … that’s the nature of development.

Eve: [00:18:51] So, final question for you. What’s your big, hairy, audacious goal? Where are you going with all of this?

Daniel: [00:18:58] For Shared Estates, specifically, I’m born and raised in the Berkshires. I love the Berkshires. I drove by these properties when I was a kid and fell in love with them. And the Berkshires is a really special place. The Boston Symphony Orchestra summers there at Tanglewood, has the oldest and longest performing dance center in the country, Jacob’s Pillow. It has one of the largest standing Shakespearean companies in the world, frankly. And these beautiful bucolic views. It’s just a phenomenal and special place. And I really want Shared Estates to contribute to the local economy, through taxes, through the nonprofit contributions we’ll be making, hopefully through investments by the local community in the business. I want the business to be ‘by and for’ the local community. And I want it to contribute, honestly, millions and millions of dollars of benefit, both direct and indirect, to local businesses. Every one of our properties supports local businesses. We champion and celebrate local businesses. We have local gift baskets and literature, and we really try to get folks who sometimes travel … they used to travel from Europe, now generally in New York and Boston, as those families are traveling more domestically. And we’ve seen a dramatic uptick, frankly, in our activity in rentals.

Eve: [00:20:19] Oh, that’s interesting, yeh.

Daniel: [00:20:19] But we really want this to be a massive engine of growth for the local economy, and to be a benefit to the local organizations there. I mean, that’s, that’s really our goal.

Eve: [00:20:30] That’s a pretty fabulous goal. And I hope you’re incredibly successful. So, thank you very much for joining me today.

Daniel: [00:20:37] Thank you, Eve. It’s been a pleasure.

Eve: [00:20:38] I hope I get to visit sometime.

Daniel: [00:20:40] Absolutely. Us, too.

Eve: [00:20:41] Ok, bye.

Daniel: [00:20:55] Bye.

Eve: [00:20:55] That was Daniel Dus. He’s planning a comeback for the many underutilized luxury estates in the Berkshires. Daniel and his team plan to reposition them for the sharing economy. Not only will they be available for middle class families to enjoy, they’ll be carbon neutral renovations, making them the ultimate recycling projects. And he’s taking the democratization of these estates one step further by offering the opportunity to invest to anyone over the age of 18. These estates won’t just be owned by the wealthy any longer.Eve: [00:21:42] You can find out more about impact real estate investing and access the show notes for today’s episode at my website, EvePicker.com. While you’re there, sign up for my newsletter to find out more about how to make money in real estate, while building better cities. Thank you so much for spending your time with me today. And thank you, Daniel, for sharing your thoughts. We’ll talk again soon. But for now, this is Eve Picker, signing off to go make some change

Image courtesy of Daniel Dus

The power of cities.

The world is reeling from the effects of the coronavirus pandemic and the resulting economic downturns. Add to this levels of civil unrest not seen since the 1960s and governments which are more ideologically polarized than ever before. How then do we collaborate to solve the enormously complex problems of our times?

The federal government plays an important part as the safety net for people, healthcare and defense. But pragmatic and localized problem solving might occur best at county, city and local levels. Here, impacted stakeholders can come together to compete and/or collaborate. 21st Century problems are complex and can’t be solved by one bureaucracy. They require multi-sectoral horizontal solutions. As a result, problem solving has become increasingly bottom up rather than top down and delivered by networks of institutions and leaders rather than the public sector.

Bruce Katz calls this phenomenon ‘the new localism.’ He believes cities have the power and ability to harness and leverage all the incredible innovative power in our country to solve local problems and to improve peoples’ lives

“Cities are more than governments, they’re networks. That’s why they’re so resilient, that’s why they’re so adaptive, that’s why in many places they’re so prosperous: they’re ecosystems.“

That’s not to say that the federal government can’t still be a platform or a participant in creating solutions, but issues that require local interaction and local networks might be best solved at the local level. We need to stop believing that all of our problems will be solved by bureaucrats and start believing in ourselves. Solutions can be created by networks. If we want to solve congestion, housing affordability or the integration of Black- and brown people into our economy, we need to bring together different sectors of our society to promote different ways of thinking. We need to develop a system where universities, health care systems, corporations, entrepreneurs, public sector philanthropies and individual stakeholders all work together to find tangible solutions to local problems, and to plan together how our cities will thrive.

Listen to my interview with Bruce Katz to learn more.

Image courtesy of John D Norton

Empowered through the Blockchain.

The blockchain is not as complicated as you might think. “Blocks” are just digital pieces of information and the “chain” is the public database where the blocks are stored.

The block

Each block (or digital piece of information) might include transactions, participants, dates, times or identifying information. This doesn’t necessarily reveal your name as the blocks use digital signatures much like usernames. Each block has a unique cryptographic code called a “hash”, created by a special algorithm, so that no two blocks can be the same. And a single block can store approximately 1MB of information.

The chain

The chain is then a number of blocks strung together. As a block of data is added, it not only becomes part of the chain, but it becomes publicly available. Information about the block such as when, where and by whom the block was added is available for anyone to see.

Distributed ledger

Each blockchain user can opt to connect through their computer to a node, often called a “distributed ledger”. This means the blockchain is “distributed” to their computer, not only providing a live feed of what is happening in that particular blockchain, but more importantly, distributing the information across a network of computers that might connect to it. Because blockchain is distributed in this way, there is no single, definitive account for a hacker to manipulate.

Security and trust

Each block is added chronologically to the end of a blockchain and contains its own hash as well as the hash of the block before it, making it extremely difficult to alter the contents of a block once it has been added to the blockchain. When a hash is created it is transformed into digital information. If this digital information is edited in any way, a new hash is created. Other security measures implemented in blockchain include tests for computers that want to join and add blocks to the chain.

Applications

The advantages of utilizing the blockchain include accuracy, cost reduction, decentralization, privacy, efficiency and transparency. Bitcoin, which we’re sure you’ve all heard about, is only one such application. Others being explored today include banking, healthcare, property records, supply chains, voting and smart contracts.

Michael Lee, a cultural planner and designer with an architectural background, has found a new use for the blockchain. He’s developed a web application called BLDGBLOX. The Bldg app is an online bulletin board which helps to turn community ideas into public action. The user-friendly interface of BLDGBLOX tracks information dynamically in projects created by anyone who wants to start one, as people use it and add to it. The information gathered in the blockchain created can be a useful way to track the impact of a particular project, thereby encouraging people to invest in projects that are impactful for their community. Michael hopes that the data gathered through BLDGBLOX projects will empower people to make more informed decisions. It’s an amazing example of blockchain being used as an organizing tool.

Listen in to my interview with Michael to learn more about how he wants to democratize the power of data.

Image by TheDigitalArtist from Pixabay

The elephant in the region.

Having joined Enterprise Community Partners in 2011, Heather Hood currently oversees efforts in Northern California that ensure low- and moderate-income residents have access to affordable, quality housing. And notably, San Francisco and the Bay Area is one of the front lines of what is a national issue. Enterprise is a national organization, over three and a half decades old, whose mission has been to create opportunity through affordable housing in diverse, thriving communities. Through lending, financing of development and building affordable housing, Enterprise has helped create over 662,000 homes, and invested over $52 billion to date.

Heather has co-authored influential pieces such as The Elephant in the Region: How Bay Metro Can Lead a Bold Regional Housing Agenda, as well as worked to develop a region-wide inclusionary zoning framework and a plan to utilize public land. She conceived Enterprise’s technical assistance approach around the Affordable Housing and Sustainable Communities program, leading to more $400 million in state resources to affordable homes, and co-chaired Oakland’s Housing Cabinet, which released A Roadmap Toward Equity, whose recommendations have mostly been implemented, or are underway.

Previously, Heather was Initiative Officer for the Great Communities Collaborative at The San Francisco Foundation where she was instrumental in the development of the $85 million Bay Area Transit-Oriented Affordable Housing Fund. She has been a lecturer at University of California, Berkeley’s Department of City and Regional Planning and was a co-founder and director of its Center for Community Innovation. Heather also co-authored The Future of Infill Housing in California: Opportunities, Potential, Feasibility and Demand for the California Department of Housing and Community Development. While in graduate school she worked at Places Journal.

Insights and Inspirations

  • We have all failed in delivering affordable housing. But NIMBYism has failed us the most.
  • Zoning needs to allow for higher density to help solve the affordable housing crisis.
  • Entitlements take far too long. This only adds to the expense of housing projects.
  • We need to preserve existing affordable housing units and buildings.

Information and Links

Read the podcast transcript here

Eve Picker: [00:00:10] Hi there. Thanks so much for joining me today for the latest episode of Impact Real Estate Investing. My guest today is Heather Hood, VP at Enterprise Community Partners and Market Leader for Northern California. Heather works to ensure low- and moderate- income residents have access to affordable, quality housing in Northern California. She’s written influential pieces on housing issues, helped to create technical assistance programs and co-chaired Oakland’s Housing Cabinet. Heather believes there are a few reasons why we are in the affordable housing pickle we are in. NIMBYism has failed us. Construction costs and the cost of land have soared. We need to permit higher density. And it takes far too long to get permission to build a building – the production line needs to be sped up, dramatically. You’ll want to hear more.

Eve: [00:01:13] Be sure to go to EvePicker.com to find out more about Heather on the show notes page for this episode, and be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small Change.

Eve: [00:01:40] Hello, Heather. I’m just delighted to have this opportunity to talk to you today.

Heather Hood: [00:01:44] Well, thank you, Eve. It’s nice to be here. Good morning.

Eve: [00:01:47] Good morning, well, midday for me, but good morning to you. So, you’re working on perhaps one of the most difficult challenges of our time, affordable housing in California. And I was hoping we could start talking about how our real estate industry has failed everyday people. And why is there such a huge gap between housing available and the need?

Heather: [00:02:14] Ah, well, I’m not really sure ..

Eve: [00:02:18] It’s a difficult first question.

Heather: [00:02:18] Yeah … it’s a complicated one to unpack. I want to back up there a little bit and question that it’s the real estate industry that has failed the population. I think we’ve all failed. And we do not have enough homes for the population. And that’s just a simple question of math. There are millions of people who need homes, but we’ve grown, in our state and with our economy, with jobs, too much and too fast without having a housing production keep up with it. So, that’s got our whole system out of whack. We don’t have enough housing at any level of affordability, and especially for low- and moderate- income people.

Eve: [00:03:02] Yeh.

Heather: [00:03:03] The way that that has happened, really … the reason I was questioning your frame that it’s the real estate industry is because there’s been many proposals all around the state for housing to be built, in the last 30 years. And our population, especially homeowners, have resisted letting it be built. And so that NIMBYism, “Not In My Backyard,” has crimped our production line, construction line, to the point where we’re choking now without enough housing.

Eve: [00:03:34] So, really, we’ve failed ourselves, right?

Heather: [00:03:38] We failed ourselves. We failed to see beyond that thing we, some of us may not have wanted on the end of the street. And we thought, oh, it’s going to cause traffic or change the character of the neighborhood or invite too many kids into our schools or whatever it was. We, the big We, were nervous about it, and wouldn’t let it happen.

Eve: [00:04:00] So, one of the key things going wrong is, is NIMBYism. And, you know, I thought for a long time developers were really focused on building housing for particular markets. Like, you see a lot of these platform projects with small one-bedroom studio apartments aimed at millennials, that isn’t … you don’t think that’s part of the problem?

Heather: [00:04:25] Sure, I think that there are multiple problems within the big problem. The big problem is we don’t have enough housing. And the construction costs have gotten so darn high with fees and materials and labor and so on. Cost of land, because land is at such a premium, that our private developers feel forced into figuring out how to squeeze the most profit out of each piece of property. And one of the ways to do that is to have the smaller and smaller and smaller units.

Eve: [00:04:57] Yes.

Heather: [00:04:58] And that only meets one segment of the market. And in addition, there’s been a push to have lots of amenities, and those tend to get expensive. Dogwashing stations and roof decks with heat lamps and, and jacuzzis, and those sorts of things to create the edge for a particular property, to entice those segments of the market … They, are targeted. So, it’s, in short, called luxury housing. In some parts of the world, it would simply be called regular middle-income housing, but because it’s in such stark contrast to low-income housing that is not subsidized and tends to often be poorly maintained, it appears to be very luxurious. In fact, it is barbells, different types of housing types, it’s a big problem. We’re not building anything, enough in between.

Eve: [00:05:49] The missing middle, right?

Heather: [00:05:50] Well, I’ll call it the missing middle. But to be clear what I mean of the middle is a pretty darn big middle. I mean, most people between 80% to 150 … I mean, the middle of between 30 percent of the area median income, up to 200 percent of median income, a big middle.

Eve: [00:06:06] That’s a very big …

Heather: [00:06:07] A big doughnut hole there.

Eve: [00:06:08] Yeah.

Heather: [00:06:09] Yeah.  Tough to build all of that.

Eve: [00:06:12] What’s it going to take to correct course, I was going to say, take to correct these things, but I’m just going to say, you know, to correct course.

Heather: [00:06:23] There are a myriad of things. I think the first of, to, for the zoning, to allow for higher density. And some time limit on how long projects can be held up. And conversely, some better process for stakeholders to be able to influence the outcome. Right now, there’s just kind of this, you know, this rote and very legal … process that doesn’t invite much conversation or compromise. So, I, something in the zoning. We need to do something about the construction costs, and maybe the answer there is manufactured housing. I hope so, because a lot has been invested in that direction. It also would mean conceiving of projects as being a mix of unit types and income types, where we might start to see some cross-subsidy from the pretty big profit that does, actually, end up being made off of these risky projects, and cross-subsidizing some of the lower income living. Either through getting that to a housing trust fund in the city or county, or by including affordable units.

Heather: [00:07:35] So, that would help … I’d also emphasize something that our industry probably will start maturing and leaning into, which is the preservation of existing buildings that are affordable. So, where there are, especially near transit or other sorts of neighborhood amenities, there are small, medium and large properties that will likely, in the next economic downturn, be for sale. And that’s a really wonderful opportunity for publicly-motivated entities, whether they’re cities or nonprofit developers, to purchase them and renovate them, make them that much healthier and permanently affordable for the folks who live there now. That would help a great deal with the displacement challenges. And that sort of technique is cheaper than building new construction. We can leave the new expensive construction to the, some affordable housing developers and the so-called luxury housing developers.

Eve: [00:08:36] Makes a lot of sense. Do you know of people or organizations that are taking these course corrections? I mean, we’ve all heard about ADUs, which is one way of mixing the market. Right? But that’s only one little way.

Heather: [00:08:53] Yeah. I’ll mention a couple that I’ve worked with. One is East Bay Asian Local Development Corporation. It’s a community development nonprofit developer in Oakland, California, who has been purchasing properties where people live now. These are once-dilapidated apartment buildings with 30 or 60 units. Or sometimes, in the case of one portfolio, scattered around the city, a very different, small and medium properties that they bought from existing owners, maybe they were kids who wanted to get out of the inheritance of owning … different stories. And they’ve been renovating them, bringing them up to code and working carefully with the residents to help them figure out where to live for a little bit of time while the renovations are getting done. And then they end up being much more handsome properties, and less blight in the neighborhood, and appreciated much better by the tenants who know that they can stay.

Eve: [00:09:53] Well, I’m sure, yeh.

Heather: [00:09:54] That’s one organization. There’s another one called the Oakland Community Land Trust. And land trusts actually are doing this more and more. These are, tend to be smaller organizations, like, one to five staff, who tend to be buying just one little building that’s maybe got a cafe on the ground floor and two units above, or a few single family houses in the neighborhood as they come available. This is something where the land remains in the holding of the nonprofit organization and the building itself gets owned by resident or commercial owner. And they’ve been looking for those kind of opportunities for a good while.

Eve: [00:10:34] Yeah, OK, this is, it’s an organic process that looks like it’s going to take a while to correct course. I mean, that’s in California. I don’t know if it’s happening anywhere else.

Heather: [00:10:47] Of course … New York is much more mature as an industry in what we would call preservation. You know, in the three P’s: producing housing, preserving affordability or protecting tenants. The second ‘P’ is, of preservation, is a more mature technique in other parts of the country. But I think we have the potential in California to shift our industry to add this technique at a much bigger scale to our toolkit. And now is the time to do that.

Eve: [00:11:18] Interesting.

Heather: [00:11:19] Yeah.

Eve: [00:11:20] So, what about financial institutions? You know, what sort of role are they taking? I mean, this is an especially difficult time to find financing of any kind. What are you seeing in that, aside from your own organization?

Heather: [00:11:37] So, that’s along the lines of things that could shift to change the outcome?

Eve: [00:11:42] Yeah, I mean, along the lines of, you know, are there financial institutions that are taking a stake in this affordable housing problem and shifting more funds towards it, making it easier to borrow money for that type of project, any of the above.

Heather: [00:12:00] Yeah. So, many of us are. I work at Enterprise Community Partners, and that’s what we wake up and do every day, is finance policy and technical assistance. On the financial team, whether it’s a nonprofit community development financial institution like ours, or others, or a bank, I think what this moment in our history has done is sort of rattle the, you said, you know, what we’ve got to do is take more quote unquote, risk, in projects. So, there’s an, what they call underwriting, which is to figure out if the proposal of a project makes financial sense, if the borrower has the chops to carry it out. There’s a safety net that’s been built in so that if things that could go awry, there’s a cushion. And all that is in the interest of making sure, and the various investors will eventually get their money back, and the project gets done and people get to live there. There, in the underwriting process, there are scores for risk, and in order to get a development done in a, in certain geographies, that would be quote unquote risky, or cities that are quote unquote risky. For some developers who are newer to the stage, especially new affordable housing developers, just … naturally some scrutiny, but we could probably all relax just a bit to make sure that more projects can flow, and the dollars flow. And I’ll have to say that this moment is forcing the financial industry to really look at itself and see that back to the 60s and 70s, the financial institution, through redlining and blockbusting, really made it their version of risky. It’s what was quite racist and is what led to creating some of the marginalization that you see in neighborhoods today that are hot neighborhoods. So, it takes some responsibility, sort of an interesting form of reparation, to see to it that the neighborhoods get a much better chance and the people in them get a much better chance to determine their fate and develop …

Eve: [00:14:17] Right.

Heather: [00:14:18] … as they would like them to.

Eve: [00:14:20] So, it’s going to take some fairly major shifts in a variety of industries to really solve this problem. And then, you know, I wonder what the role of government is in all of this. I mean, zoning definitely has cramped everyone’s style, but …

Heather: [00:14:37] Yeh. Government can do a lot. My perspective on government, and it’s not all government, so I am going to make a …. but I’ll just make a generalization. That through various tax codes, especially in California, Prop 13, we’ve, through those sort of … larger policies, we’ve forced government, local government, to be looking for those things that would create tax bases. So … wanting commercial private development, because that’s where you get taxes in order to do the things that cities want to do, take care of parks, take care of public works, ensure safety and services, and summer camps and all that kind of good stuff. So, the cities are forced to have to find that through commercial development, and to dissuade residential development, to some degree. So, different cities have responded in their own way to that reality. But if we had a different tax code and cities were not forced into that kind of cattywampus position, they could get back to balancing the various interests, whether they be mission-oriented or private interests.

Eve: [00:15:53] Interesting.

Heather: [00:15:54] Yeah, so they wouldn’t have to be sort of pretending to have this, putting lip service to the public good, but having, in to order to execute on that, do a lot of gymnastics, which capitalism …

Eve: [00:16:08] So, This problem really runs really deep, doesn’t it?

Heather: [00:16:11] Yeah, it does. We can talk at the surface level, but that’s what really, let government be government, for the people and all the people, of all the, with all the interest.

Eve: [00:16:22] Right. I want to shift gears a little bit and just ask you about yourself, because I noticed that you trained as an architect, like I did. And then as an urban planner. And I’m just wondering what prompted that shift?

Heather: [00:16:35] Oh, well, I’d love to know your story, too. But I’ll tell you mine. It’s a little bit of a long story. I’ll try to make it short. I wanted to be an architect since I was a little girl. I loved designing and spatial relations and 3-D things. And so we drew little floor plans for fun, starting on summer vacation, because my parents wouldn’t let us watch TV. And then it just kind of grew into admiring buildings where I grew up in Philadelphia or on trips that we were lucky enough to take. I got to go to architecture school twice, because I was sure that’s what I wanted to do, except that when I practiced it, interning or working in … positions at architecture firms, it really seemed as if the architects were the last ones called …

Eve: [00:17:26] Oh yeh! Absolutely.

Heather: [00:17:28] … the early 90s and mid 90s, and I just thought, now wait a minute, I don’t want to be the last one called in, you know, when you’re under 30 as an architect, you tend to just be sitting at a CAD machine. So, I thought, well, this isn’t the life I want. As much as I love my colleagues and the buildings, and the construction process and all that good stuff, I just love it. I mean, I’m looking from my window right now and I see five cranes in the air and I just love watching buildings get built …

Eve: [00:17:55] Yeah.

Heather: [00:17:55] … just love it. Endlessly entertaining. So, I happened to be at UC Berkeley and I walked down the hall at the College of Environmental Design from the architecture to the city planning department to sign up for a course. And it was, I think it was Women and Planning, and Betty, Professor Betty Deakin, was teaching it and she just had other women from the field – landscape architecture, architecture, industrial design, city planning – come in and … I got really jazzed about city planning. I thought, oh, this is what I want to do, I just didn’t know what to call it.

Eve: [00:18:32] Yeah.

Heather: [00:18:33] I wanted to make neighborhoods in cities with wonderful buildings for people, and then, ok, that’s called city planning. So, it was as simple as that.

Eve: [00:18:42] Yes.

Heather: [00:18:42] Got to go to Berkeley for a couple more years and chase that dream.

Eve: [00:18:48] And then you shifted into finance. Sort of.

Heather: [00:18:51] Sort of, yes. I was lucky enough to work for UC Berkeley doing campus planning. Mostly on the urban, off-campus urban side, and then to be on some boards that were involved in things that affected social justice in cities. And was lucky enough to get to work on an initiative called the Great Community Collaborative, at, based at the San Francisco Foundation, which was a really wonderful way to work with 25 organizations and 14 funders to figure out how can we in the Bay Area make sure that there’s higher density and more community benefits surrounding our transit nodes in the region. And that takes a lot of organizing and envisioning and technical stuff. And so we banded together to make that happen, and I got so excited about that. It was hard, but wonderful sorts of people, and important wins along the way. Except I got into it long enough to know that if there wasn’t money for what was being planned …

Eve: [00:19:51] Yeah.

Heather: [00:19:51] … that things were not going to happen.

Eve: [00:19:55] Yes.

Heather: [00:19:55] It was great to make sure that the density was approved by city council, or that more affordable housing would be built in a place, or that in the building there would be a minimum number of jobs. And that’s all great, except if there wasn’t the financing in place to, underpinning that, there, things would be stuck. And so, I just thought I’ve got to learn how this works and pursued a job at Enterprise, which was the only organization that was a financial institution that I wanted to work for, because … I shared the values and I loved all the things they did around the country, and I was incredibly fortunate to have been hired to take that job. That was the moment. And I’m still learning a lot about financing, right? Endless amounts to learn. I’m not all the way there.

Eve: [00:20:47] Yes.

Heather: [00:20:48] It’s going to take the rest of my life to really get it.

Eve: [00:20:51] Well, I always think that architects are uniquely trained to think through challenges. In architecture school we’re trained to take an idea and to turn it into something, and I, in a very creative way, and I can’t think of another profession where you can really quite do that. So, I love to see architects kind of littered across the landscape in different roles because I, I also think architecture schools fail our students. The students who need to understand that they have so many more options because they have such, I think, special training.

Heather: [00:21:25] Yeah.

Eve: [00:21:25] I actually started as an architect and then went and did a masters in urban design at Columbia, for similar reasons. I was really fascinated by cities more than iconic buildings, and I wanted to know how cities sort of worked together. And when I moved to Pittsburgh, I worked for a planning department as an urban designer, and loved that job. But I worked for an architect for a while and always felt like, you know, we were at the end of everything. There I was sitting doing stair details, whereas, you know, I really wanted to understand how you did development projects and put it together. So, I went to slightly different route and started doing my own projects, and figuring out financing and, and yeah, it is all about money. Unfortunately.

Heather: [00:22:15] So, you became a developer?

Eve: [00:22:16] Yeah, I became a developer. And then when, and then when the funds dried up, they sort of shifted after the Bush administration and the bank meltdown, I sat back and sort of tried to figure out what to do next and then launched Small Change, really, this real estate crowdfunding platform to fill in those pieces of financing that I think are so important to creating new ideas in the physical landscape. They’re the ideas that generally are not financed. So, anyway, this is way too much about me.

Heather: [00:22:56] Oh, no, it’s fascinating. I love hearing how people make decisions to curl into the next … especially when I think of younger generations as I mentor people and people call and ask, what should I do next? Which, I’m not sure how to think about this, and there’s a great deal of worry people have about …

Eve: [00:23:14] Oh, there are so many things.

Heather: [00:23:14] … Yeah. Or they start off their career, and how do I get from here to there? And the truth is, everybody’s career is fairly curly.

Eve: [00:23:21] It is curly, yeh.

Heather: [00:23:22] And you don’t really know the best path from here to there. You might change your mind.

Eve: [00:23:28] Yeh, and you should enjoy the journey, you know.

Heather: [00:23:29] Right, us planners have to be more relaxed with improvising. I certainly am learning that.

Eve: [00:23:35] Yup. Certainly, there was a period when I really worried about people looking at my resume and thinking, she can’t stick to anything. You know?

Heather: [00:23:44] Uh huh.

Eve: [00:23:44] I think that time has passed. And I think now, you know, people are in jobs for much shorter times because there’s really a much wider array array of opportunities, which I think is really fascinating.

Heather: [00:23:57] Yep.

Eve: [00:23:58] Thanks for sharing that. I wanted to ask you, what do we need to think about to make our cities and neighborhoods better places for everyone?

Heather: [00:24:07] Oh, goodness, that’s a (laughter) really big question.

Eve: [00:24:11] Well, in terms of, even financing, you know, how can we make places more equitable and better places for everyone? Because we know that’s, we’re far, far from that, right?

Heather: [00:24:21] Yeah. Well, I had the good fortune of studying in Denmark and living in Copenhagen for only six months in 1988, but I have never forgotten it.

Eve: [00:24:30] Oh, lucky you.

Heather: [00:24:32] Yeah. Yeah. I was supposed to go back this May, just for … and I can’t because of COVID, but absolutely in love with the Scandinavian way thinking about this. Where you’ve got big taxes and they carefully pour them back into the public realm, in both services and in the physical landscape. And so what we have here, it seems like we just think in terms of, maybe, you think of all the properties as being separate, and maybe there’s some design codes and zoning codes that keep things what we think is harmonious, but we still think of them as separate. And the only thing that ties things together is the streets. And did you do know that about 25 percent of most urban landscapes is streets. And in suburbs, even more.

Eve: [00:25:15] Oh, yeah. And they’re very highly occupied by cars, instead of pedestrians.

Heather: [00:25:20] Yeah. So those are the things that hold us symbolically, if you think about that, that cars and concrete and, or not concrete, asphalt is what ties all these things together. And that doesn’t set the mood the right way. So, if we thought of these places as for everyone and we put much more emphasis in the public realm, that would be a really good start. But what do we want to put there? Asking the people who are there and really listening to them and learning from other places. And getting ideas and making trade-offs and so people don’t think that they’re going to get everything, but make conscious decisions about what they prefer. I think that would be a great way to start. In order to execute we need those public dollars. Goodness gracious, I don’t even know, 10 times the scale that we have now, to, to have that. Yeah.

Eve: [00:26:10] People have spoken about that. If you think about the Open Streets program … I launched an Open Streets in Pittsburgh, and it’s been wildly successful. People just love it. That is a lineal park for one day a month. It really should be a lineal park the whole time. But they flock to events like that all over the country, all over the world, and that’s kind of speaking to what people want, right?

Heather: [00:26:37] Yeah, well, when I took my son to Disneyland, I was fascinated at how much Disneyland had so much public space and walkability and water features and cafe-like settings. And I find it fascinating that we are, as a culture, willing to pay enormous amounts of money to have that experience as if it’s an entertainment, rather than to pay enormous amounts of money into our own environment, to have that same sort of actual feeling on a daily basis … with the Open Streets and the way that cafe culture has come back and outdoor beer gardens have come back, where you can see that there’s a hunger there. I think we just haven’t quite figured out how to go beyond the property line.

Eve: [00:27:28] Yeah, but Copenhagen sure has.

Heather: [00:27:31] Oh yeh.

Eve: [00:27:31] Get easily run over by a bike there. A beautiful city.

Heather: [00:27:36] I love it.

Eve: [00:27:37] One other questions, what community engagement tools have you seen that have really worked?

Heather: [00:27:41] Oh …

Eve: [00:27:42] You talk about really listening.

Heather: [00:27:44] Yeah. So, Eve, I’m calling that into question myself and I have seen people demonstrate what’s possible using apps, for stakeholders to put in their preferences, or to note where there is a click it – fix it, kind of, I see a pothole or speed bump problem or whatever, or a tree is dying …

Eve: [00:28:04] Yes.

Heather: [00:28:05] … those things seem pretty good.

Heather: [00:28:08] Admittedly, my planning thesis in grad school,1997, was about how planners could engender democracy through better participation. And I had a particular angle on how that could happen, which was making sure people had the information that they need, and a forum for conversation and decision-making. I stand by that, except I don’t know what the best technique is. I’ve been searching for that for over two decades. It is not an evening meetings …

Eve: [00:28:38] No, for sure.

Heather: [00:28:38] …in a dank community room with somebody with a mic and people sitting in cold chairs with cold food and no child care and no language translation, listening to somebody say here’s, responding to a plan that’s already been pretty well baked. It’s not that. It’s not endless council meetings that go until 1:00 in the morning. You know, there’s a private organization that I’ve been inspired by, called SUDA it’s the developer Alan Jones and Regina Davis, who are doing a really interesting project in West Oakland. And to hear how they got community feedback was really interesting because it wasn’t necessarily these meetings. It was spending a good deal of time, and I mean years, in a community like West Oakland and listening to what people were saying on the streets and going to barbecues and churches and hearing what it was that was on people’s minds, and forming relationships with people more in the immediate surrounds of the West Oakland BART where they’re going to be doing four blocks of development. So, that they were building up a sensibility for what the community said it wanted and building the trustful relationships to then eventually present an idea, and respond to that in an iterative basis. So, something along the lines of actually really listening, and taking your time with it, and not just doing an app, but some face-to-face activity seems to be on to something.

Eve: [00:30:22] Yeah, yeah. That’s a lot of work for tiny developers. I think, you know, we’ve got to figure out something better.

Heather: [00:30:29] Well, the city planners who are doing the neighborhood planning or the district planning could be doing a lot of that over time and then let the smaller developers who are filling in hear all about it, take the time to do that.

Eve: [00:30:44] Yeah, I’m hoping that equity crowdfunding can play a little role too, because you know my platform, anyone over the age of 18 can invest, and I think if people can have a stake in development in their own neighborhoods, that’s certainly what I learnt in Pittsburgh, that people wanted to have a stake. So, it doesn’t have to be very big. It’s just, meaningful.

Heather: [00:31:05] Yeah.

Eve: [00:31:06] And then someone else talked to me about ‘power mapping,’ which I thought was really interesting as well. An interesting idea to kind of understand where the power in a neighborhood lies and talking to those people, and really, I suppose, I’d want to say enlisting their help, but that, it’s like almost like a pyramid, reaching everyone in the neighborhood. I thought it was really fascinating.

Heather: [00:31:31] There’s ‘power mapping,’ and there’s ’em-power mapping.’ Because in the power mapping we tend to want to go to the people who hold the power to make the shifts and create the influence we need. But we also have the opportunity to figure out, well, who doesn’t have power who should.

Eve: [00:31:47] Oh, I think all of that.

Heather: [00:31:49] Yeah, yeah, it’s hard to do. All of this takes a great deal of time, and in our lives when everybody’s rushing to get things done. Like we all do …

Eve: [00:31:59] Yes.

Heather: [00:31:59] Or rushing to sort of make sure that things are going to pencil out. It’s very hard to slow down a little bit and do that, although it can really go a long way. I’m excited about the crowdfunding you’re talking about. I mean, at one level, real estate always been crowdfunded, it’s just bigger chunks and formal legal entities, and to have it available to the individuals. It sounds so neat and interesting, I can’t wait to see it where it goes. It also seems like we don’t learn about design, often, or construction, or how cities are made or all the systems that go into that, in our American school system. And so, kinda no wonder we haven’t really built up a sensibility for it. And I’m thinking that maybe through crowdfunding, people will feel more connected to whatever it is that they have invested in.

Eve: [00:32:46] Perhaps. It requires a lot of education, but I suppose everything does. So, what’s next for you? I mean, the big project, that you can talk about or anything that’s got your interest at the moment.

Heather: [00:33:00] Well, I have a team of about 15 people in the Northern California office at Enterprise. We have, typically we have a San Francisco office and a Stockton office, but right now everybody’s home. I am excited to have, to work with such a great team and we’ve organized ourselves around a couple different big principles. And so just getting to organize ourselves and be clear about that is important. And we have two things. One is strengthening community resilience, and the other is building sustainable neighborhoods. So, one is about making sure that we’re sort of holding ground in neighborhoods and help people figure out how to stay where they are, if they want to stay. That’s through renter protection work or preservation work, like we talked about earlier. And work in public housing, and then also in resilience, and by that I mean both community resilience in a cultural way but responding to all these disasters, the fires and earthquakes and all the stuff that is happening in California. So, it’s sort of having gotten clear with the team about that’s what we’re about. In that body of work it’s about strengthening community resilience in a myriad of different ways. And then the other part is creating these big new systems. Like, I’m really excited that my team and I had this idea that there really ought to be a regional housing entity, that the little city, the many cities just don’t have the bandwidth or chops and finances to execute that they mean well to do for affordable and market rate housing. But at the regional scale it makes more sense. And so feeling very, very happy that this has been accepted by the state legislature and the governor and we’re actually doing it here in this region with the Metropolitan Transportation Commission and ABAG.

Eve: [00:34:46] That’s fabulous.

Heather: [00:34:48] Yeah, it is. And it’s just a fantastic group of people who really want to see it happen. So those things are exciting for me. I also think that there’s something exciting happening, in general, which is that maybe one of the silver linings of this awful pandemic that is so awful for so many people. And it’s … going to bring down potentially our whole economy. In all of that …

Eve: [00:35:16] Yes.

Heather: [00:35:17] … we might get a chance to rethink zoning and think about how, you know, you can’t shelter in place if you don’t have shelter. Therefore, it’s in all of our self-interest to really make sure that everybody has a home. So, I’m excited that maybe this has been a real wake up call that will help my industry hurry up and figure out how to get out of our own way and make sure that people are not homeless and people have safe places for their souls to rest that they can call home.

Eve: [00:35:52] Yes, I think that’s a really exciting end, and I really enjoyed our conversation, and hope your work meets great success and I’ll, I’ll be following it.

Heather: [00:36:03] Thank you, Eve. It’s really nice to hear your story too.

Eve: [00:36:16] That was Heather Hood. She’s fully immersed in the affordable housing crisis, working to help solve it in Northern California. Heather believes that NIMBYism has failed us along with zoning, too. We need to permit higher density to fill the need, and it takes far too long to get permission to build a building. The production line needs to be sped up dramatically. Heather’s also astonished that we’ll spend a fortune visiting places like Disneyland, where we can enjoy walkability, but we won’t spend that on the places we live in. I’m right there with her. You can find out more about Impact Real estate investing and access the show notes for today’s episode at my website EvePicker.com. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities.

Eve: [00:37:18] Thank you so much for spending your time with me today, and thank you for sharing your thoughts. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Heather Hood, Enterprise Community Partners

Power mapping and impact.

Impact investing has grown globally in both depth and sophistication and is now valued at $USD715 billion according to a 2020 study by Global Impact Investing Network (GIIN). But there are still many challenges. Here in the US, most of those funds are invested into cities and gentrifying areas, and although many low-income communities are beginning to see more capital investment, the most marginalized are still left out. For poor Black, native and other marginalized groups, opportunities to build wealth have historically been systematically denied. Redlining, made illegal in the 1970s, still occurs today and we know that all lending is not equal. Now the coronavirus pandemic is exacerbating the problem.

In recent news Netflix announced that a 2 percent share of its cash will go to financial institutions that serve Black communities and PayPal has also announced a $500 million fund to support black- and other minority-led start-ups. This is a promising start but to really effect change requires an understanding of the systems we operate in. They may have been built for everyone, but they don’t work for everyone.

Cynthia Muller, a thought leader of the impact investing ecosystem and director of Mission Driven Investment at the W.K. Kellogg Foundation, believes that power mapping is an important tool to help gain an understanding of how to structure a project that will be meaningful and beneficial to a community. The parties brought to the table for any particular project might include residents, real estate developers, planning departments, investment banks, venture capital, community development corporations and others. With a power map as a visual aid you can begin to recognize the roles and relationships of all parties and identify the decision makers with power who might be influenced to make change. Here are the steps required to make a power map:

  • Identify the people involved, the problems and the decision makers.
  • Place the person or institution that can make the decision or enact changes to fix the identified problems at the centre of the map.
  • Think about any associations or relationships. This requires thinking about any connection including family, neighborhood, religious, political or financial that might influence the central decision maker. Place these in a ring around the centre.
  • Look carefully at the mapped network to determine any connections, including secondary connections like family members. These are the relational power lines.
  • Identify the people with the most relational power lines as well as those with less and mark them differently. If there are no connections, plan to learn more about that person.
  • Make a plan of action. Using the relational power lines and work out the best way to access people or institutions.

Power mapping is a great community engagement tool which helps to conceptualize networks and spheres of influence. Listen to my interview with Cynthia Muller to learn more.

Original artwork by David J Allardice