Rethink Real Estate. For Good.

Development

Oasis in a food desert.

An oasis is emerging in the food desert.

Residents of the underserved Northwest Goldberg neighborhood in Detroit will finally be able to buy groceries and household goods locally, thanks to the establishment of Kornr Store, a retail concept developed by Brinda Devine of Purpose8 Real Estate. 

Only 18 months after raising $43,000 through a crowdfunding campaign on Small Change Brinda is preparing to open Kornr Store at 6224 16th Street later this summer.

That’s not the only good news: Brinda is already scouting locations for a second Kornr Store. We’d love to see this concept take root in other food deserts, which would significantly improve the health of area residents.

For now, we congratulate Brinda on the opening and look forward to celebrating this community-minded developer’s future successes.

Images courtesy of Brinda Divine

Intentional Community.

Kathryn (Katie) McCamant brings the depth and diversity of her 35 years of experience as a developer, architect, and cohousing resident to benefit her clients.

Coauthor of Cohousing: A Contemporary Approach to Housing Ourselves, the book that introduced cohousing to North America and the English-speaking world, and more recently, Creating Cohousing: Building Sustainable Communities, Katie co-founded McCamant & Durrett Architects/The CoHousing Company with Charles Durrett. More recently, she started CoHousing Solutions as a development consulting firm to share best practices and systems for successful collaborative development.

She works with urban, suburban and rural communities all across North America, helping them define and implement their development strategy and build the professional team they need. She also founded the 500 Communities Program to train other professionals to work in this realm. She lived for 12 years at Doyle Street Cohousing in the San Francisco Bay Area, and now lives at Nevada City Cohousing in the Sierra Foothills.

Read the podcast transcript here

Eve Picker: [00:00:07] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich, or poor, beautiful, or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone.

Eve: [00:00:42] Early in her career, very early, Katie McCamant visited Copenhagen. She was an architecture student studying abroad. In Copenhagen she learned of a new housing model called cohousing, a small, intentional community of private homes clustered around a shared space. Common space usually includes a large kitchen, dining area, and other common facilities, but will vary depending on each community’s wants and needs. This was a brand new concept with just eight projects built in Copenhagen and nowhere else in the world. Katie was wowed. She was interested in housing in architecture and this model made so much sense to her. So, she wrote a couple of books and built a career on helping people build their own cohousing community, advising them from soup to nuts. Listen in to learn more.

Eve: [00:01:50] Hi Katie, I’m really happy to have you on my show today.

Katie McCamant: [00:01:54] Thanks, Eve. It’s a great pleasure to be here.

Eve: [00:01:57] So you’ve immersed your life in a very particular kind of housing called cohousing. What is cohousing?

Katie: [00:02:05] Now cohousing is an intentional, collaborative neighborhood where people come together to create a neighborhood where you actually know your neighbors with the intent of working together in a more collaborative way. And in order to do that the cohousing model of community has individual private homes. They could be a small studio or four-bedroom house and extensive common facilities so that, you know, we have what’s called a common house, where we have a great room, a kitchen, often guest rooms, crafts rooms, a kid’s room, whatever that community decides. So, it’s that balance of privacy and community within a neighborhood. But just as importantly, is the social intent that we actually want to get to know our neighbors and work together in a collaborative way.

Eve: [00:02:59] So where did you learn about cohousing?

Katie: [00:03:02] Well, a long time ago I was a study abroad student in Denmark, in Copenhagen. And, you know, if you study architecture in Copenhagen, I was an architecture student there, you study the history of housing there. And this was in the early 80s when I think cohousing community number 12 was just being built. So they were, it was just really starting to get noticed there. And outside of Denmark, nobody had heard about it. But for me, as a young architect, I looked at it and said, oh, well, this makes perfect sense. I’m sure everybody back in the States knows all about this. And much to my surprise, I got to UC Berkeley, and nobody had ever heard about it. So that kind of became the path after that.

Eve: [00:03:49] So why did you want to import the idea to the US in particular?

Katie: [00:03:54] Well, I think it was both very personal and professional. You know, in the architecture world, there’s this small cadre of people who get quite fascinated by neighborhoods and housing. And I was one of those. And professionally, you know, I was in architecture school, I wanted to have a family and kids. I didn’t live near my extended family, even though I have a great extended family. We’re extended pretty much across the country.

Eve: [00:04:24] Very extended!

Katie: [00:04:25] And I was just like, how do you do this? You know, where are my models? How do I have a family and, you know, work as a professional architect? So, for me, it really hit a spot of like, oh, that’s what I can do. The other thing is it was one of the few innovative housing models from Europe that was not started with government programs or subsidies. So, I saw a model that we could actually adapt here in that it was just people getting together to create these neighborhoods, middle class households looking for something that the market didn’t provide. And Denmark is a country where 65% of the population at that time lived in single-family homes. So, it was like, it also gave me a model of how, of something that I felt was very adaptable to United States.

Eve: [00:05:16] How did you start your first cohousing community?

Katie: [00:05:21] Well, it was interesting, you know. So, I wrote the book that introduced cohousing to the English-speaking world with my ex-husband, Charles Durrett. And we started by talking to the nonprofit housing developers in the San Francisco Bay area, where we lived. I had worked for Mission Housing, so I had pretty good connections in that world and just found that, you know, this is Reagan housing cuts, and there was just no way they could fund anything innovative. So then, again learning from the Danes, we went to the market. So, we realized pretty quickly that we needed to be able to show that we had real people who really wanted something different and could afford that as a market rate model. So that really became my mission. And I think that was a really important decision, was saying, you know, there are other people out there who don’t qualify for subsidies but are looking for some the development world is not providing. And so, from that point on we were really working with buyers groups. People who wanted to live in cohousing, didn’t know how to, anything about real estate but were also looking for something other than that. So, our first project was Doyle Street Cohousing. Actually, two projects happen about the same time Muir Commons and Davis was part of a larger master plan community.

Katie: [00:06:51] And we, you know, we self-published the book, so we had 3000 books in our basement. We were desperately trying to get out just to pay the rent. And so, we would talk anywhere. So, we did a presentation in Davis, and out of that came a co-housing group that was really interested. At the other, there were two other critical attendees at that presentation. And it wasn’t that big a group. So, there was a city council woman and then one of the partners involved in a big master plan development in West Davis. So, after the presentation, the city councilwoman got up, walked over to the master-plan developer, and said, why don’t you include one of these? And there in the room were a bunch of people who were really interested in living in a community like that. So that’s how Muir Commons happened. And then, in Emeryville, in the heart of the San Francisco Bay area, a developer was kind of looking at what to do with this building and whether it should be artists, live/work or what about this cohousing thing? So, we jumped on that and said, yeah, we can bring a group of buyers and went out and brought that in.

Eve: [00:08:04] How do you start? Like, if you’re starting from scratch, what are the steps to starting a cohousing community?

Katie: [00:08:13] Yeah and that’s actually the hard part because, you know, developers are still not initiating projects. There were three of us developers. So, I’ve worked as an architect. I’ve worked as a project manager. I then started a development company that really initiated these projects, these new communities. And now I work as a development consultant working all across North America. But it hasn’t caught on in the development world. So, it would be much easier if developers were initiating the projects and then sort of testing the market to see if there were people interested in it. And that’s what I did. And I think we have a model that actually works for that. But in most cases, there’s no developers initiating cohousing projects. So that means that, you know, if you wanted to start a community where you are, you would start talking to other people who wanted to live in a cohousing community. So, it’s usually a burning soul that’s like, I don’t want to move in order to buy into another community.

Eve: [00:09:13] I know one of those in Pittsburgh. She probably worked 20 years on it to get the right group of people together, yeah.

Katie: [00:09:19] Right. And so, then you’re pulling that group together and eventually a lot of them end up hiring me as a development consultant because I kind of understand both worlds and have the patience to work with them in that early stage. And I think that the key thing is getting a group to a point where they really can deliver buyers, right? If they can deliver a buyers group. So, it’s actually more about the marketing than the development, right? Because if they can deliver a buyers group all other problems are solvable. You can find a developer; you can get financing. But you’ve got to be able to show that you really have the buyers. So, I work with groups, you know, from that earliest stages before they have land to help get them up and real and focus in a way that they could then find a developer. A lot of my work is actually looking for developers to partner with cohousing groups.

Eve: [00:10:12] I would have thought that would be easy. Once you have the buyers, like, I would have thought developers would be falling over themselves because, you know, if you build a building and it’s vacant, you’ve got to fill it. That’s a problem for developers, so…

Katie: [00:10:24] I think once I get a group up and they can be a good partner, I can always find a developer. But you know, developments, it’s really about control and not knowing how to work with a group.

Eve: [00:10:40] It’s an extra layer of work for a developer, isn’t it? Yeah.

Katie: [00:10:43] Right. And so, I think understanding that the buyers are really mitigating the risk for you. Because you got to tie down prices, that’s the thing, right? You can’t raise. So, it’s a cost-plus fee model. And that doesn’t ride the ups and downs of the real estate market in the way a truly market rate model will. But it actually works really well. So, what I use is an open book budget. The buyers all know it, the developer knows it. We know what’s in the budget, what’s not in the budget. And really looking for a developer to take the risk of construction and manage construction, as well as finding the construction, financing, and guaranteeing that loan.

Eve: [00:11:26] And so, like, what about common area amenities? Like, how are they decided?

Katie: [00:11:32] Yeah. So that’s part of the early schematic design process. Over the, you know, 35 years of developing co-housing in the US now, we’ve really developed a series of, how do you work with a group of buyers. And so, all the key design decisions are decided very early on in that schematic design phase. And so, part of that is working with the group in a weekend workshop to determine their priority common facilities. And so, there’s the core facilities pretty much every community has, which is, you know, a great room with a good kitchen. You’re trying to avoid a commercial kitchen, but just a kind of kitchen that inspires you to cook. A lounge area if it’s an intergenerational community it would have a kid’s room. Guest rooms are very popular, 1 or 2 guest rooms. But then it’s really up to the community, you know? So, do you want a pool or is a crafts room or a workshop? You know, what are their priority things? So that’s, you know, decided as part of the schematic design.

Eve: [00:12:32] If buyers drop in, drop out and add in, that must be awfully difficult to manage, Katie. Expectations change, right?

Katie: [00:12:42] Yeah. I think most of the world doesn’t realize that pretty much any housing development takes 4 or 5 years to get built. From the time you tie up land to go through the planning approval process and building permits, line up financing and get built. So, you know, I think the public just doesn’t realize how long it takes. And so that’s the first thing is, you know, life happens during that time. People do move on or decide it’s not going to work for them. And so, you know, one of the things I emphasize is it’s really the buyers putting in that front end cash to pay development costs. And that has real pluses and minuses. I would say that the pluses are that you get a really committed group of buyers, and they have skin in the game, and it keeps them focused in a way that nothing else would. The downside is that you have to have that cash, right? So, it makes it hard for middle-income and low-middle-income or lower-income people to start communities. I think, you know, there’s risk in real estate. Everybody needs to acknowledge that. But like any deal, the deal is and I, you know, part of my role now is passing on the systems we’ve developed, including the investment systems, is once your money is in the deal, it stays in the deal until the deal is done.

Eve: [00:14:03] So that’s the risk, right? Yeah.

Katie: [00:14:05] You may move on, but you got, your money’s now in this deal and we’ve got to get it finished to pay you back.

Eve: [00:14:11] Interesting. Is there an ideal size for a cohousing community?

Katie: [00:14:16] Yes. I mean, first I would say try to create community wherever you are with whatever you’ve got. So, whether it’s three households or an existing condo complex, you know, I think there’s opportunities to build stronger communities. But if you’re building new, you know, really what we have found over and over again, going back to the Danish communities in the North American communities as well, is something in that sort of 20 to 40 units. It’s large enough to accommodate diversity of ages and people and you don’t have to be best friends, and small enough that you can really know everybody. So, you have a high level of accountability. You know, I live in Nevada City Cohousing. It’s 34 homes. I know everybody by name. I know most of the dogs, I do not know the cats. But I could actually tell you their story. I could kind of walk down the homes and say tell you everybody’s story.

Eve: [00:15:16] So it’s interesting. I’ve heard the same thing. I know an architect in Australia who’s building rather large housing communities, maybe 200 units, but they break it up into 30 units per elevator with separate access from the street, so it feels like a discrete community. And he said the same thing. The research they found was that was the right size to really create a community. Too big and it’s hard, too small and it’s hard. So, it’s really interesting. Yeah. So, what about zoning regulations? Can they be an issue for cohousing?

Katie: [00:15:49] Well, you know, we’re out there with everybody else trying to build housing. So, I think, you know, there’s a lot of things that just make housing hard to build. We, you know, I would say a large number of my communities that I’ve worked on, we’re submitting as a planned unit development or planned residential development. And I find planning departments, a lot of them studied cohousing now. A lot of them are looking for alternatives. And so, as long as you have a PUD process of one sort or another and you’re not trying to increase the density. Because that’s one of the issues, right? So, one of the things I really see a contrast in is with more suburban zoning, you’re still limited to a number of units per acre. And if you’re building smaller units, you’re at a great disadvantage over what most developers are building, which is kind of bloated houses, to max out the square footage. Whereas when you’re in a more urban zoning, which is more of a form based, and they care less about the number of units and more about the setbacks, we actually do better because we’re generally building a smaller units overall as an average.

Eve: [00:17:02] Yeah, I would imagine, and I mean, is it single family homes? Have you ever been involved in a co-housing project that’s an apartment building? Like, are they, what do they look like physically?

Katie: [00:17:14] Yeah. So, I think that’s one of the things that I really love about cohousing is it can be applied at all different densities. So, right now projects that I’m working on, is I’m working on a agri-village north of Seattle called Rooted Northwest. They bought 240 acres, and they’ve always had support from the county, but the county didn’t actually know how to process it and have an ordinance to process it. So, they had to write a demonstration project ordinance, which we’re now in the process. But the plan is to save 230 acres as agricultural and forest and build two villages clustered tightly so they’re not spreading out across the land on five and ten acre lots. And finishing completion of a community in Sacramento that is a four-story building over podium parking on half an acre. Totally walkable neighborhood. You can walk to Amtrak; you can walk to the state capitol.

Eve: [00:18:17] Oh, that’s quite different, yeah. Yeah, yeah. Really fascinating. So, has cohousing evolved at all to suit the US market since you introduced it?

Katie: [00:18:29] To me, what’s actually more interesting is how much you see similar things coming up. So, my community, Nevada City Cohousing, we moved in in 2006 and, originally, we had 11 acres, the brownfield, it was a gold mining site, and we could have spread out across all the acreage. And I was like, oh, we’re going to a rural area, I don’t know what people will want. But actually, people really wanted, and they kept saying in the site planning design workshop, no, we want that village feel. Pull them closer together. So, I find that it isn’t so different. I mean, I think, you know, the American financing mechanisms are uniquely difficult. The amount of cash you have to raise to get a construction loan continues to get worse and worse. You talk to, particularly northern Europeans. About the struggles of building middle-class housing here, and they just don’t know what to do with it because they have so much more financial support than we have. But in terms of what people actually want and how they live together, I would say there’s many more similarities than differences.

Eve: [00:19:41] Do you have any idea of how many cohousing projects exist today in the US?

Katie: [00:19:47] Yeah, there’s about 180 existing communities, probably another 100 in the forming stage.

Eve: [00:19:52] So it’s increasing rapidly. Yeah.

Katie: [00:19:55] Yeah, there’s a national nonprofit, the Cohousing Association, and they put on conferences and virtual programs, and they keep the best directory. So, if you want to know where there are cohousing communities, you go to cohousing.org look for the directory.

Eve: [00:20:10] So it’s come a way since you started working on this right?

Katie: [00:20:14] It’s come a long ways. You know, I find myself split between, on one hand, it’s come a long ways and we really have established communities, communities that are thriving, you know, new generations. I have younger families moving into my community. So, I’m really seeing, you know, it last way beyond the founders. And at the same time, it’s so hard and there’s so, you know, so few. Right? I go back and forth depending on my mood of the day.

Eve: [00:20:45] I think if you look back, that’s pretty significant. It takes a really long time to build anything new for it to take hold. So, I think that’s pretty good.

Katie: [00:20:55] Yeah. And traditionally, you know, housing is a very conservative choice for most of us.

Eve: [00:21:00] Yes.

Katie: [00:21:02] It’s not an easy sell. You know, for most of us it’s our single largest investment. So, people, like, can I get my money out if somebody, is there going to be a buyer when I need it, you know. But I would say overwhelmingly it’s been really successful. It’s a great way to raise kids. It’s a great way to grow old. It just fills that community by proximity. You know, we all have a community. But these days in America, you drive to your community. And so having neighbors next door…

Eve: [00:21:37] So who will finance this? Like, how do you find financing for cohousing projects?

Katie: [00:21:43] Well it’s your, you know, your regional banks that tend to do a lot of the smaller construction loans. And so, I mean, the mortgages are easy. Once we get to mortgages, I can, you know, there’s no reason a mortgage for cohousing can’t match any Fannie Mae, Freddie Mac, FHA rules. So, that’s not a problem at all. It’s the getting it built. And, you know, what I do is I take a group of buyers with skin in the game. So, my goal is to when I’m going for construction financing, is to be 75% pre-sold. Their money’s not in escrow. It’s, they’re investing in a real estate deal that they hope to buy into themselves. And if I can partner that and find a strong local housing developer, then we have a pretty strong package.

Eve: [00:22:32] Okay, so, what about you? Where do you live?

Katie: [00:22:39] Yeah. So, I live in Nevada City Cohousing, which is in the northern Sierra foothills of California. It’s the heart of the old gold mining country. It was all raped and pillaged in the 1850s. And now is a quaint little town. So, Nevada City Cohousing is 34 homes, town homes, all of them attached. I can walk to town, so it’s fabulous. We moved in in 2006. I got the land under contract and initiated the project and acted as the developer. But now I’m just one of the neighbors.

Eve: [00:23:15] And the neighbors don’t keep coming back to you with all the problems that the developer caused? I’m just joking.

Katie: [00:23:21] Well, the first year or two, I also fired the contractor at the end. So, there was a couple of years of sorting out the end of development. But…

Eve: [00:23:28] Right. Yes, I’ve been in that situation.

Katie: [00:23:33] But yeah, now I’m way beyond that.

Eve: [00:23:35] How do you think co housing might scale? You said there’s 180 but 100 more in development. What’s this going to look like in 5 or 10 years? How does it help affordability?

Katie: [00:23:46] Well those are two really different questions. I think before it will scale, we need more developers coming into this space because trying to get a group of people, I mean, you know, who cohousing attracts is smart people who generally know nothing about real estate development. So, you know how to find a site, how to do feasibility, how to, you know, how do you do real estate development is, you know, not the strength of a buyers group. And so, there is a realm of professionals to support those groups now. But, you know, if there was any way I could get more developers looking at cohousing as one of their products and with the appropriate site, partnering with someone who can help them work with the buyers group, that’s the only way we’re really going to scale this. So, I always say, I’ll talk to any banker, I’ll talk to any developer any time. Because I do think we have a model. I did it, right, about how do you balance the risk and reward between the buyers group and the professional developers needs? And so, I think we actually have a really good model how to do that.

Eve: [00:24:57] And how do resale values work? I mean, is it really just like any other home in a city, or is it better because of the amenities? Like, what does that look like?

Katie: [00:25:07] The basic arithmetic is that the, you know, a typical common house is 3000-4000ft², so you’re adding more cost in. And for most of us, the way we think about that is, I’m going to buy a little bit smaller home and have the common amenities to support me. Right? And so that’s how I think most people think about the arithmetic. That means the cost per square foot is pretty much always going to be higher, right? Because we’re building with a different set of values and really see the common amenities as part of your daily life. So, I have my own kitchen. I do not eat every meal in the common house by any stretch, but I’m going through the common house, you know, pretty much every day. Check my mail, see who’s there. Sometimes to have a meal. So, we’re never going to win the cost per square foot goal. Which, I think it haunts American housing, frankly. But the market is most cohousing communities have a database. A lot of it is word of mouth or through the cohousing association. And I would say the large number of resales actually happen through somebody who contacted the community. So, we often will work with realtors, but it is, even when working with realtors, the buyers often knew about cohousing before, had been looking for it. There’s a national market of people looking for cohousing across America.

Eve: [00:26:39] That’s great. So, are there any other current trends or innovations in real estate development that you think are important for our future, besides cohousing?

Katie: [00:26:49] Yes, well, I was actually listening to a podcast interview of you last night on Regenerative Real Estate.

Eve: [00:26:56] How embarrassing.

Katie: [00:26:58] Oh, it was great. It was really great! And I loved your story about, you know, what you did there in Pittsburgh. And I actually think that that’s one of the things I follow, in my next life, my next developer life, is the small infill housing. How to, you know, do appropriately small development in a neighborhood that really serves a neighborhood, but also brings new and fresh blood into a neighborhood? I think that’s also gotten harder, not easier. But I think that’s so important.

Eve: [00:27:33] Much harder. It’s a battleground. Like, I own a little cottage in an amazing little fishing, ex-fishing community. And these are tiny little 600, 650-square foot cottages with some land. And at some point, in the 70s, probably, or the 80s, the borough overlaid a very suburban zoning regulation. So now, if you want to build a single-family house, it’s got to be a 3500 square foot lot. So, these little fishing cottages weren’t built to stay. But if you tear one down, you have to get a second lot and rebuild a McMansion. And so, the whole personality of this place is going to be wiped out. It’s kind of heartbreaking. And I want to say through ignorance. You know, they really didn’t understand quite the effect of what they were doing and probably still don’t. Right? So, that’s the biggest battleground for me. Like, how do you get to build something in a place where they have these zoning rules that don’t permit it. And small towns can’t afford to redo their zoning regulations. That’s a really tall order, right? So, then it’s up to little developers. And who has the energy for that? Yeah. It’s a problem.

Katie: [00:28:54] Yeah, no, it’s so much easier to fit within the rules as they’re written.

Eve: [00:29:00] Which is why cities are a bit easier, as you said. You know, cities make it a little bit easier because they’re really ready for that?

Katie: [00:29:08] Right. Yeah, I am hopeful that with the breakdown of single-family house zoning in many cities, first, just in the last couple of years that I’ve really seen cities change their parking requirements in a way that I’ve been fighting for parking variances my whole life. So, it’s like, wow, I’m kind of shocked. But I think one of the things, particularly in the West, is my sense of it is much more of a West Coast. All through the West is very few people are building small infill condo developments. Which should be the new missing middle, should be the new middle-class. And, you know, in Europe, you know, you or I, we would all be living in a small new condo development that.

Eve: [00:29:52] I live in one. It’s three units and a store front.

Katie: [00:29:56] And that, the reason they’re not being built in the West and it’s seems to be working its way across the country so it’s just a matter of time, is because of liability issues and lawsuits against condo developers. And it’s, I think, one of the largest land use issues out there that nobody knows about. So, those sorts of things. Because really, I do think, I think there is not a city or town in America that couldn’t use small infill condos, you know, as a for sale.

Eve: [00:30:31] Yeah. No, I think you’re right. I think you’re right. And there’s a lot of leftover land that’s not being used sensibly, which is a waste because there’s infrastructure there and, you know all of that. So, final question what’s next for you? It sounds like you have another company in mind.

Katie: [00:30:50] My goal is to pass on everything I’ve learned to the next generation. I do a year-long training called the 500 Communities Program. I’m looking for people both on the development side and also the marketing side. So that’s really a professional program for professionals who want to work in this space. I will share everything I’ve learned and be really curious how people take it forward. So, I think, you know, my goal is actually not to be the cutting edge, most innovative thing, but to normalize this. I want co-housing to just be one of your housing choices that when you’re thinking, oh dear, I think we should really move here. I wonder if there’s a co-housing community there. You know, that is just one of the housing choices out there and again, you know, I’m shocked that young parents today are still facing the thing young parents always faced is, it’s incredibly isolating to have children in America.

Eve: [00:31:50] It is. You’re right.

Katie: [00:31:51] And it’s the way we build neighborhoods that make it like that.

Eve: [00:31:54] Well, this has been absolutely fascinating. Thank you very much, Katie. I’ve really enjoyed the conversation.

Katie: [00:32:00] Well, great. Well, thank you, Eve, and II really enjoyed getting to know your work. And will be, continue to follow what you’re doing as well.

Eve: [00:32:22] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. Please support this podcast and all the great work my guests do by sharing it with others, posting about it on social media, or leaving a rating and a review. To catch all the latest from me, you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing, head on over to smallchange.co where I spend most of my time. A special thanks to David Allardice for his excellent editing of this podcast and original music. And a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Katie McCamant

Superpowers Interview.

Devin Thorpe interviewed Eve for his TV show, Superpowers for Good!. It’s a masterful interview. Devin teased the why and how of Small Change right out of her. For those of you still wondering what it is Eve actually does, this interview tells it all.

You can watch the interview here.

AI Episode Summary

  1. Devin Thorpe introduces Eve Picker, CEO and founder of Small Change, a crowdfunding portal for real estate projects with social impact.
  2. Eve discusses recent expansion at Small Change, including the addition of five new partners from another real estate crowdfunding platform.
  3. The short-term effect of this expansion is increased busyness and the need to align the new partners with Small Change’s processes and compliance issues.
  4. Long-term implications include the ability to handle more and larger listings and to take on a broader range of projects.
  5. Small Change leverages Regulation Crowdfunding, which enables developers to raise capital from the public for projects with emphasis on democratizing investment.
  6. The platform focuses on overlooked neighborhoods and developers, often unable to access capital through traditional means, by allowing them to raise money from people who care about their projects.
  7. Small Change has a unique rubric to ensure that listed projects make some form of social impact, whether through the team, the neighborhood, the creation of public spaces, or environmental contributions.
  8. Examples of diversity in projects include a developer helping his community buy neighborhood shopping centers and another who is purchasing and restoring great estates in the Berkshires.
  9. Investing through Small Change offers possibilities of equity ownership or debt investment in real estate projects, but like any investment, it comes with inherent risks.
  10. Devin and Eve discuss her determination and persistence, especially in the face of resistance, as her superpower that led to the creation of Small Change, aiming to disrupt the traditional system and to empower overlooked developers and communities.

Public Assets.

Former U.S. Congressman Ben McAdams is the founder and CEO of the Common Ground Institute, an organization supporting jurisdictions working to create revenue and other public benefits from government-owned real estate through public-private partnerships. He is also a Senior Fellow for the Government Finance Officers Association, where he leads the Putting Public Assets to Work Incubator, working with jurisdictions across the U.S. to support their development of public asset management strategies.

From 2009 through 2020, McAdams served as a Member of the United States Congress, a Utah State Senator, and Mayor of Salt Lake County, where he represented 1.1 million constituents and balanced a budget of $1.2 billion. In his public service, McAdams brought Republicans and Democrats together to find solutions to address homelessness, improve education and health outcomes, and promote evidence-based decision-making at all levels of government using innovations, including the first social impact bonds to achieve measurable outcomes for the public good.

Prior to elected office, McAdams taught Securities Regulation at the University of Utah Law School and was an attorney with Davis Polk in New York and Dorsey & Whitney in Salt Lake City, where he specialized in public and private securities transactions for U.S. and international issuers.

Read the podcast transcript here

Eve Picker: [00:00:13] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich, or poor, beautiful, or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone.

Eve: [00:00:48] As mayor of Salt Lake County a decade ago, Ben McAdams was frustrated that there wasn’t $500,000 in a $1.3 billion annual budget for a promising early childhood education program. Not one to permit defeat, he decided to map the value of the city’s underutilized real estate, and that yielded an impressive number. All of a sudden, the city had $45 billion on its balance sheet. I found out there is actually money under our mattress Ben says. It’s real estate that is just forgotten. Since then, Ben has spent time in politics as mayor, senator, and congressman, but now he’s launched an incubator to help cities map their public assets, much like he did a decade ago, providing a path to solve issues that need money like affordable housing and homelessness. Every city should listen in.

Eve: [00:02:11] Hi, Ben. Thank you very much for joining me today.

Ben McAdams: [00:02:14] Eve, it’s so great to be with you.

Eve: [00:02:15] So the common theme in your life for many years was politics. You’ve been a mayor, a senator, and a congressman, but you started off as a securities attorney. How does a securities attorney become a politician?

Ben: [00:02:29] Well I am passionate about public service and really, from early days in college, wanted to be in a position that I could give back to a community that I love. And so, I went to law school and also found a passion for corporate finance. So, I went to a firm in New York. I did a lot of work in Latin America with issuers who were raising money in the US to do big projects, typically in Latin America. And I found kind of an alignment between my passion for public service and finance. And what I saw was the power of finance to transform communities for the better. So, I did a lot of work in Brazil and with telecom and what we saw, I’d spent some time in Brazil previously, and when I was there nobody had a telephone. And we saw because the cost to install a landline to a home was about $5,000, and nobody could afford that upfront cost to install a landline. And then cell phones come along, and people are raising money to just skip the landline process and go straight to cell phone.

Ben: [00:03:32] And I saw in Brazil, everybody went from not having a phone to having a telephone and what that meant for their productivity, for their ability to earn money, to stay in touch with family and loved ones was transformative. And so, we found an alignment between the power of finance to do good and to lift people for the better. And so, I spent about five years working in, as a securities lawyer, I taught securities law at the University of Utah. And then there came a chance to transition to directly public service. So, I went to work for the mayor of Salt Lake City as his director of government affairs. And in that capacity, I found that somebody with a good finance background was able to add a lot of value to government. We were able to, you know, figure out how to do the Rubik’s Cube of some pretty complicated public projects that we were trying to get done. And I think that was then my life mission. I found this passion for bringing a knowledge and understanding of private finance to the world of social impact.

Eve: [00:04:34] So, after quite a few years in politics, you have now launched something called the Putting Public Assets to Work incubator. So first I want to ask what are public assets?

Ben: [00:04:47] So public assets can be any number of things. You know, it can be a mass transit system that we’ve built. It can be an educated population. It can be, you know, public safety infrastructure. But when I was mayor and looking to, so I served first for the city of Salt Lake City, and then I was elected to the Utah State Senate, and then I was elected Salt Lake County mayor and I served for six years as mayor. And that was my favorite job, because I was really in a position to impact my community for the better. And one of the things that I found is that we knew, we know empirically from numerous studies that have been done globally, that it’s less expensive to educate your population than it is to incarcerate. It’s less expensive to treat somebody with addiction than it is to watch them cycle through a homeless services system. It’s less expensive to, you know, to maintain a road than to let that road fail and then come in and rebuild the road. But what frustrated me is, while we knew these things would save taxpayer dollars over the medium term, we just didn’t have the money to do it. And I said, there’s got to be a better way. We know we are acting in a way that’s going to cost us more money in the long run. We’ve got to figure this out. So, I started looking at our budget. And, you know, government budgeting is really built around cash flow. We project how much money we’re going to bring in from taxes and fees, and then we decide where we’re going to spend that. And what we ignore in government budgeting is our balance sheet.

Ben: [00:06:13] What assets does government have? How much are those assets costing us to maintain and what opportunities can we derive from those assets? So, I started focusing on the balance sheet aspect. You know, if we have, if we’re able to better utilize our mass transit system, that means and to better utilize that asset means we’re building fewer roads, maybe fewer stormwater systems and water and electrical systems. We can actually save money by better utilizing existing assets. Pretty quickly we came to what I think is the biggest asset class of government. It’s real estate. And, surprisingly, government has very little understanding of what real estate they own, what it’s worth and because of that, they don’t make good strategic decisions about how to manage their asset, how to minimize costs and maximize value. So, I said, you know, as a county, we are spending over $1 billion a year. We should have a handle on what we own and what it’s worth and start thinking about that as a way to minimize expense and maximize value. So, we did an inventory. We hired Urban3, who came in and did an inventory for Salt Lake County, helped us to identify all of our assets and hone in on the value. And what we found was shocking. So, we said we’re going to exclude assets that have no commercial value. We excluded our watershed, our, you know, our ski terrain is sacred here, so we don’t want to touch the ski terrain. Of course, our airport runway you’re not going to, that’s going to just be what it is. It’s an asset of a different…

Eve: [00:07:44] So you’re talking about the land, even the land. You just didn’t include those assets that you’re not going to touch.

Ben: [00:07:48] We didn’t include those. So, we looked at land that had commercial potential in addition to or instead of government value, so we could make better strategic decisions. What we found was in a county that’s about 500mi², we found 44mi² of commercially viable government owned land that was not on the tax rolls. We estimated the value of that was about $13 billion. This was 2017. So, you know, it’s about 10% of our land mass. It’s about ten times our annual budget that’s tied up in non-producing land. You know, some of these things we’re still going to want them to be non-producing. A library serves a function. But we started thinking, you know, could that library in an urban area, it’s a one story building with a big parking lot, instead of just being a rundown, dilapidated library surrounded by ten story office and residential, could we think of a library as a ground floor retail, so to speak, of an office building and reduce the cost of owning and operating that facility and actually maybe even generate some revenue off of it if we were able to activate the land.

Eve: [00:08:54] Let’s just go back a bit. So, these public assets that you found, like the library, is a fascinating example. What are some other examples? Not just vacant land, like not just abandoned houses, right? It’s way more than that, right?

Ben: [00:09:07] Yeah, vacant abandoned homes is a big one, but that comes with some other policy challenges around it. You know, governments think in terms of decades and centuries, and private sector thinks in more in terms of, you know, 7 to 10 years. So, we found a lot of parcels that 50 years ago, 75 years ago, we made a decision. Maybe we were widening a road and so we did some eminent domain to condemn some homes to acquire parcels. And we will widen that road, but we didn’t need the entire parcel. So, you have kind of the scrap that’s off to the side.

Eve: [00:09:38] Right.

Ben: [00:09:38] I can think of, you know, here in Salt Lake we have a major roadway, you know. So that roadway is a valuable asset. Transportation assets are expensive and desirable. And on the side of that roadway, there are these fantastic parcels of land that have signs on it that say property of the government, you know, and we go out and we cut the grass, and we clean up graffiti. And they just have been sitting there for decades being maintained and not being activated. So, there are not vacant abandoned homes but vacant parcels that the government is banking for another use or just kind of maintaining but has forgotten.

Eve: [00:10:14] Oh, interesting.

Ben: [00:10:15] So that’s one asset class.

Eve: [00:10:17] I just have to hop in. I bought one of those little abandoned pieces of property in Australia. I’m doing a project there with my sister, and there was this tiny little laneway that we really needed to make the project. It’s a very dense urban site. The city didn’t even know they owned it. They, we paid them for it in the end, quite handsomely. But they didn’t know they owned it. No one had a record of it anywhere. It was a very interesting exercise in a very desirable neighborhood.

Ben: [00:10:47] Surprisingly, or maybe not. But that scenario where government does not even know that they own a valuable parcel of land, we’ve seen it over and over again in this work. So, you know, helping them understand what they have and then make strategic decisions about that is a big part of putting assets to work. To your point, it’s not just the vacant parcel of land. Maybe it’s the parcel of land that is being used. It’s the library, it’s the senior center. It’s the parking lot adjacent to a rec center that you know could be used. You still need parking, but in some of these urban areas, does it really make sense for government to have a surface parking lot? The private sector’s concluded that it doesn’t. Right?

Eve: [00:11:24] The highest and best use, yeah. Yeah. We’re working with a developer who actually made a deal with Alexandria to purchase and redevelop three surface parking lots, and he’s building 50 housing units and putting robotic parking in place and expanding the parking, I think by three times, all on those three lots. So, I think that’s a really good example of what you’re talking about, right?

Ben: [00:11:50] They’re getting everything they wanted, right? They’ll still have parking there, but they’re just bringing property on the tax rolls and giving people a place to live.

Eve: [00:11:57] Exactly.

Ben: [00:11:57] That’s close to transportation and transit.

Eve: [00:11:59] Right? Right.

Ben: [00:12:00] It’s checking so many boxes instead of just one.

Eve: [00:12:03] When you uncover the value of a city’s assets, how can you leverage them? On a developer’s balance sheet obviously, their net worth is what banks look at and they want to make sure that they have enough money to support a project. If it fails, how does it work in government?

Ben: [00:12:19] Evidenced by the fact that we had $13 billion of latent real estate it doesn’t work, right? So, you know, every government has a story of where they’ve taken a public asset and done a public private partnership and activated that asset. So, there are exceptions to that. But these exceptions are few and far between. It’s, you know, one every several years. And when I saw that we had $13 billion of opportunities, it dwarfed the, you know, the one opportunity that we could think of three years ago where we did something. And look, we did do, we are doing interesting things and governments are doing these, but how do you systematize it and scale it that it’s not just something that happens when somebody knocks on your door, and then they’re persistent enough to wait out a government process that takes three years. These are the examples that are successful. How do we make this the norm of what we do not an exception? I’ll tell you, when I taught securities law, I would start my class with a kind of a dumb joke. I would say two economists are walking down the road and one economist says to the other “hey look, I think I see a $10 bill lying on the ground up ahead”. And the other economist says “you’re an idiot. There’s not $10 lying on the ground up ahead. If there was $10, somebody would already picked it up”.

Ben: [00:13:31] And so I think about this with the public assets, you know. I see $13 billion under the mattress of government. Is it a mirage? Is it really there? And what are we missing? Why is it there? And I think there has to be an explanation for why the market is failing in this. And I think the first explanation is government doesn’t even know it’s there. And when they do discover it, then the second explanation is the process to unlock that is so cumbersome. So, I’ll give you an example, a different government outside of my own that we were working with in this Putting Assets to Work. They have a salt pile, you know, governments when it snows, they need to de-ice their roads. And 75 years ago, they put this salt pile in an industrial corridor on an industrial rail line. Smart place to put it on a kind of a low value parcel of land. And then they go into autopilot. The salt pile has been there for 75 years. They use it. They know, you know, somebody knows that it’s there. We are looking at this and we say, do you realize your salt pile, that industrial rail line is not an industrial rail line today? Like many governments are doing with rails to trails. It’s a trail. It’s some of the highest value real estate in your city. And your salt is sitting on land that’s worth $10 million.

Ben: [00:14:44] If you would just pick up your salt and move it a couple of miles away, you’ve got $10 million in an area that has incredible affordable housing needs. So, government can decide, do you want to pocket $10 million by selling the land? Do you want to roll up your sleeves and become part of a public private partnership and create some affordable housing? All of those are options. And so that government is doing exactly that. But I think if so many other governments where once they’ve identified that opportunity, the next step would be to turn to the public works director and say, okay, can you do a public private partnership to create some affordable housing? And the public works director would say, are you kidding? Like, I’m overworked, underpaid, and I don’t know the first thing about doing a multifamily affordable housing development. And you want me to do that on top of my job? And so that starts the process of five years of it’s on a back burner but the public works director is trying to write an RFP. They have to maybe carve out money out of their budget to hire a consultant to help them write the RFP. And it just, the systems of government…

Eve: [00:15:48] Oh, I know I’ve been there. Most of my projects have been very small public private partnerships. So, I totally understand the pace of things in government.

Ben: [00:15:57] Yeah. And so most private developers, in your perspective, just say it’s not worth the effort. There’s a, it’s a great parcel but down the road there’s a parcel I can just buy in a few months and be done with it and be on my way with my project. I can’t spend three, five years trying to unlock this. And so, where the market’s failing, why there’s still that $10 bill on the ground is first, government doesn’t know that it’s there. Private market and the neighbors know that it’s there but the process for talking to government, to engage with them and to form a partnership with them is just so exhausting that nobody’s doing it. And so that’s a couple of things.

Eve: [00:16:31] It’s exhausting. And then I wonder what this partnership looks like. Because I’ll give you an example of a project I did that, hearing what you’re saying, I think the government would have, if they had approached it differently, they would have something of much greater value now in their pocket. I redeveloped a building that’s 30,000ft² and had been vacant for 15 years in a largely Black demographic. I responded to an RFP just like the one you talked about. Spent a lot of time putting my response together. Was apparently the only developer who responded. And eventually the city sold me the property for $1,000, and it was really a liability for $1,000. They also helped in a number of ways with loans and deferred interest payments and matching facade grants, the sort of things they normally have in their pocket. But now we’re like 20 years later and the building is fully occupied, bar Covid, which rocked the boat a little bit and worth a lot of money. And I often wonder if they had said, look, we’ll give you the land and we’ll give you these special grants, but we want to be a partner what they would have today.

Ben: [00:17:40] That’s right.

Eve: [00:17:40] You know, they would have a part of a project or building they basically gave away because that neighborhood has, a little unfortunately, gentrified. Just a few blocks away we have the Google headquarters and Facebook, and it’s very close to the universities. It’s very desirable. Right across the road there’s very expensive apartments that have been built. And I mean, no one could have foreseen that, but no one really. They didn’t have the belief in the property that I had, you know. So how do you change, how do you flip that switch?

Ben: [00:18:14] Well, we have some tools that we have developed that we are advising governments to try to unlock this, because if the tool is look to your public works director, look to your library director to figure this out that doesn’t work. But I think you’re right that also just selling it for, you know, long term lease for a dollar a year, selling it for $1,000, government’s leaving money on the table and the private market’s probably fine with that. But if you want government to not just do this once every five years, but maybe make it a part of what they’re doing every day and to accelerate the pace of these partnerships, there has to be a different approach. But government has some things going for it that the private market doesn’t have. First of all, we own these land, these parcels outright. We have been sitting on them for decades and there’s no expectation to generate revenue tomorrow. The private market has to look at a IRR. How much are you going to make per time, right? And government, I think government should look to say can we, are we using tax dollars or taxpayer assets well? But we can say we can go to a partnership and say we want you to pay a market value for this, but we don’t need that market value up front before you do the development.

Eve: [00:19:27] Yeah, it’s a patient wait.

Ben: [00:19:30] We can contribute it to…

Eve: [00:19:31] Patient capital.

Ben: [00:19:32] Patient capital. Yeah, we’ll contribute it. We understand that you’re going to have bank debt that’s going to be very sensitive to time. You may have other equity investors that are very time sensitive. So, we’re going to negotiate some benchmarks. And once the project has stabilized and you’re paying your debt and you’re paying your investors and negotiated rate that, you know, then we’ll be in the waterfall, but we can be towards the back of the waterfall. And so, government can say we’re willing to absorb that time risk that, you know, we’d like to get paid, but if it takes five years or seven years, we’re willing to be patient. It’s better than what we’re doing right now, which is spending money to let it sit, you know.

Eve: [00:20:10] Right.

[00:20:10] And so there’s some tools that government can bring to the table. So, to capture value but also…

Eve: [00:20:15] Sometimes in those instances I’m thinking about this building. The fact that I renovated the building, redeveloped it, meant that other developers came in because I just happened to like being in underserved neighborhoods. I like the challenge of those projects, and it’s where I prefer to work. I want to do something that’s meaningful. But other developers are waiting to see where something’s already been invested. And so, you know, maybe government’s thinking, well, we’ll give this one away, but we’re going to get other ones. As a result.

Ben: [00:20:45] They have the ability to do, to lead out, to maybe do some philanthropic investments with their land, because, you know, their baseline is zero. So, absolutely.

Eve: [00:20:56] Okay. So interesting. So how does the incubator work? The Putting Public Assets to Work incubator?

Ben: [00:21:04] Yeah. I was mayor. I was then elected to the United States Congress. I served only two years in Congress. I lost my re-election in 2020. So, I still had a passion for public service, a passion for finance, and came back to this idea that I’d been working on as mayor of public assets. And I just said, I know there are billions of dollars under the mattress of government. I know that if we can unlock it, the amount of good we can do in our communities, you know, that can, to your point, it can catalyze growth in an underserved neighborhood. It can form affordable housing. But maybe what you’re doing is just looking to maximize revenue into government to then support childcare or, you know, childcare vouchers or investing in homeless services or investing in clean and renewable energy. There are so many different things you can do with that asset once you unlock it. So, I said, this is where I want to spend my time, is figuring out how to help governments unlock the value of their underutilized assets. So, I teamed up with the Government Finance Officers Association, GFOA. They’re a membership association, you know, pretty much every city, county, school district, the CFO of those government entities is a member of GFOA. And so, we worked with GFOA. And I said, look, putting assets to work should be part of every government’s finance. Let’s start working with GFOA member governments and helping them and others but helping them to unlock the value of their real estate. So, we started Putting Assets to Work incubator.

Ben: [00:22:34] We’ve now worked with about 15 governments, mostly cities and counties across the country. All of them saw what I saw when I was mayor. They’re all sitting on billions of dollars under the mattress, and they have challenges to activate that. So, we help, we go in, we help them identify their assets. We help them see what it’s worth. You may have an asset that is in the far flung reaches of the county that you would say, put on a back burner for now, but we help them identify 10 to 15 assets that they should take action on immediately that are really that proverbial, the salt pile. So, and then we work with them to develop some policy tools to help scale it, to make it not a one every once every five years initiative, but to make it part of what they’re doing. So, the concept that we have there is we go in, and we serve as a, what we call a municipal property advisor. And we say, you know, once we’ve identified the asset, we would like to represent you in structuring a transaction. And we’re going to do this at no charge or very little charge to the government. You know, the private developers will pay a finder’s fee for this. So, our model is built on passing that fee onto the private developers. But if we can say, look, we can clear all of this government red tape, all of these hurdles to give you a parcel that is in a prime location in a great downtown area that has already…

Eve: [00:23:55] Hell yeah, I’m in!

Ben: [00:23:56] …cleared the boxes. Yeah. And then, you know, and here’s our fee, you know. But we pass that not onto government, but onto the private sector. So, all of a sudden, the library director, the public works director, we say we don’t need you to model a multifamily real estate development. Just tell us what you need. You need us to find another parcel for your salt? You need a library that’s 20,000ft², and you need so many parking stalls. Okay, we’ll take your inputs, and we’ll work up a model, and we’ll bring it back to you, government to sign off on. And if you sign off, we’ve got private developers who will, you know, also come in and pay for the architectural work and the design work to get these projects shovel ready. All of this government doesn’t need to pay for that. They just need to create a process where they can get out of their own way and still maintain what they want out of the land. And then and then let the private sector do what they’re going to do.

Eve: [00:24:48] So you said you’ve worked with 15 cities. Can you mention some of them?

Ben: [00:24:53] Yeah. I think some of the ones that have taken this work and are now doing amazing things. City of Atlanta. The mayor of Atlanta, mayor Dickens, said he wanted to build 20,000 affordable housing units. That’s a huge goal. But they identified all of these public assets that can come in and be part of the capital stack to start lowering the cost of development and consequently insisting that those developments have affordable housing. We worked the city of Cleveland. They’re trying to create jobs. And so, they know that they have, they’re actually losing population. So affordable housing is not at the top of their to do list. It’s clearing space. You know, they want to bring in employers and they said we need parcels that are 30 acres or larger. And they did the survey of the entire city of Cleveland and said that parcels that could work for that they had one in the city of Cleveland. So, they said, we’ve got to do some work to assemble parcels, remediate any environmental contamination, and make these available. So, Atlanta and Cleveland are two that we’ve worked with. Of course, you know, given my roots, we’ve worked with Salt Lake City and Salt Lake County. We are doing some work with the city of Annapolis, Maryland. Chattanooga, Tennessee.

Eve: [00:26:02] So pretty big cities.

Ben: [00:26:04] Yeah. Austin, Texas. And some small ones, too. And some small ones, you know, Sugarland, Texas is another one that’s doing some really innovative things.

Eve: [00:26:11] I don’t suppose my city, Pittsburgh is on the list, right?

Ben: [00:26:15] Not yet. We’d love to talk to them. Although they have done some interesting things thinking about their assets as well, you know.

Eve: [00:26:22] Our Urban Redevelopment Authority has always been at the forefront, I think. Yeah, they’ve worked a lot at clearing some very large vacant assets called steel mills. You know, they’re very good at that. And they were a fabulous partner in all my projects. So, yeah. So, do you have a waiting list? Do you have cohorts that you take through? I mean, how does it work?

Ben: [00:26:44] We do. So, we have cohorts. We are preparing to start with our third cohort. So, you know, we think the, the best size for a cohort is about 4 to 5 jurisdictions, and it takes us roughly 6 to 8 months really depending on the speed of government.

Eve: [00:27:00] Doesn’t work fast.

Ben: [00:27:02] Employees have a busy schedule. Yeah. So, and we understand that we work with their time. So, we do most of the workload ourselves. But we’ve got to get into their data and sort through their data. And we need some collaboration with them, or we need them to look over our work before we go public with it. We want them to give a trained eye to tell us what they like. So, it takes about 6 to 8 months to do a cohort. We’re launching a cohort over the next couple of months. We have, almost full, we actually have one spot left for a government to join with this cohort. You know, we do 4 to 5. So, we’ve got four, but we’re looking for that fifth one. And then we’re also soliciting interest for our fall cohort with putting assets to work.

Eve: [00:27:41] It’s fascinating.

Ben: [00:27:42] So yeah, if any governments are interested, we’d love to talk to them.

Eve: [00:27:45] You must get pushback, right? There must be plenty of places that say, why on earth would we do this? We’re stuck in our ways. We don’t want to change.

Ben: [00:27:55] Yeah. No, a little bit. I think you get some pushback from some of the staff that say, you know, if I’m that public works director and I say my budget’s $100 million a year, I don’t want to spend my time on, you know, this salt pile just. It’s fine. It works for me right now. What’s the reward for thinking innovatively? And so oftentimes, what we look for when we’re deciding who to admit into the cohort, we want to see a mayor, a council, some city managers who are willing to push it a little bit to say, no, this is important. We want to be better stewards of taxpayer assets. And so, we want to see some leadership from the jurisdiction. Sometimes we think it’s our job to have some uncomfortable conversations. One jurisdiction we worked with, we saw that they had an abundance of parks and open space that were poorly maintained. And they probably had like, I’m a as a mayor, I’m a big supporter of parks and trails and open space. But if they’re too many and underutilized by the public, we said, maybe, you know, you should think about, you know, a slight reduction in your parks and go for quality over quantity. And, you know, that’s always a hard conversation to have. And we think it’s our job to like to provoke that. So, we encourage them to look at their parks parcels. And do you really need a pocket park across the street from a pocket park or can we rethink how you’re using those assets? So, you know, there are some uncomfortable conversations that we think it’s our job to have.

Eve: [00:29:25] So, what’s been the biggest surprise for you in this work?

Ben: [00:29:28] Well, I think my biggest surprise was to find that what I discovered in Salt Lake County was not unique. It is every, 100% of the governments we’ve worked with. And many governments say, look, we don’t have any vacant assets. We’re on top of it, and we’ll go in, and we’ll find them everywhere. It’s, you know this this concept actually isn’t new. It’s done pretty regularly in Europe and Asia when they think about, you know, the city of Hong Kong built their entire mass transit system without tax dollars by simply saying, we know that when we put in a transit stop, the land around the transit stop is going.

Eve: [00:30:05] Increase in value.

Ben: [00:30:06] Increase exponentially in value. So, they just were thoughtful about how they built a transit system and paid for their transit system with the value that the transit system created. So, it happens in Europe and Asia. I think it just doesn’t happen in the US because our governments are so much more fractured. You have cities and counties and school districts and housing authorities and transit authorities. And, you know, we have a mosquito abatement district here that, you know, and to get all of these entities working together is hard. And so, I think we have to develop new tools that they don’t need in, you know, in a jurisdiction where there’s just the federal government and it’s very hierarchical and aligned. So, you know, it’s been a surprise that how many assets we have and how, and what incredible opportunities there are to unlock it.

Eve: [00:30:55] One other big question, how do you plan to scale this work? What are your plans?

Ben: [00:31:01] Yeah. Well, first of all, I would say we hope people copy us. My hope is that ten years from now, this is the norm of municipal government. Everybody has a municipal property advisor or 2 or 3 who are on tap with the government, who are making unsolicited proposals to government to say, hey, we’ve noticed you have this parcel, and we’d like to help you think about how to use it better. And that government is well versed in saying, okay, let’s have that conversation, you know, and here’s what we want. And if you can hit these objectives, then we’re game. So, I would love people to copy what we’re doing and to make this the norm of municipal government. Because if we do, so many communities are going to be benefited. We have the capital to solve our homelessness crisis, to solve our housing affordability crisis, to transition to clean and renewable energy. We have the assets to do that. It’s just a matter of figuring out how to activate those assets.

Eve: [00:31:53] It’s really fascinating. Ben, thank you so much for joining me. I can’t wait to see where this goes, and I hope my city is listening.

Ben: [00:32:03] We’d love to talk to them.

Eve: [00:32:04] Okay. Thank you so much.

Ben: [00:32:07] Thank you. Eve.

Eve: [00:32:20] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. Please support this podcast and all the great work my guests do by sharing it with others, posting about it on social media, or leaving a rating and a review. To catch all the latest from me, you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing, head on over to smallchange.co where I spend most of my time. A special thanks to David Allardice for his excellent editing of this podcast and original music. And a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Ben McAdams

$280M Loan.

This is a big one.

Related Beal just closed on a $280M loan for the new Seaport life sciences project, readying them for the next phase of the project, construction. 

You might wonder why we care?

One of the partners on the project, The Boston Real Estate Inclusion Fund, led by Kirk Sykes, has listed an offering on Small Change. They’ve already raised $1 million towards a $3.75 million goal for an equity stake in this project.  

22 Drydock is focused on Impact with a capital I. Slated to become Boston’s first LEED Platinum and zero net carbon life science building, the developer has also achieved 50% minority participation in all aspects of the project including construction, design and ongoing operations.  And ownership through the Small Change platform. 

We’re excited. Take a peek at the full article here.

Image courtesy of Related Beal