Rethink Real Estate. For Good.

Equity

I do a bunch of weird stuff.

Kevin Cavenaugh is a rare developer.  Left brain, right brain, head and heart all come to bear on his wildly creative buildings. He has carved out a special place for himself in the Portland real estate world. He has said, “I’m tired of mocha-colored, vinyl-windowed boring. I can’t change the fact that the streets are gray and the sky is gray. But the buildings?”

One recent project, Tree Farm, has 50 small trees in planters mounted on the outside of a six-story building, and his projects often have far out names like: Dr. Jim’s Still Really Nice, The Ocean, Burnside Rocket, Rig-a-Hut, Two-Thirds, and The Zipper. Two of his projects, Jolene’s First Cousin and Atomic Orchard Experiment, have units reserved for homeless people and social workers at reduced rates.

Trained as an architect, with a tour in the Peace Corps in Africa, Kevin was also a Loeb Fellow in 2007. After the Peace Corps, Kevin says, “I had my dog I brought back from Africa, and I bought a $300 little Chevy truck,” he says. “I grabbed a duffle bag, my skis, my golf clubs, and my dog—that’s everything I had—and I drove up I-5” to Portland. A newspaper ad got him a room in a shared house and a dishwashing job. Soon, he and his landlord/friend went in together to buy a house on NE Alberta Street for $16,000 financed on a credit card.

Kevin said in one interview that he creates projects that attract attention so the people will say “I want to live in that city.”

Insights and Inspirations

  • “I’m driving the van” says Kevin. He doesn’t like to develop by committee. If you are on board, you’re in a back seat.
  • You can download Kevin’s pro-formas, open-source, from his website. Check out each building!
  • Kevin’s goal as a developer is to make a building that makes you happy to be there.
  • He calls the monotonous buildings we are used to seeing, “pro-formas with windows”. He likes to use his right and left brain together to develop a building – iterations between design and the numbers. Both have to work.
  • He’s been called ‘dangerously optimistic.’
  • These days, more than right and left brain, he’s focusing on ‘head and heart,’ trying to weave “the good” into his projects.
  • Of himself, he says “I’m not the smartest person in the room, but I’m the biggest risk taker.”
  • Kevin loves his buildings. They are like his progeny. He never wants to sell them.
Read the podcast transcript here

Eve Picker: [00:00:15] 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. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:11] It’s busy, and my best intentions to get you a brand new podcast this week evaporated. But this is almost better. Here’s an interview I conducted with Kevin Cavenaugh last year. Kevin Cavenaugh may very well be my favorite developer. He has carved out a special place for himself in the Portland real estate world. His buildings are memorable escapes from the mocha-colored vinyl-covered buildings he so disdains. Forgotten buildings in forgotten neighborhoods, buildings that you and I would not look twice at, are transformed into little creative hubs and bright spots in Kevin’s hands. And now he’s bringing heart into his practice as well, setting himself the challenge of incorporating homeless housing or anti-gentrification into his projects. All with no subsidy and all providing a return to his investors. You’re going to learn a lot from Kevin so listen in.

Eve: [00:02:12] If you’d like to join me in my quest to rethink real estate, please share this podcast or go to RethinkRealEstateForGood.co, and subscribe to be the first to hear what we’re cooking up next.

Eve: [00:02:34] Hello, Kevin, I’m just really thrilled to have you on my show.

Kevin Cavenaugh: [00:02:38] Howdy, Eve. Thanks for having me.

Eve: [00:02:41] You are one bad ass developer. I’m really not sure where to start with this interview. I’ve seen so many tantalizing quotes by you, so I figured I’d start with those. Is that Okay?

Kevin: [00:02:54] Okay. Yeah, of course.

Eve: [00:02:56] The one I probably love the most is, “I do a bunch of weird stuff.” So what is it you do?

Kevin: [00:03:03] Oh. Boy, that’s a big essay question. So I guess for your audience, I’m educated as an architect and I became a developer only because I knew nobody would hire me to do that weird stuff. Well, and when I was working for an architecture firm, I was doing really boring stuff. And I realized early on that I was being hired at phase one as the architect, and the interesting thing is phase zero. Like I wasn’t deciding what the ‘it’ was supposed to be, what the program is. Here’s a piece of land, who gets to decide whether it’s going to be an apartment building or retail or mixed use. I wanted to decide that. That’s why I became a developer. Once that I realized that the developers weren’t necessarily smarter than me. They just control the money. And once I realized that it wasn’t their money, they just grabbed the important seat at the table. They asked around. I took some of the developers to coffee. I’m like, hey, is there any reason I can’t grab that seat myself? And they all said, no, you know, go for it. So that allows me to build my weird stuff. So I design and then develop and own and manage projects that I always wished somebody would hire me to do. If that makes sense.

Eve: [00:04:18] Yeah, it does. So there’s another quote which probably comes right off that. “I’m tired of mocha colored vinyl window boring. I can’t change the fact that the streets are gray and the sky is gray, but the buildings?” So is this your mission statement? How does this play out in your world?

Kevin: [00:04:37] Well, I’ve got like a dozen mission statements. It’s an ever evolving mission statement. But Portland, Oregon, the skies are gray and the city’s gray and it’s that’s great. I can’t change that. But I rail against institutional money. I never, I run away from institutional money. I run away from national franchise tenants. I want to be quirky and local. And actually, I want to prove that being quirky and local and colorful and not doing copy and paste buildings is just as profitable, if not more profitable than the mocha colored vinyl windows buildings. I don’t put vinyl in anything. As a trained architect, the design comes first.

Eve: [00:05:18] Vinyl is pretty offensive.

Kevin: [00:05:20] It’s so bad, it’s so bad. And it’s cheap and it makes sense in a pro forma if I’m going to sell the building. But because I don’t sell anything, I can do deeper dives on what I put in the building. I can paint The Fair-haired Dumbbell. That paint job on that building…

Eve: [00:05:36] Is insane.

Kevin: [00:05:36] Cost a half a million dollars. It’s the most expensive paint in the world. And I’m never going to sell the building, so I can make different decisions and I can add to the city skyline in a way that institutional money would never consider.

Eve: [00:05:51] Yes, and that is impactful, isn’t it?

Kevin: [00:05:54] I think so. I hope so.

Eve: [00:05:55] So there’s a final quote I’m going to read to you.  “I just realized that I don’t have to play by the rules. It’s that simple.” How does that play out?

Kevin: [00:06:06] Real estate development is so easy and straightforward and simple. It’s almost, I’m never the brightest person in the room. The only thing I am is the person with the largest risk appetite, in the room. So once I took Francesca Gambetti to coffee and she was a client of ours when I was in the, at the architecture firm and I said, hey, how do you, what is a pro forma, how do you do what you do. And she laughs. She’s like, you’re already doing it, Kevin. You just bought a house in my neighborhood and I saw that you’re fixing it up and you’re selling. That’s development. That’s real estate development. You just have to shift the decimal point over. And instead of doing your house, do a little mixed use building. Or it could be an adaptive reuse. It could be new construction, but A plus B equals C, um, you know, hard cost plus soft cost plus land cost, you know, that’s that’s your total all in cost. And as long as when you’re done, throw a cap rate on it, it’s worth more than what it costs. You’re a successful real estate developer. So then my first question is like, that’s great, Francesca, what the hell’s a cap rate? So like, I was starting at zero. And after twenty minutes, I knew I knew everything. And then she emailed me her pro forma, which is the pro forma that I still use today, and all of my pro forma are up on my website open source. So people are downloading my pro forma from my products every day because if she gave it to me, I can pay it forward. It’s not complicated. It’s simple. And when people try to make it complicated, they mystify it in a way that keeps the layperson out of real estate development.

Eve: [00:07:40] Absolutely.

Kevin: [00:07:41] Which makes American cities dumber and uglier and more mocha colored.

Eve: [00:07:45] And doesn’t spread the wealth around. That’s what I deal with every day in crowdfunding. The fact that people don’t understand the special language that’s been developed for the developing incrowd, that just doesn’t have to be that complicated.

Kevin: [00:07:56] It’s not necessary.

Eve: [00:07:57] Yeah.

Kevin: [00:07:58] It’s so dumb. It’s just it’s you buying the neighbor house across the street that’s dilapidated and fixing it up and selling it. That’s real estate development. What you and I do, Eve, is no different. It just takes a little longer and it’s C for commercial instead of R for residential. But…

Eve: [00:08:14] That’s right, right.

Kevin: [00:08:15] Everything else is the same.

Eve: [00:08:16] Yeah. I can’t wait to download one of the pro formas. I’ll probably use it.

Kevin: [00:08:21] You’re welcome to it.

Eve: [00:08:22] There’s nothing worse than getting a pro forma that’s like 20 pages, 20 tabs, an Excel spreadsheet and you’ve got to work your way for every number, trying to figure out where it came from.  That’s just too complicated for me.

Kevin: [00:08:32] Not necessarily. Mine’s one page. And the funny thing is, I go to a bank, with that pro forma that that you’re about to download, and it’s one page and I show it to a bank and I can get a 10 million dollar loan. So complex isn’t required. Banks aren’t demanding it. It’s just part of that language that we feel we have to create to keep the outsider out, which is just not helpful.

Eve: [00:08:56] Not at all. So going back to your quote about the mocha colored vinyl window boring, many of your projects have really both striking facades and pretty far out names like Atomic Orchard Experiment, Burnside Rocket, or Dr. Jim’s Still Really Nice, which I admit is my very favorite building.

Kevin: [00:09:18] That’s where I live. That’s that’s what I’m talking to you from, right now.

Eve: [00:09:20] Oh, that’s a beautiful building.

Kevin: [00:09:21] There are stories behind all the names. I don’t know that I want to tell you the stories, though.

Eve: [00:09:24] Oh, well, what are you trying to accomplish with your buildings? Let’s talk about that.

Kevin: [00:09:30] They are all experiments. They’re all just things that I want to do and I’m curious about professionally and sadly probably like you, it all is interesting. It all like when someone brings an opportunity to me, I look at it. I have such a hard time saying, no, I’m an actual addict. Like I, I can see fun in almost any project. And I go to my coworkers, like should we do this and they’re just as bad as me. They’ve never said no, no boss, don’t buy that property, don’t do that building. We are all in all the time. The names are funny. It’s just that if I told you that the names are so deeply personal to me and I found in the past that when I explain to somebody what a name means, they’re almost disappointed because the story that’s in their head or what they’ve kind of thought of is much more compelling than what I just told them.

Eve: [00:10:21] I have no preconceptions about who Dr. Jim is.

Kevin: [00:10:25] Dr. Jim Saunders is an eye doctor.

Eve: [00:10:28] Oh.

Kevin: [00:10:29] And he sold me a warehouse over on Southeast Ankeny Street. And I got really creative financing and I borrowed hard money for hit the down payment. He carried a contract so I bought his building without any money of mine. And as soon as I closed on it, a hard money guy reached out to Dr. Jim Saunders and said, hey, Cavenaugh has no skin in the game. I want to replace him. I want, the buildings worth more than you sold it for. I’ll pay you more.

Eve: [00:10:55] Oh. Eww.

Kevin: [00:10:56] A just as little end around. And I had bounced a check, my first payment to Dr. Jim bounced. So like, I was in a really vulnerable place. And Dr. Jim called me up and he’s like, Hey Kevin, like what are you doing. Like I like you. You’ve been, we’ve been talking for a year. We’re like, you put this together and like I believe in your vision. Don’t like, I don’t want to get calls like this. So he could have made more money. And he said he had other offers for more than than what I was paying him as well. And he kept honoring his handshake to me.

Eve: [00:11:30] He is really nice.

Kevin: [00:11:33] Yeah, he’s really nice. So ,that building, that project was called Dr. Jim’s Really Nice. Now, in the recession, I had to sell that warehouse because the bank put a gun to my head and I lost everything in the recession.

Eve: [00:11:46] Awww.

Kevin: [00:11:46] But lo and behold, eight years later, I bought another warehouse, a hundred year old warehouse, one more neighborhood over. The exact same program, that exact same phase zero that I talked about, I was doing. And when thinking of a name, I just I wanted to still honor Jim Saunders. So I named it Dr. Jim’s Still Really Nice. That’s the LLC of the building and it’s a single asset, LLC. Dr. Jim doesn’t know this building is named after him. I haven’t I haven’t talked to him in a while, probably should mention to him that I’ve given him props.

Eve: [00:12:20] Well, I think that’s a great story behind the name. So what are you trying to like, they’re all experiments, but I know I’ve been to some of these and I love your buildings.

Kevin: [00:12:32] Thank you.

Eve: [00:12:32] And I can see that they are, you know, experiments with a clear purpose. There’s got to be more than just I’m going to experiment with this building.

Kevin: [00:12:41] Yeah. Yeah. So there’s a couple different layers to that. When I first started, it was about left brain, right brain. Even before that, I think most buildings have too many cooks in the kitchen. I think buildings that we’re all drawn to and we all see have one dominant voice, one dominant vision who is in charge. And and it’s not a committee of designers or a community.

Eve: [00:13:07] Not a democracy, right.

Kevin: [00:13:08] It not a democracy. No. And I say that to my investors and I say that to other folks. I don’t collaborate. I don’t have any interest in collaborating. If you want to if you want to hop into my 15 passenger van, that’s great. Just you got to sit in the back. I’m going to I’m driving this van. I’m not sharing the steering wheel with anybody. And you end up getting these hopefully iconic, singular, visionary buildings that I don’t need to explain them to you. You as the observer or participant or tenant. You just get it. And you don’t know how I got there. You don’t care. You’re just really happy to be in the building. That’s the goal.

Eve: [00:13:41] Right.

Kevin: [00:13:41] When I started, the first layer was left brain, right brain. So a product always starts with the design. And then I instantly toggle over and do a pro forma. And if the numbers don’t work, then I crumple up the paper and start with a new design. So it has to be design first and then the numbers. But the numbers can’t be ignored because there’s a lot of architects who become developers and just done one project and it’s an ode to their ego and then they can’t do it again because all of their money is sunk in the building. It’s not really a successful financial deal in the bank. The bank says next time, like, nah, I’m not that interested in giving you the million dollars because that wasn’t very pretty the first time. So the numbers have to work. But the vast majority of our peers, Eve, it’s only the numbers. So I view those mocha colored vinyl windowed buildings. I call them either Greavy buildings or I call them pro formas with windows. And I look at them. I think I know exactly what the numbers look like in that, because it’s just a pro forma that the developer is only tasking the architect to do the bare minimum to reach this ROI, to reach this return, to reach to reach this number.

Eve: [00:14:53] Right.

Kevin: [00:14:54] And the funny thing is. None of our buildings are maxed out. So if a developer says, hey, I know I can put 100 apartments on this site, so they hire the architect and the architect has no option of building designing 90 units. When a 90 unit building might be significantly better to the city skyline, to the  streetscape.

Eve: [00:15:12] Right.

Kevin: [00:15:12] There are no dog units with their 90 units, but if there’s 100, there’s going to be some dog units. But the developer doesn’t care. He or she just wants the 100 units. So toggling back and forth between my left and right brain is all about making sure the design is always front and center and it just has to make enough money. And then I pull the trigger, then I go for it. The tricky thing is that the last layer to that equation, what makes a building compelling or not, is about social repair. So now it’s more about head and heart instead of just staying left brain, right brain all on my head. Now I look around the city and I see homelessness or I’m doing a project that supports social workers. I’m doing a project that supports 18 year olds aging out of foster care, which have a higher proclivity to become homeless. I tried to do a reverse gentrification project, which isn’t actually a thing, but in the office we call it gentlefication. So how do I how do I develop in a neighborhood that’s turning without displacing anyone who’s already there? So these are the more social repair elements that I’m trying to lean into, which is super fun, but hard.

Eve: [00:16:22] Very difficult. Yeah. Oh, that’s really interesting. So these projects I mean, I’ve seen you do some pretty remarkable projects, which includes homeless housing and in neighborhoods that no one else have looked at really before. Are they making you money? Are they making your investors money?

Kevin: [00:16:42] They are. Jolene’s First Cousin is my first attempt to tackle homelessness, and it’s up and running. It opened last summer and we cut Q4 distribution checks last month.

Eve: [00:16:59] That’s amazing.

Kevin: [00:16:59] And it made five percent from the crowdfunded equity. It made, I think seven percent for the long term tranche of investors. I raised three hundred grand of crowdfunding and three hundred grand of accredited investors. And there’s not one dollar of public money in that project. And I’m super proud of that.

Eve: [00:17:18] Amazing. That’s amazing.

Kevin: [00:17:20] It’s fun.

Eve: [00:17:21] Congratulations.

Kevin: [00:17:22] Thanks. And the performance online, go ahead and take it. And I’m I’m breaking ground on Jolene’s Second Cousin and I’m buying the land for Jolene’s Third Cousin. So I’m just going to pepper, these nestle into neighborhoods. I don’t like Pruitt-Igoe or Cabrini-Green. I don’t like when thousands of poor folk are crammed into a building. That’s a great way to not break the cycle of poverty from generation to generation. So each Jolene’s Cousin only has like a roughly a 12 bed SRO plugged into it, like a 12 bedroom apartment, like a flophouse, and the tenants pay rent. It’s just that it’s super, super, super cheap rent. And there’s usually a subsidy for that rent. That’s not my, I’m not involved in that. I just provide the …

Eve: [00:18:11] What’s the what’s the rest of the building. How do you make that pro forma work?

Kevin: [00:18:17] It’s internally subsidized. So, Jolene’s First Cousin has three retail spaces. It has a hair salon, a coffee shop and a bakery. It has two market rate apartments that are very expensive and it has the SRO, the homeless housing unit. So when all six rents are added together, it’s enough to spin off a profit. And the other fun thing is, it’s allowed by a right. So I didn’t have to do any special entitlements to get it. In Portland, you have to go and present to the neighborhood association on any project. Because it’s a law by  right, you don’t have to do what they ask, but you just have to be a good neighbor and be transparent. This is the first neighborhood association I thought I was going to go in front of where I was going to get rotten tomatoes thrown at me. Because here I am, I’m bringing homeless in. I mean, there’s a single family house right next door and I presented it and I kind of stood back and waited and there were no questions and there were no tomatoes. And then I asked a question, how do you guys, what’s your take on this? Like, how do you feel about bringing homeless into your neighborhood? And then a woman in front said, well, once they lived there, they’re not homeless anymore.

Eve: [00:19:23] And they’re probably already in the neighborhood, so giving them a home…

Kevin: [00:19:27] Exactly. And then another neighbor said, with 11 bedrooms, like, we’re going to know their names. It’s going to be like Suzy and Jim and Frank. And if it was 100 units, we probably would be pushing back Kevin. But there’s 11. So they were in total support. And they’re it’s been wonderful.

Eve: [00:19:45] That is wonderful. And, you know, I think it’s vastly different than it might have been five years ago. I think homelessness and affordable housing is now on everyone’s mind. And it’s a real shift. But, you know, what about the two market rate units? How do they feel about the SRO unit right next to them?

Kevin: [00:20:02] That’s a great question, because there was so much speculation in the papers, on blogs, like like Cavenaugh’s an idiot. Like no one’s going to rent those. Nobody’s going to want to, like, be paying 1,800 bucks a month living like next to guys who used to be living in sleeping bags out in front on the sidewalk. And my response was like, well we’ll see, you know, like all of my products are all experiments. It’s a question. There’s only two units. My guess is there are two people who will love being part of this. And lo and behold, they rented out in about 20 minutes.

Eve: [00:20:40] Oh, that’s fantastic, Kevin.

Kevin: [00:20:41] There’s a huge backup. Yeah. Backup for people who want them when they become vacant again.

Eve: [00:20:46] Are you sure you won’t partner with anyone? Because I want to do a project with you.

Kevin: [00:20:52] Just take it…

Eve: [00:20:52] I would like to be in the passenger seat, not the back seat. 

Kevin: [00:20:56] You’re welcome to be in the passenger seat. I do. I do talk about that. I said it’s not a pretty ride. It’s usually scary, but I always arrives safely at the destination.

Eve: [00:21:08] Oh, it really sounds wonderful, sounds wonderful. Okay.

Kevin: [00:21:10] But you know exactly how to do this, Eve. You should just take my plans and my pro forma and build it in Pittsburgh.

Eve: [00:21:18] Yeah, I should. I’ve been thinking about it for a long time, actually. I have one in mind, but it’s a lot of fun what you’re doing and really impactful. So, you did mention crowdfunding. So, you know, I first became aware of your work when I started to build Small Change, my crowdfunding platform. And you had launched a Regulation A offering, which, if I’m remembering properly, may have been the first of its kind for one of your buildings in Portland.

Kevin: [00:21:42] Yes.

Eve: [00:21:42] The Fair-Haired Dumbbell. And what was that about? Why did you do that?

Kevin: [00:21:47] Good question. I don’t, I didn’t realize it was the first until we were done and then my lawyer, I chose this lawyer who was recommended to me because he was an expert in crowdfunding, all the hoops that he had to jump through. And when we were done, it took me a year and a half to to get through the SEC regulatory framework. He, on the phone is like, oh, my God, congratulations. We’re so excited. This is our first one. Wait, what? Like you’re the expert? What do you mean? Like this is your first one. He’s like, no, this is everybody’s first one. So,

Eve: [00:22:20] Wow.

Kevin: [00:22:21] It was a big deal. It was the the first new construction. I think there was one prior to me, construction that the Fundrise brothers put together.

Eve: [00:22:29] Yes. I remember seeing a photograph of the paperwork they had to submit, which was about three feet high.

Kevin: [00:22:38] Yeah. Yeah.

Eve: [00:22:39] And just, um, just for listeners who are not aware, Regulation A is an offering that lets anyone over the age of 18 invest. It requires really writing almost like a mini IPO and submitting it to the SEC and getting their approval before you can launch and raise money. Right?

Kevin: [00:22:54] Exactly right. Yeah. And it’s it’s a lot it’s a it’s a heavy lift.

Eve: [00:22:59] It’s really not worth it for, you know, anything much under five or ten million dollar raise. It’s too much work. Right?

Kevin: [00:23:05] I raised one and a half million dollars.

Eve: [00:23:07] Oh!

Kevin: [00:23:08] I don’t know that I would do it again for that amount, but I want to do it again because the idea of it is so profound to me and I know to you too, Eve. So, I’m legally not allowed to talk to my mailman or my kid’s teacher about a very lucrative development deal that I’m working on. They’re not accredited investors. They’re not already wealthy.

Eve: [00:23:33] Right.

Kevin: [00:23:34] And part of the social repair that I’m working on is the wealth gap in America. It’s broken, it’s distorted. It’s not sustainable in the long term. It’s not sustainable today. So when I decided to dip my toe into the crowd investing pool, it was purely to allow mechanics and school teachers and librarians to own a 17, 18, 20 percent, 10 year IRR building with me. Right. Internal rate of return, a really lucrative investment. Like my wife has a 401k and she puts her money in a mutual fund. And that’s all she, the options to her are different than the options to somebody who’s on the 17th fairway of a country club golf course talking to his buddy about deals.

Eve: [00:24:21] And many people don’t have a 401K at all. They’ve just got the bank with less than zero percent interest.

Kevin: [00:24:29] Exactly. So it was important to me, just ethically and profoundly to do this, even though it was, it would have been so much easier to just tap some rich guy’s shoulder and say, hey, I need 1.5 million, that’s the gap to get this product off the ground. Instead, I took a year and a half and people for as little as 3,000 dollars now own the Dumbbell with me. And they’ve been getting paid from day one, eight percent.

Eve: [00:24:50] That’s fantastic. So, yes, since then, regulation crowdfunding has come into play, which is, would be much easier for you. But I have yet to convince you, yet.

Kevin: [00:25:00] Well, I’ve done two other crowdfunding vehicles on the homeless housing project. I did raise 300,000 dollars that way…

Eve: [00:25:08] Through a state vehicle, right?

Kevin: [00:25:10] Yeah. State only. And that was unaccredited. And then on my Tree Farm Building. I like that one for your listeners…

Eve: [00:25:18] What is a Tree Farm Building?

Kevin: [00:25:21] You got to go my website and see it, but it’s like it’s self-explanatory.

Eve: [00:25:27] Okay.

Kevin: [00:25:29] But I raised two million dollars that way, but they’re more accredited and I don’t want to holler from the rooftops about that. But it is legally, it’s another form of crowdfunding.

Eve: [00:25:39] Well, we just had a breakthrough on our site. We raised almost 900,000 dollars through Reg CF.

Kevin: [00:25:45] Wow.

Eve: [00:25:46] For a project in the Berkshires. And the issuer was the most pleased when the local librarian made an investment.

Kevin: [00:25:53] Yeah.

Eve: [00:25:54] He was just delighted. And I mean, that’s really the point, right? That’s why I do it.

Kevin: [00:25:00] It democratizes real estate investing.

Eve: [00:26:02] Yeah.

Kevin: [00:26:05] I understand why there are fences up that keep the shitty developers from bilking Mrs. McGillicuddy from her retirement. Like there should be there should be rules and laws against that from happening. So so lowering the bar for me to talk to Mrs. McGillicuddy can be scary, but it’s still a pretty damn high bar. I just like that I can jump through some hoops and you can jump through some hoops and Mrs. McGillicuddy can invest in a building.

Eve: [00:26:32] Well, you can actually, under Reg CF talk to her, but you can’t tell her the terms of the offering. That’s got to be on a registered funding platform. But you can say to her, we’re doing a project and it’s around the corner from you and you can invest. If you go to this funding portal, right?

Kevin: [00:26:49] Yeah, yeah, I love it.

Eve: [00:26:51] Yes, I love it, too. Okay, so so you’ve gone from getting your architecture degree, to joining the Peace Corps, to far out real estate developer. And told us a little bit about how you did that. And what’s the biggest challenge you’ve had?

Kevin: [00:27:11] Mmm, well I lost everything in the 2008-10 recession. That was difficult, but, it I mean, on paper, that should be the most challenging. I lost everything. On a Thursday, I had a net worth of four million dollars. And then a month later on this day, on a Thursday, I was a million dollars underwater. And that should be bad. That should be difficult. My buddy claims that I have HSP, which stands for hyper serotonin production, which isn’t a thing, but I didn’t even know at the time that I was getting punched in the face by the economy. Every day I would wake up like, Okay, I guess this is the puzzle and I like puzzles and I know you like puzzles and just everything.

Eve: [00:28:03] Yes.

Kevin: [00:28:03] All of our products are puzzles and it’s just another puzzle. And I got to figure this one out. So I should have probably been more devastated by it, but I was too dumb to know that I was, you know, in a hole.

Eve: [00:28:13] Oh, I don’t know that that’s forward looking, right?

Kevin: [00:28:18] Yeah, I think that my internal wiring is probably such that I, like my wife calls me dangerously optimistic. So there are probably things where I should have been more concerned or realized that I was on the ground, but I just didn’t even realize it.

Eve: [00:28:34] Wow. So, you allowed to talk about your next project. What are you working on now?

Kevin: [00:28:39] Sure. This is a fun one, so I never want to sell anything.

Eve: [00:28:44] Why is that? Is it because you love your buildings too much?

Kevin: [00:28:49] Yeah, it’s like selling my progeny. Like, I spent so many, like I lie in bed for I go to sleep and I’m like building. I close my eyes. I’m building the building in my head and by the time it’s drawn, I’ve already built it 100 times in my head. It’s my baby. Like in the 2008 recession, now a lawyer owns the Burnside Rocket. And I did, it’s LEED Platinum. There’s a geothermal open loop heat pump under the under the building, although all the water is, you know, I have tapped into a 10,000 year old aquifer for all the potable water. It’s it’s a crazy fun experiment. And now some like, you know, kind of a knuckleheaded lawyer who doesn’t care about that, owns that. It’s just an asset. And he views it differently than I view it. So I don’t want to sell. Was it Monday, my most recent project? I’m buying a house on a big lot out in what’s called The Numbers of Portland. It’s a pretty trashy area. It’s no sidewalks, deeper poverty, houses without foundations, double wide trailers. It’s it’s it’s rough, but it’s also where all the young families are moving because they can buy there. Because the house prices have just gone through the roof here. So we all understand that in five, 10, 20 years, it’s going to be a place you want to be. It just not a place, now. You’re on the bleeding edge of gentrification. So, I’m actually going to buy this house for 265,000 dollars. And on Zillow is worth 100,000 more than that. It wasn’t on the market. Someone just called me up and I’m going to split the house off and probably give it to someone else to fix up and keep that. I don’t need the profit from that. Someone else can go get the profit, but all they want is the land and the rest of the land, the, a guy named Eli Spevak is a developer in town. And he does forward thinking policy. And Portland has some wonderful density promoting policy and Eli’s work to change all the zoning for every single family house you can now build fourplex on. You’re allowed by right to build a fourplex on it, in the entire, everywhere in the city. And this lot is such that I could build 12 houses if I wanted to. I don’t want to own rentals out in The Numbers. So what I’m going to do is I’ll fit seven. There will be seven two bedroom cottages, two story, two bedroom. Little front porches, you’ll walk down a path and they’ll spin off to the left and right. And these will cost 200,000 dollars each but be worth 300,000 dollars each. And I will sell them off for two hundred thousand dollars to first time homebuyers who qualify. You have to be poor, whether it’s a perfect partner with Habitat for Humanity or some agency to identify who the buyers are. But held against the deed of the house, if you buy this for 200 and that’s worth 300, that’s great, but has to always be owner occupied. And if and when you sell it, you have to sell it at two thirds of the appraised value. So it has to always be affordable. So if you sell it for, if it’s worth 600,000 grand in a decade…

Eve: [00:31:52] How are you going to track them?

Kevin: [00:31:55] Just put a covenant against the deed on everything.

Eve: [00:31:57] Wow, and are you going to break even on this?

Kevin: [00:32:01] I’ll probably make 10 grand per house, so I’ll make 60 grand and it’s not enough to, you know…  Yeah, I’ll break even. It’s it’s a deep experiment. The other projects, I’ve got 21 other projects and since I keep them ,they all spin off a little bit of money to me. But you know, it’s been a decade since the last recession and now I’ve got those 21 projects, 14 of them are spinning off money and I now make enough passably that I don’t need each project to work.

Eve: [00:32:39] Yeah, yeah.

Kevin: [00:32:39] If it breaking even is is a fine. Not everyone do I want to do that with, but…

Eve: [00:32:43] Interesting.

Kevin: [00:32:43] This feels fun. I’m also this week I’m putting an offer in on Jolene’s Third Cousin, so I’m keeping that going. So there’s, there’s no lack of fun stuff. I’m breaking ground on an apartment building where 20 percent of the lofts are being held aside at 60 percent of median family income for, I mentioned before, 18-year-old aging out of the foster care system in a really great neighborhood. Most see their options for living are way out in The Numbers, not near jobs, not in your transit, not near opportunities. So that’ll be fun.

Eve: [00:33:19] It all sounds fun. And I’m really jealous.

Kevin: [00:33:22] I just I’m just I virtue signal like nobody else, you know, that’s all I’m doing.

Eve: [00:33:28] So I’m going to ask you one wrap up question and that’s what’s your big, hairy, audacious goal?

Eve: [00:33:35] Oh, that’s a that’s a great question, because I just spent the month of January vacationing and usually the big, hairy, audacious goals happen when you’re not in your 9:00 to 5:00. You have to step outside of your life to to have them kind of allow your your brain to accept them. So, my youngest of three is a junior in high school, and in a year and a half, I’ll be an empty nester. And I have been courted by lots of other cities. Cincinnati, Honolulu, Denver. And I’ve always said no because I can’t do what I do it unless I am embedded in that city. I do a lot of micro restaurants. I find that food is a great inroad into a neighborhood. It’s a great, micro restaurants are like a a variation of the food cart. I understand the business model. I need to live in Pittsburgh to know who the sous chefs are, looking for a space that can afford 25 or 30 grand if they call their uncle and their neighbor and they can cobble together some money and open up a restaurant. I’ll never know that person without living in Pittsburgh.

Eve: [00:34:43] Mm hmm.

Kevin: [00:34:44] So in a year and a half, I know that I’m start taking the show on the road. And to kind of continue the the virtue signaling theme. I am a fifty three year old white man. And the vast, you know, this Eve, good God, the vast majority of developers look like me. Maybe 10 years older, maybe 50 pounds fatter, and it’s just it’s a caricature.

Eve: [00:35:10] Mm hmm.

Kevin: [00:35:10] But it’s true. And there’s no license you need to be a developer. There’s no special credentials or, you just need to have knowledge and you need to be invited into the room. You need to have access to the 17th fairway, the country club, and that’s a broken system. So, as I go into cities like Honolulu or Tucson, I’m thinking of Detroit as well. And I create branches of Guerrilla, and I go and I drop myself in for three months at a time. I want everyone that I hire to eventually run the show. To be native Hawaiian or Latino or African-American, and when I leave, I’m gonna drop the keys off to the company, to the next generation, a developer that looks nothing like me because that doesn’t happen to them. When I lost it all, it took me about a minute with my 505 credit score to get a loan for a million dollars for my next project.

Eve: [00:36:09] Mm hmm.

Kevin: [00:36:09] That’s not OK. There are people who are much more deserving and I didn’t question it at the time. I was just so happy that I can merge back into traffic and start developing again. Now, we all realize that there are people at that same bank getting rejections that were much more deserving of the money. They just didn’t look like, I look like I’m good at tennis and golf. I look like, I have the gift of gab. That helped me get that million dollars and my face more than anything else. I had a 505 credit score. That’s offensive. That’s really, really bad. And only now am I realizing that other people need to just be handed opportunities and they need to have hutzpah and they need to have tenacity, the way that I know you have, Eve. I mean, it’s more about personalities than skill. I can teach you skill. I can teach you how to do certain tasks, like just the way that Francesca Gambetti taught me.

Eve: [00:37:04] It’s about sticktoitness, too, isn’t it?

Kevin: [00:37:07] Oh, my God, yes. If you don’t have a risk appetite and when I’m interviewing the next generation in Detroit, I want to know all about you as a person. I don’t care about whether you know Excel. I don’t care about where you went to school. I need to know what happens when you get punched in the face.

Eve: [00:37:21] Yeah.

Kevin: [00:37:23] And I can’t wait ten years from now, to walk away from these branch companies and hand the keys off to the next generation and change the face of what development looks like.

Eve: [00:37:32] That’s an amazing goal. And I really appreciate you taking the time to talk with me. I’m totally in love with what you do, Kevin, thank you so much.

Kevin: [00:37:43] Thank you. It’s fun.

Eve: [00:37:56] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Guerrilla Development/Kevin Cavenaugh

Landing a home.

Alex Lofton is on a mission to make the home buying process more accessible and attainable for essential professionals, a group that typically cannot save the equity needed to buy a home. He co-founded Landed to help teachers, healthcare workers, government workers, and other members of the public sector (essential workers) become homeowners through a shared equity, shared appreciation down payment program. Essential professionals are crucial to the existence and vitality of the communities in which they work and Landed allows investors to support and uplift these individuals by contributing to their path towards homeownership.

Alex’s mother was a schoolteacher. His family could not afford to own a home until his grandmother died and left them one. This transfer of intergenerational wealth opened a lot of doors for Alex and his family, allowing them to start building their own wealth. But many people can’t go to “the bank of mom and dad” when they want to buy a home, says Alex. And this prohibits a substantial number of people from ever becoming homeowners, a group that continues to grow as housing prices continue to increase. This is the origin of Landed.

With over 1000 homes purchased and with significant backing, Landed expects to expand nationally and scale quickly, providing more families with the opportunity to fulfill their dream and build a future. Home ownership.

Alex worked as a member of Barack Obama’s field team mobilizing citizens and organizing volunteers throughout that campaign and then served as a regional director at Obama for America. He got his start in real estate at Forest City (now Brookfield properties) where he worked as an MBA summer associate.

Read the podcast transcript here

Eve Picker: [00:00:09] 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. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:01] Alex Lofton’s Mum was a schoolteacher. That’s who he was thinking of when he founded Landed. Alex is on a mission to help essential professionals build financial security and buy homes in the communities they serve. By essential professionals Alex means schoolteachers like his mom. Firefighters, police and health care professionals. All of those professionals that a city can’t function without, all of whom we take for granted, and many of whom can’t save enough for a down payment on a home. Landed has developed a shared equity down payment product for this target market. Their product might be as essential as the essential workers they serve. With a Series B raise in their back pocket Landed is growing rapidly to put home ownership in the hands of everyone. Please listen in to hear more. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do, share this podcast and go to rethinkrealestateforgood.co, where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies. Hi, Alex. I’m really excited to have you on the show today.

Alex Lofton: [00:02:33] Thanks for having me. Really appreciate you reaching out and connecting.

Eve: [00:02:38] So I reached out because I really want to know what Landed is. You have a company called Landed and I want to know what you do.

Alex: [00:02:47] Well, I’m happy to talk about Landed ad what we do. Landed is on a mission to help essential professionals, think your teacher, your nurse or firefighter buy homes and build financial security in the communities they serve. Recognizing that these folks uphold us every single day and we should do what we can to uphold them, and what we offer is a down payment program, a shared equity, shared appreciation down payment program that helps them get into a home and build wealth and feel rooted in the communities they serve.

Eve: [00:03:21] That’s a very particular need that you’re fulfilling. Can you take me on the journey? What made you decide this was a need worth pursuing?

Alex: [00:03:30] Totally. All roads lead to Landed there’s a lot of them. Some core things are very true about the world we live in. Number one cities and the communities we live in are becoming more and more expensive. And the options for people to be able to afford a roof over their head, especially be able to access homeownership, the pathways that are becoming fewer and fewer and the ways that most people are able to get to being a home buyer and being a homeowner are through having a bank of mom and dad, someone they can go to and help them give up capital to get in. If you don’t have that, you’re kind of screwed. And for me personally and my co-founder personally, we looked around and said, how are we going to be homebuyers someday? We don’t have that option. And so, part of this is very personal. When you look at your personal situation, then you start wondering, well, if we’re wondering now what about the folks who are working in our schools and for our cities, whatnot? What are they going to do if they don’t have a bank of mom and dad? So, some of that is the trends in the market that are that we’re all experiencing are housing being so tight. Another part for me is personal, my mom was a fourth-grade schoolteacher, my dad was a social worker. And I grew up, won the lottery on love and support, but money was always tight. And it wasn’t until Granny died and passed along her home until that’s when things changed for us financially. And so, we were lucky that was intergenerational wealth being transferred. First time that happened to my family. But most people don’t have that access to that, especially people who are kind of in the middle in roles are crucial to thriving community and thriving society, but, yet may not be able to have the fortune my parents had. So, trying to figure out ways to not have it be so granny has to die for everybody to be able to make the decision that they can build a life that they want for them and their families and their community.

Eve: [00:05:14] I can see a TV series coming like Granny has to die. That would be really awful. Okay. You said something really important here about people who are crucial to our society. Can you like just expand on that a little bit? You talked about schoolteachers, so you have a very particular market, right, or target market.

Alex: [00:05:37] Particularly, so the folks that we work with, our customers, are people who are employed by institutions in education, in health care, or in the public sector more broadly. One thing is we all have essential people in our lives, right? That’s not to say that these are the only essential people, but these roles teaching our kids, helping us when we’re sick, helping us in an emergency, and making sure that we have the transportation that we need, the roads, we have all these things that we don’t have, this basic infrastructure. It’s basic infrastructure. The plumbing that we take for granted every single day, then the outlook doesn’t look very great if you don’t have all those things, right. And at the same time, these are roles that while arguably should be paid more, I will be the first to say teachers should be paid more. They oftentimes have salaries that allow them to, say, afford rent to be able to live somewhere, but they may not have enough to do that and save for a down payment. This group is one that is thinking about something like home ownership. They’re oftentimes not at a point of thinking about do I even have a roof over my head? One of the questions like, okay, I have a roof over my head, but do I kind of have a pathway to owning that roof? And so, if that’s where your head is at, one of the core barriers to being able to move from being a renter to an owner is having a down payment, that’s the number one reason why people aren’t able to buy a home is having capital upfront. And there are many tools out there that have been built to be low down payment options for folks. But there are a lot of reasons why those are blockers. Number one, they can get really expensive on a month-to-month basis. You’re borrowing more money or you’re taking out private mortgage insurance or whatever. The month-to-month cost goes up and then all of a sudden you look at your monthly budget and you say, oh my gosh, I can’t afford, then, my car payment. I can’t afford, you know, the food that I’m trying to buy. So, no, I’m not going to be a homeowner. And so, if you can move people to having a larger down payment, then their month to month cost will go down. And so that’s the mechanics that we’re trying to work on.

Eve: [00:07:45] So this is a real equity down payment that you participate in.

Alex: [00:07:48] This is a truly, yeah, true equity is not debt. The idea is how do you get more equity in the transaction on the front end to help make sure homeownership feels on a month-to-month basis more like renting than owning from a dollars’ point of view. And then when you’re able to, as soon as you’re able to, you exit that partnership, that equity partnership, so you can be the full owner of your home. I’ll stop there. I’m happy to go into details now.

Eve: [00:08:13] That’s really interesting. The other thing that you didn’t say is these essential people, they’ve chosen professional lives and careers that, really, are not going to give them a lot of upward mobility. Being an educator or a health care professional or in the public sector, you kind of know what you’re going to be paid going in and it’s never really going to change very much.

Alex: [00:08:31] Well, you’re right. You’re right that either, you know, working in the public sector or the quasi-public sector, because a lot of America isn’t all public that provide these services. But you’re right, you have a little bit more of a predictability of what you’re going to make over time. There’s a challenge with that when you’re what you’re making over time isn’t rising at the cost of everything else. There’s also just the reality that the way that our home ownership system has been designed. You know, I think the romantic story is that you can save hard. Save a little money. Work hard, save a little money, buy that house. Which used to be the case many, many decades ago. But now the way it is, is you really need to have an infusion of cash to get started. And so that falls along the lines of families who’ve been able to build wealth over time in our country that oftentimes falls along race lines, too. And so, a lot of what we found is that this is a product that anybody can use, any essential professional can use. And the folks who oftentimes find it being the most game changing are those who haven’t come from families with wealth. And the difference between black families and white families in this country is something like 35, 40% swing between those families who are black and have been able to pass along intergenerational wealth and those who are white, and they will pass along intergenerational wealth. And this is a replacement for that. This can be someone who comes, this can be something that can come in and try to replace it. So, there’s a lot of layers here as to why, you know, it helps various individuals. But the main point is without some sort of pathway to having a sustained.

Eve: [00:10:03] Yeah. You know, I interviewed someone you probably should meet in Australia. An architect.

Alex: [00:10:07] Oh, interesting.

Eve: [00:10:08] Who’s building condominiums for exactly the same segment of society, because those essential workers are being pushed further and further out from the major cities. They’re just like in our major cities. And when you have a two-hour commute and you’re on a nightshift at a hospital, as a nurse, it’s just impossible, you know? So, he’s tackling it from a physical end.

Alex: [00:10:30] Well, we had the story of an employee at a school in the South Bay of San Francisco near San Jose that drove two and a half hours each way to work and multiple times just chose to sleep in his car during the week because it was a much better choice than trying to go home and come back, right? And he actually had a home two and a half hours away, but his lived experience was much closer to homelessness than it was being able to come home to the place where you can call your own that we all kind of dream of.

Eve: [00:11:04] Which is important at the end of a long day, right?

Alex: [00:11:06] Right.

Eve: [00:11:07] So who are your customers and where are they?

Alex: [00:11:10] Great question. So, our customers span a wide range. We have people who are first time homebuyers much closer to earlier in their career. We have people who are looking to retire and have never owned a home and wanting to do that or have owned a home and maybe even downsized at one point. But then because of the economic realities of their family, kids are moving back in. They need a bigger house and so be able to afford a bigger house because prices have gotten more expensive, they need support to get in. So, we have a wide range of folks, but typically 68% of our home buyers are first time home buyers. They are purchasing properties that are condos, town homes, single family homes, predominantly single family homes, but a whole variety of types of homes. We started our work in the most expensive metropolitan areas in the US, starting in California. So, a lot of our homebuyers in California, in and around San Francisco, L.A., as well as places like Seattle and Portland and Denver. And then as we have expanded the operation, we’ve gone further and further east, even further and further west, we’ll launch in Hawaii, but also on the East Coast, New York and D.C. and very recently are expanding our work to go much more national. But all of those cities are where primarily, where our homebuyers are purchasing. And they tend to be not only your teacher and your nurse, but also everything from a janitor or someone who works in food services, who is employed by that institution, to administrators. What those folks are purchasing is different because depending on their family situation, you know, oftentimes they’re dual income households, but not always. And some of our less expensive markets comparatively to San Francisco, you have more single folks purchasing homes. In the more expensive markets, they tend to need to be double income to be able to afford anything. But depending on where you are or what your financial situation is, will kind of dictate what level of support you choose to take out.

Eve: [00:13:12] So how many families have you helped so far?

Alex: [00:13:16] With our down payment program we’ve helped over 1000 folks purchase homes, which is very, very exciting. Big milestone and it’s just getting started. We’re right at that sweet spot.

Eve: [00:13:26] That’s even more exciting, right?

Alex: [00:13:28] Yeah, it’s showing that people want it and need it. And it’s been an awesome journey so far. But that’s why now we’re focusing on expanding our operation nationally. A partnership, so, the way that we are able to make this whole thing work and part of the innovation I like is, beyond the actual housing down payment support innovation, is our business model where you can actually think of Landed as two parts. One part is a operating company that is called Landed Inc that is a real estate brokerage. That also has a joint venture mortgage business associated with it. There’s a set of products and value that we’re trying to offer individual consumers, and every time we offer that value in the home it’s purchased, then we receive some revenue.

Eve: [00:14:13] Right. So, you get commissions like any other real estate brokers.

Alex: [00:14:15] Real estate agents or, yeah. So, the more transactions happen, the bigger the business becomes. So that’s the business side. And then on the other piece is our property business, propco, as the industry likes to call it, which is basically an investing business. So, investors who are excited to invest in residential real estate can put their money into this company and we can distribute that money in the form of the down payment support. And then when the home buyer decides to end their contract with Landed, they share back in some of the appreciation of the home back into that fund. And that’s where our investors are able to get their return. So, we are able to balance the interest of the partnership between people who want to invest, and people want to buy homes. And that’s kind of almost a separate entity or operation from us as a business growing. Our interest is just impact, scale. You know, the more folks that use it, the better. So…

Eve: [00:15:11] So who are your investors?

Alex: [00:15:14] Wow, what a great question. I spend a lot of time talking to all sorts of folks.

Eve: [00:15:18] I’m sure you do.

Alex: [00:15:20] We have venture capital investors who invest in the operating company.

Eve: [00:15:23] I heard. And congratulations.

Alex: [00:15:25] Thank you very much. And that helps us grow and scale. But then the investors in our propco is a pretty wide range of folks. It started off focused primarily impact investors, people who are interested in the opportunity to help retain and attract talent to these sectors in our expensive markets. The biggest one that people will know is Chan Zuckerberg Initiative, the philanthropic arm of Facebook founder, and they wanted to see this model take off. Their interest wasn’t to make money off of teachers. Their interest was, hey, is there a sustainable model here that, if proven, could actually take shared equity from being what it has been, which is a very localized tool? Since the seventies, some great programs out there have existed for a long time. Cities have done it like San Francisco. Universities like Stanford have done it for their employees for quite a while, but it’s never been scaled. So how do you actually do that?

Eve: [00:16:24] I was a recipient of a program like that when we moved to Pittsburgh, so.

Alex: [00:16:27] Oh, really?

Eve: [00:16:28] I think the Redevelopment Authority had down payment programs. I mean, there had been tons of them around.

Alex: [00:16:33] Lots of them around.

Eve: [00:16:35] They’re local, right?

Alex: [00:16:36] Yeah, they’re local. As a result, they tend to run out of money because there’s only a limited amount.

Eve: [00:16:41] And they also usually get their money, which, in a very targeted manner. So their money has restrictions on it.

Alex: [00:16:48] Lots more restrictions.

Eve: [00:16:49] Yeah. So that really impacts who can access that.

Alex: [00:16:53] That’s right. And then the reality is, given today’s markets in real estate, if you can’t transact in a quick manner, in a manner that leads the fewest number of hurdles to making the transaction happen, you’re going to your bid isn’t going to be chosen. Your bid is going to be the first one to go out the window. So, part of our goal is to fit into that, but back to the investors. So, there’s a combination of those who are interested on the impact side and then those who want to make money off of real estate for their investors. So, we have organizations that are investing pensioner money that say, hey, my job as a fiduciary is to grow the money, these retirees of other teacher retirees. And we’re going to invest their money into real estate. And this is one of the ways that we’re going to do it is through this shared appreciation program, we have a variety of interests that are investing in the down payment program with the idea that eventually this should sit alongside any proper investment strategy that can help diversify an institution that’s interested in investing in real estate. It could be alongside any other strategy like single family rental strategies that’s existed for a while, where people, institutions buy properties and rent them back out to folks. This is a different way of doing it. Way that I would say is a little more cooperative with the home buyer instead of maybe competing with the home buyer to buy the same property, you’re actually saying, hey, we’re going to help you get into the home, become a home buyer, and then at some point you exit the partnership, you become the full home buyer, and then we’ll share a part of the appreciation between that.

Eve: [00:18:23] So I have to ask a question that’s always on my mind because I’m all about democratizing investment. So, the investors, the propco investors, any everyday folks in that or is that all accredited investors?

Alex: [00:18:36] Yeah, great question. So far, no everyday folks. It’s all accredited investor.

Eve: [00:18:40] You and I have to talk about that.

Alex: [00:18:43] So part of the reason I got really excited, the original, one of the original concepts here is that can we build a market for this type of investment so that if I had an extra five K and I wasn’t an accredited investor, why not share 100 bucks? And I wasn’t an accredited investor, and I wanted to put some money into a fund that was distributing into residential real estate in a way that I felt good about it, helping other people become homebuyers. I’d love to do that. Still, something I hope we can help usher into the world. What I see is we’re just building towards that, building towards something like that. It’s all sequencing. You’ve got to start somewhere, prove it out, build, and it’ll come. And we’re kind of on that path but haven’t quite made it there yet.

Eve: [00:19:25] Because really, you know, then your impact is not just on the people you’re helping with. Yeah.

Alex: [00:19:30] Totally, totally. I mean, I will say to the extent you want to make the argument that because we have partnerships with institutions that are investing retirement money of teachers, you’re helping a similar group.

Eve: [00:19:42] You’re really getting triple bottom line there, I guess.

Alex: [00:19:44] So you’re able to go to both. But I think even being able to put the decision-making power into the consumer to be able to participate in this would be really cool. But again, there’s a lot of economic and regulatory reasons why you have to build towards that thing. You can’t always just jump straight there.

Eve: [00:20:00] I totally get that. Okay. It’s really pretty exciting. So, it’s a complicated model and so I want to know how you landed, no pun intended, on this model.

Alex: [00:20:13] I will say what they really love about our name, is it’s just surprising how many times the word landed comes up in language. Funny story. At the airport, Sea-Tac Airport, you land and it says landed on the board. I’m like, oh, wow. What great advertising right there.

Eve: [00:20:29] Exactly. Exactly.

Alex: [00:20:30] How do we land on this model? Complicated. I mean, that’s part of the thing here. What we’re trying to do is move a what is considered a relatively sophisticated economic model into the hands of more people in the hands of average, everyday people. My story here is I was sitting in intro to finance class at business school, not a place that people usually associate with being inspired. But I can say I was inspired in this class because we were talking about the concept of diversification. And what struck me is that I am an overly educated kid, but I come from a middle-class background, lower middle class background. No one was talking about concepts of diversification, spreading out your money in different places so that you can make sure it grew even if the economy went up and down in different ways. I didn’t have a concept of that. All I knew is that people were trying to get enough put together enough money to try to buy a home if they could even do that. And so the question was like, why? Why is there such a difference in the tools that are available between those who have money and those who don’t? What can we take, some of these tools that people usually are able to use when they have money, make them more accessible to folks so it met them where they were financially. Buying a home, going from a renter to being an owner is an example of where we still have a zero and a one. There’s not much of a gradient between those two things. And so, you go from being solely a consumer to jumping to in the Bay Area, trying to buy over $1,000,000 property. No financial council would ever tell you that’s a good idea to concentrate all your money that fast. So how could we be a part of starting towards building products that move people from a zero to a one in a more gradual manner in a way that stair steps them into ownership and allows them to properly fit their financial situation. But that does mean taking a relatively sophisticated financial tool and moving it into the hands of more folks. That’s also why we’ve cared a lot about doing this right, having a set of values, a company we felt good about that we could stick to finding what’s fair between our homebuyers and our investors, etc., and then doing a lot on making sure that we are taking the best lessons from the past where there were challenges or problems that people face as a result of new financial tools and make sure that those don’t pop up so that people don’t look up one day and be like, Oh, I thought it was a good idea, ended up really screwing me over. And so, a lot of this has been about how do you make sure people know what they’re getting into, educated around it, also encouraged to move on from a program like this when they can financially do it because they don’t want to share appreciation forever. So, all these types of things that we really take a lot of time to make sure this product is truly helpful for consumers because it’s also good for investors. You don’t want a product that blows up in a consumer’s face, it will blow up in the investor’s face. So really making sure that’s done properly has been a focus of ours.

Eve: [00:23:24] I appreciate that. My parents were refugees, so they were in the zero group for a long time and actually real estate was their pathway to the middle-class for sure. But you know, at a time when real estate wasn’t so expensive, I don’t know if that would be true even in Australia nowadays. So, um, so I have to ask is there anyone else working in this space that you know of?

Alex: [00:23:48] There are other people who offer products that are some version of, taking the equity in the home and either breaking it up, sharing it with others, whether it be shared appreciation models, equity takeout models, shared equity, other types of shared equity models. But no one’s really doing it in a way that’s targeted around a specific group of people. Thinking of this as a starting point for a specific group of people to really have a wider set of tools to help them become financially secure. Like I like to think about organizations like USAA and what they did for the military. When I think about the work that we’re doing, you know, they started with an insurance product for a very long time for military families, vets, and then they expanded the set of products that they have to do more, wrap around financial services for that specific group. And that’s more how I like to think about what we’re trying to do. Our down payment program is, is the anchor helping people with the biggest transaction of their life. And if we do that well, we can also introduce other products to them that help them build either before they’re a home buyer or help them build towards being a home buyer or after they’re a home buyer. And that’s different. That’s different that a lot of folks are thinking about it in who are thinking also about shared equity.

Eve: [00:25:00] Yeah, I think it sounds like you’re being successful because you’ve got a very clear niche that actually has a very big return.

Alex: [00:25:08] You know, I think about the down payment program. It’s I mean, I’m a nerd. Help think about this a lot as a product. Of course, I like our product, but I think it’s one thing to be oriented towards I’ve got this product and I have to shove it in everybody’s face. And it’s another one to say this product really enables people to do something in their life. How do we help people do more of that, and be a little less attached to the product and a little bit more attached to the consumer or the outcomes they want to have. And when you focus it in on a particular group of people with a particular role in society, then you can really tailor what you offer to them to the realities of their life. And that’s what we’re trying to do.

Eve: [00:25:47] Are there products you’re thinking about?

Alex: [00:25:49] Oh, yeah, I’m thinking about all sorts of products, everything. I mean, the reality is when you look at what is holding people back from building wealth, even becoming home buyers mean anything that help manage the process of home buying and then being a homeowner in a way that’s more streamlined and more cost efficient. I mean, there’s so many different pathways there. We’re still at a point where we want, we have a really great down payment product and we’re just getting started. We’re only serving a very small percentage of the people who could potentially serve. The opportunity is still huge to continue to focus on what we already do. But the more, you know, the more customers we have, the more we are hearing from them, about what would be most helpful. So, trying to take that information in and design towards more products.

Eve: [00:26:27] That was going to be my next question. What potential does this hold, this product?

Alex: [00:26:32] I think the shared equity or shared appreciation, I get really excited about it because I see it as a cooperative model between investment capital and individual consumers. And if we get it right, which includes having a supply of housing so that there are things to buy, right? I care a lot about that.

Eve: [00:26:54] That’s the really wrong thing at the moment, right?

Alex: [00:26:56] Yeah.

Eve: [00:26:56] Yeah. I don’t know whether we’re going to be able to fix it.

Alex: [00:26:58] Care a lot about that. We don’t build homes, right? We are helping people buy homes. We need homes to be built in the grand ecosystem of housing we’re big proponents of supply growth, but if we get this right, then there is a pathway for the investment part interest in residential real estate to actually be paired with the individual to help them on their path to growing wealth. And that’s just that’s a win-win on both sides. And that kind of helps to spread out risk, spread out reward, which means more balance. Any natural system that you look at tries to spread out as much as it can so it can balance. And that’s what we want our economy to be doing. So, I think that that’s what’s really exciting at the heart of something like shared equity. It just could be really great for our economy and really great for individuals as well as investors. I think this on the ability to focus on the financial health of our essential professionals and people we rely on every single day who are upholding our communities. I think it has an opportunity to have our communities thrive more. When you have more people who are rooted where they live, whether it be the teacher who lives in the community in which they teach and has a special relationship or a deeper relationship with the place and the people that they are working with every single day, or the policemen on the corner who actually lives in that community. There’s a lot of implications there that are very different than when people are traveling two and a half hours or leaving the profession altogether and you don’t have anybody, right? So, I think there’s a ton of potential here, not to mention it’s a huge market, right? So, if you, if we actually as a business fill the need for the 25% of salaried workers that are your essential professional and in these industries, that’s a huge business opportunity to deliver a whole lot of value to folks.

Eve: [00:28:50] I have one more question for you, and that is what keeps you up at night?

Alex: [00:28:56] Oh, man, I have two answers to that one. One is we need to make sure that this country continues to have a exemplar democracy that allows for organizations of all sorts for profit, nonprofit, public sector alike to thrive and to allow us to continue to have the marketplace of ideas and the marketplace, the literal marketplace of stuff to thrive as a society. And there’s a lot of signs with that that’s being that’s being been under attack for a while and more intensely recently. And so, I think we should all be paying attention to that and do what we can to make sure we still have that as our playing field to work on and live in on the Landed side. You know, I’m so excited. This is such an exciting moment at the company because for a long time we’ve been very restricted. Where we can serve folks. Capital has been much more conservative about where it would go when we certain markets now we have capital partners that are much more interested in going wide saying, hey, this is a need in many, many, many places besides our just our most expensive cities. How do we get it out there? Which is such an opportunity. And it also means national scale as whole another level operation. So just building an organization that can sustain all that is fun and is hard and keeps me up at night. But that’s the good stuff. That’s why we that’s why a start-up people get into start-ups. It’s really, really a fun, fun ride.

Eve: [00:30:20] Well, you’re a rock star and thank you very much for taking the time to talk to me.

Alex: [00:30:25] I appreciate you taking the time. Yeah. Thanks so much.

Eve: [00:30:34] Alex Lofton is passionate about helping essential professionals in education, health care and government unlock the financial benefits of home ownership. And he’s built a rapidly growing business, Landed, around his passion. Landed is taking off.

Eve: [00:31:03] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Alex Lofton

Female cities.

“Experiences of sexual harassment and violence intersect with other social inequalities, especially those of class, race, disability and sexual orientation. To track all of these indicators through an urban planning and design agenda can be bewildering, drawing attention away from deep-seated, long-standing ‘structures’ of inequality that become embedded in the built environment and in the mindsets of politicians and planners” writes Marion Roberts for Resilience.org.

Women and girls do not have the same freedoms as the other half of the population. Sexual harassment and violence, which are an everyday occurrence worldwide, hinder their ability to move freely in public spaces without fear and at any time of day or night. 

Urban planning is the act of planning the structures (and spaces) of our urban environment, including its policies, infrastructure, neighborhoods, building codes and regulations. Urban planning is data driven and both technical and political. It can be constrained by legislation as well as by market-driven economic policies. As a part of this discipline, urban planners use tools such as gender impact assessments and gender auditing and budgeting to try to meet gender equality objectives.

Marion Roberts argues that a socialist-feminist approach reduces all that complexity. By recognizing that the work of reproduction, caring and domestic duties are of equal value to other work in our society, this approach has the potential to radically transform and improve living conditions and create cities that uphold the rights of all to fair and equal citizenship.

There are many examples worldwide of inspired attempts, on different scales, to achieve this kind of equality. But the only city to truly embrace this idea is the City of Vienna where planning strategy is now based on considering housework, caring work and waged work as equal. To put this into practice they are planning a polycentric city of well-connected neighborhoods. One such neighborhood is the new Aspern Seestadt, an urban extension with a projected 20,000 households with employment opportunities, schools, medical services, Austria’s first managed high street, leisure facilities, refugee facilities, an urban park around a lake and a high-speed metro connection to the city center. 

There are also many initiatives to increase safety in cities. The program Safer Streets, Safer Trails in Mexico City, for example, reduced street crimes against women by 29 percent when they introduced measures such as better lighting, security cameras and alarm buttons to 125 miles of streets and paths. “A feminist approach to the city goes beyond merely treating women as victims and addresses all inequalities” writes Marion Roberts. “Social movements, committed politicians and educated professionals all have a role to play in transforming the urban landscape, which, in turn, shapes our lives.”

Read the original article here.

Image by Eve Picker

Reclaiming your Community.

Majora Carter’s career as urban revitalization strategist has spanned environment, economy, social mobility, and real estate development. Her work has won major awards in each sector, including a MacArthur ‘genius’ Grant and Peabody Award winning broadcaster.

Majora’s words — “Nobody should have to move out of their neighborhood to live in a better one” — are inscribed on the walls of the Smithsonian Museum of African American History and Culture. And her new book, called “Reclaiming Your Neighborhood”, the subject of our podcast, takes a next step in her thesis – build where you live,  talent will stay and your neighborhood will prosper.

Born and raised in the South Bronx, Majora has long-focused much of her work there, looking always to make positive change for her community, and in doing so, gained both national and international attention. She believes that talent retention may be the key to turning around low-status neighborhoods. And she’s backed that up with her Boogie Down Ground Hip-Hop coffee spot which she owns and operates with her husband in Hunts Point, around the corner from where she grew up.

Majora is also a lecturer at Princeton University’s Keller Center, serves as editor and senior producer at GROUNDTRUTH, a platform for telling stories of people building community power, and she previously served as associate director of The POINT Community Development Corporation. She founded and ran Sustainable South Bronx and co-founded Green for All.

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. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:01] My guest today is Majora Carter, my second interview with this powerhouse. Her career as urban revitalization strategist has spanned environment, economy, social mobility and real estate development, and her work has won major awards in each sector, including a MacArthur Genius grant. Majora’s words are inscribed on the walls of the Smithsonian Museum of African American History and Culture: “Nobody should have to move out of their neighborhood to live in a better one.” Her new book called “Reclaiming Your Neighborhood”, the subject of our podcast, takes a next step in her thesis. Build where you live, talent will stay, and your neighborhood will prosper. Look for the book on Amazon, in bookstores or on Majora’s website. There is no way around it. If you are really interested in impact investing, this podcast is a must listen.

Eve: [00:02:19] Hello, Majora. I’m so delighted to have you back on this show.

Majora Carter: [00:02:23] Thanks for having me.

Eve: [00:02:25] It’s been a while, but you’ve just written a book called “Reclaiming Your Community,” and in it you ask how we can address the problem of persistent poverty in low status communities differently. So, I wanted to start by asking you what is a low status community and what does it mean to you?

Majora: [00:02:46] A low status community to me – the way that our company defines it is a place where inequality is assumed by both the people that are in that community and those outside looking in. And so, what that what it looks like and I think that’s easier to describe that way; It’s the kind of places where there are more environmental burdens, where there’s higher rates of poverty, lower educational attainment, the kind of places where you won’t find diverse options for food. Not many great places to invest your money or you’re charged for it, like through check cashing stores or places like that. And it’s just literally the places where inequality is just understood. And so and they look different. They can be inner cities, they could be Native American reservations, they could be the kind of former booming Rust Belt towns that only white people lived in. But the jobs are long gone.

Eve: [00:03:44] This is a really big and hard question. So why is it difficult to improve the status of a low status neighborhood?

Majora: [00:03:52] Well, like a lot of things, it comes down to who benefits from it. And because if you look at those communities, literally billions of dollars are pumped into them through the philanthropic industrial sector and as well as our government. And it looks different, but it comes in the form of whether there are subsidies to build very low-income housing and homeless shelters, whether it’s the multibillion dollar economic engine that’s our pharmaceutical industry that absolutely does profit off of lifestyle related health conditions from diabetes and obesity and heart conditions. And it’s the, you know, the fact that there’s such low educational attainment but really, we’re not investing in public education within those areas either. And so, again, so it’s always like a problem to be solved. Again, folks, there are definitely industries set up to perpetuate that and actually benefit from them, but the people in those communities are not getting any better.

Eve: [00:04:53] So how does the redevelopment industry impact this cycle?

Majora: [00:04:58] Yeah, so like I think there’s an old saying, “all relationships are about real estate” and I believe it’s true in this regard because real estate development can be used as a transformational tool if we use it that way. I mean, think about it. What we’re doing is literally redefining what constitutes what is happening in those areas. So, when you do it by creating really interesting commercial, industrial, residential development. And so, you can tweak the formula and create benefits for the people that are there or not. Right?

Eve: [00:05:32] Right.

Majora: [00:05:32] And so if we’re thinking about development as a transformational tool and if we know that sort of status quo development, which either content to concentrate poverty and everything and all the ills associated with it from low health outcomes, low educational attainment, you know, higher rates of people being incarcerated. If we know that, then what if we designed those places and developed them in ways that actually promoted the opposite?

Eve: [00:06:01] Right.

Majora: [00:06:01] And that’s when we decided to look at a tool. We literally borrowed a page from the business community that looks at if you are an employer, if you own a business and you train, you hire your staff, that’s your talent and you pour resources into them, whether it’s training or benefits or reasons for them to want to stay. You know, you’re not doing it so that your competitor will hire them away. You’re doing it so that your talent sees you as the place to be. But we don’t do that in American low status communities. We don’t treat our communities that way. And so, what we’re trying to do is apply a talent retention approach to real estate development. Like what do folks that are born and raised in those communities, the talented ones, the ones that are either academically or artistically or any kind of talent, the ones that are literally taught to measure success by how far they get away from those communities, what can we do to keep them there? And so, we ask, what are you looking for in the community that you desire? We ask community members in my hometown in the South Bronx, what’s that? In that classic kind of low status community and people of all income levels, they were looking for kind of things that made them feel good about being in their own community, whether it was good places like cafes, restaurants, great parks, places to play and work. Those are the kind of things that they wanted. And so why aren’t we building those things here in our own community? And that is when we realize that that’s the kind of real estate development we wanted to do. And we labeled it a talent retention, real estate development strategy.

Eve: [00:07:47] You talk about real estate development impacting low status neighborhoods in one of two ways, and the first is displacement gentrification, which we touched on, and the second is poverty maintenance. So, tell me about poverty maintenance.

Majora: [00:08:03] Yeah. So, poverty level economic maintenance as we’ve called it, or PLM, which really sounds gross, but because it kind of is, where again, billions pumped into these communities from government and philanthropic sources, but the economic level of the people in that community does not change. So, subsidies that go to low income, quote unquote, affordable housing developers, which is only for very low income housing and even homeless shelters, lots of money in terms of the health clinics and the multinational pharmaceutical industry that are government subsidized and actually do support lifestyle illnesses according to, whether they are diabetes, obesity. But things related to the quality of life that that happen in communities, low status communities and seeing those type of things, even community centers that are that I think are often just there’s like resources that are poured in specifically to support the bright ones in the community. And so those are the ones that measure success by how far they get away. And those type of things literally pull people outside of our own community to seek greener pastures. But again, the people that remain are usually the ones that remain in poverty. And that is the way that those communities are treated.

Eve: [00:09:31] Right.

Majora: [00:09:32] Whether it’s by the philanthropic and our government interest, it’s like we play to that in terms of like creating more low-income housing, more health clinics and opportunities to support people that are chronically suffering from lifestyle health conditions. And through that, we are not seeing the kind of transition from people who are actually creating more healthy opportunities for them, for themselves in those communities. And we’re seeing more and more money pumped into those things. And thus, we’re seeing the concentration of more and more poverty and all the things associated with it, whether it’s low educational attainment, higher rates of folks involved in the justice system, poor health outcomes, and more reasons for more people to want to leave those communities. So again, poverty level, economic maintenance, somebody is doing well, but not the people that are in those communities.

Eve: [00:10:27] So, you know, I think actually in the built environment, what you’re talking about is perpetuated by the affordable building types that we see, because you can really drive through a neighborhood and you can see you can point out affordable housing very clearly. And that, I think, is a very visible manifestation of that Poverty Maintenance or PLM, as you called it.

Majora: [00:10:49] Yeah. The architecture of poverty is, you know, you know it when you see it.

Eve: [00:10:55] Yes.

Majora: [00:10:55] It’s kind of like pornography. It’s like you know it when you see it.

Eve: [00:10:59] Yes, it’s true.

Majora: [00:11:01] Yeah, it may look different in a rural or urban or a suburban context, but everybody knows.

Eve: [00:11:07] That’s right. So, you know, you’ve already touched on this, but you write about how third spaces are key to talent retention in low status community economics. And so what is a third space?

Majora: [00:11:21] So, third spaces are these urban planning parlance for places that are neither work nor home. Right? And it’s just this third space where community can happen. And to us, community is not just a place, it’s an activity. Right? It is literally an action verb, but you do need places to do it. And so, if you don’t and so if you’re in general, if you’re in a low status community, the kind of places, the kind of third spaces that are in those communities are generally not the kind of places where people feel like they’re vibrant and they’re working to support the kind of goals and aspirations for their lives. It’s like, I think about some of the places in my neighborhood in the South Bronx where the largest places were communal real estate was either the waiting rooms at health clinics or pharmacies and also community centers where most people do not go and hang out or don’t want to be seen in. Right. Or for long anyway. And it’s just like, you know, in terms of cafes or cool places to hang out, very few. And so that’s when we realize we’re creating this this architecture or the architecture that’s here is literally creating this sort of like talent repulsion experience for people who are feeling like, I know I’ve got something good to offer because I don’t – Low status communities have never had a shortage of amazing people coming from them. Right. But I do have a problem with them staying. I mean, even America loves the Cinderella story of like somebody being born into some kind of hardscrabble community and they have to pull themselves up and then they go out and make something great of themselves. They’re coming from these communities. Why can’t we make something of ourselves here?

Eve: [00:13:13] Yeah.

Majora: [00:13:14] And that’s both the challenge, but also the joy of realizing that it’s not just this thing that this this miracle that needs to happen, it’s something that we can do because we already have the tools and the keys to our own recovery within our own communities.

Eve: [00:13:33] So, you know, I visited you in the Bronx and there’s not a lot of third places there. But you created a coffee shop, and didn’t you tell me that it was voted, what was it voted, number one?

Majora: [00:13:44] We were voted the best cafe in New York in 2021.

Eve: [00:13:49] Can you believe that? That’s awesome.

Majora: [00:13:51] Yes, I can. Yes, I absolutely can. And it’s because we but it was by time out in New York and it was because we were, and yes, we do have great specialty coffee. I’m sorry. Do you hear that.

Eve: [00:14:09] The dog? Yes.

Majora: [00:14:09] Yes, I’m sorry.

Eve: [00:14:10] Everyone will have to deal with the dog on this podcast.

Majora: [00:14:13] I know.

Eve: [00:14:14] Is my life, right?

Majora: [00:14:15] He’s like really upset because my husband just walked out and he’s like, “don’t go” anyway. I’ll Start over. But yes, we were voted best cafe in New York City in 2021 by “Time Out New York magazine.” And I like to think it wasn’t just because we’ve got great coffee and tea and an awesome local craft beer and wine and sangria, but and really awesome community vibes. But it really was the vibes part because what we did was really instil within our community that our cafe was simply a vessel in which to hold all the great hopes and dreams and aspirations of our community and then gave it a platform to show it. We absolutely took advantage of having to do much of our work outdoors because of COVID, and suddenly we became this, this wasn’t just encased within the four walls of our cafe, but we took it outside and people were doing things like open mics and even credit repair workshops and art exhibits, and basically it was just such a liberating way for people to see how beautiful their community was. And because it was literally like spilling out onto the sidewalk for everybody to see. And I feel like that is the reason why we won that award. You know, not, you know, again, we do have really good stuff there, but it was mostly that we created this this environment that allowed people to see how beautiful their community was and participate in it.

Eve: [00:15:54] So you tested this thesis out. Do you know of any people who stayed in the community because of this third place? So, what’s next? How do you – that’s a big block you’re on, by the way. And yes, that’s going to take quite a lot of work to transform into a community asset, shall we say.

Majora: [00:16:12] Yes. Well, you know, you’ve got to start somewhere. I mean, some environmentalists would say, what’s the best time to plant a tree? You know, 20 years ago. What’s the next best time? Today. And so that’s where you start. And you have to start somewhere. And by creating examples and showing them what it does do is give people that are open to it an opportunity to say, well, if they could do something, why can’t I?

Eve: [00:16:37] Yes.

Majora: [00:16:37] And that is exactly what we’ve seen, like our little cafe has, actually, because it’s just allows people to connect together. We’ve seen everything from people being able to buy homes from one another. We’ve seen people start new businesses and locate them within the community. We’ve seen people develop their own capacity to see themselves as a different person, but the same one, but being able to do it within their own community. I’ve been incredibly excited by seeing folks realize that looking around and going, Wait, there’s people like me here. Why do I feel like I need to to escape when I could build something right here? So, yes. And what’s also super exciting is that I’ve also seen folks from around the country intuitively do this. And writing this book was simply a way to help other folks see that this may be mostly my story and how I got to the point where it’s like reclaiming my community was something that I want to see everybody to do because I feel like we have to do something to sort of repair the social fabric of our country. And we should start in the places that are most impacted by some of the specious problems that whether it’s systemic racism and classism have actually created in this country, but really created low status communities that are not helping us as a as a country evolve into the greatness that it could be.

Eve: [00:18:11] So I know you’re also working on a second third space, which I’ve had the good fortune to visit.

Majora: [00:18:16] Yes.

Eve: [00:18:17] A beautiful old railway building. Tell us about that. What’s going on there? It’s not far away. It’s like less than half a block away from your coffee shop, right?

Majora: [00:18:28] My world is really small at this point. I mean, the coffee shop is literally a three-minute walk away. The other project that you’re referring to is even a minute walk away from where I live.

Eve: [00:18:41] Yes, yeah, yeah.

Majora: [00:18:43] It’s a historic rail station designed by Cass Gilbert, America’s first starchitect, as they call them, Cass Gilbert, who designed also the Woolworth Building and the US Supreme Court building. It was quite the dandy in his day in the early part of the 20th century, and so we had this beautiful aesthetic. And so, this old rail station is about 4000 square feet, and so we’re transforming it into an event hall. So, my husband James and I actually literally did the initial demolition ourselves. Fortunately, we got other people to help us to finish it up, and it’s super exciting because the idea that we can take a space and by its nature as an event hall, it’s literally being filled by other people to do all sorts of things. And so we’re hoping to see it used as an amazing music venue, which actually sort of hearkens back to literally right across the street from where the rail station is, used to be a place where vaudeville excuse me, vaudeville, you know, Latin music as well is like it was like a musical and theater place where people would come right across the we want to bring some of that back as well. You know, and it’s also really interesting for me because that rail station is the reason why my family decided to settle there. My father was from down south, a big old black man who was a Pullman porter, and he bought our house for cash because back in the 1940s, there weren’t a whole lot of banks giving money to black men for mortgages. So, he actually won 15,000 in a horse race in California, put it in a satchel, literally cash, put it in a satchel, brought it back to New York. You found an Italian family that would sell to him, and he bought it.

Eve: [00:20:38] Which, in itself, was unusual, right?

Majora: [00:20:41] Literally, yeah. And he didn’t feel comfortable staying in the house for a couple of years, so he just rented it to them because it was the neighborhood was all white, but he bought that house because there was talk that they were going to reactivate that particular rail station and that was actually his line. So he was just like, Oh. Two blocks from my house. That’s what I want!

Eve: [00:21:01] He understood the power of transit, right?

Majora: [00:21:04] Exactly. Unfortunately, they never reopened it for transit, but he did have the conductor to slow down the train so he could hop off and climb out to his house.

Eve: [00:21:12] Oh, that’s great.

Majora: [00:21:13] Yeah, so that was pretty funny.

Eve: [00:21:16] Right? So, you know, I have to go back to the words that you’re quote that’s on the walls of the Smithsonian Museum of African American History and Culture. And you said, “Nobody should have to move out of the neighborhood to live in a better one.” And it really sounds like you just got tired of waiting around for someone to fix yours.

Majora: [00:21:34] Yes. In a nutshell, it was just like, you know, I mean, it was a little deeper than that, actually, because it really did come from this place where, you know, because I was one of those kids who measured success by how far she got away. I was told from very early on that I was a smart kid and that I was going to grow up and be somebody. And of course, I believed that I was just like I was really smart. I was reading when I was three. I was like, I’m getting out of here, especially when my brother was killed. And, you know, and I did watch, you know, because of financial disinvestment. All, so many of the buildings in my neighborhood were burned down. And I watched a lot of it. And there was a there was some trauma associated, I think, with like seeing and feeling these things, experiencing these things. So, yeah, I was like, education’s going to be my ticket out. And it was until I ended up back here only because I was broke and I needed a cheap place to stay when I went to graduate school. And that’s the only reason why I came back. And it did. It felt like such a horrifying defeat to be this kid with like I had a bunch of letters behind my name. I went to good schools, and then all of a sudden, I’m like back home and mommy and daddy’s house in the South Bronx. Hard and, but what was amazing was discovering that that education and distance actually was a blessing because like that’s when I saw when the city and state were building this huge waste facility on our waterfront, and we already handled an enormous amount of it. I was like, Oh my gosh. Like, it’s because we just this is history repeating itself. We are a poor community of color, politically vulnerable, and this is what happens. And all I could think was I mean, first was shame when I understood it and I was like, oh, like I just wanted to run away. And I did. And you know what? No one blamed me. But now I see it like, literally, with like eyes completely wide open, and I wanted to do something about it. And yeah, like, I wanted nice things in my own doggone community. Absolutely. For me and for everybody else.

Eve: [00:23:51] Yes. Yeah. I don’t know what to say next because I know how hard it’s been for you. It’s an amazing it’s an amazing journey that you’ve taken. I just want to say that. So, you also talked to me about the Jumpstart program in Philly, which I actually I interviewed Ken Weinstein, who launched the program in our second podcast season. If anyone wants to listen, it’s an amazing program. Tell me about it and why you why you love it so much.

Majora: [00:24:23] Wow. Yes. So, I was actually getting an award in Philadelphia, and it was the Edward Bacon Award who was actually it is Kevin Bacon’s father. And but he was like this amazing urban planner in Philly, and everybody loved him. Yeah.

Eve: [00:24:42] Yeah, yeah.

Majora: [00:24:43] And so I was getting this award and like part of it, and it’s like a really big thing over there. And so, part of it was that I got to hang out with some, some notable people in Philly, and I was like, okay, cool. And I sat in on this roundtable with graduates from this program called Jumpstart Germantown. And they were all, almost all black folks younger than me. And they were all talking about, like, the deals that they were doing. And I was just like. What? This many in a major American city talking about real estate deals and what they’re doing and how they’re doing it. And I was amazed. And so, but Jumpstart Germantown literally was a way to get folks from communities just like mine to be more involved in residential real estate development in Philadelphia, in Germantown. And so, the way that it was done, Ken Weinstein was literally, was getting inundated with, because he’s really a nice affable guy, and folks were just like, how do you do this? And he’s just like, oh, I can tell you. And he’d give them that information, and then he realized this is too much. And then he got his friends like help, created a training that gave people just enough information so that they could actually get out on their own. And then the best thing that he did was create a fund. So, where he gave the first couple of loans to those folks to do their first few deals.

Eve: [00:26:13] I remember him saying he realized that no matter what he taught them, if they couldn’t get the financing, it was useless.

Majora: [00:26:18] Exactly.

Eve: [00:26:19] And they couldn’t get the financing.

Majora: [00:26:20] No, no, no.

Eve: [00:26:22] What a guy. Yeah.

Majora: [00:26:24] So I was just like. Wait. What? And I totally flipped out and actually decided, I mean, I literally went to Philly for the next four weeks to just to take that class. And I’d love at some point to be able to start a project like that here in New York. And I actually encourage everybody to consider it in other places, too. But again, what we saw there was an incredible example. It wasn’t like a non-profit kind of like, “Oh, we’re here to help the poor people.” It was more like, “Nah, we’re going to help you compete” in this capitalist system that we’re in so that you can actually reclaim your own doggone community. And I was blown away.

Eve: [00:27:05] Pretty fabulous. And he’s franchised it, right? So, there have been a number of different neighborhoods and cities that are now have jumpstart programs.

Majora: [00:27:13] Yes, quite a few at this point.

Eve: [00:27:15] If I weren’t so busy, I would start one.

Majora: [00:27:17] I know.

Eve: [00:27:18] Pretty it’s pretty fabulous. But requires a little bit of resources. I want to ask one other big question and that is what does meaningful community engagement look like, especially when it comes to redevelopment of an area? What should it look like?

Majora: [00:27:37] Yeah. For us, meaningful community engagement means that it’s actually driven, at least in part, by listening to what the community’s hopes and dreams and aspirations actually are. And by no means assuming that you know what they are before you start. Because if you do, basically what we’ll do is what we see the non-profit industrial complex and even our government telling us what needs to happen in those communities. And that’s the same kind of status quo development that actually concentrates poverty. And what we did, we literally created surveys and did focus groups, and we even had an advisory board built from very informal leaders within our community that allow folks to give them reasons to think about. Yeah, what does it look like? What does a great community look like for me? And they were really specific about what those things were, and we knew it because they would talk about the things that they would leave the community to experience. And when we realized like honestly, where somebody’s hardest is, where they spend their money, and if you weren’t spending it in your community, what were you spending it on? And could we actually create the same kind of experience in our community that make people that just to give people a second look. And it has been hard because there’s such low expectations applied to low status communities and after a while people even internalize them. And that’s why it’s difficult to do that, which is why I’m so glad that I’ve actually gotten there’s company now. I mean, being the first one in to do something as crazy as like a really high-end specialty coffee shop in a place that hasn’t had anything like that in decades. It was exhausting. But at the same time.

Eve: [00:29:35] You got a lot of pushback early on from the neighbors, right?

Majora: [00:29:38] I got some pushback. I didn’t get a lot. What I got was they were very loud, but I think it was basically rooted in fear.

Eve: [00:29:46] I agree. I was going to say the same thing. I think change is very difficult for most people. And.

Majora: [00:29:52] Yeah.

Eve: [00:29:53] And they’re worried about being left out, you know, and, and they usually are left out, let’s be honest about it. So, you know, that was really why I asked that question. Like, how do we make people feel like part of something?

Majora: [00:30:08] Right, and their people are left out because the folks that are doing most of the development never had any intention of letting them in in the first place. I mean, if you think about the kind of development that happens in poverty level economic maintenance, I mean, there isn’t a place for most of the people in our community to even participate at all. I mean, there’s this thing, like, oh, we do community engagement and outreach, which means you get people together for some kind of little visioning thing and some ridiculous highly paid consultant gets like post-its up on a wall. And then you say, you did it. What did you do? I mean, it’s just like this is ridiculous. The kind of development that happens in low status communities was never intended to include people from those communities, except as recipients of like whatever they’re putting out, which we know concentrates poverty, and everything associated with it.

Eve: [00:31:04] Or gentrified it. Right. But either way, they’re left out. Yeah.

Majora: [00:31:09] Yeah, totally. And so, they know that. And that’s why I’ve been advocating as much as I can and also literally putting myself in that role of developer because I’m like, I’m already trying to create more opportunities for folks like we’ve done revenue shares for the cafe. We, we set it up so that people from our community can actively use it in a way that meets their goals and dreams and aspirations. I do that and I’m not a non-profit of not like I do that on my own. We’re absolutely looking to develop more opportunities for crowdfunding investment projects, for people within our community, for the other projects that we’re doing, because we want them to feel like they actually have an investment in their own community. And the only way to do that –

Eve: [00:32:01] I’ll help you bring them to Small Change. That’d be so cool, I’ll be waiting.

Majora: [00:32:02] I’m pretty, I would love that. I would love that. So, it is different when people do the development from our own communities because we are sensitive to what we haven’t had and what we do need and what our dreams are, because we bothered to ask and I’ve also experienced it, you know, I was that little girl who was just like, there’s nothing in this neighborhood. And it makes me feel like I’ve got a stain attached to me because of the way people think about my community. And, and I don’t want that on anybody. Like, I also don’t want them to feel like they’ve got to leave in order to believe that that they’re of any value.

Eve: [00:32:48] Awesome. So final question. If you were to change one thing about real estate development in the US to make better cities for everyone, what would that be? Maybe that’s unfair, you can say two or three.

Majora: [00:33:04] Yes, I’m going to say a few things. I’m sure. So, oh, gosh. If I could change the way real estate development happens in order to support more people doing it. I mean, I’m not exactly sure how to do this, but I know that the cost of doing it just literally is physically doing it is just so high. And I just wish that the cost of construction could go down. Don’t ask me how to do that.

Eve: [00:33:30] Oh God, yeah, everyone I think wishes that.

Majora: [00:33:33] But it’s just insane. And then sort of like the barriers to entry I wish would be a lot more equitable. I mean, I remember my very first deal where and it was just to do a small rehab know our mortgage broker literally made me write a letter because she looked at me, looked at my community and literally said, you know, I have a story in the book. She was like. Why did you want another house? Or another property? You already have one. And I was like, do?

Eve: [00:34:09] Because this is called wealth creation. This is called Building My Future, right?

Majora: [00:34:14] Yes. And but she, to her, it was just like, why would a black woman want to do that? Especially from a neighborhood like that. And so, she made me write a letter to the underwriters explaining to them that I was a fine, upstanding individual. That does nice things for her community. And I was like, I know she doesn’t ask any white men about this, but you know what? I wrote the letter. So, this was me. And I had great credit, property in mind, a willing seller, a free development loan, already pre-approved. I mean, it was just like and that’s a small example. You know, I hear about them all the time, you know, access to capital, how hard it can be.

Eve: [00:34:58] Yeah. So do I, I think the access to capital is completely inequitable.

Majora: [00:35:02] Yeah, exactly. And those are the main two things. But also, I think the other one is making sure that people in low status communities see themselves as rightful developers of their own community. Because that is one of the hardest things where I think even some of the challengers that I get is more like, who do you think you are? And these are people from communities like mine within the social justice industrial complex who are just like, “You shouldn’t do that.” And it’s just like, why should that? It does like because again, such low expectations of folks in our communities like here, I’m being challenged because I’m actually saying, no, I can do better than what’s actually happening here. Yeah. And I get it coming and going sometimes. But there are more people who see the value of it and who are actually thinking about how they can do it themselves.

Eve: [00:35:59] Well, thank you, Marjora. I love you to death. And I think this is fantastic. And I can’t wait to visit again.

Majora: [00:36:08] I know.

Eve: [00:36:09] Hang out in that coffee shop.

Majora: [00:36:11] Yes. Yes. Oh, my gosh. It’s so super exciting. And wait till you see the rail station within the next few weeks. We’re getting it ready for a pretty big event. Ted X the Bronx is

Eve: [00:36:25] Fabulous!

Majora: [00:36:26] Doing their event there. Yeah,

Eve: [00:36:27] That’s really fabulous.

Majora: [00:36:29] You know, we’re phasing it in.

Eve: [00:36:31] I have to come back again soon.

Majora: [00:36:33] You’re going to love it.

Eve: [00:36:34] Cool. Okay. Bye.

Majora: [00:36:35] Thank you. All right. Take care. Bye bye.

Eve: [00:36:44] That was Majora Carter. I’m repeating myself, but I’m still in awe. Majora is uncompromising about her mission. She lives and works in Hunts Point in the South Bronx, one of America’s lowest status communities, just two blocks from the house she grew up in. When it became clear that no coffee shop operator wanted to operate out of her space in the neighborhood. She created her own business to achieve a goal. Now that is putting your money where your mouth is.

Eve: [00:37:27] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Majora Carter

Public Practice.

Trained as an architect, and with a background in planning and government, Pooja Agrawal understands the need for talented architects and planning practitioners in local government, where talent is thin. She co-founded Public Practice to fill that void.

Based in London, Public Practice trains and places architects and planners in local government positions with the  aim of  building capacity to respond to the affordable housing crisis. They currently onboard two cohorts per year and place them in 24 partner councils across London and south-east England but they are growing.

Many associates stay beyond their one year placement. Over time Pooja expects Public Practice to grow and strategically change the talent and culture in government in additional sectors, such as energy solutions, all towards building better places for everyone. 

And in case she’s not busy enough, Pooja also co-hosts a ‘diversity platform’ called Sound Advice, and has a slew of honors and engagements attached to her name.

Pooja has worked as a public servant at Homes England and the Greater London Authority, and in private architecture and urban design practices including Publica and We Made That. She co-published Now You Know, a compendium of fifty essays exploring spatial and racial inequality, is a Fellow at the Institute of Innovation and Public Purpose and an Associate at the Quality of Life Foundation. She has previously mentored at FLUID and Stephen Lawrence Trust, taught at Central Saint Martins and was a trustee for the Museum of Architecture. And she was nominated for the Planner’s Woman of Influence in 2018 and 2019.

Read the podcast transcript here

Eve Picker: [00:00:09] 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. If you haven’t already, check out all of my podcasts at our website RethinkRealEstateForGood.co, or you can find them at your favorite podcast station. You’ll find lots worth listening to, I’m sure.

Eve: [00:01:08] Today, I’m talking with Puja Aggarwal, the founder of Public Practice and what a pleasure it is. Trained as an architect and with a background in government, Pooja understands the need for talented architects and planning practitioners in local government where talent is thin. She co-founded Public Practice to fill that void. Based in London, Public Practice trains and places architects and planners in local government positions with the aim of building capacity to respond to the affordable housing crisis. They currently onboard two cohorts per year and place them in 24 partner councils across London and South England, but they are growing. Many associates stay beyond their one year placement. Over time, Puja expects Public Practice to grow and strategically change the talent and culture in government in additional sectors such as energy solutions, all towards building better places for everyone. And in case she’s not busy enough, Puja also co-hosts a diversity platform called Sound Advice and has a slew of honors and engagements attached to her name. Puja is a dynamo. Listen in to learn more.

Eve: [00:02:37] If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast and go to RethinkRealEstateForGood.co, where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:03:13] Hello, Pooja. I’m hugely excited to talk to you today.

Pooja Agrawal: [00:03:17] Hi Eve, thank you so much for having me.

Eve: [00:03:20] You’re an architect by training, but you launched a non-profit called Public Practice, which I think has a really clear and simple vision. “We find, select, and place built environment professionals into local authority teams.” I’m just wondering, why did you start Public Practice? Can you take me on that journey?

Pooja: [00:03:39] Yeah, absolutely. So, you’re right, I am an architect by background, and it takes a very long time, I think probably in most places in the world, to become an architect. I guess the things that always attracted me to architecture was the impact it can have on people’s lives. And throughout my career, I was always trying to work for places that were sort of pushing what that actually looks like. So, I was always interested in looking beyond the building. And I think even when I was studying, it was always that same kind of radical at the time. So, hold on, why are you talking about what’s happening just outside the building? We’re interested in the fabric of the building or the form of the building. And I was more interested in the wider context of the places that we were designing these propositional buildings in, or through actual practice. I worked in both New York and in London for a number of years in private practices. And I guess increasingly started to come across some really interesting clients who tended to be public sector clients. And I realized then that, I guess, actually the clients had some of the really interesting opportunities to shape those places. So, I guess as an architect, you were given this remit. We were given you’ve got a budget of 300,000 pounds to design this town centre in this place. And I suppose I was asking, hold on, why are we even looking at town centres in the first place? Why is it this particular town centre and why only 300,000 pounds?

Pooja: [00:05:16] And I realized, actually the people that were making that decision had a lot of power, and there was this really interesting opportunity to be in that position and make change from that side of the table. So, I joined the Greater London Authority, which is the equivalent of the city mayor, the Mayor of London. And here that’s about eight hundred people working in an organization. So, I brought, I suppose, my architectural background and design into this team that was looking at regeneration more broadly and was able to make, I guess, some of those spatial decisions with my background, but also input on a whole range of other things like policy, looking at design quality in housing, or looking at the circular economy- how can that be embedded in the London plan? Or just all public spaces – how can that appeal and be equal for all different types of people? So, I guess that was the beginning of my journey.

Eve: [00:06:16] It sounds really, really familiar to me because I made very similar choices, maybe not as clearly as you, but it was very frustrating to be an architect, to be told to kind of draw lines and toilet details and stair details for projects that I wanted to understand why this project in this place? So, I totally get it. I actually ended up at a planning department myself for very similar reasons. Yeah,

Pooja: [00:06:43] That’s fascinating.

[00:06:44] I’m not sure what at the time, I was too young to realise that’s where the power lay. But I think the power definitely lies there, and with finances. There’s no doubt about it. And architects hold, unfortunately, very little power, right?

Pooja: [00:07:00] Completely. And I think that’s it. I realise as an architect, I felt like I was at the bottom of this pecking order of decision makers and people with power. And actually, the higher you would go in that decision making process, you’d be able to make more decisions. So, I guess the ultimate aim is to be the Prime Minister, right?

Eve: [00:07:18] Yeah, exactly. Oh yes, way to go Pooja! So, you know, the thing that’s odd about this is that I think architecture training is probably the best training that you could possibly get. It’s like creatives trained to take absolutely nothing and turn it into something. That sort of brainpower is unbelievable, right?

Pooja: [00:07:41] It’s a really good question. So, especially in the UK system, it’s very siloed the way we think about learning. Actually, I moved to the UK from India when I was about 16, so I’ve done most of my higher education and formal education in this country, and I was really surprised, aged 16, you were having to choose three or four subjects. And I know it’s really different in America and even through university, we choose one subject. Lots of friends are choosing English or science or biology, and yeah, I just…

Eve: [00:08:15] I mean, it was the same for me in Australia. I think we’re based on the English system.

Pooja: [00:08:19] Yes, it’s very similar. Exactly. Unfortunately, I don’t know why. So, I think the appeal for me, even with architecture, was because I have a creative mind, but I also have quite a practical and technical mind, and I’m quite entrepreneurial. So, architecture somehow always was this kind of, the most broad education I could have had and hence choosing architecture. So yes, in many ways, I find it a really interesting training because you do have so many different parts of your brain are working and you’re trying to think about all of these different complexities. What I felt was missing in my own personal education and training, even in architecture, was the more city-making side of things. And I guess that’s why I sort of pushed and found myself working in practices or places that were kind of influencing that. And I suppose, I guess, going back to where Public Practice evolved or came from, it was at the Greater London Authority that when I was working there, we work very closely with lots of different partners, including the municipalities and where I saw places having the most holistic visions or ambitions was where the people were most ambitious or the places or municipalities that had the people power.

Pooja: [00:09:37] So there was a huge gap in terms of the capacity of local authorities, and there’s lots of evidence on this whole subject about, I guess, austerity. You know, the public sector has massively shrunk over the years. There’s a lot of what municipalities do here is kind of children’s and adult services, and all of the more innovative vision making side of public sector has shrunk and planning is a huge part of that. And on the other side, you have all of these brilliant people working in architecture, urban design, who just didn’t really think about working the public sector at all because, I mean, no one ever came and spoke to me about that when I was at university.

Eve: [00:10:22] Yeah, that’s true.

Pooja: [00:10:22] And I do think things have changed over the last 10, 15 years. I’d like to think Public Practice has had a big part of that, at least in this part of the country, but it wasn’t really seen as an ambitious and fulfilled, like an ambitious thing to do. So, I suppose in summary, where Public Practice emerged or came from, me and a colleague set it up from within the Greater London Authority but spun it out as an independent organisation. And the whole purpose of Public Practice is to be able to find those people, attract the most talented people, really advocate for working in the public sector is a really ambitious thing to do. And we place them in the public sector for a variety of different roles that influence places for a year-long program. That’s the kind of core of what we do, and we…

Eve: [00:11:14] It’s a yearlong programme. It’s a specific programme.

Pooja: [00:11:17] Exactly. So the programme itself is a yearlong, but we have found that most of the people we have placed in the public sector, we’re young organisations only just over four years old, over 90 percent of the people we’ve placed have stayed on from that first year. So, from the architectural design side, people have found us. It’s almost like they’re kind of dipping their toes and they’re like, “oh, wait, this is great!” and have continued to stay on. And in parallel, these people who, we call them are associates, we put in a cohort of people, so they all start at the same time. So, there’s say twenty five people starting on this journey together, we have a whole training programme for them that happens in parallel, both in terms of kind of hard knowledge, but also some of the more softer support network that they have with each other that helps them transition into the public sector.

Eve: [00:12:12] That’s really interesting. I mean, I had a very similar journey myself, and I think it’s almost like trade school when you’re at high school. I don’t know what you call trade school in England, but the trades, like being a chef or welding or something that isn’t a college degree. They just don’t talk about them at high school as if they’re some lesser way to live your life, right? So, it’s really interesting. So, you’re pretty young. How do architects and other built environment professionals find you?

Pooja: [00:12:47] So we have really established our brand where we are in London, but in the wider region of this country at the moment, and we really, I think just advocating for the public sector, we just seem to have really grown our support network over time. So, we, really practically and pragmatically, we just really, we’re out there where we have written opinion pieces, we do lots of events, we go to universities so that four years on, they’ll come and join the program. So just to say, this is not, we attract people who have been working for at least three or four years in a professional environment. So, we want people who know what they’re doing and can hit the floor running as it were. So, I guess we’ve just been able to really build our brand and reputation over time. And when we first started four years ago, we were very much focused on design skills and were very much looking at London. But over those last four years, what has been quite interesting to see is actually the local authorities are asking us for a whole variety of different skills to be able to impact their places. So, for example, loads of local authorities have committed to being net zero by 2030, but do not have the skills to be able to even envision what that looks like. So they come to us

Eve: [00:14:10] That’s pretty ambitious, yeah.

Pooja: [00:14:12] Absolutely. So, they come to us and we’re able to find those people who are really committed to making change and put them in those positions. So, it’s been an interesting journey for us.

Eve: [00:14:24] So that was my next question. Do you place everyone? What does the process look like for someone who is interested in participating in your program?

Pooja: [00:14:33] So we run a really competitive process, and I think that’s part of the, being part of the cohort is almost that like stamp on your CV because it’s so competitive to get on the program. So, every round of applications, which in this region we do every six months, we get a couple of hundred applications and twenty-five people tend to go through. We run a very bespoke recruitment process, which is a three-step process, and I won’t go into all the detail, but the process has been designed to be really inclusive, and we look at best practice in terms of, how do you create a really inclusive environment for a whole variety of different needs? We look at a whole range of different things. So yes, we look at, you know, a little bit maybe about experience, but actually we look at things like, how do these people work in a team? Are they kind of humble enough? Will they listen to other people? Because working in the public sector is, if you’re talking about architects, you really need to leave your ego behind to get anything done.

Pooja: [00:15:41] The one thing about a public service is bringing people together on a journey to make something happen, and you will always have people with really strongly differing views. Not even in the public, just but within a public sector organisation. And that’s because every single department has a different ambition or is trying really hard to do something really specific. So how do you build consensus, for example? And that’s one of the things we test in our recruitment design process. And then we try and understand people’s own personal motivations and ambitions. We’re a value-led organisation. We believe strongly in the public sector about change-making from within the system. We really believe in social equality, and we believe in that interdisciplinary approach. So, we see whether these people have a passion and really believe in these things. And so that’s how we shortlist from, like I said, a couple of hundred people to about twenty-five people at the end. And at the same time, we do the same with local authorities. We really push them to say, hold on are these ambitious roles because we have ambitious people who want to make change. It shouldn’t just be the standard role that you’ve been trying to recruit to for three years and haven’t had any luck. Like what is it that’s slightly different? Are you being really ambitious about this? Are you engaging with your communities? We push them as well.

Eve: [00:17:05] It’s a real matchmaking process.

Pooja: [00:17:07] Exactly. So, we have a very complex matchmaking process, which we’re refining every round, but we are getting there and it’s really fulfilling to see when it all kind of comes together and all these people the first week when they start their journey together, it’s truly inspiring. And every six months you think, great, this is this is amazing.

Eve: [00:17:26] Well, that was my next question. You talked about a cohort. So, it’s yeah, twice a year event at the moment.

Pooja: [00:17:32] At the moment it is exactly. And at the moment it’s also within a particular region. So, we say that in this country, it’s like the southeast of England, the east of England and London. We have, as of a few weeks ago, actually just got funding from national government to expand our services to across England. So, we are in a really exciting, pivotal moment. And I guess we are in that process of just determining our strategy, but within the next two years, we should be operating across the country.

Eve: [00:18:05] Well, that’s very exciting. And I had a question about diversity, and you touched on that. What does diversity look like in architecture and the built environment in England today?

Pooja: [00:18:16] It’s pathetic. It’s really quite depressing. So I personally have been an advocate for diversity in the industry more broadly for quite a long time, and I have sort of attacked it in lots of different ways. So, when I was at the Greater London Authority, we tried to, with the team obviously, it was not only me, but we worked on a more policy-led approach. I have also set up another organisation called Sound Advice with a dear friend, and that was really provocative, really like gets people really uncomfortable and primarily on Instagram, and we published a book with the whole variety of people of colour a couple of years ago, last year. So, I suppose I’ve always attacked it in different ways. At Public Practice in the last six months actually, since I’ve come, we’ve just been trying to break down the data a little bit more and actually seeing where the data gaps are. So historically, we have always compared the data of our associates, of our cohort compared to the industry, and we tend to do way, way better than the industry. But the problem is that that’s not actually that hard. To date Public Practice has done quite well compared to the industry. So, if we were to take something like ethnic minorities, public practices cohorts have been twenty-six percent diverse in that instance.

Pooja: [00:19:46] But some something like architect is only four percent in this country and planning and surveying is even much less. So, we’ve tended to be really like good in terms of the industry or, for example, over 60 percent of people identify as women. And again, I think architecture is about thirty five percent here in this country. So, in some ways, we could pat ourselves in the back and say, we’re doing really well. But actually, what we’re trying to do now is compare ourselves to the regions or the places we represent. And as soon as you do that, of course, our statistics drop. But if we target that in the longer term, that’s really where we’d like to be. So, we, from our data analysis, learned that the lowest number of candidates we’ve had have been black men. So, we have in the last six months launched a #BlackInThePublicSector campaign, and you can see that on our Twitter and LinkedIn, but it’s very much targeting and celebrating Black men in the public sector to be those role models for people to see that as a career ambition. And this will take time to build, make that change within public practice but more broadly, but it’s something that we are genuinely passionate about and are trying to take a very data-led approach to it.

Eve: [00:21:06] You know, I’m kind of surprised because I always think of England as, especially London, as such a diverse place. These statistics are pretty awful. Does that start in architecture school? Like, can you, are you controlled by what’s happening there?

Pooja: [00:21:22] Yeah, there’s a lot of interesting literature about this. And in fact, one of the pieces of work I worked on at the Greater London Authority was called Supporting Diversity, and there’s a lot of evidence there. It looks at the architecture career, journey even, at each stage and shows what is happening, what are the key barriers. And I’m sure this is common everywhere. At every stage you seem to lose, if we’re talking about ethnic minorities, at every stage you get less and less and less. And as soon as you get to the director level of running a practice, it becomes minuscule. So, there’s lots of different ways you can tackle this, but there is definitely a sense of urgency of trying to tackle it, in a real, tangible way.

Eve: [00:22:06] Right. Interesting. How many are there? I mean, you said there are 25 people in a cohort. Is that 25 authorities that you’re dealing with it? That would be a lot.

Pooja: [00:22:15] Yeah. So, at the moment, it tends to be at around twenty, twenty-five authorities in one particular cohort. But of course, there’s always two cohorts running in parallel. So while our network of authorities fundraise, and what we try and do is create those spaces for them to learn from each other as well. And I think that’s a really important and interesting thing. Over the years, it’s been interesting to see where, so it’s been four years now, we’re seeing teams develop, in particular authorities of our alumni and then new associates. So, we might have 12 or 15 people in a particular authority who’ve had some sort of link or route through Public Practice. And another thing that’s really interesting there is seeing people placing people in different departments. So, you might have someone in the transport and highways team, and you might have someone in the housing team. And because of Public Practice, they have a relationship, and you start to see them working together within their local authority. So, we’re seeing that sort of culture shift that is building over time and when you start to see local authorities talking to each other across the region, say, we’re all trying to tackle coastal poverty, for example, you can start to see how we’ll be able to use our network to connect those dots and share those learnings.

Eve: [00:23:38] So you’re building a complete ecosystem of architects who are not practicing architecture but are using their skills in an entirely different way. It’s pretty exciting. How do you think about impact and how do you track that for your organization? Like, what are the stats look like?

Pooja: [00:23:53] It’s a really good question. So, there’s so many different ways that we can track that way. Like I said, we’re quite young now. So, so far, what a really tangible impact is us being able to say we’ve placed over two hundred people in over 50 authorities in this region. We can say things like, from the first few years what we’ve been able to track, over 90 percent of people have stayed on. It’s those types of impacts and statistics that we’re able to capture. Where we’re getting to now, a few years on, are actually looking at particular case studies. So, looking at places like Cambridgeshire. So, we’ve just actually made a video which shows, over the years, the different types of skills we brought into Cambridge, whether it’s digital skills or community engagement skills or architecture and urban design skills, and how they have worked to create different projects in places. It’s hard for us to take the impact of what associates are doing on the ground as the impact that Public Practice is making directly but we see that more as that qualitative evidence that we’ve been able to influence these places by those places having those multidisciplinary skills within their authorities.

Eve: [00:25:09] What are some examples of some really notable projects that have been impacted by your placements, that you love? Your favorites.

Pooja: [00:25:18] One, if the local authorities we’ve worked with quite a lot over the years and we’ve placed a whole number of different associates, I think it’s over 10 people there over the last few years is, it’s a district council called Epping Forest District Council but there’s a particular area where five different authorities come together working on a garden town. So, Harlow and Gilston Garden Town. And their whole ambition was delivering over sixteen-thousand homes. What is really particularly interesting about this is the different types of skills they came to us for. So, we’ve placed urban design architect and master planning skills, but we’ve also placed sustainability skills, landscape architecture, planning skills and also ecology and biodiversity. And that has been really interesting seeing all of these different people working together. So, we placed someone who had a very specific specialism in SUDS (sustainable urban drainage systems) and other people who were more transport experts. And one of the kind of, I guess, outcomes of products that came out of the work they were doing was a sustainability guidance and checklist. And these things seem really like, oh, it’s another report or a technical thing, but a lot of what, about working in public sector is bringing all of these different people to commit to saying, we’re going to do this. And in this document, they’ve committed to making these different types of changes or encouraging developers or encouraging people. These are the things that you actually really pragmatically need to look at if you want to create a sustainable place. So, I think that is one, like a more process-driven example.

Pooja: [00:26:54] I guess another example that springs to mind is a project in Oxford City Council, and I think that speaks quite well to where we’ve been over the last few years with COVID. So again, we’ve placed a few associates there with actually more urban design and engagement and actually social enterprise skills there. And with COVID, I guess we were in that position, you know, everyone knows how over the last few years.

Eve: [00:27:33] Very weird,

[00:27:35] Really hard. And suddenly you realize the importance of public spaces as a place to actually bring different people together. And when you’re not allowed to go inside and have a coffee with a friend what do you do? So actually, a few of our associates worked, bringing their different expertise to create a temporary outdoor space, and it’s called Broad Meadow. And it was meant to be this temporary project. And yeah, it has all of these like lovely green elements to it, and it became such a kind of loved place in the town center that actually it’s become a long-term project and the council are investing in it. And most, like, you know, it’s like 90 percent of the respondents said that they want this to become a permanent scheme and building that momentum from the community and really delivering something tangible on the ground that has been really celebrated and loved is a really exciting and another interesting example of something we’ve seen on the ground.

Eve: [00:28:34] What excites you most about the work you’re doing?

Pooja: [00:28:40] What excites me the most is seeing people excited about their jobs. I guess a lot of what I’m doing is bringing all of these people into public sector roles, and I think that, almost that first day when people are sort of bright-eyed and thinking, oh, this is going to be a really exciting year and then tends to be about four months in, they’re like, oh my God, this is so hard and I’m not going to be4 able to do anything this year. And then eight months in they’re like, oh, I don’t know if I’m gonna achieve anything. And then 10 months in, they’re like, oh, wow, look at this thing, it’s happening. And seeing that journey…

Eve: [00:29:17] That’s great. That’s really great.

Pooja: [00:29:18] …it’s really exciting. And now, you know, whenever I go to any built environment, architecture planning event, there will be someone from the Public Practice family that is there. And just knowing that you’re making that influence like you’re creating this network of change through people. For me, it’s really, I find that quite powerful. And I’m sort of this idealist, I do really believe in the public sector and the impact public sector can have. If it’s designed well, if it’s really representative of communities, I do believe that that’s where change can come from. So, for me, that is seeing that kind of change build over time makes me excited and passionate about what we’re trying to do here.

Eve: [00:30:08] So would you say that Public Practice has met your expectations?

Pooja: [00:30:13] Well, I mean, nothing ever meets my expectations. Eve, I’m always trying to improve things.

Eve: [00:30:22] So what can you do better? Then what do you want to do better?

Pooja: [00:30:26] That’s a good question. So, I guess the first thing would be about measuring our impact better, you know, to be honest. You touched on that already. Like, how can we really capture what we’re doing? It sometimes can feel nuanced. Like, how do you capture culture change? That’s hard. And that’s something we’re thinking about. How do we grow across the country and still ensure that quality is going to be a really interesting challenge for us over the few years? And that’s something I’m thinking about. And being maybe just still being in that kind of thought leadership space. What is the next type of need? What is it that we need the public sector to have in-house in a year’s time or two years’ time knowing what is happening in our wider context? Being able to be able to predict that and build. Be ready for that or always tell them that that’s what they need. I think that is another interesting space that we are constantly thinking about.

Eve: [00:31:26] So what is that next need? I’m going to have to ask,

Pooja: [00:31:30] What is that next need? =I like, I’m… We just launched this report around town centre recovery, looking at high streets and one of those things that, I guess I’m interested in what you do as well. We had a crowdfunding platform at the Mayor of London and…

[00:31:50] Spacehive, right?

[00:31:51] Yeah, exactly.

Eve: [00:31:51] I love Chris Gourlay. I interviewed him. I’ve known him for years. It’s a really fabulous platform. I was going to ask you, you know, because his model sort of reminds me of what you’re doing, and it’s fascinating to me how he has this partnership with all these local authorities. It’s fascinating how the local authorities are so engaged in the U.K.

Pooja: [00:32:12] Yeah. No, it’s interesting. And maybe it’s almost the work that Spacehive are doing and we’re doing is almost engaging local authorities to see that they can drive that change. I’ve forgotten your question now.

Eve: [00:32:25] Oh, me too. Okay.

Pooja: [00:32:26] What were we talking about?

Eve: [00:32:26] So, what’s the what’s the next step? You know, and…

Pooja: [00:32:30] Oh yeah, what’s the next thing? Yeah, I think it’s something, I feel like we’re still a little bit, and I think I’ve thought of this as well. We can be quite siloed and being like, it’s all about communities leading the change. It’s all about the public sector leading the change. And increasingly, there is something a bit more nuanced about how all of these different players play a role. We also tend to think, where does the private sector fit into this space as well? You know, increasingly there’s a whole conversation about B Corps or, you know, green financing and all of this stuff. And like, how do all of these different bodies, if you want to call them that, these organisms work together in a more network way or in a way that’s not so perhaps idealistic, which I can critique myself for, and not feel like you’re giving up on your ethics because you’re making that longer-term change. So, there’s something there around… oh, that’s so boring to say a partnership working, but there’s something more about, like, a bit more nuance around power and change-making, perhaps.

Eve: [00:33:40] Interesting. So, what’s your big, hairy, audacious goal, as they say in the US – your BHAG?

Pooja: [00:33:48] My what? I’ve never of this.

Eve: [00:33:50] You never heard that before? The big, hairy, audacious goal.

Pooja: [00:33:54] Big, hairy audacious… No, I need to write this down, look it up and make one.

Eve: [00:34:00] I love that: big, hairy, audacious goal. You don’t have one. I can’t. Well, it’s the Mayor of London, right? That’s your BHAG.

Pooja: [00:34:08] Yeah, sure. Or, Prime Minister, we joked about that. No, I think that increasingly I feel like we’re in this interesting space where it’s nice not to be like, this is what I’m going to do in five years’ time. Actually, especially the people we bring into the public sector, our associates have quite squiggly careers. I actually find that quite inspiring that we’re finding our way and through making change you find different opportunities and it’s almost like creating Public Practice. Six years ago, I wouldn’t have been able to say I’ll be CEO of an organization that I’m going to create. Like, who knew that was going to happen? So, I guess it’s hard for me to predict what it is that’s going to capture my imagination next.

Eve: [00:34:54] I have a feeling your mother probably knew, but. Anyway, this is truly inspirational, and I’ve really enjoyed talking to you, and I’d love to chat more, and I just feel drawn to come back to England at some point and just… There’s something about the way that you approach working with authorities there that’s very different. I love what I see with Spacehive and with Public Practice, and I love that connectivity. It’s really interesting. Congratulations.

Pooja: [00:35:30] Thank you so much. It’s been such a pleasure, and I hope…

Eve: [00:35:33] Can’t wait to see what happens.

Pooja: [00:35:34] Yeah. Oh well, you’ll know, I’ll keep you updated. But come and visit, it’ll be lovely to meet you properly.

Eve: [00:35:40] Okay, wonderful.

Eve: [00:35:48] That was Pooja Aggarwal. She’s an insightful and forceful leader, trained as an architect and with a background in government. Puja understands the need for talented architects and planning practitioners in local government where talent is thin. She’s not waiting around for anyone else to fix that problem. She plans to fix it herself.

Eve: [00:36:17] You can find out more about this episode or others you might have missed on the show notes page at our website RethinkRealEstateForGood.co. There’s lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music, and thanks to you for spending your time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Pooja Agrawal and Public Practice