Rethink Real Estate. For Good.

Impact

Home.

Katie Swenson is a Senior Principal at MASS Design. She joined Mass in 2020 after having worked for many years on affordable housing with Enterprise Community Partners on issues of design and sustainability. Her role at MASS, which has built a reputation as a design practice that embraces issues of economic and social equity, is to help them to define MASS version 2.0.

With a career that has spanned both arts and design, Katie grew up in Washington, D.C. and Boston, and studied comparative literature at Berkeley. Then, for six years she immersed herself in the modern dance community in New York City. When she finally decided to attend graduate school, she chose architecture as her discipline.

After graduating from the University of Virginia, she received an Enterprise Rose Fellowship to help initiate the 10th and Page Street Neighborhood Revitalization Project, working with the local Piedmont Housing Alliance. And that’s when the magic started to happen.

“It allowed me to become a community-based architect,” she says, “one who brings big ideas to the local level and works with the city and community to make things happen.” She founded the Charlottesville Community Design Center soon afterwards, leading it for the next two years, during which time she co-authored Growing Urban Habitats: Seeking a New Housing Development Model, with William Morrish and Susanne Schindler.

In 2007, Katie was asked to head the Rose Fellowship program itself, and went on to spend over a decade at the parent organization, Enterprise Community Partners. She has taught at the Boston Architectural College and Parsons School of Design, and in 2018-19, she was a Loeb Fellow at Harvard’s Graduate Design School.

Listen to Katie talk about the importance of ‘community’ for impactful development.

Insights and Inspirations

  • Diversity is not an abstract word.
  • Katie’s mom was her architectural mentor.
  • Home can mean so many different things.

Information and Links

  • Katie stays tuned to designvanguard.org for the creative edge in design and technology in the social sector.
  • Katie loves listening to Eric Cesal’s social-design-insights conversations with social justice designers.
  • Mia Scharphie is one of the greatest champions of women in design and Katie loves following her buildyourselfworkshop.com and highly recommends taking a Build Yourself workshop.
Read the podcast transcript here

Eve Picker: [00:00:17] Hi there, thanks so much for joining me today for the latest episode of Impact Real Estate Investing.

Eve: [00:00:24] My guest today is Katie Swenson. Katie joined MASS Design in 2020 as a senior principal after having worked for many years on affordable housing with enterprise community partners. There she was, a vice president of Design and Sustainability. Her role at MASS, a design practice that embraces issues of economic and social equity, is to help them to define Mass Version 2.0.

Eve: [00:01:06] Katie’s career has spanned both arts and design, from comparative literature to modern dance. When she finally decided to attend graduate school, she chose architecture as her discipline. And that’s when the magic really started to happen. “It allowed me to become a community-based architect,” she says, “one who brings ideas to the local level and works with the city and community to make things happen.”

Eve: [00:01:37] Be sure to go to rethinkrealestateforgood.co to find out more about Katie on the show notes page for this episode. And be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small change.

Eve: [00:02:00] So hello, Katie. Thank you so much for spending some time with me today.

Katie Swenson: [00:02:04] So glad to be here. Thank you, Eve.

Eve: [00:02:07] I’m really fascinated. You’ve built a career around this question: How do we create an equitable, sustainable, affordable city? And I’m just wondering how you would answer that very big question.

Katie: [00:02:20] Yes. Thank you for that question. How do we create an equitable, affordable, sustainable city and communities, I would say, as well.

Eve: [00:02:30] Yes.

Katie: [00:02:30] You know, my work has taken me into communities mostly across the United States, both large cities and small cities, rural communities and tribal communities. And I think at the base of everything that we’ve been trying to do is to understand how people can create lives for themselves and their families that give them the opportunity to become and be the people that they want to be, to live lives with purpose and dignity and have the resources and abilities to contribute to the world at large and to their families. So I think that has to happen and in all kinds of environments, certainly so much of the focus of both the sort of economic engines as well as a lot of the environmental work has been around densifying cities and creating cities as urban centers where so much of our work and life can happen. But I think it’s also important to understand the broad spectrum of communities that we have throughout the United States and understand that we need to address critical issues around housing and jobs and health and education resources for everybody in the country.

Eve: [00:04:01] Basically, one one size does not fit all, right?

Katie: [00:04:04] You know, America is much more diverse, I think, than we necessarily give it credit. I’ve had the incredible opportunity over the last dozen years to really travel quite a lot throughout the United States. And last year, I partnered with a photographer named Harry Connolly and the two of us have been working on a book that we called ‘Design with Love at Home in America’. And we went and revisited 10 of the communities where we’ve been working in partnership for many years with local community development corporations. And the experience kind of re-revealed for me how diverse America really is, from border communities to very rural tribal communities. We worked in geographic diverse locations from the Mississippi Delta through Yakima, Washington, which is sort of the breadbasket of America for produce and fruit production, through inner cities in Baltimore and elsewhere. So, I think one size does not fit all in some ways and in other ways, of course, there are so many common themes that unite best efforts throughout the country.

Eve: [00:05:33] Yes, I think about one size does not fit all, I immediately think about, you know, the very typical residential project that developers will build, which really seems to be one size for all. And what you’re describing is something very much more diverse.

Katie: [00:05:53] Yeah, I think that communities need to grow to reflect themselves. That’s the essence of place-based attitude towards building MASS Design. We have talked too often about the provenence of a building. You think of, let’s say, wine that comes from a certain region and is grown from a certain type of soil. And buildings and communities also have the opportunity to be grown from their place and to be designed, really, in concert with the values and ambitions and aesthetics and goals of the people who both are responsible for creating them and then will live and grow their own communities. So, yes, I think it’s really important to understand that diversity is not an abstract goal, but is the result of, sort of, expression of an environment and that of people and community values that create something that’s unique and individual to a place.

Eve: [00:07:09] Yeah, I love that thought that a building has a provenance. I think that’s great. So, the question of the architect’s role within community has sort of continued to grow and change in recent years, but I don’t think it’s fully formed yet. And how would you like to see that role continue to evolve?

Katie: [00:07:28] You know, through our work with the Enterprise Rose Fellowship program, we’ve learned a lot about a role that an architect can play in local communities. So, just to give a little bit of context, I worked for almost 15 years at Enterprise Community Partners. Back in 2001 to 2004 I participated in a program called the Enterprise Rose Fellowship Program and as an aspiring architect, I was partnered with a community-based development corporation. And the goal was to bring an architect or designer on to the development team of a community development group. The Community Development Group could use the resources of a dedicated designer, and the designer would be able to learn the ins and outs of not only affordable housing development, but also community engagement processes and the regulatory processes that contribute to the creation for affordable housing. So, over these past nearly 20 years, Enterprise has partnered 85 Rose Fellows with community-based groups, and it’s been an incredible privilege to be able to witness the growth that has happened through these partnerships. Each one has looked very different. In all cases, there are definitely some sort of underlying values. The architects who are attracted to this work and who succeed at it are generally very humble people who approach the work with the desire to uplift, first and foremost, the goals of the community, but also have to be able to be both brave enough and resourceful to bring the best resources from the architectural and design communities to sort of bear in the local work. So, it’s been wonderful to watch these relationships and partnerships grow over time, and each one has resulted in very different kinds of outcomes.

Eve: [00:09:49] Do you want to give me some examples? What should a community architect be thinking about that’s perhaps different than a rock star architect might be thinking about?

Katie: [00:09:58] Absolutely, I’d be happy to share a few examples. I think I would start back in the early days, maybe in 2001, when David Flores was partnered with a community group in San Ysidro, California, called Casa Familiar. A local non-profit that is now about 50 years old and has been working as a kind of community organizer in San Ysidro for many years, helping families navigate life on both sides of the border and provide affordable housing and other community development resources in San Ysidro. And David Flores was a member of my class of fellows, so we both started work in 2001. At the beginning, David started building what he called Casitas, small houses along some of the alleys in the historic part of San Ysidro. But I think he quickly started to realize what the larger challenges that families were facing at the border, including, of course, the border itself. And as the San Ysidro land port of entry has expanded and increased its, I guess, militarization of the border process for crossing, it also took up more space and land space in the community, more energy and also, because of the long wait times to cross the border, was creating environmental effects from stalled vehicles. So David, not only has been working as the design director at Casa Familiar, he was there for almost 20 years working to oversee the development of affordable housing in the neighborhood, but he also joined, for a time, he led the Planning Commission efforts and he got involved in the design and planning of the border control station so that it would be more receptive and welcoming to pedestrians and people crossing each way. And he got involved in environmental studies and testing air quality in the region.

Katie: [00:12:16] So I think that architects and designers like David show that an architect’s job is not only on distinct projects, that, absolutely he’s been involved in helping to realize some very beautiful pieces of architecture including a project which just opened recently that Teddy Cruz and Fonna Forman designed for Casa Familiar, a longtime project in development. But that these building blocks of housing and libraries and parks also need to be knitted together into a larger point of view and larger ability to help a community, as a whole, feel supported and able to grow a family’s life and capabilities in some of the most stressful, you know, environments that we have here in the country.

Eve: [00:13:16] That’s a lovely story. So, I’d really love to hear about how you came to be such a powerful advocate for equitable cities and communities and where did that passion come from? I think you started life academically in a very different place by the sounds of it.

Katie: [00:13:32] Yes, I was asked recently who one of my architectural mentors was and, as a child, and I said my mom and the response was one of surprise, actually, and I thought it was so interesting because my mom was a professional, but she was also a home maker. And I’ve been thinking about these words, not homemaker, one word, but home maker, maybe two words. And I think in many ways, I grew up with a very strong attachment to home, the idea of home, the physical reality of home, how both the design and feeling of your home as well as the stability and platform that your home kind of provides you is just a critical piece of this formation of who you are. And I think in high school, while I had a very stable and wonderful home, I also had the chance to volunteer for what started as a month engagement and ended up being a little over a year and a half at a homeless shelter in Boston. And I think that in the mid-eighties, when homelessness was starting to, kind of, take hold of America and we had, kind of, a high point in the mid-80s, I realize now that actually has not dissipated much. So for me, as a high school student, sort of understanding this dichotomy, not just the power of my own home and what it meant for me, but what happens when you don’t have a home and how slippery a slope it becomes and how quickly life can fall apart without a stable home. So I think that this has guided so much of my passion for my work and while it hasn’t necessarily been a linear path in terms of my career, I studied comparative literature as an undergrad and I have spent time as a modern dancer and I’ve done a lot of different things throughout my life, but some core essence around the importance of home and making homes, making my own home and making homes for others has been something that has driven me as long as I can remember and to this day.

Eve: [00:16:12] You also sound like you’ve had a lot of fun. And, you know, I think people have this idea that your life should be linear. But I think, you know, all of those interesting things that you’ve done must surely feed into what you do now and the way you look at the world and I love that idea. I wanted to talk a little bit about the pandemic as well. It’s taken me a while to get my brain around it, but I’m starting to think about what does it mean? And what does our world look like when and if it comes to an end? And if it wasn’t already bad enough, the affordable housing crisis just got a lot worse with the onset of the pandemic and many people losing their jobs. And I don’t even know how to begin to think about how the U.S. can tackle this monster problem and I’m wondering if you have any thoughts about that.

Katie: [00:17:04] Oh boy. Well, I wish I could say that I was able to get my mind around what this is going to mean for all of us. I think we’re still in this period of profound uncertainty. And I am really grateful for the wide-spread activism that I’ve seen from the housing community, first and foremost, on protecting renters and working to stop evictions and understand that that’s one critical base of all of this is, again, I guess, the importance of having a home right now. We talk about stay at home, right? Stay at home.

Eve: [00:17:43] If you don’t have a home, how do you stay at home, right? Yeah.

Katie: [00:17:47] Oh, my goodness. I mean, that means very different things for different people. And the importance of home has maybe never been so, kind of, revealed, right? I heard Governor Cuomo talking about the subways in New York, ridership is down 92 percent and they were going to start to close the subways in the mid-morning hours because many people were in many ways taking up residence on the subways.

Eve: [00:18:16] Oh wow.

Katie: [00:18:16] So this kind of crisis around home, whether it’s becoming increasingly unaffordable because you’re out of work, whether it’s a place that is not safe, perhaps. I mean, not everybody is living at home in a safe environment or you have no home. So, we think this moment, certainly we all want to, kind of, understand what is the future of, you know, our public transit system, what is the future of our work spaces, what’s the future of the restaurant and food industry? There’s so many questions, but I think one of the most elemental questions is going to have to be what is the future of our housing policy and are we going to use this moment when it could not be more clear how important it is, both for each of us as individuals and for all of us as a society, to be able to safely house every member of our community?

Eve: [00:19:26] Yeah, and more, you know, you can’t really say that home is just a roof over your head because there’s so much inequity around who has a computer and who has broadband, and if you even have a place to work in your home. And I think all of that, surely, has to come into play as well. If we’re really looking at schools being closed, and I know my husband’s a teacher and his university is already talking about online classes only in the fall, all of that is going to really matter quickly. I mean, as an architect, I’m grappling with, you know, what does that mean in the way we even design homes and cities?

Katie: [00:20:07] You know, in some ways, you’re right in that this is sort of exciting time to think about home, right? I think everybody’s looking around and going like, oh, my goodness I have to sort of expect so much more of this space. And I hope that that notion of expecting more from our buildings and our spaces is one of the things that will come out of this time. You know, the idea that our buildings need to keep us healthy is an idea that really attracted me originally to MASS Design Group who started during a tuberculosis epidemic and designing hospitals with the goal of having the hospital itself, the building itself, participate in enhancing the health of the staff and patients and visitors who experienced it. That the buildings have such a role to play. Buildings shape us, they shape our experience. They shape our health outcomes. And so, I hope that this will be a moment where we are understanding that we need to ask more of our buildings and participate in a greater spatial awareness and spatial literacy to understand the profound effects that the built environment in general, and the buildings that we occupy in specific, have on our health outcomes and our quality of life and productivity outcomes and that we gain a sort of awareness and capabilities around our ambitions for the built environment.

Eve: [00:21:59] Yeah, and that, you know, the buildings shape cities. And I think cities, too, will need to be re-thought in terms of how do you make them safe places for larger groups of people? You know, some cities in other countries are starting to think about changes to their transportation patterns or, in Lithuania they’ve given over all public spaces to outdoor restaurants so restaurants can operate again. I mean, these are kind of baby steps but in amongst the misery of all of this, it’s interesting to watch how creative people can be. That’s encouraging, I think.

Katie: [00:22:37] It’s hard to talk about silver linings at this moment. I mean, I think people are going to be experiencing so much grief of all kinds from lost loved ones to lost, you know, hopes or experiences. So, there’s going to be just a wide swath of, kind of, having to recover from this moment but, as you say, there’s also a lot of opportunities that are being revealed. Like in New York City, where they’re coming up with strategies to re-occupy the city streets in a different way, I think that’s so exciting. And I think it’s really important, I mean, if home is important, though is. I guess, you know, the old words home and garden, right? Home is as equally reflected in the sort of outdoor space. and I think our ability to kind of get more creative about understanding how we can use our outdoor spaces more effectively is really important.

Katie: [00:23:39] I also think that different kinds of projects. We have just been involved in a project in a community in West Baltimore where neighborhood leaders started leading the charge to create a park where there had been three homes which, over time in a disinvested area of Baltimore, had been first made vacant and then started to deteriorate and eventually were taken down and the lots that were left had become a dumping grounds. And one of the local neighbors, so a block leader, a block captain on his block, his name is Donald Quarles, started working with one of our Rose Fellows and his neighborhood group and the Bon Secours Community Development Group to clean up first this lot and now turn it into what has become this incredibly beautiful small pocket park that they call Kirby Lane Park. And the process has taken about two years and we figure that in the end, it’s been mostly volunteer labor, but the hard costs have been less than one unit of housing costs to create in that community. And it’s provided this outdoor space, a kind of backyard or a front porch, whatever you want to call it, for this community at large. So I think from big ideas to how do we re-occupy city streets and city parks and beaches, to small ideas of how to prioritize and re-integrate smaller outdoor spaces into our day-to-day lives, there are lots of models and ideas that we need to be working on simultaneously at different scales.

Eve: [00:25:41] I think what excites me is the people I talk to who are incredibly creative and they’re all going to put the brainpower to this. I can’t wait to see how they make things better. It’s fascinating to me. But, in the meantime, I would just like to ask you one final question, and that is what’s next for you? You have a brand, new job with MASS Design Group and where’s that going to lead you?

Katie: [00:26:06] Oh yes, it is so exciting. I started at MASS Design on February 3rd. I’ve been a friend and sort of champion and cheerleader to the organization since 2010 when I first met them and then had joined their board. So, I came on full-time in February, thank goodness, really just in time to be able to participate in this moment with this incredible group.

Katie: [00:26:34] So, the very first morning that we, sort of were all getting on our first Zoom call with one hundred and twenty five people from around the world at nine a.m. Eastern Time on Monday morning, one of our design directors, Chris Scovel, had gotten a call from one of our partners at Boston Health Care for the Homeless, saying that were going to be putting up some makeshift tents to be able to test and treat people without homes in Boston and would we look at the plans? And so, Chris and a team got on to making really makeshift design recommendations. We’re not calling them designs because it’s not about designing a tent or creating something ideal in any way, it’s about trying to apply our experience and design for infection control that we’ve learned over many years through, not only tuberculosis, but also Ebola and cholera, and to understand with our medical partners how Covid19 is manifesting itself and what can we do from a spatial guidance to help limit contagion and keep health care workers and patients healthier. So we started in on this immediately and realized that if one group needed it, as one partner needed it, probably so did others. So, we set off on this kind of larger understanding about, how can we use our spatial cues, spatial literacy, to help respond in this crisis? You know, I think that obviously architects are not on the frontlines of this crisis. Health care workers are on the frontlines of this crisis and make no mistake about it, but the rub is that our buildings are on the front lines. And so, we need to be there, showing up to understand how do we need to adapt? What are the retrofits that we need to do? How can we learn from this experience so that our buildings are able to support health care workers, to be able to support our communities, getting back into our lives in so many ways, but to do it safely?

Katie: [00:29:04] It’s been an incredible process and I feel very, very lucky to work not only with an incredible team at MASS, but also such a robust network of amazing partners both in the medical fields and in all of the sort of social service fields.

Eve: [00:29:22] Well, I really can’t wait to see what comes next. And thank you very much for spending this time with me today.

Katie: [00:29:30] Thank you. Really a pleasure to join you and we’ll look forward to having this conversation evolve and thanks for highlighting all the creative efforts. Appreciate it.

Eve: [00:29:41] Thank you.

Eve: [00:29:56] That was Katie Swenson. I loved that her early professional years meandered through the arts from comparative literature to dance before she landed on architecture. Her trajectory shows that climbing the ladder is not necessarily the path to success. Her career as a community architect started later than most but that didn’t stop her from becoming a star in the field. And she brought with her creativity and a human passion for making better places for everyone.

Eve: [00:30:27] You can find out more about impact real estate investing and access the show notes for today’s episode at my web site, rethinkrealestateforgood.co. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities.Eve: [00:30:44] Thank you so much for spending your time with me today and thank you, Katie, for sharing your thoughts. We’ll talk again soon but for now, this is EVe Picker signing off to go make some change.

Image courtesy of Katie Swenson

1,000 urban entrepreneurs.

Lyneir Richardson is a man with a mission. His goal is to help 1,000 urban entrepreneurs grow their businesses, through a nine-month program run by the Center for Urban Entrepreneurship & Economic Development (CUEED) at Rutgers University in Newark, NJ. The program, where diversity abounds, has enrolled about 400 entrepreneurs so far.

As executive director of CUEED, Lyneir leads capacity-building programs, teaches an M.B.A. course in Urban Entrepreneurship and Economic Development and serves as faculty advisor to students consulting with small business owners. About 70 percent of the entrepreneurs within CUEED are African American and Latino, and 62 percent are women. Most have no connection to Rutgers. About 60 percent of the businesses employ fewer than five people but have potential to grow.

Lyneir is also co-founder and CEO of The Chicago TREND Corporation, a social enterprise initially funded by the John D. and Catherine T. MacArthur Foundation and Chicago Community Trust. It acts as a centralized resource for real estate developers, retailers and community development organizations wanting to invest in and understand Chicago’s neighborhoods, that can drive transformative change.

Lyneir was formerly the CEO of Brick City Development Corporation, where he had responsibility for real estate development, small business services and business attraction in Newark, N.J. He is an experienced commercial and residential real estate developer with over 17 years of experience in urban retail development.

Describing himself as an urban entrepreneur who is interested in strengthening economic conditions in underserved areas, Lyneir says he likes to work on bringing together private, public and philanthropic funds to support these kinds of projects. And he does that with incredible energy.

Information and Links

Read the podcast transcript here

Eve Picker: [00:00:12] Hi there, thanks so much for joining me today for the latest episode of Impact Real Estate Investing.

Eve: [00:00:18] My guest today is the energetic Lyneir Richardson. In all that he does, Lyneir is razor-focused on helping urban entrepreneurs. He straddles two roles in two cities, Newark and Chicago. At Rutgers University in Newark, he is the executive director of the Center for Urban Entrepreneurship and Economic Development. There he is intent on helping 1000 diverse urban entrepreneurs grow their companies. And he’s also an entrepreneur himself. He co-founded and is CEO of the Chicago Trend, a social enterprise providing resources to real estate developers and retailers to promote investment in Chicago neighborhoods.

Eve: [00:01:05] Be sure to go to rethinkrealestateforgood.co to find out more about Lyneir on the show notes page for this episode. And be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small change.

Eve: [00:01:38] Hello Lyneir, I’m really excited to have you here today.

Lyneir Richardson: [00:01:42] Thank you for inviting me. I’m looking forward to our conversation.

Eve: [00:01:45] Yeah. So, you’re a man with a mission and I’d really love to talk about that today. And like, firstly, in your role as the director of the Center for Urban Entrepreneurship and Economic Development at Rutgers University, and that’s quite a mouthful, you’ve set a goal there of helping 1000 urban entrepreneurs grow their businesses. And I’d really like to hear more about that.

Lyneir: [00:02:09] Great. Well, I have been at Rutgers Business School for six years. In October of 2019 we celebrated the 10th anniversary of the Rutgers Center for Urban Entrepreneurship and Economic Development. During that 10-year period, we really focused on helping a diverse set of entrepreneurs get to, quote unquote, the next level, and that’s how we always talked about, and then made the connection between entrepreneurship and economic development. Let me tell you a little bit about what I mean. We can point to the fact that we directly assisted over 400, now probably almost 500 entrepreneurs, 70 percent are entrepreneurs of color, African American or Latino largely, over 62 percent are women. 40 percent are right in the city of Newark, New Jersey which is an urban city that’s been really revitalizing through local municipal leadership and corporate support. And of those firms we’ve taken now a little over 160 above a million dollars a year in revenue. So we’re really excited about.

Eve: [00:03:22] Fabulous, yeah.

Lyneir: [00:03:23] That was really my, you know, first 10 years of work. And so the next, as we thought about it, all right, we’ve completed our 10 years, what do you want to do next? We really focused on this initiative we’re calling a thousand million. And as you mentioned, the focus is, can we help, you know, a thousand diverse entrepreneurs get to and exceed a million dollars a year of annual recurring revenue? The reason why that’s important for us is, you know, the million-dollar revenue mark is not the end all be all, but it’s an important threshold, it’s when an entrepreneur typically can start to think about either borrowing money or taking on investors. It’s at that point where they have some employees beyond themselves. It’s at that point where they hopefully will start to be able to consistently have some owner’s compensation or some profit to share. You know, they have customer validations and that type of stuff.

Eve: [00:04:21] They’re at the beginning of growth mode, right?

Lyneir: [00:04:24] The beginning of growth mode. And so, while we work with, you know, micro-entrepreneurs, you know, initially doing a hundred or two hundred thousand dollars of revenue, as long as they were in business for two years and we won’t, you know, discontinue working with them, we sort of turn to an intentional effort to take firms who are in the two to three, six hundred thousand dollar range and try to focus on getting them to the next level. That’s been fun.

Lyneir: [00:04:49] That’s our Rutgers Center for Urban…, and Rutgers has been a really supportive university environment because typically entrepreneurship centers at universities are, you know, internally focused. Helping students pursue entrepreneurial activity and helping alumni. Rutgers here, because we have this Chancellor, Nancy Cantor, who’s really made publicly engaged scholarship a strategic priority and a mission, she’s a national spokesperson for it, as well as the dean of our business school who made social impact, you know, one of her top initiatives and priorities we are able to open the doors of the business school to a community of entrepreneurs, many or most of which are not Rutgers students, and they’re not Rutgers alumni, you know. It’s just a community around us, the local coffee shop or the professional service provider in the area, in our state or region that we really are helping to accelerate and grow.

Eve: [00:05:53] Cool. How long is it going to get to a thousand of them?

Lyneir: [00:05:56] You know, it’s interesting. So, if you think about it, it took us 10 years to get 400 entrepreneurs in our program 160, I think by, you know, intentionally focusing, we’re hoping that over the next five years you will start to reach that goal. So we’re talking to a number of corporate partners, we’ve talked to some of the big philanthropy about both making, you know, our in-person courses, expanding them out some, but obviously not just because of the pandemic, but even in advance of it, using online tools so that we can expand our reach. So, yeah, we’re hoping that over the next five years, you know, we’ll start to see more, you know, more entrepreneurs across the threshold. We’re going to research it and track it and celebrate it as well.

Eve: [00:06:43] So what does an urban entrepreneur look like and where are they located? What sort of businesses are they?

Lyneir: [00:06:49] Yep. So it’s interesting. So, you know, urban entrepreneur is, it’s an interesting term. Urban is an interesting term, right? So, you know, what’s urban? Is it, in most instances place? Is it about density of place? I’ve been most passionate about urban with a racial lens. Racially diverse, economically, you know, challenged ethnic and underserved areas. So, in a lot of respects, my urban is really focused on here in the US, who have not been able to realize the full promise of our American dream, right? They have been subjected by, you know, systemic racism and that kind of stuff. So the question is, can I help them get resources and opportunity, you know to folks who have been overlooked and undervalued, right? So that’s really the focus of the urban we do. Distressed urban neighborhoods where we’ll create jobs and create wealth in communities. And then the economic development impact’s all-around quality of life, right? You know, will crime decrease? Will there be better educational outcomes, you know, more amenities and neighborhoods, you know, that type of work, right? And that’s the things that we measure, right? And so, our view is these urban entrepreneurs, as they become more successful, will be community anchors. They support the Little League team, you know, and civically active and employ locally and, you know, that’s the big dream and the vision for it all.

Eve: [00:08:20] Can you give us some examples of the sorts of businesses you’ve helped?

Lyneir: [00:08:24] So, a wide variety. I’ll talk about a few that we’re proud of.

Eve: [00:08:29] Surely, you’re proud of them all, right?

Lyneir: [00:08:33] Right, we’re proud of them all. I just did it off the top of my head, You’re right about that.

Eve: [00:08:35] It’s like your children.

Lyneir: [00:08:37] Well thank you for that, you’re right.

Lyneir: [00:08:38] We have four categories or signature program, sort of, lanes. One we call, which is our bedrock program, the Entrepreneurs Pioneers Initiative. It’s for first generation entrepreneurs. We have a program for media and art in entertainment industry entrepreneurs. We have a program that focuses on helping retail and restaurant entrepreneurs. And we have done a lot of work recently with people of color forming technology ventures and accelerating, you know, those ideas. And typically, after school and on the summer, we will do some youth entrepreneurship programs.

Lyneir: [00:09:17] You know, we have a really cool – I’ll just go walk back up the ladder – so we have a really cool technology firm called WearWorks that have started to raise capital into a number of strategic partnerships. This product is a haptics, sort of a navigation device for people with visual disabilities. Their recent accomplishment is using their product – a blind individual ran the New York Marathon for the first time without any type of seeing eye dog or, you know, used that tool to do it. We hope that they’re going to continue to grow and get resources and use their tools for training and for all types of health outcomes as well. We have put the local right down the street from our business school. We have a number of restaurants and coffee shops. Black Swan coffee, Green Chickpea is a restaurant. These are local businesses that we’ve either helped get contracts with the university, you know, one is soon to announce a second location. You know, the coffee shop I love because the donuts are so great, right? So, you know, I would I should be avoiding the donut shop, it’s really cool right down the street. A lot of professional services firms, PR firms, accounting firms.

Eve: [00:10:33] That’s a really wide variety.

Lyneir: [00:10:35] Yeah, very exciting.

Eve: [00:10:36] So, I wonder, how do you identify these entrepreneurs? What’s the bar they have to reach to be able to get into a program?

Lyneir: [00:10:43] Our initial requirement was in business at least two years, and one hundred thousand dollars of revenue is the threshold for most of our programs. The technology ventures, you know, we knew they were start-ups and, you know, it was, do we believe they could have some type of traction? Either they’ve gotten some other investment or been admitted into some other accelerator programs or, you know, have some indication of probability of success. But the goal really is, is to take people on, you know, a rung of the ladder and help them get to the next rung of the ladder. You know, at the state university where we view ourselves as an anchor, that’s going to be here. And so, we provide resources over many years. The entrepreneurs is not just in a program. You know, we give people student consulting teams over multiple years. We invite them back to universities over multiple years. So, you know, we’re in it for the long haul with the entrepreneurs in our funds.

Eve: [00:11:40] That sounds fabulous. What’s your background and how did you get here?

Lyneir: [00:11:45] Well, I started as a lawyer. I grew up in a family of entrepreneurs. My dad owned a restaurant and bar. We owned popcorn stores., we owned five popcorn stores. So, you know, like, our dinnertime conversations were around, you know, we got a new location or lease, or a truck broke down, or someone didn’t show up. You know, what are you going to do? And I, growing up as a teen, I was a D.J., a clean-up person, a delivery person, so I had all of those roles and saw business firsthand. I went to law school and practiced law initially as a bank lawyer.

Eve: [00:12:19] I have to ask, a family that owns popcorn stores begets a lawyer? How did that happen?

Lyneir: [00:12:25] Well, you know what? Yeah, our parents believed in education, right? And they believed, you know, in the value of education to continue to advance the family. What was interesting in being a bank lawyer was to de-mystify banking. I remember as a child, we’d always talk about how difficult it was to get a bank loan or, you know, and the narrative is, I was probably drawn to be a bank lawyer, and 90 lawyers in the law department there. But I remember every afternoon around 2:00 p.m., I’d start to fall asleep on the bank loan documents. It wasn’t until I got an opportunity to do a community pro bono project of loaning, instead of loaning one hundred million dollars to an airlines or a public utility, I got a project to loan one hundred thousand dollars to a little entrepreneur, a local entrepreneur who was buying the building that I think he was operating his barbershop from. And it was the same documents, promissory note, loan agreement, guarantee, minus three zeros. Instead of one hundred million it was one hundred thousand.

Eve: [00:13:27] Right, I’m very familiar.

Lyneir: [00:13:29] But I loved it, right? It was, all of a sudden, I could see the connection to the work. And, you know, being on that court or in a struggling neighborhood not far from where we initially grew up. Then that community development work became my passion, right. Getting resources to those type of entrepreneurs into the communities, that became my passion.

[00:13:50] I worked as a bank lawyer. I became an entrepreneur myself in Chicago. I developed, built and sold well over 300 single family homes and town homes, mostly in underserved areas, was Young Entrepreneur of the Year in SBA many years ago, right 25, almost 30 years ago. But then I had all the highs and all the lows of entrepreneurship from, you know, the cover of the Crain’s Magazine and the awards to the doors of bankruptcy court. I ended up selling my company in a fire sale after a tough period. I lost, got fired on the job, we over-extended ourself on a contract, you know, I had, you know personal, you know, the mother died, you know, I had this period of just needing to restructure. But I was able to get a job doing the same work, heading a national initiative with a publicly traded company that was focused on doing retail development in urban neighborhoods.

Lyneir: [00:14:45] And so by now, I start to see this pattern. I was a bank lawyer and found passion and lending in urban neighborhoods. I then started as an entrepreneur building homes in urban neighborhoods. Then I found this big corporate position that had a national focus on getting retail to urban neighborhoods. And then, when the recession hit in 2007, I got this opportunity to work with Cory Booker and head the Economic Development Organization in Newark, New Jersey. Cory Booker, as you may know, very charismatic mayor of Newark, New Jersey, ultimately became Senator Booker. And because of his charisma, we had this opportunity to position Newark as a city that would be a national model of urban transformation and started to do projects. So, we did grocery stores and office buildings and new restaurants in the city – it became a lot of fun. And when he became Senator Booker is when I moved to Rutgers. So that’s the long sort of career journey.

Eve: [00:15:45] I mean, there seems to be a lot happening in Newark. I keep running into people doing…

Lyneir: [00:15:49] Very good. I mean, even now, phenomenal current leadership. Senator Booker is working more at the national level, but we have a phenomenal local mayor who’s galvanized both the business community, the residential community, and really done phenomenal work here. So, a lot’s going on. The last thing I just want to mention is, what initially started out as a research project in my first year at Rutgers has now morphed into a social enterprise that we’re. you know, really excited about. I’m also CEO of a social enterprise called Chicago Trend. It’s a real estate focused social enterprise that now has about 15 million dollars of capital investing in the same neighborhoods, trying to determine when commercial real estate development and retail amenities and services and performing arts, and we’ve been investing two hundred thousand, two million dollars into various projects with the mission of strengthening the commercial corridors that will ultimately strengthen the neighborhoods. And again, Rutgers has been very good in allowing this research work to be in synergy with the entrepreneurial activity in Chicago. So, for me, I am at a high point in my career, both sides of the brain. One side is teaching entrepreneurs and being a champion and cheerleader of entrepreneurs in Rutgers. The other side is, I actually get to put money into ventures and, and trying to make an investment return. So, it really is a fun time. A fun career.

Eve: [00:17:24] Exciting. It sounds like you’re very busy.

Lyneir: [00:17:27] Absolutely. But, when it’s passion work, even though it’s busy, you know, it doesn’t hurt.

Eve: [00:17:32] No, I totally agree with you. So then, what, you know, what does socially responsible real estate look like to you?

Lyneir: [00:17:39] So, again, my focus has been getting resources to people in places that other people overlook and undervalue. And for me, that is, every city has a part of town, again I headed economic development in Newark, so there was a part of town where crime is higher, where there’s more blight, where, you know, educational achievement is not as great, where there’s adverse health indicators. That’s the part of town that I believe, a focus on real estate development and a focus on commercial corridor, inclusive ownership of property, getting amenities, day-care, dry cleaner, urgent care center, grocery store is what people often talk about, sit down restaurant. Those type of investments can change and strengthen a neighborhood. And people also will change, I’m concerned about gentrification. It’s always not bringing Neiman Marcus in, it’s bringing the amenities and services that improve the quality of life for the residents who have decided this is where I want to live, but to also continue to add economic diversity to a neighborhood as well. Additional income so that middle income families and, you know, people with additional educational achievements can say: I grew up here, I have some connection to this neighborhood and I can make this a place where I choose to live because of its conveniences and its history  and, you know, be a part of its continued progression.

Eve: [00:19:22] Yeah, I mean, I think the gentrification line is very difficult because we can’t leave places like that without investment. So, you have to find a way to invest respectfully, I suppose it’s the way.

Lyneir: [00:19:35] Exactly right. And doing it inclusively. So this is, you know, the capital we’ve invested. It’s with people of color who have some connection to that neighborhood. It’s helping residents open a national franchise in a neighborhood. Again, it’s getting capital to help residents and local entrepreneurs own and drive the revitalization, own and drive the economic growth. That’s what’s fun for me.

Eve: [00:20:05] So the fund, the fifteen-million-dollar fund that you’re using, how did you raise that?

Lyneir: [00:20:11] It initially philanthropically motivated impact investors. It is, the MacArthur Foundation in Chicago provided the initial five million dollars of what they call the program related investment, a very flexible, patient capital which allows us to invest it into projects in a patient and flexible way as well. We’ve had a second investor, five million dollars of venture called Benefit Chicago, which was, includes the Coward Foundation. And then most recently we announced a five-million-dollar investment from Fifth Third Bank, you know, again a flexible capital. And we have, some of the religious organizations have also made some. The American Baptist Home Mission Society has provided some equity capital that we’re using also, so really excited about it.

Eve: [00:21:04] So, you know, my next comment is going to be, you know, what about crowdfunding? Letting everyday people invest?

Lyneir: [00:21:11] Again, when I read about your work, it’s something that I would love to figure out how to do. We haven’t and it’s certainly, we want crowdfunding to be a part of our menu. And again, now that we have made investments, have a track record, you know, this thought of can I create vehicles that will allow more local ownership alongside of our investment would be phenomenal. So,

Eve: [00:21:37] Well, we should talk ’cause you don’t need to figure it out ’cause I have.

Lyneir: [00:21:40] Great. We should do something together. I love it.

Eve: [00:21:43] Yeah, it really is an impact fund with impact investors who care about what you’re doing. It’s pretty great stuff. Yeah. So, I have to ask, we’re in the middle of a pandemic and we’re both at home doing this interview, how are you supporting your entrepreneurs through this pandemic?

Lyneir: [00:22:05] Phenomenal question. You know, we have done a few webinars initially asking people, how is the pandemic affecting you? How are you thinking about your business model? How can we be supportive? So, you know, first thing was, instead of just responding, we started to talk to the entrepreneurs and try to understand from our customers how we could best support them. We’ve done a number of webinars and servers around applying for the available resources, as well as thinking about how to innovate business model to a more aligned and my favorite was, one of the entrepreneurs in our program operates a dance studio. But, you know, they’re doing their jazz dance programs via Zoom now. And the one question she wanted us to help her figure out was, you know, do I have legal liability? And, you know, how do I, you know, either get some consents because they’re not in my spaces, if someone gets hurt? So, you know, that those type of strategic questions, right?

Eve: [00:23:05] That’s interesting, yeah.

Lyneir: [00:23:06] That’s really been the nature of the work. Where I am spending a lot of time is on a program that goes deep, right? So, I think right now, everybody is having, rightfully so and thankfully so, there’s a lot of announcements about new programs and small grants, local, municipal, federal, corporate, even philanthropic, to help entrepreneurs sort of survive. I really am spending a lot of time thinking about, and we’ve designed a sort of, I call it entrepreneurial management consulting to help entrepreneurs really think beyond the first three months of opening. But to think about, you know, the economic reality over the next year and two, you know. How do you change your model? How do you create new revenue streams? Is this the time to reposition? Can you raise new capital in addition to, you know, accessing all of the survival and recovery capital and strategies that are out there? How do you really think about this as a moment to become stronger?

Eve: [00:24:16] Yes. The interesting thing is, like, entrepreneurs are wired that way, right? They’re people who think things up and work through challenges and are flexible and figure out how to get through unexpected challenges and it could be a really good opportunity to make a business stronger or different or add some programming to it or whatever. And I have noticed amongst people in general, there seems to be a clear divide between people who say, well, we’re just gonna get back to normal and others who say, well, what’s normal going to be? It’s going to be different. It’s very interesting to me. And you’re clearly one of the people thinking about a different normal, right?

Lyneir: [00:24:58] Absolutely. And again, I think entrepreneurs are thinking about that as well. I guess there’s two categories. There are some folks who say this is the time for me to reposition or to do entrepreneurship, either in a different way or to think about that this is not fun, right. And then again, there’s a lot of parts of entrepreneurship that are not fun. And, you know there’s late nights and there’s accounts payable and, you know, and chasing, you know, opportunity. And so, I think there’ll be some folks who will say, this may be my time to exit or to leave, right? But there’s another subset of entrepreneurs that I believe are, even right now, thinking where’s the new opportunity? How do I get new capital to pursue that opportunity? They’re sitting back at home and thinking about what do I need to do to create a stronger business, additional wealth, you know, when we all are back outside again in the new norm?

Eve: [00:26:03] Yeah, interesting. So, a final question is, what do you think that the Center will look like in a year? Have you thought about that?

Lyneir: [00:26:14] Yeah, so I mean, again, we have already pivoted to all of our capacity building programs now are virtual. And the thought of being able to have a broader reach. You know, we won three of four awards for the effectiveness of our programs. And to be able to have a broader reach because of technology, and it being accepted, that’s the cool thing about using all of the Zoom and WebEx and other tools is before, it always was sort of, well it was a second option, the technology was always sort of clunky. You would never make that even part of the first consideration. I think now our Center’s going to have a whole lot more reach and impact by using, and leaning into, and the acceptance of the virtual tools. And we’re also, you know, embarking on a campaign to endow our Center which will allow us to be, you know, not raising money program by program, to name the Center and to be able to continue to impact entrepreneurs along the scale. From youth to technology to the coffee shop down the street.

Eve: [00:27:30] Well, I really can’t wait to hear, see what happens next and you and I are going to have some coffee on Zoom sometime very soon. Thank you very much.

Lyneir: [00:27:42] What a phenomenal opportunity and thank you.

Eve: [00:27:46] OK, bye.

Eve: [00:28:02] That was Lyneir Richardson, while Lyneir’s work straddles two cities the goal is the same in both places. He’s searching for ways to level the playing field for entrepreneurs and real estate developers in economically disadvantaged neighborhoods. In Newark he’s helped 400 diverse entrepreneurs, growing to a thousand, grow their businesses. And in Chicago he provides resources to real estate developers and retailers to promote investment in disadvantaged Chicago neighborhoods.

Eve: [00:28:35] You can find out more about impact real estate investing and access the show notes for today’s episode at my web site, rethinkrealestateforgood.co. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities.

[00:28:52] Thank you so much for spending your time with me today and thank you Lyneir for sharing your thoughts with me. We’ll talk again soon but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Lyneir Richardson

Advancing financial inclusion. With Fintech.

Melissa Koide has described herself as a “policy entrepreneur,” and she is the founder of a relatively new research organization called FinRegLab (2018), an independent non-profit working rigorously to test the technological tools used by the world of financial services. Most specifically, they have been looking at the use of data in credit underwriting. By examining the opportunities and risks in new technologies and data tools, FinRegLab hopes to better inform both policymakers and financial institutions, helping to create a more inclusive, and safe, marketplace.

Previously, Melissa served as the Deputy Assistant Secretary for Consumer Policy at the U.S. Treasury Department, and before that she was Vice President of Policy at the Center for Financial Services Innovation. At the Treasury Department, Melissa was involved in building the first pre-retirement savings product offered by the U.S. Government, the myRA. And she also established the Innovation Fund, a five million dollar fund to drive research and strategies for improving consumer financial health through access to safe and affordable financial services. 

It was while working in government that Melissa saw a critical need for an independent research organization, an honest broker of sorts to test financial methodologies and new technological tools. When she left government in 2017 she reached out to federal and state regulatory agencies, consumer protection groups, and the financial industry. What she learned helped define the parameters of what would became FinRegLab. Major funding comes from Flourish Ventures, a spinoff of the Omidyar Network, the family investment firm of Ebay founder Pierre Omidyar, and the Milken Institute. One major upfront goal was to work on issues of financial health and inclusion, both for consumers and small businesses. She has spoken of the 26 million people who have no traditional credit history, and the 15 million sole proprietors who lack access to affordable credit to grow their businesses, and how they might all be better served. 

Highly wonkish and an advocate of leveraging technological solutions, Melissa’s work aims to better inform the institutions that provide us with financial tools and protections, whether civic or corporate, policymakers or lenders. She has also worked at New America and been a fellow at the Urban Institute. She is originally from Kentucky.

Insights and Inspirations

  • Melissa describes herself as a “policy entrepreneur” and her team as “small and mighty.” Together they are tackling mighty big policy issues.
  • Policy makers need an independent, non-advocacy driven resource to turn to for empirical evaluation of data and technology. That’s what FinRegLab provides.
  • FinRegLab has preformed cash flow research in underwriting credit.

Information and Links

Read the podcast transcript here

Eve Picker: [00:00:09] Hi there. Thanks so much for joining me today for the latest episode of Impact Real Estate Investing.

Eve: [00:00:15] My guest today is Melissa Koide, the founder of FinRegLab, a pretty new research organization. Melissa describes herself as a policy entrepreneur. While working in government she saw the critical need for an independent research organization, an honest broker of sorts, to test financial methodologies and new technological tools. Through FinRegLab, Melissa hopes to inform policymakers and financial institutions. Their ultimate goal is to advance financial inclusion.

Eve: [00:00:58] Be sure to go to rethinkrealestateforgood.co to find out more about Melissa on the show notes page for this episode. And be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small Change.

Eve: [00:01:21] Hello, Melissa and thank you so much for joining me.

Melissa Koide: [00:01:24] Good morning. Thanks, Eve, for reaching out to me. I’m looking forward to our conversation.

Eve: [00:01:28] Yeah, me too. So you launched a company called FinRegLab with the goal of helping to create a more inclusive and safe financial marketplace and I’m wondering how Fintech – because I think that’s what FinRegLab does, financial technology – helps to meet the unique needs of the unbanked and the underbanked.

Melissa: [00:01:52] Absolutely. I’d love to tell you a little bit about why I stood up FinRegLab, if you’d like to hear a little bit of the origination story.

Melissa: [00:02:02] I was in the U.S. Treasury Department, in the Obama administration, and my office was the Office of Consumer Policy. And I jokingly say, being the head of the Office of Consumer Policy meant that I got to engage in virtually any and all policies that touched people, which meant that we had an important role to play across lots of important policy areas, which was a priority for Treasury and the administration at that time, which was really around financial inclusion and thinking about how public policy and the financial sector could be ensuring support of access, or financial inclusion, for households and families and small businesses who lack access to safe and affordable financial products and services. So that might show up in our financial inclusion agenda, it would very much show up in the work that we were doing looking at some of the consumer protection policies that were being developed. This was after the creation of the CFPD, but there were still a lot of developing policies that the administration was very thoughtful about in the consumer protection area, whether it was housing and mortgages, auto financing all the way to the other end of the spectrum that Treasury focused on, which was making sure that our financial system was safe from bad actors, whether it would be bad actors trying to use a financial system for fraudulent purposes all the way to really bad actors who, you know, would potentially be trying to fund things like financing for terrorists through the financial system. All of those different policy areas were under the purview, or are under the purview of the Treasury Department and all of them, in fact, have real implications for people because people are clearly who make up and who use our financial system.

Eve: [00:04:13] Probably, you know, Small Change and what I built it on comes right out of those policies.

Melissa: [00:04:20] Say more.

Eve: [00:04:21] Oh, the Jobs Act, I mean, the Jobs Act of 2012 and the Regulation Crowdfunding which allows access to anyone over the age of 18 to invest, is pretty much part of opening up that whole financial system to everyone.

Melissa: [00:04:36] That’s exactly. Yep, that’s absolutely right. And you’re putting your finger on another important aspect of what the work we were doing at Treasury and then what was the impetus for creating FinRegLab. So this was back in 2012, 2011, when this notion of something called Fintech was really just coming online and it was post the Dodd-Frank Act but it was definitely something that was thought about in the Jobs Act. And that was: wait a minute, how can new technologies and new data uses potentially enable the creation of access to financial products and services that can be delivered to individuals who may be harder to serve, may be more non-traditional? I can talk about examples around this, but, whereas tech and data potentially able to level the access to the financial sector especially for individuals who may, for a variety of reasons, not be able to get into the more mainstream financial system. And whereas tech and data enabling the innovative and creative new providers of financial products and services who may not be banks, they may not be depositories. We saw the rise of new marketplace lenders who are generally non-bank financial institutions, who in the beginning, and it sounds like you know this well Eve, really doing a level of matchmaking with data between those who were interested in providing resources and funds for borrowers and then the borrowers on the other side who were in need of funds for a variety of purpose. And it was these intermediaries that really, sort of, were at the forefront of this onslaught of new types of non-bank actors. What we now, shorthand is Fintech firms, who are bringing in access to things like credit where that kind of access hadn’t been available especially, I think it’s an important distinction, credit that is affordable and non-predatory. And it doesn’t mean that there aren’t predatory marketplace lenders, there are some of those out there, but the use of the technology and the data, I think, helped to really create a ecosystem of providers of credit that are doing it at a much more affordable price for consumers. And small businesses, actually.

Eve: [00:07:17] Yes. That’s been your background and then, how does your organization FinRegLab play a role in all of this? You launched 2017, right?

Melissa: [00:07:28] Yeah, and so the punch line in terms of, you know, what I was doing at Treasury and what’s FinRegLab is, what we didn’t have while I was sitting at Treasury for four and a half years, was any independent organization that didn’t, frankly, have a particular advocacy agenda. While sitting at Treasury we would hear from the banks, we would hear from consumer advocates, we would hear from merchants, we would hear from Fintech. And everybody had a vested interest in how policy evolves in light of any particular data or technology use. And that’s completely reasonable and understandable. But as policymakers, what we needed, and what policymakers still require, is an independent, non-advocacy, empirically-driven resource or answers that are empirical and non-advocacy driven. That really help to evaluate what are the implications? What are the implications for people from a new type of data use? What are the implications for the financial sector when a new data use might be brought online? And what does that then mean for public policy? What does it mean for the existing rules and laws that we already have in place that may need to evolve and may need to change in light of what a particular new data application may mean for consumers, small businesses and the financial market? And so, while sitting at Treasury, we didn’t have any independent organization to turn to to just get that empirical evaluation.

Melissa: [00:09:09] And so after leaving Treasury at the end of the Obama administration, I spent some time for about six or seven months talking to my policy colleagues who I had worked with, especially the regulators, about this idea of standing up. Would it be valuable to them and what would they like to see evaluated? But to stand up a non-profit research organization that could go about, in a fairly sophisticated way, creating actual empirical evaluations of particular data or technology applications and then, importantly, providing a space for the dialogue for all of the different stakeholders who both need to learn from what the empirical research offers, but then they have a dialogue about what does that data use, now that we understand from an empirical standpoint, what does that mean in terms of the evolution of our policies and our laws? And so that’s, after six months talking with the regulators in particular and identifying a host of particular data applications or technology uses that would be of value for us to study, I then began to explore some of the different philanthropic funders who would be interested in supporting this kind of organization. And we found the Omidyar Network was particularly interested in being supporting for a non-profit to do this kind of research.

Melissa: [00:10:45] I then stood up FinRegLab to go about, frankly year one – and it sounds like, Eve, you’ve run a nonprofit too – year one, what sort of proof of concept is the idea that we’re putting forth, you know, will it succeed? Can we deliver what we’re promising to deliver? And so year one, year one and a half was really first test case. Can we get industry to share the type of data that we need in order to do a genuinely independent empirical assessment? Will we be able to get the regulators to join in the dialogue discussions and all of those industry stakeholders, consumer advocates, the big banks, the Fintechs? And so it was a really exciting year for both building this new organization and undertaking that research. And I’m pleased to say it was a really productive project.

Eve: [00:11:38] I want to maybe know in a little more detail how these projects work. What happens in your lab?

Melissa: [00:11:42] Sure. I’ll tell you some of the projects that we’ve done and some of the things that we have underway that I think are pretty important for the moment that we’re in today. The way that we work is, again, we engage the regulators, consumer advocates and the broader financial market to identify what are emerging data or emerging data uses or emerging technologies that those may have real scale effects for the financial sector? But importantly, and this is FinRegLab, our true north, but that also may have real benefits and power for advancing financial inclusion. We are talking to the financial sector, the Fintechs, the banker, the investors, the regulators constantly to really keep tabs on what are trends in the market in terms of data that are being used or that are being thought about being used, or that present as having real scale effects potential? And then we go about essentially constructing a research project that would enable us to be able to then get the level of data or the access to the technology that we need in order to then evaluate it. And so I’ll use our cash flow research as a sort of tangible way to explain it. So there is a lot of conviction, for very good reason, that we need more affordable and safe credit access. There’s also a fair bit of, I think our research bears this out, concern that our existing credit evaluation process may not sufficiently evaluate the credit risk of underserved consumers and small businesses. And so this may be, in this country alone we have between 40 and 60 million Americans who are considered, that they have insufficient credit history or they have no credit history at all. And therefore, because we rely on credit history, the current approach for underwriting isn’t able to successfully evaluate their credit risk.

Eve: [00:14:00] I actually went through this years ago because when I moved from Australia a long time ago, we just didn’t use credit cards there in the way that they were used here. We didn’t have any credit history.

Melissa: [00:14:11] Exactly.

Eve: [00:14:12] And the mortgage lenders were completely baffled. They didn’t know what to do with us. It was a bizarre experience.

Eve Picker: [00:14:17] How did you find your way through that?

Eve: [00:14:20] I think, my husband had a job with the university and they were supportive in the background. They provided some hand money. You know, this was a long time ago. So somehow we convinced the lenders that we were a reasonable risk. And honestly, part of that is we’re white. I think that when you’re a minority in this country, perhaps that convincing isn’t as easy, right?

Melissa: [00:14:49] Yep, yep. Yep. There is definitely, you know, we see a lot of access issues, especially among low to moderate income communities and individuals who also happen to be minority. So, it is absolutely a need in this country to make sure that financial access is extending to minority communities and minority communities, especially who are low and moderate income. So, absolutely.

Eve: [00:15:18] And that redlining goes away, because it still exists. It exists strongly. And it’s astounding to me that it still does. But there it is.

Melissa: [00:15:28] Well, just to digress on that point for a minute, back in the 70s, we had significant redlining in Chicago, across the country. But there was research that, empirical work, that clearly identified the type of redlining that had been happening in this country. And we ended up with a law put in place, the Community Reinvestment Act, which, in essence, it sounds like you’re familiar with it, says, you know, if you are going to be taking deposits from these communities you need to be serving these communities. With credit, in particular credit access. And I think it’s a really interesting question to bring it back to technology and data today. There is a general belief that that law is too dated in light of how financial products and services are delivered now, where people are going to get and sign up for bank accounts to credit access. And there’s also important questions around, that law specifically covers are depositary, our banks. Should that law be updated so that some of these new types of financial service providers are also included, right? I mean, there are questions around should non-banks who are providing financial products and services have some obligation around that. There’s a lot of complexity and things that have to be considered but I think the general notion of where people are getting their financial needs met, what then are the obligations in terms of the financial system and making sure that people are fairly served and accessing credit and other, ultimately what are wealth building opportunities, right? Credit and your…

Eve: [00:17:16] Yeah. But the problem is, the poorest people who need that credit, it costs them the most. So the opportunity to build wealth becomes even harder. Whereas the more you have in this country, the less it costs you to make more money and to get better credit. And that’s that’s really scary.

Melissa: [00:17:40] Yeah. Yeah. We thought about this a lot while sitting at Treasury and we thought about it, I think it’s important also to be thinking about it, quite holistically. For one, in the financial sector, in the credit decisions, as I said, we’ve got 40 to 60 million people who are quite possibly credit-worthy, but we just can’t tell from the existing way that we evaluate them. And that’s what that cash flow research looked at. And we actually did find that other types of data, in particular bank account transaction information, is able to distinctfully evaluate credit risk, distinct from using a FICO Score or a VantageScore. So just put a pin in that, right? That there are other ways to evaluate people who really are credit-worthy, who haven’t been able to get the credit under traditional means. But this bigger, real problem that is in front of us is, it’s not just the credit system that has to be astute in tackling access issues, we also have much bigger, more foundational needs that would help to lead down the path, if we could fix these issues, for equality. And that means thinking about our higher education, and what does it take to get a good education? And can we deliver a good education with how…strapping people down with debt that may encumber their ability to then be able to acquire other things like a home, as a for instance. Income. Huge issue, right?

Eve: [00:19:21] Right.

Melissa: [00:19:21] Are people getting their basic needs met, are they able to do so with the income they make? And that list would go on. I mean, there is that tax system to think about. We spend a lot of time thinking about how we could be potentially driving savings in a way that is very efficient, very streamlined at virtually no cost. And when I was sitting at Treasury we built a product called the myRA, which was the starter retirement account. This was a Roth-structured IRA product that we set up for the millions of households who aren’t able to save in a traditional employer-sponsored retirement plan. So I think that there are other really important levers like retirement, like higher education financing, like really focusing on income that are so critical to giving everybody the opportunity to have some financial security and financial stability, which, let’s face it, all our families need.

Eve: [00:20:27] Small business lending and I consider, you know, small real estate development to be small, small business as well, is very difficult and really geared towards a very distinctive population. White men. You know, all these businesses that are built on credit cards, which is very expensive, you know, by women and minorities or immigrants. I know we’ve tried to shift that, but that is a really big hairy goal. Like, I’ll give you an example. My parents were immigrants to Australia, and when they arrived, they were refugees from the war. They had absolutely nothing. You know, I grew up with these people who worked really hard to build a life and to make sure their kids had a good education. In a sense, immigrants like that are self-selected because they are driven enough to pick themselves up and go to another country and make something happen to better their lives. So I’m puzzled why we treat them so badly, you know, and that’s around lending for small businesses. Is that a credit issue? Is that, you know, is… I don’t know.

Melissa: [00:21:41] Yeah. I think that there are some presumed limitations on being able to serve immigrants and undocumented individuals that aren’t there but, you know, maybe sort of inhibitors that people decide to put in place themselves.

Eve: [00:22:03] Well definitely with undocumented, but there are plenty of immigrants who are documented, right?

Melissa: [00:22:10] Yep.

Eve: [00:22:11] Anyway, now we’re going down a very different path here. It’s the culture around lending and credit and everything that..

Melissa: [00:22:19] It sounds like you’ve actually, sort of, studied this particular area in terms of some of the decisioning and the culture around lending for small businesses.

Eve: [00:22:27] Well around buildings. But that’s a slightly different culture, you know, that is around…I don’t know enough about banking to really be able to understand this completely, but over the last 15 or 20 years, first of all, the number of banks has been greatly reduced in this country – I think it was 15,000 and now it’s under 5,000.

Melissa: [00:22:49] No, we’r a little under seven.

Eve: [00:22:51] In a sense, community banking has been a little squashed, right? And along with that, what I noticed in real estate, and I’m sure it’s true in business, is that if you’re doing a project that is slightly different in an underserved neighborhood, let’s say it’s the first 10 affordable housing units, or retail on a street that hasn’t had any new investment in 10 years. banks just really shy away from that. They want to appraise it. They want to see that it’s happened before, you know, at least three times. And they want to be really comfortable with a product that they completely understand. And in my mind, that squashes innovation and an improvement in our country, because if you keep supporting the same, how do you grow better?

Melissa: [00:23:43] Yeah, we haven’t studied the real estate market, but we did do a deep dive study looking at small business lending by marketplace lenders. And we did do some level of, sort of, where are the banks relative to the marketplace lenders? I think one of the interesting takeaways that has some resonance in light of the concerns you’re raising are, as we are moving to, and I think this environment with Covid emphasizes this even further, as we’re moving to a much more online and data driven decisioning process and even a more autonomous evaluation process, including for small business lending, I think generally it’s perceived that’s going to help in terms of any type of bias or explicit sort of discriminatory perspectives or behaviors that lenders would apply, right? Because it’s all about what’s the data tell you? On the other hand, it also puts a lot of pressure on, do the data tell you enough? And I think one of the things that I hear you’re asking is, is there enough openness and risk-taking by lenders and banks in the financial sector generally, to allow for and appreciate the diversity that may be coming through, depending upon what the particular small business may be selling, who that small business is, what the geography is that the lender is sort of evaluating. I think it’s a, I think you’re absolutely putting your finger on an interesting question is, you know, that sort of risk taking, are we clamping it down further? We may be mitigating some of the explicit discriminatory bias that we have seen historically, because now it’s really, you know, how long is that business been a business or what is that, sort of, expected small business planning to do? Now we have the ability for lenders to think about a small business idea of, look across the country to compare what’s that business endeavor look like in another marketplace? And what are the factors then that you would want to consider when making a decision to make a loan? On the other hand, is it further driving away the willingness to take risks? And clearly lending and small business is a lot about risk taking, right? I mean,

Eve: [00:26:26] Absolutely.

Melissa: [00:26:26] A lot of small businesses, you don’t make it. And no doubt we have, you know, too many small businesses right now struggling.

Eve: [00:26:34] Oh, it’s awful.

Melissa: [00:26:35] But yeah.

Eve: [00:26:36] And this is the rise of equity crowdfunding, which is really barely an industry at this time. It’s very nascent but, you know, the fact that people will take a risk in other people rather than a financial institution between them is, is a really direct and interesting idea because, you know, people in my neighborhood would band together and buy a house to stop it falling into the hands of a slum-lord.

Melissa: [00:27:03] In Australia?

Eve: [00:27:04] No, no in Pittsburgh, in Pittsburgh.

Melissa: [00:27:06] In Pittsburgh? That’s great.

Eve: [00:27:09] That’s a very direct relationship with a place you’re in. Maybe it’s a direct relationship with a developer. Maybe it’s a direct relationship with a business, you know?

Melissa: [00:27:19] Well, and what’s interesting about what you just said there is it’s all human relationships too, right? It’s your relationship with your neighbor, your sort of shared interest and commitment to taking a risk together all the way to having a relationship with somebody who’s a developer in the neighborhood who’s going to join you in, yeah, taking some level of risk. Yeah, it’s a good question, Eve, I think, you know, how do we make sure that we don’t both lose the sort of human aspect of this, the willingness to take risks because there is such importance and diversity of who the small business owners are, what they provide. Who gets to take advantage of whatever they happen to be building or selling?

Eve: [00:28:05] So what’s your big hope for, big hairy goal for FinReglab? How do you think, or how might you like to change the world?

Melissa: [00:28:14] Goodness. We know to be, we are a small and mighty team,

Eve: [00:28:23] Small and mighty, I like that.

Melissa: [00:28:25] But we are taking on, I think, some of the big and important questions when it comes to technology and data being used to make decisions in consumers financial lives. Our ambition is to sort of be looking around the bend and really, sort of, keep an eye on what are the technology or data applications that will have real scale impact for bringing more people into the financial system? And also being really careful in recognizing there are real risks, too, potentially. We want to grow up and we want to be effective at informing across the entire financial marketplace. I think we have been quite good so far. We’re still pretty little, pretty young. But I think we’ve been good at, sort of, being able to spot what are trends where there is real opportunity, but also the need to assess the risk. Cashflow data was one particular type of data. And I think we did a good job of that evaluation. We’re now actually turning to look at some of the technologies and in particular some of the algorithms, the more sophisticated machine learning algorithms that are being considered for credit underwriting, right? This gets to this whole question of, to what extent is the decision engine for who gets credit and who doesn’t q black box??And so we’re really honing in on this question of, well, is that black box explainable?

Melissa: [00:30:01] And so we’ve embarked on a research project. We’re partnering with a team from Stanford to evaluate some of the explainer technologies that may help to determine how was a credit decision made, if it was a machine learning algorithm that was applied? Is the information able to be explained to a consumer, right? How is the information, is it able to be explained to a regulator? And then, really importantly, how is what’s coming out of that machine learning algorithm understandable for making sure that we are not perpetuating bias? And differences between protected classes and non-protected classes. And so, again, there is, the academic literature suggests there’s real promise in using what I call fancy math. We also really need to make sure that we are able to assess it and understand what comes out of those black boxes so that our policy objectives, our societal objectives are able to be met. So one day at a time for us, but..

Eve: [00:31:18] It sounds like you’re shooting for the stars and  I can’t wait to see what comes out of your…

Melissa: [00:31:24] Oh, thank you.

Eve: [00:31:25] …Small and Mighty Team next. And thank you, thank you very much for talking with me.

Melissa: [00:31:31] Absolutely. Thank you so much for reaching out to me. I’m glad we’ve done this.

Eve: [00:31:54] That was Melissa Koide. FinReglab is tackling a fundamental issue, the need to create a more inclusive and safe financial marketplace for everyone. Melissa believes that technology can solve some of the problems of the inequitable marketplace we operate in now. And she wants FinRegLab to be looking around the bend to identify technology that can advance financial inclusion. While her team is still small, they are tackling a mighty big problem. Small and mighty is how she describes them.

Eve: [00:32:36] You can find out more about impact real estate investing and access the show notes for today’s episode at my website, rethinkrealestateforgood.co. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities.

Eve: [00:32:53] Thank you so much for spending your time with me today. And thank you, Melissa, for sharing your thoughts. We’ll talk again soon but for now, this is Eve Picker signing off to go make some change.

Image courtesy of Melissa Koide

Small versus big.

There’s a history to small-scale development. It’s what we did for centuries until industrial modernism brought large-scale development to our cities.

Large-scale development

The scale and cost of large developments falls into the realm of large-scale developers, and not always good ones. They have been the protagonists in the rapid transformation of our urban environment. Large-scale developments have often had disastrous impacts on local communities and small businesses and have led to the decline of diversity and vitality in many neighborhoods.

Some solutions

There have been many studies into how to tackle the problems that large-scale developments have caused. One important step is to involve the locals. Engaging the community plays a fundamental role in identifying negative impacts and understanding how a development will impact its surroundings.

Most important is the relationship between social activities and the urban space. Solutions might include a mix of old and new buildings to keep some of a neighborhood’s character, small blocks where neighbors might get to know each other, a mix of residential and small business to bring people out into the streets and public space to create a local focus and help promote vitality.

Back to small-scale

Large-scale developers have many resources to tackle zoning codes, financial institutions and all the other complications of development. But small-scale development, buildings with less than 20 units, has become a lost art. How do you build a small building in the place you love? Jim Kumon co-founded the Incremental Development Alliance with the goal of “resurrecting the small developer.” The Alliance provides training and technical assistance to anyone interested in tackling those small-scale projects that make your neighborhood great.

To learn more listen to my full interview with Jim Kumon

Image by Peyton Chung / CC BY-2.0

The reluctant planner.

Self-described as a “planning geek” and “transport nerd,” Harriet Tregoning is a veteran smart-growth advocate who has been wrestling with issues of planning, mobility, disaster resilience, housing and community development issues for over two decades. Her work has centered both on resilience in the face of a changing climate, as well as on an economy based on enhancing quality of place, economic opportunity, fiscal stability, transportation choice and affordability.

Harriet is the Director of NUMO, the New Urban Mobility alliance, a new collaborative effort that aims to guide policymakers, the private sector and people toward a shared vision of cities and urban mobility. The pace of technology-driven disruption in transportation is not only changing how people get around but changing cities themselves as ride-hailing, dock-less bikes and scooters, and even autonomous vehicles are added to the list of transit options. NUMO aims to help answer these questions through collaboration with alliance members around research priorities, innovative pilot projects, public engagement and policy development in cities around the world. Hosted by WRI Ross Center, NUMO is an outgrowth of the Shared Mobility Principles for Livable Cities, which more than 170 companies and governments have signed on to as a guiding vision for more sustainable, inclusive, prosperous and resilient cities.

Harriet has been deeply engaged on planning, smart mobility, disaster resilience, housing and community development issues for the past two decades. She has been working with organizations around the country to help states and localities prepare for a range of future challenges, including smart mobility; climate change; disaster recovery and resilience; housing affordability; and community development. She served in the Obama Administration as Principal Deputy Assistant Secretary of the Office of Community Planning and Development at the U.S Department of Housing and Urban Development. She initiated the first ever $1 billion National Disaster Resilience Competition. Her work encompassed helping states, regions, cities, counties and towns across the country build a strong foundation for resilience in the face of a changing climate, and for a diverse and prosperous economy based on enhancing community quality of place, economic opportunity, fiscal stability, transportation choice, and affordability. She was the Director of the District of Columbia Office of Planning under the past 2 Mayors, where she worked to make DC a walkable, bike-able, eminently livable, globally competitive and thriving city.

She studied Engineering and Public Policy at Washington University. She was a Loeb Fellow at the Harvard Graduate School of Design.

Harriet believes good transportation policy is good land use policy. We can’t fix our transportation woes without addressing the root of the problem: development patterns that have allowed auto-mobility to be a substitute for proximity.  I’m right there with her.

Insights and Inspirations

  • Good transportation policy is good land use policy. We can’t fix our transportation woes without addressing the root of the problem: development patterns that have allowed auto-mobility to be substitute for proximity.
  • Transportation is about access. Essential workers during COVID-19 pandemic had always been essential but they were poorly served by existing transportation options during the pandemic.
  • We often think of redundancy as a bad thing, but in another context, we call it choice. A resilient transportation system provides real choices for all trip lengths.

Information and Links

Read the podcast transcript here

Eve Picker: [00:00:16] Hi there, thanks so much for joining me today for the latest episode of Impact Real Estate Investing.

Eve: [00:00:22] My guest today is Harriet Tregoning, the director of NUMO, the New Urban Mobility Alliance. As a self-described “planning geek” and “transport nerd”, Harriet is a veteran, smart-growth advocate. She has been wrestling with issues of planning, mobility, disaster resilience, housing and community development issues for over two decades. In her work, she has focused on resilience in the face of disaster and challenge, including the changing climate and equity in transportation and access.

Eve: [00:01:06] Be sure to go to rethinkrealestateforgood.co to find out more about Harriet on the show notes page for this episode and be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small Change.

Eve: [00:01:27] Hello, Harriet, I’m really honored to have you on my show today.

Harriet Tregoning: [00:01:31] It’s my pleasure. I’ve been really looking forward to it.

Eve: [00:01:34] Great. You know, you’ve said for many people, change is a really difficult topic. And you actually said I can’t say I love it myself in my own neighborhood. And it sounds to me like change has been a theme in your career from planning director in DC to director of HUD’s Office of Economic Resilience and now heading up the new Urban Mobility Alliance. So, you wrestle constantly with what could be better and what should come next. And right now, the huge change we’re all confronting is driven by this pandemic. I’m wondering what the thread is that you see emerging around Covid19, this pandemic, and transportation issues.

Harriet: [00:02:17] Well, I think the link has been really, really an important one and I think the pandemic has revealed both the vulnerability of our transportation system and pointed out who is not being well served, how transit is vulnerable and yet essential, but also highlighted that while there are some risks to being close together, that is also essential in many ways, to have things and people that you need near you. So, I think in many ways you could see the pandemic and its impact very much through the lens of transportation and, you know, even our development pattern and how that affects what people can get to easily or not.

Eve: [00:03:13] Yeah. In Pittsburgh, we have a pretty active bus system, which is all about, you know, cramming people onto this moving box, right? And that’s the exact opposite that you want right now. What other way can these can people get around right now?

Harriet: [00:03:32] Well, I think what it highlights maybe, Eve, is not so much even that that type of transportation is that, is an optimal right now. I think it suggests that we need redundancy in our transportation system. That we, there are many occasions, you know, global pandemic or not, where one mode of transportation isn’t suitable for you, but yet you’re trapped if that’s the only mode you have, whether that’s auto mobility, whether that’s transit, whether that’s, you know, maybe you have mobility issues in general and it’s hard for you to do other things like walk or bike.

Harriet: [00:04:14] But, you know, one of the great things I got to do when I was at HUD was really work on resilience from disasters. And at the same time, in D.C., I had a firsthand experience with being a local official during the last great, you know, during the Great Recession and an economic crisis. In both of those roles I got to see first-hand how important those transportation choices and options really are. Think of evacuating Houston in the advance of a predicted hurricane. Now, despite having more lane miles and freeway than virtually any other U.S. city, things were utterly gridlocked and people couldn’t get out. We had an earthquake in D.C. in 2011. The federal government and all the governments in the area told people to go home while they check the stability of buildings at exactly the same instant and the gridlock was unbelievable. But if you were on a bicycle, you had not just a normal commute home, but you had a space commute because no other vehicle was moving. And so, you didn’t have to worry about speeding cars or things like that. So, that redundancy is really, really an important thing. And what we’re seeing is that we don’t have that in the US in most cases, that people have at best, they have one choice and when that choice is no longer suitable for whatever reason, they’re really stuck.

Eve: [00:05:47] How do you change that? How do you design that redundancy into a transportation system in a city?

Harriet: [00:05:54] Well, one of the great things, you know, that’s true about the moment we’re in right now is both the technology and some degree of electrification have provided us with a lot of additional choices that can either substitute for or better complement the transportation that we already have. We’re a long way away from a perfect intermodal system, but e-bikes, e-scooters, e-mopeds are recent additions to many cities across the globe and those additions can cover a range of trips from, you know, a few hundred yards to, you know, to on an e-bike you could easily go seven or ten miles without breaking a sweat. Those options are really, really new things in cities and a lot of ways and so, having those to help you get more easily to a transit stop or help you get from a transit stop to the place that you need to go, bikes can be great because they can carry cargo and probably electric cargo bikes are one of the fastest growing types of individual transportation that’s out there. Some places, Germany for example, have seen unbelievable increases in e-bikes. I have to say, I’m a proud bike owner myself as of last summer. It’s really game-changing and super fun as a way to get around. So, I think that making provisions for walk, bike and micro-mobility on our streets where people don’t have to be in fear of their lives from fast moving vehicles is really critical.

Eve: [00:07:38] Probably in my mind that’s the real issue, you know, these solutions like e-bikes and e-scooters and e-mopeds are all fabulous, but it’s the traffic on the street and a cultural shift that really has to happen, maybe as much as these solutions, right?

Harriet: [00:07:55] You know, you’ve really hit the nail on the head with that comment. It’s absolutely true that there’s a lot of latent demand for that sort of transportation, that people are totally fearful about riding in mixed traffic with automobiles, and so I think it’s really up to city planners and transportation departments to provide those safe facilities and, you know, it’s absolutely been demonstrated that if you build it, people will use them. Those things are really important. I could give you another example from when I was a local official during the recession. You know, we saw hundreds of cars drop off the DMV rolls in D.C. I was afraid people were fleeing the jurisdiction. But it turns out they were dialling down their transportation costs because they could. So, they were getting rid of a car. So, they were a two-car household they were becoming a one-car household. I’m sure in their minds, temporarily, right? Just a temporary step to lower their costs. And some one-car households became no-car household. Again, maybe they thought of it as a hardship, but there were other options that they could use so it was absolutely doable for them. As a consequence. we had very little bankruptcy, very little foreclosure in the district because people could manage those economic hard times and it was similarly true for the other inner ring jurisdictions, Arlington and Alexandria. But in the same jobs and housing market, which was the Washington metropolitan region, the jurisdictions fared extremely differently and so did households. If you didn’t have those transportation choices, you were stuck. And those communities saw so much more bankruptcy and foreclosure, so much more, so much higher declines in property value. There are still some parts of our region who have not fully recovered. Whereas the places that had these choices, the market and the budget debt, but they didn’t plummet and the rebound was so rapid that this was really a case where those jurisdictions sprang ahead in terms of their resilience. They didn’t just recover, they did better. They improved on their share of the region’s job and housing growth post-recession. I know in part because of the lesson of those choices and what they can do for the resiliency of households and of jurisdictions.

Eve: [00:10:19] I was in Beijing a few years ago and was really struck by, you know, first of all, they have a pretty wonderful subway system. But the stops are really far apart and whenever you go to a subway stop, there are literally thousands of bicycles parked outside it. Thousands. So, the culture there is very much you have an old battered bike and you get yourself to, you know, the next bit of transportation which gets you where you want to go faster. And so, it’s sort of this connected string of things that get you to places, not just one type of transportation. I thought it was pretty fabulous. I’m afraid China’s probably going the other way now. The other thing in China that I thought was really amazing was, if you watched bicycles on a street with cars it was almost like a dance. They just sort of respected each other and the bikes would keep going and the cars would move around them. It is an entirely different arrangement then in our cities here.

Harriet: [00:11:22] I think that that’s a good point, too. And I think that you see, when bicycles become a visible and significant part of the transportation picture, they are treated differently. You know, I’ve been in Shanghai and been in a mob of cyclists. I mean, the largest group of cyclists I’ve ever been in and it wasn’t an organized ride. People were just, you know, riding, you know, going about their business and, you know, and they took up lanes, you know, travel lanes, general purpose lanes, you know, for the bikes. And it didn’t, you know, it wasn’t causing an outcry. And in places like Amsterdam and Copenhagen, the cyclists easily outnumber the vehicles on any given day and they’ve given over more and more of the right-of-way to accommodate cycling. You have to wait through several light cycles in some places, you know, on your bike in order to get through an intersection because there’s so many cyclists. So, yeah, that makes a difference.

Eve: [00:12:20] Why are we not there in the US? Like, why are we sort of lagging behind all these other countries?

Harriet: [00:12:25] Well, I know that you’re all about real estate. I mean, I think the answer is the real estate issue. We, in the U.S., with the advent of the automobile, you know, more than a hundred years ago, we started making decisions that, more so than any other western country, we started substituting auto mobility for proximity. I mean, think of how much proximity was valued and how, when we didn’t have an automobile for transportation, you know, things were close together. You know, neighborhoods had almost everything you needed, you know, in walking distance. Even the streetcar suburbs, which is one of the earliest examples of transport and real estate kind of going together, a lot of those early streetcar suburbs were actually owned by property owners and developers who wanted to open up land for development, even though distances weren’t very far. But with the automobile, you know, our U.S. cities in particular really bent over backward to accommodate the automobile and accommodate those who wanted to use auto mobility in order to access what was largely cheap, undeveloped land, you know, to put factories, to put office parks, to put housing and to use cars instead of walking or biking or streetcars to be able to get people there.

Harriet: [00:13:57] And what’s happened increasingly is that auto mobility is out of the range, the price range for many households and that means that they don’t get access to really important things that are part of economic mobility. They can’t get or keep a good job because their transportation is unreliable. They can’t access health opportunities, educational opportunities, you know, without a lot of time and effort. So, it’s really created a bifurcated society. And I think one of the things about this crisis that we’re in globally, is that some of the workers that we most value, that we most rely on, who are part of the food chain, the supply chain for our food, who re-stock grocery stores, who clean, ICU’s, these low wage workers are really struggling to get to their jobs and to keep doing the important, and at this point even dangerous things that they’re doing to serve the rest of us. And you know, that is part of the example of why and how our transportation system is not serving us.

Eve: [00:15:04] And I think also in terms of real estate, 30 years ago people did not live in cities. So, cities have really seen a pretty, pretty significant comeback. And in places like San Francisco, especially, it is out of reach of those workers to be living in the city. So, they’re being pushed further and further and further out, which means that transportation becomes an ever bigger problem, right?

Harriet: [00:15:32] This whole conversation is really about transportation and land use, like, these two things have to happen together. That’s an example of where the land uses and the provision of housing isn’t keeping up with the provision of jobs. And in California, part of that conversation is really about their tax structure. But yeah, I think in every place we have that mismatch, that spatial mismatch that we need to solve, and I’d rather solve it with land use and real estate than providing lots of additional transportation infrastructure that’s costly to maintain, costly to access and keeps people further apart.

Eve: [00:16:13] Yeah, I mean I read an article recently in Strong Towns, I think it was a an old one, but about the parking requirements for a retail space, which sort of drives that space to become a little bit of a strip mall. And obviously the more parking a small retail space has to provide, the more they seek cheaper solutions, which, again probably further out of the city. All of those decisions, all the parking requirements, all the decisions that are sort of burdened on land use just make the problem exponentially worse. If you waive those parking requirements for a small business so that they could locate in the heart of a small main street, then they’d be within walking distance of a lot of people and…

Harriet: [00:17:03] I think that’s right, and I think that parking, the parking requirements, which, you know, one of my heroes is Don Shoup, you know, who’s written a wonderful book called The High Cost of Free Parking, you know, and his researchers, the students and graduate students at UCLA have basically identified that there are six to nine parking spaces for each and every automobile in the US, which is horrifying to, kind of, contemplate and that, you know, at any given moment that parking isn’t being used, right? You know, and when retailers provide parking, what they want is, you know, parking for, you know, Black Friday. You know, they want the peak of the peak parking, which means that any other time, it’s mostly not being used.

Harriet: [00:17:56] So I think smart cities, you know, are lowering parking requirements, requiring shared parking, you know, so that the time of day usage can be shared. So, an office building and an apartment building, you know, might be able to share parking or a movie theater and, you know, and an office might be able to share parking and they’re also de-coupling the parking. So, if I don’t want to have to pay as part of my apartment rent for a parking space because I can get by without a car, I don’t want to have to have that parking included. And I don’t want to have to buy a house or a condo where that is necessarily included either. I’d like to be able to purchase those things separately only if I need them.

Harriet: [00:18:40] So all those things that cities are doing to de-couple parking and to be smarter about it means that they’re producing less parking going forward. And almost everyone who’s looking at the future of travel is also thinking that we will have less individual car ownership in the future and also less need for parking. Because right now, you know, not only is parking wasteful, but we don’t drive cars that much. You know, our average in the US is 5 percent of the time, on average, the cars are being driven along, 95 percent of the time they’re not being driven. If you’re in some other business, yeah, you’d say, oh, my gosh, that’s not an asset utilization that’s very good. I should be trying to be more efficient. So, I think that’s also the future.

Eve: [00:19:30] And then, of course, as parking requirements are reduced, you’re freeing up land. Much needed land for affordable housing and other things like that, that are close in to jobs. So, they’re really big issues. So, yeah. So, what’s your background and what path led you to all of this?

Harriet: [00:19:51] So, I studied civil engineering in school, but I’ve been, you know, I’ve been essentially pretending to be a planner for more than 20 years, really. And I have to say I was probably a reluctant planner. I admired planners very much but, you know, I wasn’t necessarily trained in it.

Harriet: [00:20:10] And my first job, my first official planning job was actually to be the secretary of planning for the state of Maryland. I worked with an organization you might know, the Urban Land Institute.

Eve: [00:20:22] Oh, yes.

Harriet: [00:20:23] When I was at the Environmental Protection Agency to help create a national smart-growth movement, because, from my perspective sitting at EPA, we were kind of swabbing the deck of the Titanic to worry about what was smaller and smaller amounts of pollution coming out of tailpipes and smokestacks and utterly ignoring the changing use of the land. That more and more land was being converted to roads and driveways and parking lots and making watersheds impervious and causing lots of runoff, and even though automobiles were getting more efficient in terms of fuel and economy and pollution, that people were driving more every year. So, and EPA was doing absolutely nothing to address those issues. So, from a pollution perspective, I thought if we could figure out a way to have more compact developments, so in the course of doing that I actually became completely impassioned about the idea of returning to a historical development pattern that was six thousand years old, you know, the walkable neighborhood, and that so many people would benefit. If we had more walkable neighborhoods, it wouldn’t be a rarity and an expensive amenity that only a few could afford but if we had it for everyone we’d be healthier, our transportation would be a lot more affordable, it wouldn’t be nearly so expensive to serve people from a government perspective, and maintaining infrastructure, we’d save farmland and forests, we would reduce pollution and greenhouse gases. I mean, there were just tons of reasons from so many stakeholders’ perspectives why it was better, that it really did grow into a movement.

Harriet: [00:22:02] And so, ever since, I’ve been doing something having to do with this. I mean, the good news, the bad news is that there are so many reasons why we have the development pattern that we do in the US than in other parts of the world, that any one change, any one job can’t fix it all. There are hundreds of jobs, hundreds of things that would need to change and have begun to change to make a difference. So that there are lots of jobs that I could be in and I’d play a role in that change and have held a lot of those different jobs, whether it’s doing disaster recovery at the federal level or sitting on the board of our transit agency or being the head of planning for a state or for a city, and now at an advocacy organization that really focuses on all the different stakeholders in transportation.

Eve: [00:22:52] Yeah, no, I agree with you and I’m doing my little bit at Small Change and trying to support projects that make a difference in the same way. You know, I’ve been fortunate with this podcast to, to interview really amazing people tackling these issues in so many different ways it’s absolutely astounding. So, do you think we’re better off than we were when you started thinking about this decades ago?

Harriet: [00:23:16] I think we are. I think that, as you mentioned, the comeback in cities, the increase in walking and biking in a lot of our cities, the increase in transit use, you know, relatively speaking I would say we’ve hit the peak and declined and obviously transit is on life support at the moment with this particular global pandemic. But transit of the value-add for real estate has also been amazing. You know, I find it wonderful that there’s now something like walk scores that people look at when they’re deciding where to site an office or where to buy a house or rent an apartment – to look at what’s the stuff within walking distance?, how convenient is my neighborhood going to be? So, yeah, I think that we’re definitely making progress.

Harriet: [00:24:02] We have a, we have a long way to go to make it normative in the US for these choices to be ubiquitous and every-day. But I think every crisis that we’ve had, whether it was the Great Recession or what we’re in the middle of now, point to some of the benefits of proximity and I think we’ll see more of that when we come out of the health part of this crisis and start really looking at the impacts on the economy. And my hope is that we can do more to provide that infrastructure that will make it safe and comfortable for people to use the transportation choices that should be available to them – the walking, the biking, the micro-mobility, the transit – that we’ll continue to think about trying to put the things that people need closer to them. And I think telework is going to be a much bigger part of our future employment picture and that also means that on any given day in any ostensibly residential neighborhood, there’s gonna be an office building’s worth of workers, you know, in that neighborhood needing coffee, needing a place to meet people for lunch, you know, needing a place to get out of the house and do some work and hopefully that will encourage more mixed use in even those currently residential only neighborhoods.

Eve: [00:25:24] Yeah, so a real loosening up of zoning as well that can really help make better cities for everyone, right?

Harriet: [00:25:31] Yeah, absolutely.

Eve: [00:25:32] So I have a question for you and that’s what’s next for NUMO?

Harriet: [00:25:37] Well, NUMO is definitely looking at both responding during this crisis, but also looking at what’s coming. You know, a lot of the micro-mobility that have entered market in the last couple of years, you know, have brought some new choices to residents, but they have come in as pure market players when in fact micro-mobility might be a great thing for employers who can’t fill certain types of jobs to be offering to those workers. It might be that cities are interested in using micro mobility to help people better access transit or to be a substitute when transit isn’t running for whatever reason and really think of more integration of these new choices with the existing public transportation system. So, I think those opportunities are there. Those have not been the business model that a lot of these new entrants have been using. But we’re working with some folks right now to talk about how employers, hospital employers, grocery employers are really interested in helping their workers get to their place of work and that having dedicated fleets of micro-mobility vehicles, whether those are e-bikes or e-scooters or e-mopeds. Those might be really great choices for them and I think they’ll find that that’s true, not just in the crisis, but after. And I think that’s also true for transit agencies. You know, if we could integrate the payments across different types of transportation, you pay once and you can take, you know, you can have a number of choices for how you get from the place where you are to the place you want to be, even if those trips involve an e-bike and then a train and then a scooter at the other end. If those were all part of a seamless transportation experience, a lot more people would be doing it and you could bundle trips in a way that really create value and incentives for the rider for the person needing the transportation.

Eve: [00:27:45] So this is sort of a perfect storm for transportation and technology and maybe this horrible pandemic will kind of move a little forward more quickly and we’ll see something good come out of it.

Harriet: [00:27:56] Yeah, and I think the data that all of these new options are generating is a whole nother thing that we haven’t been getting from, you know, we don’t know nearly as much about any individual car movements as we know about transit and about these technology-enabled micro-mobility devices. So that tells us a lot about who’s traveling where and when and where there are big gaps where people don’t have access and how that access, you know, that access this crisis has really highlighted how really important that is. Whether it’s two grocery stores or to hospitals or to critical places of work. So that’s, that’s the thing I think we’re gonna be focusing on.

Eve: [00:28:41] Well, thank you very much for talking with me today. I can’t wait to see what comes next.

Harriet: [00:28:45] Thank you so much. It’s really been a pleasure. I’m really happy to have done it.

[00:28:52] OK, thank you. Bye.

[00:28:56] That was Harriet Tregoning, the director of NUMO, the New Urban Mobility Alliance. While she calls herself a reluctant planner, planning has been the full-frontal focus of her career as she has tugged and wrestled with issues of how to make our country better, more sustainable and more equitable. Harriet believes good transportation policy is good land use policy. We can’t fix up transportation woes without addressing the root of the problem. Development patterns that have allowed auto mobility to be the substitute for proximity. I’m right there with her.

Eve: [00:29:44] You can find out more about impact real estate investing and access the show notes for today’s episode at my website rethinkrealestateforgood.co. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities.

Eve: [00:30:01] Thank you so much for spending your time with me today. And thank you, Harriet, for sharing your thoughts. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Harriet Tregoning