Rethink Real Estate. For Good.

Technology

The mobility landscape.

Mobility and transportation are inextricably linked to real estate and land use. Why?  Because the largest proportion of most people’s incomes are spent on these two things alone. This is why the demand for walkable urban neighborhoods just keeps growing. But mobility is all about volumetrics. In dense urban areas, there are limiting factors to how many people you can move and how quickly.

The question is, how do you create a system that lets people live where they want with a good quality of life, affordably and with greater access to jobs? Solving this problem will help to solve the affordable housing crisis. Just becoming a one-car family, instead of a two-car family can save around $150,000. And if you can walk to shop for groceries, and there is transport to get you to work, you might opt to have no car at all.

Reallocating space

The ability to move people relies on the physical landscape. If all the lanes in a street are used for cars that only carry one or two people, we can’t move very many people. And new modes of transport like e-scooters and bike shares need safe space to be successful. Further, cities want to get people out of cars for numerous other reasons. It’s expensive to give over valuable land to cars. They take up a lot of space and they make our air unhealthy to breathe.

The reallocation of our streets has already begun.  Cities are narrowing their streets, adding bike lanes and closing some to pedestrian traffic only. This movement is gaining momentum, and even more quickly since the coronavirus shutdown.

Technology

At the same time there’s a technology revolution going on that has reached the mobility sector. GPS technology, electrification of cars, enhanced cell phone networks and even solar energy are powering a transformation in mobility. Data will help to harmonize seemingly disparate transportation modes. One example is Los Angeles, where the Department of Transportation is using data to successfully manage the addition of more than 30,000 scooters to its streets.

Soon we’ll have dockless rentable scooters, autonomous vehicles and mobility services that will seamlessly combine transit services for users. Pittsburgh is already creating a first-of-its-kind, mobility-as-a-service system. Diverse mobility services will be organized into a one-stop transit app, along with physical hubs. Users will be able to seamlessly opt for a variety of transit options to get them from A to B.

Joining Forces

This mobility revolution ultimately depends on strong public-private partnerships with a sharing of the risks and rewards. Many cities already work with the private sector on sharing data effectively for planning and operating systems. At the same time venture capital, private dollars, are being invested into mobility solutions. These private companies need government support to be successful, from the building of a physical landscape that supports them to concessions for operating services that support their citizens.

Gabe Klein has spent his career specializing in all facets of urban mobility, both within government and as an entrepreneur. He sees the exchange of ideas between the public and private sectors, two very different cultures, as essential to solving the major problems of our times.

Listen in to my interview with Gabe.

Image from pxhere, licensed CC0

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

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

Equity is the thread.

John Folan is an architect and teacher like no other I know. He frames his work around issues of the environment, social justice and equity. Not only is his own body of work significant, but he is dedicated to teaching students to be the next generation of thoughtful architects, makers and citizens.

John is probably best known for his work in Pittsburgh, as founder of the Urban Design Build Studio. He has used design processes to work with under-represented communities on the development and implementation of a variety of interesting projects for most of his professional career. In 2011, he co-founded PROJECT RE_ also in Pittsburgh, geared towards creating entrepreneurial opportunities for local communities with a three-part mission: “Reuse materials. Rebuild communities and Restore lives by teaching trade skills to help people secure a living wage.”

In 2019 John was appointed architecture department head in the Fay Jones School of Architecture and Design at the University of Arkansas. Previously he was the T. David Fitz-Gibbon Professor of Architecture at Carnegie Mellon University’s School of Design. His work has been recognized by the American Institute of Architects (AIA), the Association of Collegiate Schools of Architecture (ASCA), and Design Corps SEED Awards. Before joining Carnegie Mellon University, John was a tenured faculty member at the University of Arizona, and the co-founder of Drachman Design Build Coalition (DDBC), a university-affiliated, non-profit corporation dedicated to the design and construction of environmentally specific, energy-efficient, affordable housing prototypes. He has been registered as an architect since 1995 and a LEED Accredited Professional since 2008.

Insights and Inspirations

  • Successful design projects can emerge organically out of conversations with communities and stakeholders long before any building or idea is imagined.
  • Design training has increasingly become important to fields outside of architecture, because of the ability to think critically and across disciplines.
  • Design education should help students to understand opportunities, while learning an agility that allows them to adapt and grow and change.
  • Cities have actually been improving, making strides towards being much more inclusive in terms of both social and economic platforms, although we have to move the meter much further.

Information and Links

  • John founded and leads the The Urban Design Build Studio (UDBS), a collaborative of students, professors, and allied professionals who work with community residents on implementation of appropriate, affordable, replicable design solutions.
  • John also founded PROJECT RE_, with a mission to reuse materials and facilitate landfill diversion; rebuild communities by strengthening capacity of local residents; and restore lives by teaching people trade skills to secure a living wage. The 10,000 SF Project RE_ space includes a community room, design studio, gallery and workshops for wood, metal, masonry, and digital fabrication.
  • And here’s an example. Re_Fab is a mobile fabrication lab that brings digital tools and educational activities to your front door.
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: [00:00:23] My guest today is John Folan, head of the Department of Architecture and Design at the University of Arkansas. John is probably best known for his recent work in Pittsburgh. As founder of the Urban Design Build Studio, he has used design processes to work with underrepresented communities on the development and implementation of a variety of interesting projects. And in 2011, he co-founded PROJECT RE_, also in Pittsburgh, which was geared towards creating entrepreneurial opportunities for local communities with a three part mission: re-use materials, rebuild communities and restore lives by teaching trade skills to help people secure a living wage.

Eve: [00:01:16] Be sure to go to EvePicker.com to find out more about John on the show notes page for this episode, and be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small Change.

Eve: [00:01:40] Hello, John. It’s just lovely to be able to chat with you today.

John Folan: [00:01:45] It’s great to speak with you, too.

Eve: [00:01:46] Yeah, it’s been way too long.

John: [00:01:48] Yeah.

Eve: [00:01:49] So, you are now the head of the School of Architecture at the University of Arkansas. But I’ve known you, I knew you through your tenure at Carnegie Mellon University and saw you launch the Urban Design Build Studio there. It’s pretty rare to meet an architect and teacher who is so squarely focused on public interest and equity. And I wanted you to tell me a little bit about the Urban Design Build Studio and the goals you have there.

John: [00:02:19] Well, the Urban Design Build Studio is still alive and well, actually, I’ve carried it with me to the University of Arkansas and it’s now at the Fay Jones School of Architecture. We’re on the initial phases of the first project down here, with promises of many more to come, even in the context of the changes that we’re experiencing with the pandemic. The focus of the Urban Design Build Studio is really to focus on public interest design issues. The clear objective is to use collective intelligence so that the work benefits from the perspectives of multiple entities, multiple individuals, people of multiple expertise. And what we’re trying to do is develop work … tangible outcomes, tangible impact that is replicable and appropriate for the circumstances being addressed. So, it’s quite often that Urban Design Build Studio projects start without having an idea of what the project is, but they emerge more organically out of conversations with community stakeholders and community leaders.

Eve: [00:03:41] So, tell us a little bit about the first project that you’re doing there. Or, maybe a past project that you did in Pittsburgh, but one that you think is really a good example of what you’re trying to do.

John: [00:03:51] I think probably the best example of the one in Pittsburgh, and then I can talk about what we’re starting to do here. The projects in Pittsburgh have ranged in scope from a fabrication facility to a cafe to housing proposals and all sorts of projects in between. Mobile advocacy projects, as well. Probably the one that demonstrates the underpinnings of the Urban Design Build Studio best would be Cafe 524, which is now the Everyday Cafe in Homewood. That project was initiated with …

Eve: [00:04:34] Everyday Cafe?

John: [00:04:36] Yeah, Everyday Cafe, which is right there on North Homewood Avenue, in Homewood, and that project emerged out of a chance introduction to Dr. John Wallace at the University of Pittsburgh and is a native of the Homewood neighborhood, and working with students. By virtue of the suggestion of the Urban Redevelopment Authority, we started working in Homewood and and started with some community engagement, met Dr. Wallace and really focused on this notion of a “third place.” And he had put together a group of people who were interested in establishing a third place and a business opportunity for local residents, and put together a team with Operation Better Block and obtained a license agreement for the property, and then ultimately stuck with that project. And Dr. Wallace has now run that facility for about three years. So, that’s the type of project that probably best exemplifies an organic path to coming up with something that’s meaningful and sustainable for a community.

Eve: [00:05:53] A little bit of background for our listeners. So, Homewood is one of the neighborhoods that kind of suffered most, I think, when Pittsburgh lost half its population, and really hasn’t come back. I don’t know about, I don’t know the demographic numbers there, maybe you do, but it’s very poor …

John: [00:06:12] Yeah, it’s one of the most economically challenged neighborhoods in the city, if not the most, depending on the sector of the neighborhood that you look at. It is, it demonstrates the most challenged characteristics in terms of median income levels. So, there are a number of factors that the significance of that project and the significance of having stakeholders who are really invested in the community, and want to sustain something. So, you know, the work of the Urban Design Build Studio, we’re bringing design services to a group of individuals who may not have had access to those services otherwise. And to achieve something that they might not achieve otherwise. By virtue of affiliations with a research university, there’s an opportunity to spend longer periods of time and working on the projects with those stakeholders than might be possible in a traditional market rate scenario.

Eve: [00:07:13] So, your projects are then in pretty underserved neighborhoods where people are in serious need economically, or affordable homes, or any variety of those options, right?

John: [00:07:27] Yes.

Eve: [00:07:29] Okay. And so you also launched PROJECT RE _ in Pittsburgh. And I don’t know if you took that with you as well. But what was that about?

John: [00:07:37] PROJECT RE_ was a way to expand the efforts of the Urban Design Build Studio. I’m still the executive director of PROJECT RE_. PROJECT RE_ was focused to address regional issues in Allegheny County and Pittsburgh, focusing on restoring community, rebuilding lives and re-use of materials. So, it was a transactional entity and a physical space that has been put together to bring design expertise … You submit materials that are extracted from building deconstruction associated with blight that exists, in Pittsburgh, and then involve efforts of job skill training in the creation of the projects. So, it’s a, the space is about 20,000 square feet in size. There’s a large community meeting center. There’s a gallery in there. There’s a small studio. There’s an industrial fabrication shop that has CNC technology as well as a wood shop. And then there’s an assembly area, and welding training centers.

Eve: [00:08:49] Wow.

John: [00:08:50] Since 2012 that’s been the main working space for the Urban Design Build Studio in Pittsburgh. And we plan to use that space, now that I’m in Arkansas as the head of the Fay Jones School, the intention is to use that space in the summers for design build projects with a number of universities around the country and potentially around the globe, to work on projects that are more targeted in nature, and bring people to Pittsburgh. And then during the year, we’re planning on moving forward to have a series of fabricators and artists and residents who work on projects and initiatives that they’re interested in.

Eve: [00:09:41] That’s pretty extensive. So, how do you hope these initiatives will impact architecture, and architects as citizens, in general? This is not what most architecture schools do, right?

John: [00:09:54] No, it’s not, but I think that there’s been a growing awareness of it. I would say it’s become much more common now. There’s a much greater awareness of the benefit that people can have. I think that, you know, when we talk statistically, if you reference the Cooper-Hewitt Museum exhibition from a number of years ago, you know, they always talk about the other 98 percent, that two percent of the population can afford to use the services of an architect. That statistic is not really correct. The language, more precisely, should be to two percent of population elect to use the services of an architect. And so if we take a look at that, that 98 percent sector is enormous. There is a large portion of that sector that simply don’t value design. And so there needs to be greater awareness.

Eve: [00:10:53] I used to always say that people would spend more time picking the sneakers they buy then choosing an architect, right?

John: [00:11:00] True. Yeah, they will. And so there’s a culture that has to be cultivated around that and and an appreciation for that. So, the intent here is not that every student emerges wanting to be a contractor, or wanting to build their own work, or that they pursue public interest design as a full-time endeavor. But it’s more that we’re elevating their awareness, more that we are helping them to become better citizens, helping them to understand opportunities and how to navigate the context of projects to help them be innovative in ways that are appropriate and have impact to broader communities.

Eve: [00:11:41] You know, I’ve always thought that architectural training is really unique because it teaches these kids to take nothing and turn it into something in a very creative way. And it’s a training and problem solving that I don’t think, I don’t think you can really match in another profession, but maybe in engineering, but perhaps not so creatively there.

John: [00:12:04] No, I agree entirely. I think that it’s an enormous skill set. And most of the students who are successful in migrating the whole way through a curriculum possess a great deal of passion, and a great deal of persistence, as well. And I think those sensibilities and those attributes become so important. And I think that we undervalue ourselves …

Eve: [00:12:30] Yeah, I agree.

John: [00:12:31]  … quite clearly. And, you know, and it’s interesting, too, this trend towards project-based learning that has been adopted across academic circles. You know, it’s really interesting, that’s been embedded in architectural education since its inception. We never seemed to value it. But now other academic units find enormous value in it. And it’s something that’s always been inherent, what we do.

Eve: [00:12:57] So, you know, I’m an architect by training and I’ve morphed over the years into now … I’m a fintech expert! And who knew? But I would say that, you know, early on when I was young, I had a very hard time thinking about leaving architecture because it felt like a waste of training. But I’ve realized over the years that’s absolutely not true, and that training has helped me in innumerable ways. So, I wonder whether architecture schools are getting better at showing young architecture students the possibilities of what they can do with this training. They don’t need to just go work for a, you know, a starchitect somewhere, but there’s sort of endless possibilities for what they can do.

John: [00:13:45] No, I think that students emerging today are so much more aware. I do think that schools are being far more successful in terms of providing opportunities  to students that suggest the full spectrum of things, that they might branch out and might explore professionally after they leave the academic setting. It’s really interesting. I’ve always been amazed at what you’ve accomplished. And I think in a way you’re sort of the poster child for …

Eve: [00:14:19] The wayward architect, right?

John: [00:14:20] Well, yeah. I mean, but not really. You’ve always come back and you’ve been an advocate for design. And I think that, I think where there’s now greater awareness of what architectural education can do is evidenced by programs that are not necessarily professional programs. Like four year programs that are really elevating the awareness of young individuals about the potency of design, what design has to offer. And what happens is those people who graduate, say, with a bachelor of science that will not position them for professional licensure, they’re merging and entering other disciplines, allied disciplines and allied fields. Allied fields are as important, as you know, to the implementation of innovative work as design. I mean, so, yes, I think that the schools are much better now at getting students away from navel-gazing. You know, where you just sit in isolation and try to develop things in isolation. I think that there’s much more emphasis placed on collaboration, team building. I think you see that across the board.

Eve: [00:15:37] Yeah, that’s pretty fabulous. So, as head of the architecture school there, what do you think is the most vital now for the next generation of architecture students, then?

John: [00:15:49] Well, I think it’s probably the same thing that it’s always been, is agility. And I think that’s probably a lot of what we’ve been discussing today, is the the ability of somebody to adapt to a situation, to understand a situation, to bring different levels of expertise and to orchestrate that expertise in a positive way. It’s also knowing when to be a soldier and when to be a leader. And I think that those are important things, important sensibilities. And of course, with climate change being such a significant factor, I mean, that has been part of the conversation. We’re starting to see much greater awareness in the area of social justice and equity. That will need to continue as well. So, I think, again, this training is a problem solver. It’s really just the critical thinking skills and being agile that you really want to have somebody emerge with. They don’t feel that they’re indoctrinated, in a way that they’re equipped with a series of tools that will allow them to adapt and grow and change …

Eve: [00:17:01] Yeah.

John: [00:17:01] … as they move through their career.

Eve: [00:17:03] I’m jealous that they’re learning that so young. Because it really wasn’t a possibility when I went through school.

John: [00:17:08] Yeah, no. Same for me. There was one way to do it. And you kind of had to find your way after you got out.

Eve: [00:17:16] We had to butt our heads against it, right?

John: [00:17:18] Yeah.

Eve: [00:17:19] So, what’s your background and what … You’ve spent a life kind of fascinated with equity in architecture and in the physical environment. And I’m just wondering how you got there.

John: [00:17:29] Well, I’m always proud to tell people that I’m from Chicago, if they’re willing to ask and if they can’t discern from my accent. So, I had, you know, I’m also old enough that when I was young, there were a number of significant buildings that were being constructed at the time. And I was fortunate enough to have the opportunity to see those buildings being built and was just fascinated by construction and the physical environment. And so I really can’t remember a time where I did not want to be involved in architecture, professionally. It was always a an interest of mine and something that I thought would be a great privilege to be involved with. I think as I got older I started to develop an interest in affordable housing and equity, just by virtue of circumstance that I had growing up. Then my career took me about as far away from that and as you can get and I went to work for a couple of starchitects and worked on large projects, significant projects. And then I was principal for a large, well-known firm. And when … I hit a point in my career where I was not addressing things necessarily related to equity and not related to issues in neighborhoods that I felt needed help and made it a sea change in my career and focused on nonprofit work … an extension of that. So that’s kind of the path I took.

Eve: [00:19:07] Yes. We know that you care about socially responsible real estate, but are there any current trends in real estate development that interest you the most? And perhaps the second question is, given what’s going on with the coronavirus right now, how might an architecture change to address things like pandemics and keeping people safe?

[00:19:33] Those are really interesting questions. And, you know, it’s interesting that you’re asking it because the answer, probably .. well, it might have been same a few weeks ago, but it’s … you know, given the perspective that we all have at this time. Of course, it’s changed all of our perspectives. Things that are interesting in terms of real estate; I think that there’s much greater awareness of how market rate development can be leveraged to advantage mixed-income development and provide an opportunity for communities where fixed income residents can be part of a successful neighborhood. I think that there’s an enormous amount of advocacy that is still needed with regard to that. Issues around gentrification. I think people are very keenly aware of some of those issues, but a lot of what’s perceived as gentrification, it is byproduct, in fact, of misinformation many times. That there’s a perception that somebody will be pushed out rather than understanding that there’s a mechanism for long-term residents to stay in an area. So, I think advocacy there becomes really important. The things that Small Change is doing by allowing people to invest through crowdsourced funding is incredibly important. I know the range of projects that you have that are demonstrated through the website really illustrate the potency of groups of people coming together to impact change in areas where it would probably be risk averse in terms of taking on opportunities. So, those are probably the areas in development. In terms of response to the pandemic, I really am at a loss on that.

Eve: [00:21:28] I am a little bit, too. But I’ve been thinking a lot about Small Change. And first and foremost, I have this tool that lets everyday people invest. And yet, you know how many people filed for unemployment in one week, this …

John: [00:21:43] Yeah.

Eve: [00:21:43] … last week? You know, and I can’t really kind of reconcile the two at the moment. I think we’re going to have to wait and see.

John: [00:21:53] Yeah. Yeah, no, I, You know when I think, with the pandemic, I think I probably, I haven’t been thinking about it in terms of the investment side. But the point that you raise is really important. My mind tends to shift more towards the practicalities of one’s physical health. And then, of course, I   of the work of MASS, things that they’ve done with Dr. Farmer, and just simple things.

Eve: [00:22:21] We’re going to see a sea of technological changes as to how you open doors for example.

John: [00:22:28] Oh yeah. No, that’s right. Yes, it will it will transform those things that we take for granted. So, fundamentally. Yes.

Eve: [00:22:35] Yeah, it’s a bit crazy. And of course it’s having an impact on your school because the teamwork that is clearly really part of what you’re doing is sort of being shut down at the moment, right? With the students and how they work together. Or has it? Or are you finding other ways to do that?

John: [00:22:53] Well, we’re still in the first weeks. I think unfortunately … what struck me … You know, it’s interesting if I just relay a story. When we made, when they first made the announcement they were going to distance learning, and anybody who knows architects knows how, understands the intensity of the educational process and studio culture. The younger students in the school happened to be outside my office and I heard this eruption of laughter. And, you know, they’re quite happy that they might gain relief from the demands of the curriculum. And then, when I went up to visit my studio, because I work with students who are further along in the program the kids were in tears. And it was at that time that I really realized the impact that it’s having on those who are emerging into the profession. They understood the gravity of the situation at that time by virtue of the fact that they understood that was probably gonna be the last time they were going to see their classmates as a large group. That was, you know, the celebrations of graduation were clearly going to be suspended, at least for a while. And then, immediate concerns over what it meant for viability of their professional future … the immediate viability. So, I think your perspective, depending on your age …

Eve: [00:24:30] Yes. Definitely.

John: [00:24:30] … changes and your understanding of the impact.

Eve: [00:24:39] Yeah, and then, I asked the current terms question in other interviews and a month ago, you know, people are talking about co-working. And this month, I have to wonder if co-working is dead. You know, it’s very, very difficult …

John: [00:24:57] Yeah.

Eve: [00:24:57] … It’s difficult to imagine. Anyway, now we’re down this depressing path, so.

John: [00:25:01] Yeah. Well, I think to think about it optimistically, you know, going back to what we said. This is a wicked problem. And it’s not a wicked problem. It is illuminating thousands of wicked problems. And I think that the opportunities will emerge out of what we understand. And I think right now it’s so early in the process, as we start to come out of this, as the virus is controlled and contained, and we start to plan for the future. I think that will open up all sorts of avenues. But what those are I don’t know, and I really haven’t had time to speculate.

Eve: [00:25:47] But, you know, I think architects might be at the center of some solutions, I’m sure. So.

John: [00:25:52] Yes. Yeah.

Eve: [00:25:53] So, it’s actually a very interesting thought. How do you think we need to think about our cities and neighborhoods to build better places for everyone?

John: [00:26:04] Well, I think we’ve been on a rather positive trajectory. When I was a, you know, again, going back to when I was a child, when I was a child cities were horrible places. You didn’t want to be in cities, you know, unless you were really serious about urbanism. We avoided cities. And I think that the perceptions of cities really didn’t start shifting until the early 90s. And it really hasn’t been until, I would say, the last decade that we’ve seen the benefits of positive urban thinking, and consideration of new models of development. Yeah, I think that the cities are making strides towards being much more inclusive in terms of both social and economic platforms. And so, we still have to move the meter a lot further in terms of that. You still have, you know, there’s still issues of segregation. There’s still issues of economic disparity and concentrated poverty. So, I think that where urban environments need to start moving is towards deep concentration of those negative attributes. I think that it has gotten significantly better in recent history and I think we are on a path forward. And again, I think crowdfunding in support of developments is a significant component to that continued success in the future. I do think it’s interesting, we always talk about density being … and then, of course, in cities like Pittsburgh, where there been a population loss, you know, the term that was developed was “right sizing.” I don’t know if the pandemic is is going to lead us to start thinking about what appropriate levels of density are or how that ties into the general health and well-being that’s to be determined in the future.

Eve: [00:28:16] Well, I really enjoyed this conversation, and I’m excited to see how you and your students put some thought to the post-pandemic problems and the future that we’re all looking at. It’s going to be really interesting to see.

John: [00:28:31] Well, thank you. I really enjoyed the conversation. This has been a great conversation.

Eve: [00:28:37] Ok, bye John. Bye.

John: [00:28:37] All right. Bye Eve. Thanks.

Eve: [00:28:44] That was John Folan, head of the Department of Architecture and Design at the University of Arkansas. John is an architect and teacher like no other I know. He frames his work around issues of the environment, social justice and equity. Not only is his own body of work significant, but he is dedicated to teaching students to be the next generation of thoughtful architects, makers and citizens.

Eve: [00:29:21] You can find out more about impact real estate investing and access, the show notes for today’s episode at my website, EvePicker.com. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities.

Eve: [00:29:38] Thank you so much for spending your time with me today. And thank you, John, 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 John Folan.

Mobility is pretty pedestrian.

Gabe Klein has invested his life and career in all facets of urban mobility, both as an entrepreneur and within the halls of city government. Now a consultant and advocate for positive urban change, Gabe co-created Cityfi, in 2016, to help cities adapt to new technologies, sustainability issues and growth using public-private partnerships and market-based ideas.

Growing up in the 1970s during the energy crisis, Gabe remembers the rationing of fuel and how it inspired his father to get into the bicycle business. He worked for his family’s company until he went to college and saw first-hand the opportunity to rethink the way people get around in urban areas. Hired by ZipCar in 2002, just as it was getting started, Gabe helped to grow that early mobility company dramatically during its formative years. He served as the director of the District of Columbia Department of Transportation (2008-10), and as commissioner of the Chicago Department of Transportation (2011-13), where he helped create two of the first bike share programs in the U.S., and worked on issues such as bus rapid transit, infrastructure projects and cycling and pedestrian plans, to name a few. He even started an electric-powered, organic food truck chain called On The Fly.

Gabe is also the co-author, with David Vega Barachowitz, of Start-Up City: Inspiring Private and Public Entrepreneurship, Getting Projects Done, and Having Fun (2015).

A huge fan of challenging the status quo, Gabe says one of his mottos is “if somebody is not calling you crazy, then you’re not working hard enough.”

Insights and Inspirations

  • Our biggest problems can be solved through an exchange of ideas between the public and private sectors.
  • Reallocation of urban space away from cars is critical for urban mobility. The majority of urban trips are less than one to three miles, and there’s a big market there.
  • We need more rebels, people pushing the envelope, even when we don’t agree with them.

Information and Links

  • You can buy Gabe’s book at Island Press or on Amazon.
  • Watch Gabe’s TEDx talk: Cars Almost Killed Our Cities, But Here’s How We Can Bring Them Back.
Read the podcast transcript here

Eve Picker: [00:00:14] Hi there. Thanks so much for joining me today for the latest episode of Impact Real Estate Investing.

[00:00:21] Today’s guest is Gabe Klein. Gabe has invested his life and career in all facets of urban mobility, both as an entrepreneur and within halls of city government. That’s made for a very interesting point of view, from Zipcar to bike sharing to transportation commissioner to book and now to Cityfi, Gabe has left a mark on mobility in this country.

[00:00:50] So, listen in and be sure to go to EvePicker.com to find out more about Gabe 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: [00:01:18] Hello, Gabe. Thanks so much for joining me today.

Gabe Klein: [00:01:20] Thanks for having me, Eve.

Eve: [00:01:22] So, you’ve done so much, I really don’t know where to begin. Zipcar. Bike sharing. Transportation commissioner. A book called ‘Startup City.’ And my personal favorite, On The Fly, your own electric-powered, organic, food truck chain.

Gabe: [00:01:37] That’s correct.

Eve: [00:01:39] And, of course, now you wrap that all up in your company called Cityfi. I’m wondering how you got there and why transportation issues matter so much to you.

Gabe: [00:01:50] Yeah. Well, you know, I grew up in the 1970s, actually, as a kid, and 80s, but I grew up during the energy crisis, and I remember the rationing of fuel and it inspired my dad to get into the bicycle business. And so from the age of, like, five years old, six years old, I was always around bicycles. We had skateboards and we had mopeds in the stores. And we used these things at home, too. And my dad actually commuted by bike, many days. And so I grew up looking at these quote unquote alternative modes of transportation, actually as normal ways of getting around. And, by the way, we lived in a rural area. So, we would commute all the way from our rural home into the local town on these busy roads. And so, as I got older and I was, so, you know, in the bicycle business, even post-college, I realized that in urban areas there was this huge opportunity to rethink the way people got around. And I had moved to Washington, D.C., in the mid 90s, and, you know, our major arterials were speedways. People were doing 65, 70 miles an hour …

Eve: [00:03:04] Oh, yeah.

Gabe: [00:03:04] … completely out of control. And yet, we had all these people moving back to our cities. So, I met Robin Chase, and that was around 2002, and she hired me as an executive at Zipcar, and I helped build that business, and it was really instrumental in me understanding the relationship between public and private sector, and how important the public sector was in empowering small businesses like ours, and tying them in to the existing infrastructure in the city, in the space, in, you know, in terms of giving us parking spaces, in terms of tying us into the transit system. And it was really the key to our success, I think. And so, ever since then, I’ve been really focused on, you know, how do we do good, make money and enhance the lives of people in our urban areas.

Eve: [00:03:59] From those early beginnings, because things have changed a lot since Zipcar, right? Zipcar has waned a little bit because other things have popped up instead. What is the mobility landscape look like to you in the U.S. today by comparison?

Gabe: [00:04:13] Yeah, well, look, I think businesses always need to evolve, right? I mean, look at Amazon. It started out as a bookstore out of a garage, right? So, I think that there’s been a lot of evolution related to the technology that we have in our hands. The GPS technology that allows us to geolocate where things are. Solar and electrification. Obviously, the backbone of it all, the enhanced cell phone networks. And that’s what’s really powered the transformation in mobility. At the same time, what we find is we have all these new modes, and they’re really exciting, and it’s actually gotten a lot of people on bikes, which I love.

Eve: [00:04:50] Yes.

Gabe: [00:04:50] Right? But on the other hand, things are pretty pedestrian. And what I mean by that is, like, there’s a basic way that we’ve been getting around for a couple 100,000 years. You know, we’ve been walking, we’ve been riding the horse. Then we start riding bikes, taking streetcars. And fundamentally, you have a sort of geometry problem, and you have, sort of, movement of people and the geometry of how you move them, and it’s really about volumetrics. And so, in a dense urban area, you can only move so many people so quickly. And so it becomes about bigger things. It’s about, like, what creates a healthy city, what creates a safe city, creates an equitable city, or town, by the way, it doesn’t have to be a big city. And so, you know, my time in government was really instrumental in seeing that the levers that we had that could really change the quality of life for people. And now we’re talking about things like universal basic mobility. We’re having conversations in the public square about, you know, because mobility and transportation are so closely tied to land use and real estate, and because so much of people’s income goes to those two things, that if you can create a system where people don’t have to use a very complex transport system, and you don’t have to make a capital investment in the transportation, they can afford to live in a place …

Eve: [00:06:16] Yeh.

Gabe: [00:06:16] … that they want to live and they can do it in a way that they have a higher quality of life, and more access to jobs. And so, that’s …

Eve: [00:06:22] Solving the mobility issue actually makes housing more affordable.

Gabe: [00:06:29] Well, look, if you shed one car like, let’s say you’re a two-car family, you shed a car, that’s 150,000 dollars more real estate you can afford.

Eve: [00:06:36] Yes.

Gabe: [00:06:37] Right?

Eve: [00:06:37] If you’re a worker who needs to get to a job every day and there is, you can walk to pick up your groceries, and there’s a train or bus near you that gets to work, you can shed both the cars.

Gabe: [00:06:50] Right. Right. I mean, look, people say like D.C., San Francisco, Boston, these are the most expensive places to live. However, you know, in D.C., car payments are less than 10 percent of people’s income, right? And you look at a lot of other, like Sunbelt cities, it’s 20, 25, 30 percent. In a low-income neighborhood, over 50 percent. My household? We’ve gotten to, because we have an apartment downstairs, one, two, three, four, five, six, seven people. And there’s one car, …

Eve: [00:07:17] Yeh.

Gabe: [00:07:17]  … you know. And so, actually, our cost of living is relatively low.

Eve: [00:07:23] Yes. Yeah. So, you know, interestingly, I mean, I think about this. So, while technology has been advancing some mobility solutions, we’re really kind of still stuck in how to model the physical landscape, right?

Gabe: [00:07:38] Oh, absolutely. And that’s what I was getting at when I was saying, like some of the problems are very pedestrian. I was trying to be funny, but it’s like, it’s really about the reallocation of space, right? It’s like, you can only move so many people if you allocate all the lanes to cars that carry one or two people, what we call single-occupancy vehicles. And so, there’s a big movement, like, if this technology and these new modes are going to be successful, like scooters, for instance, and shared bicycles, you’ve got to give space to them or people won’t feel safe. And if they don’t feel safe, even for a small portion of the trip, let’s say they’re driving, or riding, excuse me, from home to work, and it’s a five mile trip and there’s two blocks that feel terribly unsafe. That mom may not make that trip, the entire five mile trip, because of those two blocks. And so, it’s really about creating a safe system for people.

Eve: [00:08:28] I know that the public sector is thinking about this. Is the private sector thinking about this? Who’s more advanced in their thinking? Are they talking to each other?

Gabe: [00:08:40] Well, that’s actually why I wrote ‘Startup City.’ When I went into the public sector, I had never worked, I mean, and I came in running the agency, I had never worked in government in my life. And so I had a very different perspective. And I’m really fixated and focused on this exchange of ideas between public and private. Because, to be honest, to solve the climate crisis, our affordability crisis, all the major problems of our time, we’re not going to do it without the two sides working together. Now, government has a very strong arm in terms of regulation and setting the tone, which I think they are going to need to flex. But the more we can work with the private sector, understand the private sector’s, you know, business models, their motivations, their, the outcomes that they’re looking for, and we can inform the regulatory environment and policy, then we can come together and make change a lot more quickly. And to be honest, in the situation we find ourselves in, particularly with climate, we need to move a lot faster.

Eve: [00:09:38] So, do you think that the public sector can somehow be infused with the urgency and energy of a startup?

Gabe: [00:09:47] Well, that’s what I did. I’d like to think I did. I mean, I ran these two agencies as if they were well-funded startups. And, you know, there were some people that thought I was crazy.

Eve: [00:09:59] Ha.

Gabe: [00:09:59] And, you know, one of my mottos is, like, if you’re, if somebody is not calling you crazy, then you’re not working hard enough. You know, like, if somebody doesn’t think that your ideas are a little crazy, then you’re not challenging the status quo enough. And I think the government can work on behalf of taxpayers, move a lot faster, and also, to be honest, be fiscally responsible, and in some cases, share in profits, or losses, with the private sector, which is what we did with some of our bike share programs. I think the private sector needs to be much more open to working for the greater good, taking a long term view versus the short term view. And looking at the long-term sustainability of their business, and sustainability of the planet, and the urban environment that they’re operating in. And if we can get the two thinking alike, and I work with a lot of companies and governments, it is just amazing what they can do and the speed that they can do it in. A lot of it comes down to … tried and true old school relationships, and understanding and trust. And that’s what we try to build.

Eve: [00:11:02] Yes. Yeah. Yeah. So, Then how should equity play into transportation solutions?

Gabe: [00:11:11] Yeah. I mean, there’s so much to talk about here.

Eve: [00:11:14] Yes.

Gabe: [00:11:14] But it’s actually, at the end of the day, and I hate to say something like this as an entrepreneur, but transportation doesn’t make any money. I mean, like how many transportation systems, you know, that consistently make money. Like Pepsi does, right? Almost none. Uber lost almost eight billion dollars last year. There are a couple of transit systems that are profitable because so many people use them, like Hong Kong and Singapore. There are some private sector companies that make money some times, like some of the airlines. But fundamentally, it is not a big moneymaking business. And so, we need to think about the outcomes that we want for our people, We need to think about creating equitable outcomes around all the elements that make up quality of life, or the happiness index, for instance, and then figure out how do we fund transportation to make that work. So, Uber today might be funded by venture capitalists, and long term it may be partially funded by the government …

Eve: [00:12:08] Yes.

Gabe: [00:12:09] … for certain types of trips. For low-income people, late at night, hourly workers, when the bus isn’t running, to make it home, you know? So, I think the business models are going to change and shift. We saw this around the turn of the last century where there were so many streetcar systems built by developers, funded by developers, so that people could reach their new streetcar suburbs. And then over time, as the automobile came up and you had such a fractured marketplace, you had the consolidation of them, and then you eventually had the collapse of them, and then they became public sector entities, and then they were killed by the car companies. I mean, it’s a little bit of an oversimplification, but that’s sort of how it went down.

Eve: [00:12:47] Yeh. Pretty correct.

Gabe: [00:12:48] Right? And so, I mean, you know, everything’s cyclical. We’re going to see a lot of interesting high-flying startups. We’re going to see a lot of consolidation. We’re gonna see mobility service systems, where you see, like, Spin scooters and Argo autonomous vehicles, and the bus. And you’re gonna see a lot of public-private partnerships where good actors, that want to share in risk and reward with the government, will be given concessions to operate various types of services. And that’s, I think, how it’s going to shake out in the long term.

Eve: [00:13:21] Yeh, also last week, and I’m trying to remember where this was, I read an article about a town, city, that had done the analysis on what it will cost them to upgrade their fare structure. And they decided it was cheaper just to make it free for people who ride the bus. Where was that?

Gabe: [00:13:39] You’re probably thinking of Kansas City?

Eve: [00:13:40] Yeah.

Gabe: [00:13:41] I have, actually, I was out there a few years ago. One of my partners was the chief innovation officer there. And I went out and met with the city manager, years ago, and he wanted to do this and they finally got it done. And the argument was, look, you know, we’re spending five million dollars a year to recover eight to 10 million dollars of farebox, right?

Eve: [00:14:07] Right.

Gabe: [00:14:07] So, you have a net positive of three or four million. You know, what if we just made it free, how many more people would ride? What kind of friction would we reduce? How many cars we take off the road? How much more equity would we create with low-income people that need to take the bus and maybe a dollar or two every trip is a lot. I think that’s really interesting.

Eve: [00:14:29] I think it’s fascinating, but I’m wondering why it took them so long to come to it, to, you know, to decide to do it. It seems obvious.

Gabe: [00:14:36] This is why we need more rebels, right? In government and in the private sector. Like people are very critical of Elon Musk, particularly in my sort of urban, you know, transportation world. And I get it. And I’m critical of him, too. But at the same time, we need people pushing the envelope, even when we don’t agree with that. Even when we think that some of their ideas are crazy. Because sometimes the application of things – like the Boring Company, for instance, you know, tunneling – the ultimate application may not be what they’re selling today, and it could be very, very useful. And let’s face it, the Second Avenue subway that took 100 years to build in New York. We can do better. So, we need to take disparate ideas, different types of people, put them in the mix, be patient, have some tolerance, and try some things.

Eve: [00:15:24] Yes. So, failure could be a good thing, right?

Gabe: [00:15:27] Absolutely. We …

Eve: [00:15:28] People don’t like failure in the United States. We gotta try, right?

Gabe: [00:15:33] Well, we’re either obsessed with failure and think it’s a good thing, it’s a horrible thing. It comes down to, you know, government risk aversion vs. private sector risk acceptance, right? And we have two very different cultures. And so, when you try to bring the two together to work on things, this is actually one of the big issues that keeps them from understanding each other. One is trying to keep their name out of the paper. One is trying to not get noticed. One is trying to do good for the citizens, look out for the greater good, but not make a big splash, typically. And you have the opposite on the private side. And these are generalizations. Sometimes it’s the opposite. But if you get the two to understand how they can benefit each other, and the value that they each bring, and the leverage they can get out of each other, it’s amazing what could happen.

Eve: [00:16:18] Yeah, so, the interesting thing is what you’re talking about, you know, is that’s really the way I developed my real estate portfolio, in partnership with the city of Pittsburgh, and the Urban Redevelopment Authority. And we both fully understood what we were bringing to the table and how we could help each other. That was in real estate. And I thought that was an amazing opportunity for both of us. And the city understood that, and I understood that. So, it’s kind of puzzling why … why this doesn’t extend to other things, I think.

Gabe: [00:16:49] I agree 100 percent. That’s why people like you, me, and many others are important in pushing that envelope. Pittsburgh is a really interesting city, and we’re doing a lot of work in Pittsburgh right now, trying to create a first-of-its-kind, mobility-as-a-service offering, basically, for the city. So, unlike Lyft and Uber, which are creating their own, like, walled gardens, and I don’t fault them for that, but they’re creating their own sort of systems within their app. We’re saying, how about if you bring best in class providers together?

Eve: [00:17:23] Yes.

Gabe: [00:17:24] From all different walks of life. And then let, aggregate the services in one app, transit app …

Eve: [00:17:29] Right.

Gabe: [00:17:29] … and let people use them, and create a physical installation, right? Near real estate. So, create a physical mobility hub, and there’ll be like 50 of them. So, you get some of that enhancement around real estate like you get from a TOD metro stop, but then also have to be virtual, too. And give the city some level of access to data and some level of control …

Eve: [00:17:55] Right.

Gabe: [00:17:55] … versus being 100 percent private.

Eve: [00:17:58] I actually interviewed Karina Ricks on these little mobility stations. It’s a very exciting program. And, you know, you just led me right into my next question, which was how do you think data can help to formulate better solutions?

Gabe: [00:18:17] Oh yeah. Data is really important. And it’s really evolving and changing. And there’s all kinds of arguments, you know, within our little nerdy world about privacy and, you know, very important topics, but at the end of the day, this idea that data that’s generated by citizens belongs to somebody, is sort of misguided, right? I mean, at the end of the day, it really belongs to the citizen that’s generating that data. And you could argue in some sense that it belongs to nobody. But the data is now being shared a little more widely with cities. So, that cities can plan more effectively for the future. So, that they have a sense of what’s happening on their street. And we’re really moving from an analog system of operational control of how the city signal system works, for instance. We started moving to GPS about 10 years ago, where we started to gather a lot of data from GPS trackers on our buses and our taxis, like in places like Chicago. We could start to estimate for our constituency what congestion was looking like in real time. But now it’s becoming more about operating, than just planning for the future. So, it’s like, how you operate day to day, a very complex system where Waze might have better data than the city does? And so, it’s really interesting how it’s playing out. And the Open Mobility Foundation, which we worked with LA DOT and other consultants on helping to set up, is a really interesting place for a lot of these ideas to germinate, and a lot of the cities to work together and figure out with the private sector, by the way, how to share data, effectively, how to be very respectful and careful about privacy, and how to look at both planning, as well as day to day operating, utilizing these very rich data sets.

Eve: [00:20:12] Can you give me an example of a solution that was crafted from data that you think is fabulous?

Gabe: [00:20:18] Sure, sure. Well, look, scooters have been very controversial, right? Some people love them. some people just despise them. And that goes for politicians as well. So, you know, you go to a place like D.C. or L.A. and you have, you know, very smart, bold leadership. And they see the potential with an electric scooter to displace fossil fuel-powered car trips. So, they want to go big. But they know that you have elderly people that need access to the sidewalks, and disabled people, and children. So, if you don’t have some level of control, then what happens is it doesn’t work. And it ends up, you know, flaming out.

Eve: [00:21:00] We’re rubbing up against the physical landscape again, right?

Gabe: [00:21:03] Exactly.

Eve: [00:21:04] Yeah.

Gabe: [00:21:05] But often people who have not worked in government don’t understand it. They understand it theoretically, they understand the data side, but they don’t actually understand how this plays out politically in a city. And so in a place like L.A., we have council members saying, hey, I don’t want any of these in Brentwood. Right? The ability to geofence, and to then know if, like, not just to say we’re gonna geofence scooters out of this council member’s ward, but we’re actually going to be able to know and validate if the scooter company was able to get people to adhere to that. That’s very important. You know, that’s how L.A. went to 30,000 plus scooters, because the council members …

Eve: [00:21:49] Wow.

Gabe: [00:21:49] … and the people felt comfortable that LA DOT actually had the tools to manage a program that large. In Dallas, where it was a total free for all, they had no data, and they told people to just do whatever they wanted, it was a disaster.

Eve: [00:22:05] Oh, interesting.

Gabe: [00:22:05] And so I think it what … yeah. So, what we’ve learned is that, and the private sector has learned right along with the public sector, is like, oh, we need a common data standard. We need to share data. We need to be more transparent. Or the public and the politicians will rise up and boot us out of here. And so, it’s very much, actually, the folks that are running the DOTs that are trying to help a lot of these new companies be successful.

Eve: [00:22:31] Wow. Is there a current trend in transportation that holds the most hope for you?

Gabe: [00:22:38] When you say trend, do you mean a mode per se or do you mean …

Eve: [00:22:41] I mean a mode or, you know … even like, I’ll give you something that I’ve been reading a lot recently. And one thing that I read that I thought was fascinating was a couple of cities and states taking a look at their very wide roads and very heavily trafficked roads and actually deciding to give them a road diet. I think this is an example in New York State of one of the most heavily trafficked roads, and rather than widening it, they decided to narrow it, which I think is really an interesting trend. Because it opens up space in an unexpected way and it controls traffic in a very different and unexpected way, as well. So, I don’t really know what the outcome will be, but I’ve noticed, I suppose, experiments like that, more and more.

Gabe: [00:23:34] Right, uhm, no, I would say the number one thing I’m excited about is the reallocation of space that we’re finally starting to see on our streets. The closing of Market Street in San Francisco. You know, I put a bike lane down the middle of Pennsylvania Avenue, and, you know, there’s a real movement towards serious reallocations of space, as was as the idea of actually implementing congestion pricing in cities. So, I think that’s a very positive movement. And then, obviously, on the private side, the venture capital investment and efforts in active mobility, you know, and bike share and scooter share, I think these are very positive movements. You know, not to say that all the companies will be successful, but the realization that the majority of urban trips are less than one to three miles and that there’s a big market there, and that cities also want to get people out of cars. So, I think, you know, these are the things that that give me quite a bit of hope.

Eve: [00:24:35] Yeah. And then there’s some fallout that I just personally find very interesting. I had a conversation with someone last week who said, you know, in the next five years, we’re going to be figuring out how to repurpose parking garages. And I thought that was like, that’s really fascinating.

Gabe: [00:24:50] Well, yes. And the important thing is to build them in such a way that they can be repurposed. Flat, right? That the ramps are on the exterior. That you run the ductwork for the electrical and HVAC when you build the garage. So, the smarter people are about what the potential is, the more they can build into their developments, and I have a lot of funny stories about conversations I’ve had with folks over the years that were building buildings and, you know, feeling like I should have been paid for my 15 minute conversation that saved them millions of dollars. Because, I mean, I’m sort of kidding. But, you know, shared parking facilities, not building parking facilities and convincing cities to move more towards parking maximum, shared parking zoning and ordinances, creating mobility wallets to give people access to mobility instead of incenting people to use parking. There’s so many interesting things that we can do and a lot of it comes down to carrots and sticks, both for developers, for cities and for individuals.

Eve: [00:25:53] Right. I’d love to know a little bit more about the sort of you tackled through Cityfi.

Gabe: [00:25:57] Yeah.

Eve: [00:25:57] It’s a great name.

Gabe: [00:26:00] Thank you. So, we do a lot of different types of work. I’ll say that about half our work is public sector, mostly cities. And then about half is private sector. And we do some foundation work as well. We’ve been working with the Knight Foundation on autonomous vehicle piloting and outreach, which has been fascinating work. But we do a lot of public-private partnership work. We do a lot of urban planning, around everything from strategic plans for cities, shared mobility plans, curbside management, which is becoming a huge issue with the change in how people move around. And a big opportunity as well. And then, you know, we do a lot with the private sector on go-to-market strategy, and positioning them to be triple bottom line companies that the government will want to do business with. Which means sometimes like a wholesale revamp, not just of how they market themselves, but how they conduct their business, and making sure that sustainability and health and equity and positive outcomes for society are not just talking points in their marketing, but key pillars, north stars of their strategy. And when we’re successful there, I mean, it’s very rewarding. Very … it feels really good to have that kind of impact.

Eve: [00:27:14] So, I think right now, socially responsible real estate is still a minority fraction of what is going on in this country. I’m wondering what you think it will take to kind of move it to the only way to do real estate development, or think about building in cities.

Gabe: [00:27:30] It’ll be a combination of the regulatory environment changing. You know, we’re gonna get away from single-use anything. We’re going to get away from fossil fuel-powered anything. And so, you know, as these are put into a regulatory form, these policies, that will change the way people build. We need more affordable housing. We need more workforce housing. I do think that government leads. I know we have challenges with the finance folks who will say, yeah, I’m not going to finance that if you don’t build two spaces per unit. And this is where government is so important, because obviously if a local government says, look, we’re going to parking maximums for minimums, it’s not like finance companies will say, oh, we’re not going to build in New York City, we’re not going to build in Nashville. They will. And that’s why government’s got to lead. I think, also, the other side of this coin is that once people see what they want, they will buy it. And then once you hit a tipping point …

Eve: [00:28:32] Right.

Gabe: [00:28:34] …. the market sort of takes over and …

Eve: [00:28:36] Kind of like iPhone, right?

Gabe: [00:28:39] Yeh. I mean, look, government used to lead. Government incented Tesla to build electric cars and loaned them a billion dollars, and all of that, right?

Eve: [00:28:47] Right.

Gabe: [00:28:48] But now the reason people are buying Teslas is they’re saving money and they’re really high quality cars. And so people are self-selecting into micro-units or developments without parking that are cheaper, but also maybe closer to the things that they want to experience. And the market is begging for this. We are so … like I was talking to Chris Leinberger the other day and he said we have 40 years of pent up demand for urban, livable, walkable. And so at some point, the next generation of developers are going to come out and say, well, why the hell are we building that?

Eve: [00:29:23] Right. You know, I think that zoning is a really important piece in this. And I was involved in the zoning code rewrite, and it is huge. You know, and every municipality has a different zoning code. When I think about this, it’s overwhelming how you kind of move towards countrywide acceptance and regulatory changes to really make this happen for everyone. It’s a big, big job.

Gabe: [00:29:51] That’s interesting. Yeah, it’ll be interesting to see when when we get a new president, hopefully in November, you know, the tack that they take towards transportation, and, you know, hopefully getting away from the sort of modal silos that we have DOT and thinking much more across HUD and DOT and DOE, which, you know, was attempted last time, but it was never funded. And I would love to see that really happen. I mean, you could almost see collapsing these agencies into one, and … with different divisions internally based around land use type, you know, urban,  suburban, exurban, rural, versus the bimodal stuff and then addressing the energy, you know, around housing and transportation and production.

Eve: [00:30:42] Yeah, yeah, yeah. Well, this has been fascinating, but I want to know what’s next for you.

Gabe: [00:30:48] Yeah. Well, you know, I’m really enjoying my work. I mean, we’ll see if the entire economy just grinds to a halt.

Eve: [00:30:56] For at least a month, right?

Gabe: [00:30:57] Yeah. Maybe we’ll all be living in communes soon and just dancing and eating tofu. But in the in the meantime, I going to continue working with cities, working with companies. I also work with Fontinalis Partners out of Detroit, wonderful firm, and we invest in scalable platforms, you know, often software based, but sometimes hardware based also. So, I really enjoy working with startups. And we do that at Cityfi. But also, obviously, at Fontinalis, there’s a lot of work to not just invest in these companies, but then to help make them successful. And in my personal life, I’m revamping a beach house.

Eve: [00:31:37] Oh, lovely.

Gabe: [00:31:38] Trying to get that done by summer.

Eve: [00:31:41] I’m revamping a tiny little rural cottage. It’s fun. Well, thank you very much, Gabe, it’s been really delightful talking to you. And I can’t wait to see what you do next.

Gabe: [00:31:54] Well, thank you and thanks for thinking of me and I’ll be following your work as well.

Eve: [00:31:58] OK.

Eve: [00:32:02] That was Gabe Klein of Cityfi. Gabe believes a few things adamantly. First, that there is enormous power in collaboration between the private and public sector. Second, that data rules. And third, that over the next few years we’ll see a reallocation towards pedestrians first and automobiles second.

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

[00:32:50] Thank you so much for spending your time with me today. And thank you, Gabe, 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 Gabe Klein, Cityfi