Wealth Creation, Housing Solutions and Their Roles in City Revitalization


Hello, I’m Tom Murphy I’m the senior resident fellow at the Urban Land Institute and was the former mayor of Pittsburgh For twelve years and My father worked in a steel mill for 51 years and he you know, he wasn’t a boss He quit school in eighth grade and went to work in the steel mill, and he was a laborer always life for 51 years When I became here we bought the old steel mill that was shut down I’ve been vacant and you know now there’s a cheesecake factory there. He would have shot me if he were alive but But I’d live what we’re talking about I mean when my father and mother died the only wealth that they passed on to me was their house that We lived in and it was the wealth that gave me an opportunity then to build on that and and generationally I Watched how that happens, and I think that’s the challenge in America today and that’s what we’re going to talk about because wealth creation really the How you do? It is really by owning a house. And and I think that’s ideaq still is a very important idea So, let me take a moment to introduce our panel Reverend faith Fowler is somebody who couldn’t make up. She wanted to save our souls or our cities, right? She has both a master’s in divinity In theology and also a master in public administration And she has lived in Detroit for 30 years She was the executive the executive director of the caste community social services author of tiny homes in a big city She’s both pastor of community Caste community United Methodist Church in the executive director of the caste community social services a nonprofit agency providing food housing mental health and employment programs here in Detroit Jeff Wilson is founder of cassette cassette CD And Jeff has brought his house with him where he’s living while he’s here at the it’s right outside the door you can see it if between if you walk here between here and the maryadas have blocked on from the interest of the Convention Center and and Jeff has a whole story the best he met a young woman online and Invited her to go on a seven-day or a 21-day seven country date I asked him if they’re still talking to each other and he tells me they are But besides that he’s very involved with startups and very focused on how to provide alternative choices and how to build housing so this affordable Tasha Tyrone is Somebody who is sitting at the core of the conversation which is she’s a vice president of relationship management for global philanthropy for JPMorgan Chase Foundation So she’s the woman with the money on this panel, right and and how she makes a choice about how to invest that money clearly the Partnerships that make this happen or not clearly involve financial institutions and working closely with community leaders And David Elena Elena Elida Was a Wall Street guy? and found religion and moved the Detroit and has become a community advocate and real estate development in Detroit’s neighborhoods because he saw the Opportunity where many sought liability David moved here to talk to not only talk about it but to do it So you’ll talk about that so why don’t we start with you Jeff and talk a little bit about your little house out here and what else you’re doing and you want to come up here or Yeah, and the slides will be here and don’t ask me how to get you there Okay So and then we’ll save some time for questions afterwards and I hope some of you will have some questions about with for our panelists Okay, I’m just going to show a couple of slides Talking about our solution and not from Detroit. I may never leave I may never leave my maybe part of your flat tire and then you’ll never to get a flat tire. So I’m founder of caseta We’re about a three year old company and I think what makes us a little bit different than the other folks we cover several Sort of sides of the affordability equation here, but we’re really trying to provide a tool Specifically in places where time and space is very rare So I’m not going to go into the whole model mostly just going to show a few photos If of what these units look like our idea was to build something in a factory That was super high design and high tolerance while still being Attainable Particularly in the very expensive markets we can make one of these in about four weeks put it on a truck and ship it anywhere In the country, and I’d encourage you to walk through one outside Part of our strategy here is in in dense urban Areas to find those smaller regular plots of land that almost nobody else wants to build on and so we’ve identified These it’s a typical sort of thing that many folks have looked at These things arrive on a truck and they can stack directly up. We’re working two projects as high as 10 floors Let me see. Yeah, so here’s an example out of New York we’re working with a developer that has bought a Few hundred Lots and all of these Lots as you can see are really small Most of them are irregular and by that means he’s been able to buy them way under market So what he’s going to do is then he actually put in a proposal yesterday to Mary de Blasio’s office such that he can go and basically drop these casitas all over the city on these very small Lots and then either rent them out at 50% 30% am I extremely affordable or so them as a means of wealth creation? for folks in these four boroughs where he’s doing it so small Lots backing them up a few at a time and You know as you can see you can kind of match the local environment. You don’t need this kind of shiny iPhone looking thing next to a brownstone You know over in bed star wherever you are the other thing that I’ll talk about where we’re sort of enabling an innovative model is there’s a developer right outside the city limits in Austin the the average price of a homes about $400,000 right now in Austin what he is doing is something sort of in between what you might say is a Trailer park and a regular home. He’s calling them micro estates He’s got Fannie Mae backing To where you can buy a casita and then pay a Condo fee essentially and build equity in that and own it Then you can either move it or you can sell it at any time after a building some equity So I don’t know that you know these Solutions particularly are for Detroit right now. I think there are some sort of Some things that we could work with and being able to set and stack these casitas up and then move them on plots of land Within places like Detroit a reusable model You know, we’re also looking at disaster relief type modules in Santa Rosa California New Orleans those sort of places so You know really we want to be the tool to be placed into the developers hand in local Environments and to solve some affordability issues. So, thank you So the big question, what’s a good hosta get it? Yeah So the units start at eighty nine thousand there about four hundred square feet and they’re sort of fully finished out They arrive we can plug one in and it’s ready to go within four hours after it arrives on-site and is set down So I have a few more slides and I’m sorry, I’ll try and go through it Quickly, I just know that seeing is believing We we purchased twenty six Lots from the city of Detroit for fifteen thousand dollars We had to do clear title. We had to do environmental testing but basically we’re building twenty five houses between 250 and 400 square feet and each house is going on an existing lot each house is Distinctive inside and outside because generally speaking poor people which is our target population low-income people Tend to live in nondescript and sometimes even ugly housing. So each house has a distinctive feature and We believe is rather attractive on purpose We’re building on vacant land that’s the land we built occasionally we get criticisms for folks who say why aren’t you rehabbing because there are 80,000 vacant structures in the city of Detroit if you look at the parcels or the blocks that we’re building on there was nothing there So that wasn’t even an option It also is at the edge the northern edge of our campus so that anybody living in our homes can access the services We’re already offering GED jobs a food a medical clinic a store a bike bank just everything is free if they want it and they can walk to it, which is Critical because our folks don’t own cars and mass transit could use some improvement We’re different than other organizations that are using tiny houses as transitional housing most of those are Tiny bedrooms really a bedroom. Maybe a sink maybe a chair but they go to communal spaces for shower and eating and laundry and That didn’t make sense for the program. We’re offering it doesn’t mean what they’re doing is bad It means what we’re doing is different ours is a rent then owned project Meaning we’ve raised the money to build the houses up front. They’re not paying for the properties. They’re paying $1.00 per square foot So the smallest house they pay 250 a month the largest they pay 400 a month which is about half of what they pay elsewhere in our neighborhood and Then they work a program for seven years while they’re renting they go to homeownership classes. They work with a financial coach They volunteer eight hours a month in the community and they have to join the homeowners association if they do all of that They pay their rent. They go to homeowners class. They work with their coach. They volunteer they join then it’s theirs so The reason this is so important. Is that a third of the city of Detroit the households and the third of the city of Detroit make less than $15,000 a year according to the last census. We have a large numbers of people who never gain Equity who never have a tax write-off who never have anything to serve as collateral Hall who never have anything to leave their kids when? They die. And so we have targeted folks who make eight nine ten eleven thousand dollars a year At least half of them are formerly homeless and in seven years Oops, they can move in as a renter If you’re formerly homeless your life changes right away because in the shelter system You control nothing not lights not temperature not meals or snacks Or company or overnight company or pets? I don’t know why we put this slide in I hate cats But you can have a dog all right We’re building them with a general contractor in trades to do the foundation the shell the the roof the electrical the plumbing because you have to call permits and Then we’re using volunteers to build everything else the shots actually from Washington, DC So they are doing the drywall the flooring the counters the countertops the painting the landscaping I would point out that originally we search for our plans online Both of these houses are beautiful, but they’re they’re like the old Hollywood sets. There’s the front and nothing behind them and so we went to architects and said would you would you draw us a house and At least ten architects have and they’re allowing us then to sell the plans to other people so they can build beautiful Houses other places we just built this recycle house Which is the barnwood up in Lansing and it keeps advancing on me the other thing about Volunteers is they bring in materials a metal roof the cultured stone the tile the paint you don’t need much for a tiny house Somebody gave us their old granite countertops. It was enough for three houses We never would have spent money on granite countertops, but they get a tax write-off We got good solid countertops and and the homeowners obviously are doing well. Every house is on a foundation I know you’ve heard HGTV they’re all on wheels. If you’re a poor person you don’t own a car or a truck You can’t pull a tiny home anywhere And by the way, you don’t own land and they won’t let you park here or on Belle Isle Right. So on foundations, everyone has a front porch or back deck So you increase your living space on your three by a hundred-foot lot? Every house comes with a washer/dryer combo like in Europe a stove refrigerator microwave Furnishings if they want it if they don’t want it they don’t have to take it. There’s not a charge for any of it Landscaping is good for Michigan herb Foundation And greening of Detroit is helping us plant some trees and do some rain barrels for harvesting every house comes with a security system So they and their property are safe at night. I should tell you really quickly We got the security systems from a guy who way underbid the rest of the people and So I was suspicious and asked our owner rep to write him and find out why and was he gonna raise it in a year Or seven years and he wrote back and said dear Stacy 20 years ago I was a drug addict and Somebody helped me And now it’s my turn to help somebody else So that’s what’s happened through this whole darn process people have stepped forward that we didn’t even know Bon Jovi called. Can I send? $100,000 now we don’t need it Just kidding. We took it so so he started the first house was open in September of 16 six more open last year six will open this summer six more by Christmas by next year June will have 25 houses and then we’ll look to build houses for Families and develop the commercial strip We’ve had tremendous media coverage almost too much originally David Wolfe Went viral with 13 million between June and December last year two different videos together garnered 75 million views So we’ve heard from India Italy Germany, Canada, Australia Mexico Peru Ghana Liberia a friend of mine from college was in Bangladesh and said, hey you’re in the TV this morning Would have thought because of the way we’ve married affordable housing with home ownership for extremely poor people It’s not only a roof residential stability its economic mobility for very poor folks who are locked out. Otherwise, I Have a look if you wanted it’s 20 bucks I’m not Hawking it but here’s so here’s the results the residents get homes and have an asset the neighborhood gets Repopulated with homeowners, which is always important the city gets tax revenue off Lots that have been for 20 years The planet of course is better and we’ve we’ve made some innovations for instance developing a solar generator Because all the houses are electric and then when the hurricane hit Puerto Rico we took 50 down there Because we heard they were going to be without power till Christmas, of course two weeks ago The whole island was at without power except that you know, the 50 houses we lit up I’m done Wow. No, you’re not so so What does that house cost me so it doesn’t cost you anything you pay that rent well here’s the key So we raised the money upfront. I have a very fiscally conservative board, which is a good thing They say I can’t put a shovel in the ground till I’ve raised all the money and it’s common I mean we’ve never asked individuals have come and written $40,000 checks. Everybody understands what it is to own a home where What was the question so the question is What is the grand applying right? Yeah, what am I going to pay at the end of the day for me? you’re not you’re going to pay rent for seven years and we use that rent sense has already paid for we use the rent to Pay your water your taxes your insurance and your security system Because if you can pay your rent every month for seven years on time and we use it just to pay your bills When we give you the house, we give you the bills – you’re sad, you’ve got a track record. So I own the house It’s yours and then have any sold No, we’re not selling that you’d have to come through I mean, I mean somebody’s bought the house and now they’re gonna move so not yet No and during during the time we set up the homeowners association. They’ll help establish the rules I’m sure one of the rules will be you have to join the homeowners association to be able to buy. Oh, okay, okay Wonderful story. Thank you. Thank you. Thanks for your leadership. I don’t know how showing it off now, you know where to put your money JPMorgan Tasha wins the really the philanthropy for JPMorgan and Michigan and JPMorgan invest over 200 million dollars a year in donations to communities all across the globe so so you are sitting at a very important place to be able to make Critical investments tell us a little bit about what you’re doing about wealth creation and homeownership in Michigan. Sure so we made a 150 million dollar commitment you started at 100 hundred million dollars in 2014 talking to partners around the city of betrayed and 75 percent of an initial investment went into thinking about the physical landscape of the city of the Train for those who are New to the city every trailer don’t have this place down in the last couple of days we have you know 95,000 lighted houses in the city of Detroit that are right now sitting inside of The Detroit Land Bank that need to be put into pre reproductive use again so the you know one of the ways that the mayor thought about thinking of the thought about trying to address this issue of these plight structures around the city of Detroit was this auction process right you Could buy a house in the city of Detroit for a thousand dollars Online right? So but once you get this house You’ve got thirty thousand forty thousand dollars worth of work that you need to do to these homes. So And the values, you know, we’ve got too much supply not enough to ban for these homes So the values in the market has not returned at some of these in neighborhoods where people are buying these homes and to your point you’ve got someone who’s Raising their family over $15,000 a year there see this opportunity to own a house for a thousand dollars what they don’t know what they’re walking into is All the work that has to go into actually creating a livable environment for the for the home They’re picking up. So some of the work that we’ve been doing Has been on both sides. It’s been on a development side with alternative lending Solutions for developers that can do things that scale and you’ll be talking to one in a minute that can actually do some of this redevelopment of these big homes of these homes and then sell them as a value to these homes to these These families with downpayment assistance and other layers of resources that can get someone into a home that’s habitable and so our job as a large organization who can’t get to these Populations is to work in pulling putting money into community development financial institution creating down payment assistance creating alternative lending salut with the Community development financial institutions and other partners in the city and putting philanthropic dollars into gaps So that we can actually get to a place where some were can afford to move into a home in the city of Detroit So that’s that’s seventy five percent of what we do with a hundred and hundred million dollars. The rest of it is It’s looking at the opportunity to create jobs in this whole ecosystem of redeveloping the city All right, so we’ve got to get more developers of color into the city. We’ve got to get more minority contracts We’ve got a bit the city’s eighty-five percent people of color. Why are they a part of the development ecosystem? How do we create? opportunities for them to be a part of that ecosystem We’ve a launched a number of initiatives that have been very specifically tailored for developers of color Tailored for minority contractors of color to get access to dollars so they can scale their companies and hire more traders and that allows for us to take advantage of the community benefits agreements and all of these other resources where Lara’s contractors can’t meet the demand because there’s not enough talent in the marketplaces to support the new development and you’ll hear I’m sure David’s gonna talk about some of this right now to How it’s hard to get talent to build out the environment that we have right now, then are actually Detroiters are ready to work. So That’s that’s what we’re doing. Right so work trying to create jobs and actually create housing that makes sense for the people who live here And David you’re doing real estate development and also community Advocacy know is that are you focusing in a particular neighborhood and both? developing the houses and trying to create the sense of community that Reverend Fowler was talking about I Can’t say I’m doing anything like remand Fowler. That’s incredible work. I See that that’s really amazing For us. We’re really focused. I’m from New York, and I moved to Detroit with when my best friend’s was from, Mississippi He moved from a city I moved from New York We thought we could do development in Detroit a little bit differently than how we saw it done in New York Where development often comes in tandem with displacement? No developers come in they buy things they fix things up rent goes up and folks have to leave we thought Detroit was unique because the choice had a really high percentage of home ownership Particularly for a top-25 sized city had a high percentages of home ownership for folks of color it also coupled that with a really high degree of it, you know abandonment a vacancy for For housing in neighborhoods that are oftentimes a very very close proximity neighborhoods that are really strong So we thought we could come in we could we could build around the neighborhood that are really strong So go a little bit maybe one block north or south or east places that had more lapidation, you know more vacancy more crime But still really beautiful housing stuff that would require significant investment to restore and bring back. So that’s what we did we went in we went into a neighborhood just south of Boston Edison and We started with one house. We talked to community We said hey we want to develop we want rehab the vacant abandoned housing stock as many as possible on the street and over about a year we Rehabbed and rented out about 20 houses and we saw a Nissen within a five-block radius all in one street Go back in the street and we saw a lot of wonderful things happen We saw one live in a crime, you know with reduced I would saw people walking, you know in the streets, you know We saw the people that we hired in locally in a neighborhood, you know We saw them become more active participants and neighborhood as opposed to potentially negatively contributing You know to the neighborhood’s and we saw a housing prices dramatically increase I’d say the two main populations that were the happiest with us were One the homeowners who never left Detroit who never gave up on her city who never gave up on your street They’re really happy that their folks who are coming in and doing what they say They’re going to do and a second population of the contractors again the contractors who always Remain in Detroit and and decided to stay here in service to our residents all the money We raised pretty much go support them and help like Tasha said scale their businesses help them retain talent as we’re giving them Consistent work, you know over and over again So we’ve carried the strategy now We’re in three neighborhoods and Detroit Kind of just out the Boston Anderson area the north end area and easting Spillers our next project and focus area is the Fitzgerald Project. So we’re we have responded to an hour By the city of Detroit to purchase and activate over 300 parcels of land all located within a quarter square mile area that that areas adjacent to some of the best neighborhoods and with some of the most beautiful housing stock and install communities and Yeah, it’s hard to say, but that’s why we’re there it goes Tasha it’s in such close proximity University Mercy there Mary Grove University so similar how a lot of our work was focused on finding a strong neighborhood here There are tons of opportunity of tens of strong anger institutions who would have an opportunity to go in we over a hundred homes Deconstruct and demolished about 25 structures, and we’re really looking to using deconstruction It’s enabled for us to get jobs, you know into neighborhood and activate over 200 vacant lots with some form of green infrastructure So that’s meadows. No that’s trees. That’s pocket parks. That’s neighborhood hubs Hopefully some solar pavilions and some Barbara To really help address the issues. We’re seeing around water and energy efficiency and finally homestead So we’re actually selling houses and a portion of these house be sold to low to moderate income buyers folks who make below 80 percent of the area median income We’re selling homes to them in addition to Five to eight adjacent locks and their own home and their own a lot and they’ll be able to to farm a lot and provide Food for the families for the neighborhood and even distribute to some of the food and the restaurants here to kind of farm the table at the pound concept so that’s the death latest project been working on and we’re really excited to Let’s roll it out with the with partners like city of Detroit with JPMorgan Been best Detroit in it some other really great. Also, let’s dig into this a little bit. I mean, there’s two big themes that come out in my in this discussion is one is The financing obviously of how do you get these houses affordable? the second really is for the individual buying it their ability to get access to credit or That they need and in the in the third one that Reverend Father really I think talked about was homeownership Classes is that I I live in a neighborhood word I’ve seen a lot of vacant houses because people didn’t understand what it meant to own a house They weren’t ready to own a house And so let’s get into the financing if you bill if you’ve rehabbed 20 or 50 houses you’re getting the land essentially for very little he in Detroit not always the case in many other cities but here And and then you have you’re either rehabbing or doing new construction What it how much is it that you sell the house for? Well recognizing that there’s going to be a variety with the square forties and all that. Yes Again, Detroit’s a very interesting housing market. It’s very very street by street And one thing that surprised us when we first came he misses in 20 2014 2013. We saw one house houses were selling for $5,000 a house and that same exact house one block north was 125,000 so it really depends on where where the street is. It houses the community, you know, what’s the history? What’s the ending so neighborhood really strong John Brennan, but this Fitzgerald project in particular The houses will sell for anywhere between 80 to a hundred And that’s where your figure that’s sort of that weary and you need to be at that eighty to a hundred Thousand dollars to get to the market you want to get to people making thirty to fifty thousand dollars a year Maybe sir, in many cases you think even at a hundred and fifty thousand dollars your mortgage There’s nothing kind of oftentimes much less than what you’d pay for rent right in a similar time size So I think we’re really excited because effectively people will get a brand-new house, you know We’re doing a full government evasion new electrical plumbing HVAC new roofs Masonry work they get a brand new house for and they’re paying Particularly, look at the downpayment assistance where what’s provide folks who are partners like Liberty Bank and again a support from JPMorgan often paying and before or about you know five ninety dollars a month Perfed to a brand-new house that they now own and they’re on and in a neighborhood where prices are going to go up we’re because the work we’re doing because of the partnerships that we’re creating because of the investment city’s making there is going to be significant appreciation and wealth Creation for the folks what? I think it really needed much in Tasha one of the other big pieces of this conversation is it’s really just you’re not just buying a house or buying a community and so that I mean I’ve lots of watch lots of people struggle to buy a house and then have the community fall apart Around them and they they lose their investment in their assets so when you’re thinking about as a bank a financial institution make investments, are you looking at the coherency of that community and the organization’s of it and whether there’s Sort of as Reverend Fowler has talked about building a community rather than just investing in houses How are you measuring that as a financial institution? Sure, so Our CEO from the business banking scene was here this week We announced a new platform About what we couldn’t do we’re taking the CDF eyes and allowing them to if we decline a loan This is another opportunity for a second look, right? So one of the things he talked about was like innovation is not something that we necessarily do What we do is become fast followers of great ideas. So here’s a great idea. It’s all on this panel right now Our our focus is to figure out how to get a little financed and get them You know get them at a scale that makes sense for neighborhoods so our initial investments that we made we thought about place it wasn’t like we can’t we’ve already looked at the model of 139 square miles and like just spreading out dollars across the entire city You have to kind of like think about place and you mentioned long, you know, great branding of certain neighborhoods how can you build on anchor institutions and think about strong organizations that are thinking about the commercial corridors and trying to refill the retail so you have to is a Holistic approach that made us think about the six neighborhoods that we selected at the beginning and leveraging other foundation resource So you’re really trying to get that coherent strategy for an absolutist and then in the city is actually playing Active role in saying look we’re gonna be strategic about where we’re dropping our resources we’re gonna bring on a number of partners and we’re gonna like Build up a market and hopefully within a certain amount of time we can actually take those resources to take them So are you a Reverend Fowler doing some deals here? I would love to do that. So you might get you some more money so let’s talk about minds over here When I was impressed with Reverend Fowler is that you laid out a very clear Regiment of Armin’s for somebody to get the house, right? And and so do people fail I mean do you like kick people out of the house? Because they’re not doing home ownership or they’re not volunteering So for the first seven years they rent if at the end of a year, they haven’t fulfilled their program requirements We don’t renew their lease we haven’t had to so you are I mean This is a pretty no-nonsense kind of it is so in the first month We took in a hundred and twenty two applications for twenty-five houses, and then we cut it off In the next six months after that we had nine hundred requests for applications So a thousand people want to live in those twenty five houses. So there’s a demand. Yeah The other thing I would tell you is do you know what day of the week October 1st was last year No, I’ll tell you it was a Sunday. And the reason I know it was a Sunday is because my phone was Exploding and a past or two. I’m supposed to be in church preaching and I finally answered sort of aggravated and said what do you want and it was one of the residents and she explained to me that our Headquarters was closed but it was the 1st of the month and she couldn’t pay her rent and she didn’t want to be kicked out and four of the residents Called to say the same thing. They’ve never owned homes before they know this is a chance of a lifetime Talk about the homeownership training on that that’s what I think is is really critical in this conversation because you raise you raise people’s Expectations and then you put them in a situation where they don’t they often will fail right so So the vetting is pretty Serious, we make sure that they have you know, seven eight Thousand dollars a year at least and that it’s secure we look at their housing history We look at their criminal history. You can have a criminal history. It can’t be recently it Can’t be a sexual crime that you’ve been convicted for because of the other people in the neighborhood In terms of the housing classes, they all come together. They teach each other. You know, when do you change the furnace filter? when do you What do you do if your toilet chain breaks? How do you engage a contractor? Do you pay it all upfront? You pay half up front? How do you check references? How do you make sure they’re insured? Although if you’ve never owned before you don’t know what you don’t know Then the financial coach is a really important role because everybody gets their own everybody’s in a different place Do you have debt? Do you have a budget you have a save down a checking account? Can you earn more money? And that’s a question You never hear in affordable housing because if you earn more money you tend that you have to pay more rent Right, right, but ours is based on square footage So if you earn more money, you keep more money and you’re not gonna lie to us about making more money We want you to make more money Because that’s the American Way Then the coach comes back and says now that you have more money. Have you ever thought about investing it? Have you thought about a savings bond or a CD or the stock market? Because when you own this home, you have to have a financial cushion So we’ve got seven years to work with a month after month to make sure they understand how to do Preventative maintenance to work with a contract or to handle small things that happen around the home They take care of the home It gets inspected by the city that they’re being fiscally, you know, most of them are fiscally responsible already They just don’t have financial literacy and that they’re engaging in their community They’re working with the CB patrol or the kids Halloween party So their neighbors get to know them and they get to know their neighbors and they are seen as the asset not just the house Although the house in our neighborhood. They haven’t built anything since 1974 and it was a garage So if you don’t think the neighborhood is excited about seeing new construction and meeting their new neighbors It’s it’s wild we can’t to get them to go home. Stop taking selfies. Get off the law and go home, right? But it’s really fun. I’ve never you know, I’ve been it cast 23 years now. I’ve never seen this kind of community Halation well, that’s great. It’s fun. And Jeff you primarily have looked at the cost of housing and And so you’ve developed this model Do you think that’s the bottom-line price you can get to know I mean where we’re other innovations? Yeah
I mean as we scale the price will come down a lot and we’re you know working with FEMA on particular Modules that are a little bit smaller much more cost effective But I don’t think it isn’t just about making Cheaper housing like we were talking about this before you’re not you’re not solving a puzzle You know, we’re solving more of a Rubik’s Cube with multiple facets on it, right? So it’s it’s not just about making a home that someone’s proud the living it but it’s figuring out the land the financing the You know who’s actually Building and developing the homes in a city like Detroit here where it’s 85% people of color, right? I I would venture a guess that the development community is not 85% You know folks of color. So there are all of these different sort of sides, you know, we we want to insert a solution where folks can live with dignity That can be plugged in To very tight spaces and tight and tight pieces at a time You know it one example that I didn’t mention that’s kind of on the other side of the time spectrum here is You know Austin has a lot of gentrification issues The east side of Austin in particular was a second most rapidly gentrifying ZIP code in the United States 2000 to 2010 so you know, I’ve been to a block there where there is one family left on the whole block other than tear downs and Doing rehabs They are looking at a solution to put a casita or something like it in the backyard Rent that out or have somebody assist with the financing to rent that out such that you know Maybe they put a hipster in the backyard That’s essentially paying their rent and paying more important if they don’t have rent their taxes so that they’re not pushed out They want to stay in these neighborhoods, but there’s no real solution To do that right now. So these are some of the kind of things that we’re thinking about, you know, once these neighborhoods do Gentrify and those you know these rents do and I’ve already seen some of it here in Detroit, you know I think we need to start thinking about some of those solutions as well Do you have questions for each other? After were your own quick was bad so that zip code. That’s the most probably done How do you define that’s by race without the judge Barnes? Yeah, so East Austin We about it afterwards. Yeah, there was a reason for that Yeah. Yes Tasha. Where do you go next? Doctor father. What do you think? You want to go next with this kind of program? So after the first 25 then we were looking to do family homes and tiny homes And as I mentioned the commercial strip We’re also doing a lot of consulting because people are asking how they can replicate either it or something like it in other areas And so we’ve spent a lot of time Speaking elsewhere and advising elsewhere. So tell where do you get? Where did you get the chunk of money to permit you to buy that build the homes that people are now renting from me did You get grants or foundation? No government money at all We it’s not that we reverse together say then again, no government money it okay. Not a nickel not a dime Not a penny we use government money in other programs But in the last few years for instance HUD has closed down some programs with great outcomes They just want to do something different and it didn’t want to say to you you can own a house in seven years and in Three years have the funding store say oops We’re going to do something new and so I have to go back and say you can’t on the home So I started with a PowerPoint much like you saw there and went to a family foundation. They gave us the original $70,000 to start buying land and buying plans Ford Motor GM Flag Star Bank many religious communities have given like $40,000 at a time to adopt a house Schools the Royal Oak high school just raised ten grand and and handed it over I mean, so I’ve been amazed at the generosity of the community But as I say everybody understands what it is to own a home I mean here in Michigan we went through a horrible recession, where were scores of people lost their homes So it’s not a hard sell it’s helping people understand the program that we’re just not giving away homes We’ve set it up for success as best as we can and I’ll tell you the truth. It really came because my mother died That my whole life. I had a safety net. I didn’t really recognize but The truth is if I ever got in trouble finance or any other way, they might lecture me They would lecture me about being fiscally responsible But then they they’d help me And when she died, I got a house. I got a house I didn’t need right and I thought boy if I was poor My parents would love me just as much but they aren’t able to rescue you and when they die you get debt you get nothing, so generationally There’s not economic mobility. And that’s the American dream. I mean, that’s the American dream So there were spectacular designs in some of your houses Buildings or local architects some are local. We got one woman from the UK We’ve got a man from Ann Arbor We’ve got some from Detroit and as I say not only have they drawn the plans for us. They’ve Gifted them to us so that we can then sell them. So that that first house you showed to sort of English What does that cost when I move into it as a family? What does that cost you to build a Square foot it’s just like any other real estate it also Depends on how much labor I get donated and how much material I get donated We aim between 45 and 55, which is about the price of a new pickup truck And to run the utilities in and lay the slab on grade foundation you’re talking $20,000 just right off the bat So I think we do it We build quality on purpose people are going to live there for decades But you can’t do it for free So you’re those houses as it is without land cost forty to fifty thousand dollars That quality of design that’s pretty impressive. You’re at eighty nine thousand for your stackable ones, right? You doesn’t get the volunteers or the donated? It costs money to build something and then for and you know, and if you’re going to more dense cities more successful, you know You’re you’re looking at a pretty high land cost your land cost is essentially nothing next to nothing, right? What we’re doing? State level such that They can be dropped in very quickly, right? So you just lay a slab you can come but these virtually And did you guys run in and David also jump in did you run in? the bureaucracy Sort of sort of saying what is this? How are you doing this or there? Was there were lots of paperwork? To get the houses and Rehab them and was that it was added another cost that you ran into It was a please. I think it’s not a fun bureaucracy I think the body of at least brought us the buying the houses was the easiest part And the episode Detroit has made all that very easy for you to do buy it and get the permits to start the rehab The permitting is a separate issue, but I would definitely say in Detroit that narrative. You become Detroit a buy a thousand dollar house I think that’s almost impossible now to buy a thousand dollar house in a neighborhood. Do you think you’d like to live in? To me that the buying is that the issue it’s really the the rehabilitation and expensive cost a lot of these houses that you know, we’re purchasing were built between 1909 and 1930 a lot of these houses are over a hundred years old so You there’s no way to fully know what the rehab cost will will be and until you start tearing down walls and and seeing seeing What’s there so I think the choice don’t know Because the process of buying out is really easy people buy them through the Wayne County auction Detroit Detroit land bank They’ve now made a more stringent process around the time you have to do. We have a house all the time You’re leaving a house station So you lose you lose you get a they take it back if you’re just sitting on it for a couple of years and nothing’s Happening definitely even now it’s the land bank says it you have six months to fix up So when you go to families, how big are they going to know? You’re going to a thousand square feet then? You can lofts with families kids are gonna go up and down ladders We didn’t have any trouble with the city per se permitting is a little slower than we’d like some days But there’s no minimal building requirement in the city so we could have built smaller We didn’t want to and because we’re putting one house where houses used to be built in the nineteen sixteen seventeen eighty There was no need for a variance Where would I if I want to if somebody in the audience wants to go see some of your little houses the lodge North get Off at Webb take a left and a right on Woodrow Wilson and okay with that. I want to thank our panelists Let’s give them a big hand every terrific

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