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What Would Equitable Real Estate Finance Look Like? – Non Profit News – Nonprofit Quarterly

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The Art of RE-Membering How to Be Human,” Lola Audu

“Real estate is a defining issue of America,” noted Avery Ebron, who directs operations at The Guild in Atlanta. Ebron made those remarks at a press briefing last month at the release of the Inclusive Capital Collective (ICC)’s first “black paper,” titled Building Community Wealth: Shifting Power and Capital in Real Estate Finance. Ebron coauthors that paper, along with The Guild’s CEO, Nikishka Iyengar, and Chicago Trend CEO Lyneir Richardson. The report provides an important framework for not only identifying how structural racism disadvantages real estate development by and for BIPOC communities, but also identifying specific changes that could greatly reduce those barriers.

ICC defines itself as a “growing network of community fund managers and entrepreneur support organizations who have been designing and developing shared technical and financial infrastructure for aggregating and deploying financial capital and other resources to entrepreneurs and communities of color in the US.” Founded in the fall of 2019 at a gathering in Denver, the group is being incubated by Zebras Unite Cooperative, which formed in 2015 and seeks to promote capital access for socially minded businesses, especially businesses owned by women and people of color.

Often, discussion of real estate focuses on residential property and the gap between Black and white rates of homeownership. Here, however, the focus is less on residential real estate and more about the actual business of real estate development. As Amanda Abrams wrote in the New York Times earlier this year, “Commercial real estate remains a field in which the vast majority of developers are white.” Abrams noted that a 2013 industry survey found that only 4.4 percent of commercial real estate professionals were Black. A more recent 2020 survey from the Urban Land Institute finds that only five percent of its members were Black, while 82 percent were white.

In their paper, the authors note that, “Current community development practices and institutions tend to focus on outputs (notably affordable housing units) over outcomes that create structural change.” In their report, Iyengar and her coauthors contend that a commercial real estate industry in which Black and other real estate entrepreneurs of color played a larger role would not simply be more diverse and inclusive but would place the goal of community wealth building at its center. A “community centered” real estate market would, according to the authors:

  • Prioritize affordable operating space for local BIPOC-owned business
  • Be more democratic and involve community organizers, small business owners, and residents in the development process
  • Focus on providing space for key community goods, such as groceries and community meeting space
  • Use infill development to support affordable rental and homeownership that stabilizes existing BIPOC neighborhoods
  • Create opportunities for Black, Indigenous, and other residents of color to have an ownership interest in commercial real estate
  • Better link residents and businesses to public resources such as technical assistance, financial literacy programming, and business grants

Redesigning Real Estate for Equity

An important contribution of the report is that it provides a thoughtful list of both obstacles to equitable real estate development and potential solutions. As Joe Neri, CEO of IFF, a leading Chicago-based community development financial institution (CDFI), has explained, one of the many ways structural racism impacts real estate is that appraisals in BIPOC neighborhoods are lower than in white neighborhoods, making it harder to finance projects (since loans max out at a percentage of appraised value), requiring a developer to raise more cash.

As Neri put it, “Old government-sanctioned bank regulations drove down the property/land value for decades, and now current bank regulations prevent investment in those areas where appraised-values are low.” Building on Neri, the ICC report calls for “income-based lending” (i.e., lending based on a percentage of income the project is expected to generate), which is forward-looking, rather than appraisals, which bake in past discrimination.

The authors describe specific loan products that could bring down the cost of financing for BIPOC real estate developers. This includes “patient equity,” which the report authors define as having long time horizons (e.g., 10 years), low interest rates (zero to five percent), and provisions that protect development projects from early costs (such as having interest-only payments for the first 12 to 24 months of the loan). Foundations, the authors indicate, would be the likely providers of such financing, and this funding might be five percent of the project’s value. Another 20 percent of the financing structure could be “friendly debt,” such as low-interest loans from CDFIs. The remaining 75 percent could be standard bank loans. In other words, while the need for philanthropic support is clear, the report also shows how limited philanthropic dollars can leverage more standard commercial financing.

The authors also describe additional steps to overcome barriers—for example, easier access to lines of credit, reduction of zoning restrictions, loan guarantees (perhaps provided by CDFIs or foundations) to reduce interest costs, and partnerships with public land banks to help BIPOC real estate developers obtain low-cost land.

In the report’s conclusion, the authors note that “there are an abundance of Black developers creating equitable and contextualized real estate solutions for their communities—transforming the way real estate development is done and turning it into a vector for wealth creations for all Americans.” In the report’s appendices, the authors document this through case studies of BIPOC-led real estate ventures in four cities—Philadelphia, Chicago, Atlanta, and Florida’s Fort Myers.

At the report launch, Kevin Williams, a member of the Black Squirrel Collective in Philadelphia, spoke to the urgency of the work. “You see a lot of studies and research being done about the plight of minorities in America,” Williams observed. “But you don’t see any follow-up. Somebody writes a paper and says Black people are poor. Yeah, we know that. But has anyone done a follow-up to see what has been done to address that problem?… We need to continue to be vocal…and we have to continue to drive the point that equity has to occur.”

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Canadian Real Estate Prices To Fall More Than Expected: Desjardins – Better Dwelling – Better Dwelling

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Canadian Real Estate Prices To Fall More Than Expected: Desjardins – Better Dwelling  Better Dwelling



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B.C. ‘clear’ there’s not enough housing as Vancouver encampment ordered dismantled

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VANCOUVER — British Columbia’s acting attorney general says the province was “clear” with Vancouver officials that the Crown corporation responsible for subsidized housing does not have enough spaces available for people who are being told to dismantle their tents along a street in the city’s Downtown Eastside.

Murray Rankin, who is also minister responsible for housing, says housing is a human right, and the “deeply concerning scenes from Hastings Street demonstrate how much more work we have to do to make that a reality for everyone in our communities.”

Rankin in a statement Friday says BC Housing has accelerated efforts to secure new housing for encampment residents including pursuing new sites to lease or buy and expediting renovations on single-room occupancy units as they become vacant.

He says BC Housing is aiming to make a “limited number” of renovated units available next week, with more opening later in the fall.

Vancouver fire Chief Karen Fry ordered tents set up along Hastings Street sidewalks dismantled last month, saying there was an extreme fire and safety risk.

Police blocked traffic Tuesday as city staff began what’s expected to be a weeks-long process of dismantling the encampment but little had changed by the end of the week with most residents staying put, saying they have nowhere to go.

The city has said staff plan to approach encampment residents with “respect and sensitivity” to encourage the voluntary removal of their tents and belongings.

Community advocacy groups, including the Vancouver Area of Drug Users and Pivot Legal Society, have said clearing the encampment violates a memorandum of understanding between the city, the B.C. government and Vancouver’s park board, because people are being told to move without being offered suitable housing.

The stated aim of the agreement struck last March is to connect unsheltered people to housing and preserve their dignity when dismantling encampments.

The City of Vancouver may enforce bylaws that prohibit structures on sidewalks “when suitable spaces are available for people to move indoors,” it reads.

The province is not involved in the fire chief’s order or the enforcement of local bylaws, which prohibit structures on sidewalks, but it is “bringing all of BC Housing’s resources to bear to do what we can to secure housing for people, Rankin said.

“I recognize the profound uncertainty and upheaval people impacted by the fire order are facing, and we will provide updates on this work as we have news to share,” he said.

Rankin, who had been serving as minister of Indigenous relations, was appointed acting attorney general after David Eby stepped down to run for leadership of the B.C. NDP.

This report by The Canadian Press was first published Aug. 12, 2022.

 

The Canadian Press

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Mismanaged real estate deals land B.C. lawyer two-month suspension – Business in Vancouver

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Mismanaged trust accounts have landed a ban on residential real estate conveyancing for a B.C. lawyer.

A Law Society of BC tribunal panel has suspended Surrey lawyer Serf Grewal after determining he unintentionally misappropriated tens of thousands of dollars of trust funds.

Grewal was found to have committed several breaches of law society rules, largely related to real estate. As such he’s also been barred from future residential real estate conveyancing.

“The proven misconduct,” stated the society, “includes unintentional misappropriation of slightly over $42,000 of client trust funds, due to trust shortages and accounting errors, mishandling of a further $3,770 of client trust funds which resulted in a trust shortage that he did not report to the law society, improper withdrawal of $5,500 held in trust for fees before delivering bills to the client, failure to comply with accounting obligations over a four year period, and improperly commissioning an affidavit by not personally witnessing the attestation.”

Grewal’s suspension was said to be curtailed from what may have been a longer one, granted there was “evidence establishing that none of Grewal’s misconduct arose from dishonesty or deliberate misconduct for personal gain.”

As well, “the panel also considered evidence of a clear connection between Grewal’s misconduct and mental health issues related to childhood and personal trauma, and that the consequences flowed from his decision to report that trauma,” noted the society in a statement Aug. 10.

Grewal was also ordered to undertake trust account supervision and educational courses.

He claimed his annual income was in the range of $45,000 to $50,000 and so the tribunal panel afforded him 16 months to pay $9,000 in costs.

gwood@glaciermedia.ca

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