Patrick Sisson - Writer, Journalist, Cultural Documentarian, Music Lover



January 2019

When Cameron Crow, 29, contemplated a move back to his native Boise, Idaho, three years ago, his friends reacted with confusion. At the time, Crow was a data analyst working in San Francisco, the nation’s tech hub; why would he leave that for a small city in Idaho?

Crow said it took a single sentence for them to see the light: “You can easily own a home, have a 10-minute commute to work by bike, and drink $4 craft beers downtown.”

Three years after Crow returned home, becoming a Boise boomerang and starting his own analytics firm, he’s realized he’s in a much different city than the one he grew up in—and the one he pitched to friends. The picturesque metropolitan on the Boise River has boomed. New businesses—and, yes, breweries—have changed the core of a city that’s earned rave reviewsfor its livability and proximity to nature.

The Boise metro area (population 700,000) has also experienced the downsides of rapid growth. Idaho, now the fastest-growing state in the nation, and Boise, a boomtown by many measures, have felt the strain from the city’s recent success. Downtown is straining under traffic problems, and housing costs have skyrocketed. The state projects the region will add another 100,000 residents by 2025.

As Crow says, when people thought of Boise, or Idaho, they usually thought of potatoes, the signature blue field used by Boise State University’s football field (“Smurf turf”), or the film Napoleon Dynamite. Increasingly, the city is also known as a destination for new arrivals, many of them from California, Seattle, and Portland.

Like other smaller Western cities, like Reno, Nevada, and Spokane, Washington, an echo boom—driven by West Coasters priced out of their increasingly expensive metros—is exacerbating the problems of economic growth and a tight housing market. According to the most recent census data, of the roughly 80,000 new Idaho residents in 2016, 17,000 (roughly 21 percent) came from California (hence the term “Californiacation”), and 9,300 came from Washington. found that last quarter, 86 percent of all out-of-state views of Boise listings came from the Golden State. These homebuyers, especially retirees, who cashed out at California or Seattle prices and want to buy in and around Boise, have helped increase the cost of real estate.

The median home price for Ada County, Idaho, which includes Boise, was $209,990 in October 2014, according to Boise Regional Realtors president Phil Mount. Last month, it was $324,950, an increase of nearly 55 percent. The median price jumped 15.2 percent last year alone.

According to Don Day, publisher and writer for BoiseDev, a site that covers local development news, the region is now more sprawling and expensive. Smaller suburbs like Nampa and Meridian are booming and farm roads are being repaved to make way for planned communities. While locals can see the rising housing values, they, unlike new arrivals, can’t trade up.

“At the end of the day, people experience growth personally, through how hard it is to park downtown, how long it takes to get to work, or if their kid can afford a home nearby,” says Jen Schneider, a professor of public policy at Boise State. “I was born and raised here when it was a sleepy town. You can still climb the foothills in the morning and not see anybody. If you start to see those things change, especially due to competition from people coming from California, it’s not just NIMBYism. It’s people holding on to something that’s dear.”

“They’re trying to throw gas on the fire of growth”

Evidence of Boise’s boom is ever-present, according to longtime residents: Microbreweries and condo complexes have sprung up downtown, and dockless electric scooters zip through increasingly congested streets. Tech firms like Payocity have relocated here, boosting the established tech industry in a region historically known as Treasure Valley. Near the Zions Bank Building, a recent addition to Boise’s skyline, the tech investment firm Clearwater Analytics and the Boise State University computer science department are just a few floors from each other at 777 Main Street. Talk about an experiment in synergy.

And more is coming. Expansive planned communities, including a development in nearby Syringa Valley boasting 2,000 homes, seek to turn around the area’s housing shortage; the Boise region has seen a continuous month-over-month inventory decline for the last four years. Two large public projects, including a multipurpose stadium and a $100 million-plus riverfront library designed by Habitat 67 architect Moshe Safdie, would symbolize significant investment in the city’s civic infrastructure. To many, they also symbolize how Boise is changing too fast.

“People are concerned the city is trying to throw gas on the fire of growth,” says Crow. “People think they’re taking any opportunity to grow Boise.”

Boise has experienced booms and busts before, especially during the ’80s and late ’90s. The city’s experience with urban renewal in the ’70s was the subject of a famous Harper’s magazine article, “Tearing Down Boise.”

”If things go on as they are, Boise stands an excellent chance of becoming the first American city to have deliberately eradicated itself,” wrote journalist L.J. Davis. “Downtown Boise gives the impression that it has recently been visited by an exceedingly tidy bombing raid conducted by planes that cleaned up after themselves.”

The current expansion may not even be as big, percentage-wise, as other city growth spurts, says Schneider. But as housing developments and sprawl turn formerly detached suburbs into extended parts of a larger metro area, new industries expand, and new arrivals settle in, the change that many feel is as much about character as population figures.

“People see remote workers here, and worry if this place is becoming an extension of Silicon Valley, in a way,” says BoiseDev’s Day. “People are worried about feeling the same impacts as Palo Alto or the Bay Area, that the new arrivals are hurting their standard of living.”

“The spigot is turned on, stop promoting growth”

Boise’s economic growth and skyrocketing housing prices have many factors beyond an influx of new arrivals from San Francisco and Los Angeles: Low costs, a business-friendly state government, and a backdrop of forests and foothills have each exerted a strong pull. But new Boisians are easy to point to when discussing the region’s increasing affordability problem.

With median home prices north of $300,000, and the median Idaho income measuring roughly $51,000 a year, people may soon be priced out, says Samia Islam, an economics professor at Boise State University. Islam points to the shortage of medium- and high-density housing, as well as the housing consumption gap: Local homeowners can get a great price when they sell their homes, due to recent appreciation, but trading up to accommodate a larger family becomes more challenging. found that someone making the median income could only afford 13 percent of the homes on the market.

“Building condos downtown that are priced at $425,000 and above for single-bedroom downtown apartments are also not reflective of the purchasing power of the average local resident by any measure,” she adds.

Rising prices and rapid change created the perfect conditions for Vanishing Boise, a group founded by Lori Dicaire that bills itself as a collection of smart-growth advocates seeking to preserve the city’s small businesses, landmarks, and farmland in the face of rapid change.

Dicaire argues that, in addition to losing the region’s heritage, the “urban growth machine” is threatening affordability, green space, and connection to nature, leading to the kind of unsustainable policies that pushed new arrivals to move to Boise in the first place. The group, which launched in 2017 and successfully protested the demolition of a downtown apartment building to make way for a CVS, has opposed the library proposal, arguing it uses funds that should be helping working-class Boisians suffering from rising housing costs and should be put to a referendum.

“The spigot is already turned on,” says Dicaire. “Stop promoting the city’s growth.”

In fact, some of the voices pushing back on growth and advocating for Boise to stay just the way it is haven’t been in the city long: After Crow’s return to Boise, he founded a data analytics firm and launched Make Idaho Better, a survey site measures public opinion and offers analysis to local government. His surveys asking Boisians about the city’s housing crunch suggested that those who had recently relocated were more likely to oppose growth.

“They come from LA and see the life they want, and then see it’s on a growth rampage, and then think, ‘I don’t want it to get closer to the place that I left,’” he says.

Boise’s growth challenges city government to evolve

Boise has found itself facing the same challenges as larger cities. Boise State University’s Schneider helped the city run a series of community conversations on growth over the last year to gauge sentiment about the current era of rapid change. The most important issues for residents included housing affordability, transportation and the lack of public transit options, environmental preservation, and a government that was moving too fast to promote development.

According to Mike Journee, the mayor’s director of communications, the city has been working on a series of proposals to tackle the city’s affordable-housing concerns, including creating a housing trust fund and reworking the zoning code to increase density. But Boise, a blue dot in a deep-red state, faces an uphill urban planning battle: With limited powers due to the state constitution’s small-government stance—the city can’t use inclusionary zoning or rent control since those are illegal, or levy a tax to pay for a much-needed expansion of local bus service—it’s hamstrung with a set of legal tools that don’t favor an active city government.

“People who are drawn to Boise now for its small-town charm are likely going to be disappointed if it becomes too much like what they left behind too soon,” says Islam. “But that change is inevitable. Our city is going to continue to evolve, regardless of our preference to keep it the way it is.”


February 2019

Chicago’s many nicknames, from the City of Big Shoulders to the City That Works, riff on its reputation as a gritty, hard-working, and down-to-earth alternative to coastal cities.

But the nickname that best characterizes life in Chicago may be the City of Neighborhoods, which reflects its array of diverse, distinct, and close-knit communities.

That sentiment may explain why Lincoln Yards, a new mixed-use mega-development set to reshape a wide swath of the city’s near north side, has angered so many Chicagoans. Estimating total costs to be $6 billion, the proposal, which recently passed an important vote in the Planning Commission after being re-calibrated to reflect community concerns, will ask the city council to approve $900 million in public funding in early March.

Blair Kamin, the Chicago Tribune architecture critic who shot down earlier versions of the plan, still says the latest version is rife with negative consequences—“snarled streets, bland street facades, and concealed park space”—while three of the city’s largest papers, the Chicago Sun-Timesthe Chicago Tribune, and Crain’s Chicago Business, have all proposed braking or halting the city approval process. “Anyone have a crowbar we can shove into the conveyor belt’s gears?” the Tribune editorial board said of what they called a rushed process.

Lincoln Yards has also led to complaints among the city’s music venues and creative community, since the project would surround the Hideout, a beloved bar and club, and, in an earlier iteration, included new performance venues that were to be run by Live Nation, the concert promoter.

“This isn’t a city within a city; it’s suburb within a city,” says Robert Gomez, owner of the Subterranean, a music club in Wicker Park. “It looks like they took Schaumburg and plopped it in the middle of the Chicago.”

The proposal, and requests for public funding, raise fundamental questions about Chicago’s direction, which could be applied to any U.S. city contemplating large-scale re-development. Can we create working neighborhoods out of whole cloth? Should the public help fund their construction? And, more importantly, can these neighborhoods work for everyone?

“Most people who live and love Chicago celebrate [its] neighborhoods,” says DePaul professor Winifred Curran, who studies sustainable urban development and gentrification. “Lincoln Yards feels homogenizing. It’s not the Chicago people know and love. We’re being asked to put a lot of money into a development that’s not servicing the city as a whole.”

Lincoln Yards is still being promoted as an economic magnet, the kind of mixed-use, walkable, tech-friendly district where business and city tax revenues blossom and the next Amazon could arise.

The economic symbolism of Lincoln Yards

The brainchild of Sterling Bay, a local mega-developer known for transformative projects, including recasting a cold storage warehouse as a Google office, this “city within a city” was master-planned by Skidmore, Owings & Merrill (SOM), with landscape architecture by James Corner Field Operations, best known for New York’s High Line.

Once spoken of as a possible Amazon HQ2 location, Lincoln Yards is still being promoted as an economic magnet, the kind of mixed-use, walkable, tech-friendly district where business and city tax revenues blossom and the next Amazon could arise. Amid new “character zones,” designed to create more street-level personality among the towers and offices, 23,000 permanent jobs are eventually expected to take root, according to a Sterling Bay spokesperson, and become a “vital economic engine and job creation center.”

Lincoln Yards, set to reshape the former industrial district on the north branch of the Chicago River and bring high-rises to a landscape of warehouses and two- to three-story flats, fits likes a puzzle piece into the city map. Conveniently located near many of the city’s most expensive residential neighborhoods, the 52-acre project would place high-end residential towers, luxury office space, and a network of parks, trails, and 21 acres of riverfront space at a confluence of Lincoln Park, Bucktown, and Old Town. The newest plans include an extension of the city’s 606 bike path and water taxi stops, as well as a relocation and upgrade of the nearby Clybourn Metra station, which would turn the station into a larger, multimodal transit hub.

This development presents a real opportunity to connect and improve the city’s transportation network, says Jim Merrell, advocacy director of the Active Transportation Alliance, not just create a space for cafes and wine bars.

Like New York’s Hudson Yards, a vast repurposing of 20th-century Manhattan rail yards for 21st-century commercial and residential real estate, Lincoln Yards trades on the symbolism of using the infrastructure of the industrial economy to house the tech- and service-based businesses of the future. It’s a common trope, found littered throughout city proposals for Amazon’s new headquarters.

“The reality is, Chicago is shrinking,” says Josh Ellis, vice president of the Metropolitan Planning Council, a regional planning group. “Downtown and a few other neighborhoods are growing, but others are shrinking. These large projects, in general, are geared toward stemming the tide of loss, and bringing resources back to the city.”

Despite, or maybe because of, its potential to alter the landscape, Lincoln Yards has been designed to reflect the area’s past. Industrial touches, like truss bridges and repurposed steel from the defunct A. Finkl Steel mill, are meant to show this isn’t being treated as tabula rasa by designers, but as an evolution of an area with important history.

It’s a powerful merger of story and symbolism. But based on the performance of the former industrial district, known as a Planned Manufacturing District, as well as concerns about rising prices, displacement, and density, many housing advocates and community leaders question the rush to break ground.

Does the economy need to double down on technology?

One of the fundamental hopes backers have for Lincoln Yards is that the area will be a new economic hub—and that transforming a riverfront industrial district into a sort of tech village will bring new jobs and development.

But the history of the area not only suggests that many of those changes were already taking place, but that this former industrial site was more successful than many assume.

The proposed boundaries for Lincoln Yards sit atop the city’s first planned manufacturing district (PMD), a zoning designation created in the late ’80s to help save and salvage the city’s manufacturing workforce. By prohibiting residential and most retail use, the idea went, the zoning tweak could keep factories and warehouses in town. DePaul’s Curran says the concept was “wildly successful” and became a national model.

As of a few years ago, the North Branch Corridor was doing just that, according to Michael Holzer, president of the community development group North Branch Works. He told Curbed in 2016 that the area had a 90 percent occupancy rate, with breweries and distilleries clamoring for this type of space. The area’s most famous tenant, A. Finkl & Sons steel mill, didn’t close down; the growing business needed to expand and relocated, on its own timeline, to a bigger facility on the city’s South Side. C.H. Robinson, a large logistics provider, broke ground on a new headquarters in the district last year.

”The PMD has worked, and has helped maintain businesses,” Holzer said in 2016. “There [are] about 10,000 jobs and 400 businesses in the North Branch Corridor, with an average wage of $70,000. We call these ‘head-of-household jobs.’”

It’s true, however, that traditional manufacturing employment has shrunk significantly over time. According to government job numbers provided by Peter Strazzabosco, deputy commissioner of the city’s Department of Planning and Development, manufacturing land use in this PMD decreased from 73 to 20 percent between 1990 and 2016, while employment in manufacturing declined by more than half between 1988 and 2002, and decreased a further 41 percent between 2002 and 2014.

But the same data shows that from 2002 to 2014, the PMD saw business services jobs increase by 577 percent, and IT & Management sector employment jump 261 percent. Even more encouraging, the area covered by the PMD also saw significant growth in tech jobs before any rezoning or redevelopment, according to city researchUI Labs, a $320 million digital design and manufacturing hub, opened on nearby Goose Island in 2015 to help make Chicago an “epicenter for advanced manufacturing.” And other office space and incubation hubs, such as Lost Arts, have set up shop over the last few years.

That isn’t to say that a redevelopment on the scale of Lincoln Yards wouldn’t kick-start what’s already happening organically, and bring even more entrepreneurs and start-ups to the neighborhood. Years of public meetings and numerous studies have addressed the question of how this area should evolve. But it does call into question the perceived rush to both rezone and provide hundreds of millions of taxpayer dollars for a private development, all in an area that seems to be growing at its own pace.

Who benefits from the new Chicago?

If Lincoln Yards lives up to its potential—both in terms of job creation and facilitating a more walkable, integrated transit network—will it also live up to the promise of working for all Chicagoans? Local politicians and community leaders who oppose the plan point to the affordable housing plans for the project as evidence that it won’t.

According to the most recent proposal, Sterling Bay is asking for the creation of a $900 million TIF, or tax-increment finance district, that would redirect property taxes to pay for infrastructure upgrades to support the mega-development.

The company says it’s a needed investment to transform an underutilized part of the city. In addition, $100 million in industrial corridor bonuses and fees paid by Sterling Bay will support other Chicago PMDs.

“The roads and transit infrastructure in the area are a hinderance to thousands of residents who travel in and around the area daily,” says a Sterling Bay spokesperson. “The TIF will support much-needed and long-overdue infrastructure improvements and untangle the grid as well as provide for new roadways and bridges.”

A number of housing advocates and city aldermen have argued that calling this area “blighted,” as is required for TIF designation, is ridiculous, and that Lincoln Yards doesn’t go nearly far enough in providing on-site affordable housing, which would provide a better link between housing, jobs, and opportunity.

Alderman Ameya Pawar, part of a 10-alderman minority that opposes the Lincoln Yards TIF, says he doesn’t have an issue with density or paying incentives. But he feels the incentive should go toward more affordable housing.

By asking for the TIF, the proposal triggers affordable housing requirements. In this case, according to the most recent proposal, that would mean 1,200 of the 6,000 units would need to be affordable. Sterling Bay has said it will meet the city’s Affordable Requirements Ordinance (ARO) and build 300 of those units on-site, and will pay into the city’s affordable housing fund, as well as fines and fees, to support the other 900 units, which fulfills the city’s requirements.

“Segregating affordable housing from these developments encourages segregation,” says Pawar. “They say it’s not paying the city back with the city’s money. Bullshit. I can make a spreadsheet saying what I want to, too.”

Kevin Jackson, executive director of Rehab Chicago, a coalition of affordable housing groups, said that while developments like Lincoln Yards provide jobs and opportunity, the real question is how they help workers in the city’s traditionally underinvested south and west sides.

Setting the precedent for mega-developments to come

Lincoln Yards is far from the only large-scale redevelopment project taking place in Chicago right now, even as political corruption scandals affecting two powerful aldermen, Ed Burke and Danny Solis, rock city politics. Another big riverfront parcel pursued by developers at Related Midwest, called the 78, is moving forward, and many observers expect the Michael Reese Hospital complex in the city’s Bronzeville neighborhood to also start taking shape. In many ways, Lincoln Yards will become a precedent.

“I think Lincoln Yards and the 78 should be rebooted,” says Pawar. “These are once-in-a-lifetime opportunities to build mixed-income communities, and get lots of affordable housing on-site, and start chipping away on the city’s legacy of segregation.”

Everyone agrees that area encompassed by Lincoln Yards has incredible potential, and that the project could be a catalyst, changing the city and its economy for the better. How the city funds these types of developments going forward, and how Chicago and other cities decide to develop their economies, hits at the intersection of inequality and opportunity that is often so stubbornly entrenched.

“Maybe it wasn’t the prettiest example of what happens in the city, but that industrial area had actual value,” says Curran. “We need to think about things that build capacity for people who live in the city now, and build on the strengths of people who are already here—not attract some elite cosmopolitan class.”


March 2019

Along with dog parks and third-wave coffee shops, the high-end, over-amenitized apartment has become a contemporary urban cliche. Luxury apartments aren’t new. But today’s developers have elevated to an art form the practice of including amenities that pander to millennial lifestyle trends.

In Seattle, where the Amazon-fueled boom in luxury high-rises added so much inventory that rents at the top of the market have actually dropped, everything from a bowling alley and arcade to a communal treehouse have been built as bait to attract new tenants. Contemporary New York apartments offer dog yoga and guitar lessons. In Detroit, planned developments feature smart lockers, pre-installed smart home assistants, sky terraces with fire pits, and on-site vehicles for rent. In San Diego, the forthcoming development features an infinity hallway, a vaulted mailroom lined with gold, an outdoor chef’s pavilion, an open-air garden in the round, a maker’s space, and a design scheme that references technological progress, from the industrial revolution to 2001: A Space Odyssey.

The artist’s loft at Makers Quarter features a a loom, vintage drafting tables and Toledo chairs, and custom pivoting invisible white boards.
Right off the main lobby, the Infinity Hallway was inspired by 2001: A Space Odyssey.
The Gold Mail Room was inspired by the concept of silver, gold, and oil. A local artist rendered a custom black Venetian plaster with gold leaf.

Are these amenities a bit over the top? Definitely. But they reflect significant shifts in how apartment dwellers—and developers—think high-rise living should evolve. The nation will need to add 4.6 million new units by 2030 just to keep up with the demand for apartment living, according to “Disruption,” a report by the National Multifamily Housing Council (NMHC). The building boom has forced the industry to be more anticipatory as it tries to design units that are “more personalized, flexible and adaptable to changing lifestyles and needs.”

“The top two ways to separate yourself in a market that’s seen so much activity is adding an infusion of technology, and giving your residence some kind of identity,” says Shauntá Bruner, a senior associate with Delta Associates, a commercial real estate research firm. “Everybody has a rooftop grilling area or a dog park. Successful developers need to create things that tell a story and tie together the community.”

Bruner says that this boils down to better tech and more services. A majority of younger renters agree: 58 percent of millennials surveyed in the NMHC’s 2018 Consumer Housing Insights Survey believe apartments should provide helpful services and amenities for the surrounding community.

Smart apartment technology—especially when it comes to locks, in-building messaging, and energy efficiency—has attracted greater interest from landlords, developers, and tech firms, says Zach Aarons, a co-founder of real estate technology, or proptech, venture capital fund MetaProp. Newer buildings, like the Eugene, just one block from New York’s Hudson Yards megadevelopment and tricked out with tech-enabled concierge service LIVunLtd, exemplify this trend.

“It’s going to be a required thing,” says Aarons. “Developers will feel they need to pre-wire their apartments.”

Technology and services trump gyms and rooftops

Though it may seem like sheer marketing, there are economic motives fueling the amenity wars. Developers feel challenged by restrictive zoning, as well as rising labor, land, and construction costs, which make it harder to turn a profit on a building that’s not decked out for high-income renters.

And high-income renters are a growing demographic. The number of renters making over $100,000 increased by 5 percent nationwide in 2017, according to the most recent rental-market report from Harvard’s Joint Center on Housing Studies, while 19 percent of Americans making six figures rented, an all-time high. The competition for these renters has increased the pressure to add more amenities. In 2016, 86 percent of new apartments offered swimming pool access, and 89 percent had in-unit laundry, according to Harvard figures.

Renters who pay a premium want ease and convenience, and increasingly, that’s translating into a desire for more services, better technology, and new spaces that can accommodate both.

“As technology gets more advanced, so do amenities,” says Caitlin Walter, vice president of research at the National Multifamily Housing Council. “The old fitness center with treadmills and weights isn’t going to cut it. Now, renters want a Peloton.”

Reflecting shifts toward e-commerce and online shopping, one of the most popular new amenities is package delivery services, Walter says, including dedicated lockers. Some are even configured for laundry or refrigerated to hold grocery deliveries. Many of the new upscale urban apartments include smart locks, which not only reflect a more app-centric existence but, by making it possible to remotely control entry and exit, streamline access for the new generation of online service providers.

While adding smart home tech to apartments can be complicated owners find value in creating more efficient buildings and offering more services. Hello Alfred, the concierge service startup, and Baroo, which offers walking and doggie daycare services, have used mobile tech and increasingly wired apartments as a means to reach customers in high-rent areas. Emerging companies like Dwello, a payment system that functions like Venmo for rent, and Amenify, a platform that connects renters with a number of service and “experience” providers, have both moved the landlord-tenant relationship online and made it more robust.

Taken together, there’s a concerted push to create digital platforms for apartment living, and offer easier access for digital providers of cleaning services, dinner delivery, and other deliveries.

Creating community in apartment buildings

What these technological solutions offer in ways to simplify life with the tap of a phone screen, they often lack in human connection. Perhaps thanks to the rise of tech amenities in high-end apartments, the desire for community as an amenity has grown. It’s not just about offering community gardens or rooftops; it’s about planning events and finding ways to link residents.

As Delta Associates’s Bruner puts it, that means “bringing in a yoga instructor, not just creating a yoga studio.”

Bruner finds the best property managers have turned features into events, and find more creative ways to make use of areas like communal kitchens. Two apartment complexes in the Washington, D.C., area, the Pearl in Silver Springs, Maryland, and the Ten at Clarendon, in Arlington, Virginia, feature community gardens, a particularly popular amenity. But the management companies go one step beyond and contract with a local gardening company, Love & Carrots, which provides residents with monthly samples of vegetables and herbs harvested on the premises and demos preparations for these ingredients.

Many properties now hire outside companies to manage resident events. Michael Wittich, co-owner of Axiom Amenities, works in New York City and a handful of other metro areas and helps plan community events for apartment owners and property managers.

“Amenities aren’t what’s selling units anymore,” he says. “Oftentimes, renters live on a floor with 15 other people, and don’t know any of their names. People just don’t want to interact with each other; they’re just not used to doing it. We’re helping that along, and breaking down those barriers.”

Data from recent NMHC surveys suggest community is top-of-mind for renters. The 2018 Consumer Housing Insights Survey found that 83 percent of respondents believed face-to-face socializing with friends and family is an important housing feature, while 58 percent believed apartments should “provide helpful services and amenities for the surrounding community.”

Creating a specific community, and using it as a selling point, informs the business plan of KIN, a family-focused coliving community devised by developer Tishman Speyer and coliving operator Common. According to Brad Hargreaves, Common’s founder, KIN will be a testing ground for a new ground-up app that Common’s tech team designed for residents to communicate, meet each other, and ideally form community.

“The really, really interesting stuff comes from unlocking the idea of density, when you have a lot of people with similar needs in one place,” he says. “I think the basic level of success for KIN is if we’re getting residents to book and share babysitters together through the app. That’s the kind of thing residential operators haven’t done in the past, and it’s a big opportunity.”

Hargreaves, who has promoted Common and coliving as vehicles to build community in our estranged digital age, says that 70 percent of his company’s residents have moved to a city for the first time. Of course, as a coliving space, Common serves a specific clientele. But that statistic just illustrates the potential power landlords, developers, and property managers have to shape spaces made for community and relationships.

“Having connections based on shared interests is table stakes,” says Hargreaves. “As a residential operator, I want to make sure we exercise that power and serve that up to our members.”


May 2019

Like many born and raised in Bakersfield, California, Austin Smith has made peace with the city’s reputation. Built on oil and agriculture, the city of half a million in the state’s rural Central Valley, known by outsiders for its unique strain of country music and long-running role as a punchline for Johnny Carson, has traditionally been stereotyped as unsophisticated and backwards.

“It’s like a California version of the New York versus New Jersey thing—but maybe worse,” Smith says. “You’re so close to one of the biggest metro areas in the country, but never quite there.”

Like many of his generation, Smith, 37, moved to bigger cities in search of opportunity. In his case, he sought work in urban planning and commercial development in Los Angeles and the Bay Area. But as he developed a passion for downtown revitalization, he began wondering, why not Bakersfield? He returned to his hometown in 2014 with a hunch that the city was ripe for redevelopment, and soon began work on what would become the 17th Place Townhomes.

Since opening in 2016, the high-end three-story, 44-unit downtown development represents the first market-rate housing built in the city’s core in decades. It’s not every day the city gets new housing, complete with a dog park, fountains, and a fire pit. Now that the development is fully leased—not a small accomplishment for new housing asking the highest rent in town, at between $1,630 and $1,830 for a two-bedroom—its success has convinced Smith and his firm, Sage Equities Real Estate, to break ground later this year on a new 53-unit project downtown.

“What we’re doing is a real niche product,” he says. “But you can really start seeing people get excited about this neighborhood.”

As in just about every other small- or medium-sized U.S. city experiencing a downtown rebirth, opportunity and affordability have drawn many millennials to return to Bakersfield and kickstart new businesses.
Since opening in 2016, the 17th Place Townhomes development represents the first market-rate housing built in the city’s core in decades.

A bet on Bakersfield and rebuilding downtown

Smith’s bet on Bakersfield represents a new era of development, however small, for this Central Valley city. A recent report from the National Association of Realtors (NAR) found Bakersfield to have one of the highest rates of millennial movers and homeowners, setting off a series of stories written with a tone of “wait, that Bakersfield?” as if it were a shock that somebody might find the city was both a good value and a good opportunity.

After all, compared to coastal California, where were the high-paying tech jobs and new homes? When California Gov. Gavin Newsom announced the state’s troubled high-speed rail project would focus on the Bakersfield to Merced section, connecting two Central Valley locations, many rail supporters felt Newsom was saying the train would never connect to LA or San Francisco.

But, as in just about every other small- or medium-sized U.S. city experiencing a downtown rebirth, opportunity and affordability have drawn many millennials, like Smith, to return to their hometowns and kickstart new businesses. Bakersfield may be starting later than most, but it’s following the same narrative, led by a core group of early supporters and entrepreneurs.

The 17th Place Townhomes helped bring more attention to a newly christened neighborhood, Eastchester, that’s beginning to blossom, and includes restaurants, coffee shops, and new businesses. In this formerly industrial stretch of town, business owners are finding new uses for old buildings, including Cafe Smitten, another Smith project, and Dot x Ott, a just-opened seasonal kitchen that sources its produce from a farm 10 miles away.

Though tiny, the downtown turnaround is palpable, says Debbie Lewis, a wealth manager who moved back to Bakersfield a few years ago.

“The downtown that I grew up hearing about and knew as a young adult was a ghost town that people were hesitant to visit and a place that businesses had a hard time sustaining,” she says. “Now, it appears to be growing at a slow but steady pace and an inspiring amount of businesses have are continuing to decide to take that leap, get creative, and get in on the action. People are starting to see the positive impact of investing more care, money, and time in our downtown.”

While the city’s current growth spurt has been out, not up, as nearby farmland has been turned into housing developments, there are a lot of buildings with good bones downtown, according to Gunnar Hand, an urban designer with architecture and planning firm Skidmore, Owings & Merrill (SOM). Hand led a team that devised a new downtown plan for Bakersfield in 2016, in anticipation of the arrival of high-speed rail. They found the beginning stages of placemaking investments had already laid the groundwork for the nexus of new downtown development.

“This is, for lack of a better term, a third-tier city that’s only now coming around to urban revitalization,” says Hand. “Los Angeles is 20 to 30 years into revitalizing its downtown. Kansas City, [Missouri], my hometown, is 10 years in. Bakersfield is in, like, year one.”

Moving back and making a new start

When talking to Bakersfield residents who left town for college or careers and have now returned as older adults, affordability is a constant theme.

It helps in California to have housing that’s actually affordable. With a median home value of $241,000 as of last March, and median starter homes beginning at just $145,300 according to Zillow, it’s no surprise that the median age of a first-time buyer in Bakersfield is just 33. The city’s sprawling growth pattern has played a big role in creating cheap housing; as the city and metro region grew out, Bakersfield’s population ballooned from 70,000 in 1970 to more than 380,000 today.

According to NAR researcher Nadia Evangelou, these newly arrived millennials can afford to buy nearly 15 percent of homes currently listed for sale in Bakersfield, compared to only 4 percent in Los Angeles.

“Millennials still move to big metro areas such as Los Angeles and San Francisco,” she says. “But we see that they don’t stay in these areas, because of weak affordability conditions.”

The Eastchester neighborhood in Bakersfield.

But the real draw goes beyond affordability. Cheaper housing enables many of the Bakersfield boomerangs to buy rather than rent, have a better quality of life, and start businesses, all of which might be unaffordable in other California cities.

For Jessie Blackwell, a cofounder of Dot x Ott, the seasonal restaurant and market just a few blocks from the 17th Place Townhomes, now is the perfect time to open a new kind of business in town. The restaurant, which opened last month, is taking advantage of the region’s wealth of farms and fresh produce in a way that just wasn’t really done here just a decade ago.

“There’s a food movement here,” she says. “You can see it in the revitalization of downtown, and the handful of farm-to-table restaurants that have come to town. In the last five years, you’ve just seen this boom in farmers markets and so many more local options.”

Melissa Delgado is a product manager for an agriculture company who returned to town in 2011 after studying in San Diego. She found that the city, with its low cost of living, was perfect for growing her career. With the $2,000 or more she would be spending per month on rent elsewhere, she’s been able to buy a house.

“When I first came back here, I hated it,” she says. “I wanted to go right back to the city. But I’ve been able to grow my career here, and the style of living is just so much better.”

Daniel Cater, an architect and designer who recently returned to town with his wife three years ago, has found great opportunity since moving home (Smith hired him to design the townhome project).

“You’re beginning to see a city of half a million support innovation and change,” he says. “For me, it’s exciting to watch a city that hasn’t really found itself, where the entrepreneurial spirit is alive. It’s fun to be in a place where you can get to know the people making an impact, and make an impact yourself.”

The original SOM plan for Bakersfield would be to connect the city’s historic core, Mill Creek, and forthcoming high-speed rail station. 

Placemaking and the Padre Hotel

Most of the Bakersfield residents interviewed for this story noted that a lot of the new energy downtown comes from people who have returned after moving away, not a flood of new arrivals from other parts of the state or country. There’s still a relatively tight-knit circle of businesses and entrepreneurs in town, often built on local networks. Smith’s dad, for instance, is city Councilmember Bob Smith. And compared to the urban renaissances touted in other cities, Bakersfield’s new developments are not linked to any kind of broad apartment-building boom or big economic expansion yet.

But the catalysts for such change seem to be in place: Two local groups, Kern Economic Development Corporation, a traditional local business group, and Be In Bakersfield, a grassroots nonprofit that promotes new local businesses, have started marketing the city as a place of opportunity.

With some additional investments in transit and placemaking, Bakersfield also has the potential to truly activate its downtown. According to SOM’s Hand, when the firm studied the city in 2016, it found that much of the infrastructure for downtown growth was already finished or in the works. As part of a larger community redevelopment project, Bakersfield developed Mill Creek, a River Walk-style public space and linear park lined with theaters and new businesses. It opened in 2010.

Many of SOM’s suggestions—to create new transit links, connect the city’s already impressive bike lane network, and tie together disparate parts of downtown—have already been done or are in development.

“Our main suggestion was to create infill that brings together Mill Creek with the downtown core,” he says. “That’s already happening now, without the rail station being built.”

In addition to larger urban plans setting the table for more dense development, the successful redevelopment of the Padre Hotel also served as a marker and milestone for downtown. A landmark from the ’20s that reopened in 2010, the ornate hotel at 18th and H streets, a four-star property in the Central Valley, showed many that the city’s stock of old buildings held promise.

“The 17th Place Townhomes and the Padre Hotel are landmark projects for a town this size,” says Hand. “They signal something to the market that didn’t exist before, and it’s starting to snowball. There are local developers taking note.”

A landmark from the ’20s that reopened in 2010, the ornate hotel at 18th and H streets, a four-star property in the Central Valley, showed many that the city’s stock of old buildings held promise. 

Continuing challenges to building a better Bakersfield

Bakersfield has gained momentum, but it still has a ways to go. Like many Central Valley cities, such as Merced, it’s pushing to diversify economically and build new industries, as well as regain the attention of state government after being ignored for many years.

As part of a larger demographic trend statewide, however, these Central Valley cities have seen more attention from new arrivals. Interior metros like Riverside, Fresno, and Sacramento have seen net domestic migration rise from 2012, when this region collectively lost 4,000 people, to 2017, when 38,000 arrived. At the same time, coastal parts of California have grown at a much slower pace, two-thirds less in 2017 than in 2012.

To capitalize on its growing population, Bakersfield’s economy needs to expand beyond health care, agriculture, and oil, and the region needs to invest in creating a more educated workforce. According to the Brookings Institution, among those ages 25 to 34 in the Bakersfield area, 29 percent are in poverty and only 14 percent graduated from college. The city’s persistent problems with air pollution, some of the worst in the state and nation, give potential residents pause.

“We have historically relied on cyclical industries like oil and agriculture, but the truth is, that’s not the future of where the world is moving,” says Anna Smith, a columnist for the Bakersfield Californian, and Austin’s wife. “We need to diversify, and bringing new minds here who have lived in other places is key to the 21st century.”

Anna Smith, like others, has pinned some hope on Newsom’s commitment to the Central Valley, including high-speed rail and other economic plans. Proposals at the local level, like Measure N, an initiative to revive state-funded community development, and a forthcoming update to the city’s general plan, could help finish out some of the placemaking plans SOM and others have proposed to knit together Bakersfield’s downtown.

“Newsom has the opportunity to show us that he can make connections here,” says Smith.

Coming back to feel more connected

The small cadre of new businesses, and Bakersfield residents returning home, suggests a similar story—like those in places like Memphis, Tennessee, or Louisville, Kentucky—is starting to play out. Bakersfield hasn’t had a downtown boom, at least not yet, but the seeds have been planted.

As Debbie Lewis, the wealth manager, suggests, there’s a hunger among young adults to make a mark on their environment.

“They don’t just want to be one of the millions of people swallowed by social media and all the reminders that we’re broke and don’t have any money,” she says. “All that negativity is pushing people to connect with a place and make a difference, and I think that’s possible here in Bakersfield.”

Or, as Anna Smith suggests, affordability isn’t the entire answer, it’s just the beginning. Without the pressure to pay for increasingly high rents, having more time to focus on passion projects and community engagement makes a real difference.

“If you want to say it’s just about affordable housing, that’s not all there is the Bakersfield,” she says. “Young professionals can come here, start a business, and find lower barriers to entry. Most importantly, they can feel connected to the community and make a real impact.”


May 2019

When country music megastars George Strait and Alan Jackson performed “Murder on Music Row” live during the 1999 Country Music Association Awards show, the two singers used the song’s blunt lyrics to critique the radio-friendly sheen of contemporary country and its threat to traditional songwriting and artistry.

Anyone familiar with the country music world immediately understood the reference to Nashville’s Music Row. This modest strip of homes and offices clustered southwest of downtown Nashville is considered the heart and soul of country music, and contains a critical mass of songwriters, recording studios, publishing houses, and industry figures unmatched anywhere else in the country. A 2013 analysis by the Nashville Area Chamber of Commerce’s found the region’s music industry, which is largely contained by this small neighborhood, generates $9.7 billion in economic activity each year, representing 56,000 jobs.

When Strait and Jackson uttered their particularly savage broadside—”Nobody saw him running from 16th Avenue / They never found the fingerprint or the weapon that was used / But someone killed country music, cut out its heart and soul / They got away with murder down on Music Row”—it’s a good bet that more than a few in the audience could picture those famous blocks.

Construction cranes dot the skyline of Nashville in March 2018. 

Today, Music Row isn’t stalked by a metaphorical killer. But the threat to the heritage and musical legacy of this historic neighborhood is real: Nashville’s last decade of booming growth, rising real estate prices, and furious pace of new residential construction has meant this unique center of creativity and artistry is facing pressure from development, which has already led to the demolition and displacement of former studios. The National Trust, one of the nation’s foremost historic preservation group, just placed the area on the 2019 edition of its America’s 11 Most Endangered Historic Places list.

It’s all part of the rapid change rippling across the region. James Fraser, an urban studies professor who used to teach in Nashville, estimates the city is short 30,000 units of affordable housing, and told the Wall Street Journal that the city is at risk of becoming a “chic urban playground for the wealthy.”

The alarm has been raised, successfully in some cases, to preserve parts of Music Row: Indie rocker Ben Folds drew attention to the plight of Studio A, which has since been saved, and the National Trust for Historic Preservation has studied, chronicled, and cataloged the neighborhood’s history since 2015. But without a comprehensive strategy, buildings and studios continue to be bought, demolished, and turned into offices or apartments.

According to records kept by Carolyn Brackett, an expert on Music Row who works for the National Trust, 50 buildings in the neighborhood have been lost to demolition since 2013 to make way for apartments and even a new Virgin Hotel. Between 2000 and 2012, just 13 were demolished.

Nashville’s planning department, as well as preservation advocates and members of the music community, believe they have the beginnings of a solution. The new Music Row Vision Plan, introduced in late April, hopes to preserve the past while allowing the district to grow and prosper in the future.

According to records kept by Carolyn Brackett, an expert on Music Row who works for the National Trust, 50 buildings in the neighborhood have been lost to demolition since 2013.
Pressure from surrounding neighborhoods such as the Gulch and Midtown has led some developers to demolish Music Row buildings to make way for new apartment or condo developments.

More than two years in the making, after extensive input from studio owners and neighborhood groups, the Vision Plan isn’t the whole solution to what ails Music Row; current businesses still have to contend with the larger challenges of an evolving music industry. But the hope is that this combination of zoning changes, new schemes to fund historical preservation, and placemaking and transit improvements will help protect the dynamic cultural district, and perhaps offer a blueprint for other neighborhoods facing similar challenges.

“If we don’t preserve the character of Music Row today, then we lose some of what makes Nashville unique, and a reason that people want to come here,” says Sean Braisted, public information officer for the city’s Metro Planning Department. “There are religious undertones to the history of Music Row. For people to make that pilgrimage, that character needs to be well preserved.”

The original innovation district

Nashville is a much different place now than it was when Music Row started taking shape after World War II. Today, the city is in the midst of a huge expansion in business, real estate, and tourism. The region’s population grew 45 percent between 2000 and 2017, according to the U.S. Census Bureau, hitting 1.9 million. This explosive growth has transformed neighborhoods near or adjacent to Music Row, like the Gulch and Midtown, the latter of which has seen a 176 percent jump in property values since 2010.

Last year, Amazon announced it was bringing an Operations Center of Excellence, and an estimated 5,000 jobs, to town. Also in 2018, the city welcomed a record 15.2 million visitors, leading to the famous strip of honky-tonks on Broadway being invaded by beer bikes and bachelorette parties.

When Music Row started taking its modern form in the ’50s, Nashville was a relatively sleepy Southern city. To accommodate postwar growth, the city’s planning commission decided to permit residential areas near downtown to be zoned commercial. Seeing a future marked by lower overhead, the music industry began setting up shop in homes in and around 16th and 17th avenues south. In 1954, brothers Owen and Harold Bradley became pioneers, establishing Bradley Film and Recording Studios, later called the Quonset Hut Studio, on 16th Avenue, and opening the first of many modern major label studios in the neighborhood.

A view of the offices and studios of Capitol Records in the area known as Music Row in October 1965 in Nashville, Tennessee. 
Country music guitarist Chet Atkins standing in front of RCA recording studio. 

Soon, a flood of studios and related businesses would transform the surrounding streets and alleyways into a musical mecca. By the ’60s, Nashville used Music City as part of its marketing message, and hundreds of businesses, including publishing houses and offices for major labels—as well as cafes, bars, and anything related to music—had opened for business. In 1965, Chet Atkins, a famous guitarist and record producer, built the famed Studio A, which has hosted recording sessions by legends like Elvis Presley, Dolly Parton, Waylon Jennings, Willie Nelson, and the Beach Boys, as well as contemporary country stars like Carrie Underwood, Keith Urban, and Miranda Lambert.

When the National Trust began researching the history of Music Row—which led to the entire area being declared a National Treasure in 2015—it sought comparative examples in other cities famous for being musical hubs, like Detroit and Chicago.

Not only was there more activity in Nashville’s Music Row than comparable areas in LA or New York, says Brackett, but the trust determined the interconnectedness of the music industry in Nashville was literally one of a kind. A survey conducted earlier this year of the Music Row Business Association found that half of area businesses are music-related.

“Music Row is exactly the kind of cultural district that many other cities have been trying to create,” said Katherine Malone-France, interim chief preservation officer of the National Trust for Historic Preservation. “The sweeping arc of the past and present of the music industry can be felt in Nashville’s modest late-19th century bungalows and small-scale commercial buildings that have inspired and incubated the creation of music for generations.”

The ability to interact with all levels and aspects of the industry in just a few square blocks is an irreplaceable advantage, says Pat McMakin, a member of the neighborhood steering committee that helped shape the new Music Row Vision Plan, as well as a studio owner and long-time employee of Music Row businesses. When he produced records in the ’90s, he remembers taking artists on trips to songwriters, literally shopping for songs with four or five different publishing houses during the course of a day. During a lunch break, he might meet someone with studio space to record those songs, or even make a deal with a record executive.

“It’s so important to have proximity and serendipity,” says McMakin. “It’s like Google’s campus. They’re building a space for people to meet and interact now. We’ve had this for the last 50 years.”

A proposed public space in Music Row, updated with more walkable streets and green space. 

How the Music Row Vision Plan helps

The new Music Row Vision Plan attempts to preserve and protect the neighborhood by recognizing one of the tricky aspects of maintaining a creative, cultural business district. If the only issue was protecting the architectural heritage of the neighborhood, then existing historical district rules would suffice.

But as the industry and specific companies evolve and require more office space, hard and fast restrictions that protect heritage and restrict growth may do harm while trying to do good. By its nature, such an area needs to continue to grow to evolve.

In fact, the city struggled with this issue before, and in 2015, issued a blanket ban on official code changes. Instead of stopping development, the freeze—and a lack of proper guard rails to steer Music Row development in a sustainable direction—led to a rush of specific plan (SP) rezoning projects, limited exceptions to existing rules. According to Brackett, since 2013, 64 percent of the new apartment and condo development projects encroaching on Music Row are SP projects.

“Music Row is unique in that it started as a residential neighborhood, with houses turned into office spaces, and that worked a lot better when it was all a small, fledgling industry,” says Braisted. “This planning process allowed us to think a little more broadly about what we’re trying to preserve. Is it the businesses themselves, or the character of the neighborhood? The plan does both.”

The Vision Plan tries to strike the right balance with zoning shifts, business incentives and support, and placemaking. First, the plan divides Music Row into four character areas, offering suggestions and support for each. Critically, the northern area, near Nashville’s fast-developing residential areas, would be upzoned as sort of a release valve for development.

Bigger music labels that need more office space can concentrate their multistory structures in this area, according to Braisted. There’s even a call to allow businesses to swap their zoning allowances, known as a Transfer of Development Rights ordinance, meaning smaller studios in other Character Areas, where taller buildings wouldn’t be allowed, could sell these rights to other developers and turn a profit.

On the business front, the plan calls for the creation of a private business association to represent the music industry, manage tourism, and push for affordability. The neighborhood would also be designated a Cultural Industry District, and there are suggestions to start a revolving preservation fund, which would create a trust to invest in and preserve properties, with the aim of providing cheap rent to music-business startups.

To encourage easier circulation, historical awareness, and safer and easier transit, and further tie together Music Row, the plan also includes a number of placemaking suggestions, including more pedestrian-focused streetscapes, new and expanded park space, and historic markers.

The city hasn’t run a cost analysis yet, says Braisted, because most of the plan involves rule changes and encouraging private investment, with city only paying to add transit and green space.

These ideas gel with what Jamie Bennet, executive director of ArtPlace America, considers best practice when it comes to protecting and expanding such cultural districts.

”When I’ve seen districts created, cities tend to enter that conversation with a focus on honoring the past or reinventing for the future,” he told Curbed. “In reality, you need to do both. You need to honor what made the area like it is, and build in adaptability for the future.”

The National Trust, however, along with its local partner Historic Nashville, disagrees with certain aspects of the plan; the group wants to ban increased building heights and allow owners of historic buildings to sell their developments rights to other parts of Nashville. Allowing these options would change the fabric of the neighborhood. A letter the Trust submitted to the Metro Planning commission argues that “the plan does not include a strong historic preservation component, which is essential to protecting the overall look, feel, and context of Music Row.”

The continuing threat to preservation and protection

Currently open for public comments through June 3, the plan goes up for a vote by the city’s planning commission on June 13. But an effort like this can’t come soon enough when the goal is to put safeguards in place.

According to Brackett, five Music Row buildings were demolished last year, and six are slated to go down this year. All of the Music Row buildings that have previously been listed on the local preservation group Historic Nashville’s annual “Nashville Nine” watch list have been torn down. And more properties and studios continue to be sold, offering the potential for even more high-end residential development.

The Tracking Room, close to Music Row and the scene of recording sessions by Chet Atkins, U2, and Donna Summer, just hit the market for $4.1 million. It’s reminiscent of the story of Studio A, which, before being saved, was purchased for $4 million by a developer looking to turn it into condos. According to Nate Greene, the agent with Colliers representing the seller, the Tracking Room’s fate could go either way; the significant studio could remain part of the music industry, or be bought, knocked down, and turned into high-end residential units.

“It’s such an active market, cranes are everywhere, and the activity is very much spread out,” Greene says. “The major studios are sticking around, but the smaller, less significant ones, their days are numbered.”

In an age when citiesdevelopers, and colleges are spending hundreds of millions of dollars to build innovation districts and startup spaces to foster new business ideas and collaboration, Nashville’s Music Row offers an existing and thriving blueprint for building a creative campus. The question facing city leaders, studio owners, and preservationists is how they can best guarantee music is being made on 16th Avenue for generations to come.

“If you don’t have the plan, you’ll see more haphazard growth, without an eye toward the character of the neighborhood,” says Braisted. “It’s about market forces. This is a way to create incentives for good development, while protecting people’s investment and the heritage of the area.”


June 2019

Charlotte, North Carolina, one of the Southeast’s biggest cities, is short 34,000 affordable housing units. A booming job market has attracted 100,000 new households to the city since 2000, and supply hasn’t kept up with demand. In Salt Lake City, Utah, there are more families than available places to live, a shortage of about 54,000 units. It’s the most severe manifestation of pricing pressure in a state where housing costs can run higher than both Las Vegas and Phoenix. This deficit comes after a year when Salt Lake City led the nation in homebuilding. In Columbus, Ohio, the housing market has cooled after ever-higher prices exhausted buyers who simply can’t keep up with rising costs.

“The sweet spots are still a challenge, but there’s no sweet spot in the high end,” Andrew Show, a local realtor, told the Columbus Dispatch.

Three of the nation’s fastestgrowing cities, all far from the craziness of real estate in coastal markets, all building at a relatively speedy clip, and all with popular neighborhoods, boasting year after year of rising prices, have become too expensive for a greater number of potential owners and renters.

When policymakers and pundits talk about the nation’s affordable housing crisis, they usually talk about the forces that deny low-income Americans reliable and accessible housing near better jobs and educational opportunity. And they should; it’s not just a national crisis and widespread policy failure, but a moral crisis for the world’s richest nation.

But new research shows that the shocking realities of the nation’s affordability crisis—8 million renters pay more than half their income on rent, and the country is short 7.2 million affordable housing units, according to the National Low-Income Housing Coalition—have begun to metastasize and impact the middle class.

A new paper by Jenny Schuetz, a housing policy fellow at the Brookings Institution’s Metropolitan Policy Program, found that some of the severe affordability issues impacting low-income Americans have crept into the lower-middle class and, without action, will get worse. In “Cost, crowding, or commuting? Housing stress on the middle class,” Schuetz looked at census data to find the impact of a decade when housing costs rose faster than average incomes.

Her nuanced conclusions suggest that, on an aggregate national level, there isn’t a middle-class housing crisis. High-cost metros like Seattle and San Francisco unquestionably have challenges, and, of course, low-income households are stretched like crazy. But it depends on how you look at the data.

If you break down the nation into five income groups, the crises faced by the fifth group—or the lowest-income—are increasingly being seen within the fourth group, the lower-middle class. The fifth of the country with the lowest income spends 60 percent of their money on housing, while the next-lowest fifth spends 40 percent, both significantly higher than the 30 percent recommended by economists.

“The issues facing low-income Americans are now showing up in lower-middle-income Americans, and I think that’s something we should worry about,” says Schuetz. “It’s a national pattern. That group is spending more money on rent everywhere, in Cleveland and not just in California.”

Other studies point to a similar kind of strain. Research from Berkadia, a Berkshire Hathaway company, found that the lower-middle income bracket, which it qualified as earning $35,000 to $49,999 between 2012 and 2017, has been hit hard, with 6 percent growth in rent-stressed families during that time period. Cities like Tulsa, Oklahoma, and Omaha, Nebraska, have become challenging for renters, with 40 percent or more of families identifying as rent-burdened.

It’s easier to focus on the extremes of the housing shortage, both the rising levels of poverty and homelessness and the seven-figure spec mansions of the tech jet set. But the creeping cost of housing is pinching a middle class already struggling with flat wages, rising child care costs, and the skyrocketing price tag of a four-year college degree. This “middle-class squeeze,” as a 2014 report by the Center for American Progress illuminated, was about new constraints, and how “the costs of key elements of middle-class security rose by more than $10,000 in the 12 years from 2000 to 2012, at a time when this family’s income was stagnant.”

Housing unaffordability isn’t the cause of the crisis, per se. But with the cost of everything else rising, it’s not surprising that formerly stable families feel squeezed by even slight increases in housing costs, and that overall growth is hampered by a middle class barely able to pay the bills and put their kids through school.

Aren’t we already in a crisis?

Middle-class Californians, many of whom have recently moved to other, more affordable, areas in the West, like Boise, Idaho, and most new homebuyers looking to buy in the nation’s largest cities, would probably tell you there’s long been an affordability crisis across the income spectrum. And it’s an issue that’s grown over decades: According to a 2017 report done by the St. Louis Federal Reserve Bank, the median price of single-family housing in the U.S. outgrew the rise in median household income by 390 percent between January 1986 and July 2017.

Schuetz’s analysis for Brookings found that lower-middle-income renters and homeowners continue to be forced to make the traditional trade-offs, sacrificing a combination of cost, commute time, and home size for proximity to big-city job markets. It’s all part of the agglomeration crisis, the clustering of jobs and opportunities in specific metros.

What Schuetz has identified as a newer aspect of the problem is the decision by city governments to cut back on housing production via restrictive codes and zoning, which only drives up land prices (the Lincoln Institute of Land Policy found that the cost of land skyrocketed by 76 percent from 2000 to 2016). Big, productive, and progressive cities have hampered their housing supply with very deliberate policy choices.

“Waving our hands and saying we can’t do anything to fix it gives a pass to local government who have made very bad decisions,” says Schuetz. “As the cost burden of housing keeps inching its way up the income spectrum, if we don’t see that as a problem and change the housing delivery system, it will become a middle-income crisis in more widespread terms.”

If this is what the housing market can produce in a good economy, what will happen to homebuilding if we fall into a recession? A report from the Kansas City Federal Reserve Bank found that during the last 10 years of economic expansion the annual rate of single-family home starts was 25 percent below ’90s levels. The current rate of construction relative to the number of households is at its lowest levels since the ’50s, the earliest date at which this kind of reliable nationwide data is available.

Schuetz believes cities need to ramp up affordable housing production. Will newly rising metros like Denver, Austin, and Nashville act in time to stem rampant price inflation? Or will they fall into the same trap as other, larger metros?

There are also increased calls for state-level intervention, to overrule failed policies at the local level. The repeated, and so far unrealized, push for SB 50, California’s transit-oriented zoning bill, as well as the successful passage of statewide rent control in Oregon, demonstrate the public’s hunger to have governors and state legislatures step in and use the tools at their disposal to put pressure on local governments.

“Local governments have no incentive to change, and actually have incentive to dig in their heels on these issues, so ultimately, I think that’s going to require probably state intervention, like withholding funds,” says Schuetz.

Without some kind of relief on the horizon, the middle class will be locked out of many areas due to housing strain. And like all Americans suffering from the affordability crisis, they’ll lose out—a loss for the entire country.

“The highest-opportunity neighborhoods have become gated communities, and you can’t move in unless you’re a millionaire,” says Schuetz. “To the extent that high housing costs discourage anybody from moving to a place to find a job, have new ideas, and contribute to a society, we should worry about that. That’s fundamentally damaging to opportunity, and that’s going to hurt the vitality of our most productive regions.”


June 2019

If you had asked Paul Smith Jr., mayor of Union Beach, New Jersey, if he thought he’d still be talking about Hurricane Sandy today, more than six and a half years after the storm made landfall, he would have said no.

But years after the storm pummeled New Jersey’s coastline, Sandy is part of the present, not the past, for many of the residents Smith represents. His small beach town on the state’s northern coast, just 6,649 people spread over an area under 2 square miles, spent roughly $6.3 million cleaning debris off the beach. Half of the city’s homeowners were affected by the storm, and so far, more than 350 homes have been rebuilt or raised. But there’s still work to be done.

“The state helped a lot, but some people did decide to walk away from their homes,” says Smith. “That’s what we’re trying to figure out: what’s abandoned [and] where the empty spots are.”

Many New Jerseyans feel the same way. Since Sandy’s initial impact, which damaged 346,000 households up and down the coast, billions of dollars of state and federal money have been spent on repairing, readjusting, and making the state’s buildings more resilient.

But in conversations with a number of storm-impacted homeowners, and homeowners-turned-advocates, it’s clear there are big questions about the efficacy of the government’s strategy for helping communities recover from massive weather events and flooding—and what that means for today’s era of increased storm risk.

Members of the NJOP with Gov. Phil Murphy and Sen. Corey Booker at the signing of the $50 million cross-the-finish-line fundlast October.

Just last October, on the sixth anniversary of the storm, New Jersey Gov. Phil Murphy announced a $50 million cross-the-finish-line fund, meant to assist homeowners who qualified for federal help but, for numerous reasons, have struggled to fully rebuild. The fund aims to help them obtain “some much-overdue normalcy in their lives,” according to Murphy, speaking at a press conference last fall in Union Beach.

Advocates from the New Jersey Organizing Project (NJOP), a citizen-led coalition of homeowners who lobbied for the finish-line fund, among other measures, say the delays show that the nation is unprepared to deal with massive floods and weather events. The families impacted by Sandy are the “canaries in the coal mine,” according to Amanda Devecka-Rinear, the NJOP’s founder, as increased flooding on both coasts and in the Midwest will see this recovery drama repeating itself.

“We need a major mentality shift, and need to accept the water is coming,” says Devecka-Rinear.

The story of Sandy recovery illustrates the various steps and stages of storm recovery, and the shortfalls of the current system. Every step of the way—outdated flood maps that don’t properly show the extent of flood risk, federal appropriations that need to be approved after each event, a constellation of different agencies offering different funding sources, and delays that require families to live in limbo—costs more money. This is especially true when it comes to prioritizing resilience and mitigation ahead of the next storm.

And as the current devastating Midwest floods suggest, along with last year’s record-breaking California wildfires, the nation will continue to face pressure from rising waters, extreme weather, and the resulting aftermath: damaged homes and businesses.

“One of the conundrums that we face is that [the challenges we face are] not just limited to storm surge flooding from the ocean,” says Tom Jeffery, senior hazard scientist at CoreLogic, a company that analyzes insurance risk. “People also want to live near rivers, or in the midst of scenic mountains, and that risk impacts the cost of insurance. We’re dealing with this on multiple fronts.”

How disaster funds arrive, and delays begin

For better or worse, the reaction to Hurricane Sandy shed light on the nation’s system of disaster recovery. As the storm hit in October 2012, the Federal Emergency Management Agency (FEMA) was on the ground. But federal appropriations for long-term recovery and rebuilding weren’t passed by Congress and dispersed until March of 2013, at which point the state of New Jersey needed to set up a separate infrastructure and bureaucracy within its Department of Community Affairs to distribute funding.

The Sandy Recovery Division and ReNew New Jersey, which operated the $1 billion Rehabilitation, Reconstruction, Elevation and Mitigation (RREM) fund, has to date assisted nearly 7,300 homeowners rebuild. Of that number, roughly 900 have qualified for help, but, as of this week, have incomplete projects.

In a photo taken Thursday, October 27, 2016, construction workers labor on a beachfront home in Bay Head, New Jersey. Sandy damaged or destroyed virtually every one of the 521 homes in neighboring Mantoloking, New Jersey, including dozens that were swept clean off the map, some coming to rest in a bay or even atop a drawbridge.

Local control and flexibility is the logic behind this arrangement: States and cities understand local needs best, and programs like RREM made the deliberate decision to allow homeowners freedom to choose contractors to help get money disbursed as quickly as possible, while maintaining appropriate safeguards. The “breathtaking” levels of fraud and waste in the aftermath of Hurricane Katrina led to a more cautious approach post-Sandy.

But as far as the NJOP and others are concerned, there isn’t enough knowledge transfer between groups helping places recover after different disasters. Since the states need to create and establish their own guidelines for disbursement, “we’re asking people to start from scratch every time,” says Devecka-Rinear.

Then there’s the issue of homeowners juggling different funding streams and rebuilding requirements. FEMA provided immediate support; the National Flood Insurance Program paid out claims to qualifying homeowners; and the Community Development Block Grant program, a big chunk of the money given to the state via the Department of Housing and Urban Development, was one of the primary sources for rebuilding. The Small Business Association also offers funds.

But ever since rebuilding began in earnest in 2013, homeowners have struggled to raise enough funds for rebuilding and meet evolving standards for resilience and flood readiness—all while finding temporary places to live. Numerous roadblocks appeared. Flood zone maps changed, requiring more costly repairs, like lofting homes on stilts. Flood insurance claims often didn’t pay enough for homeowners to rebuild to the new standards; in 2015, U.S. senators forced the NFIP to reopen claims, resulting in $300 million more for homeowners.

The New Jersey RREM program released money in separate cycles, or “tranches,” in 2013, 2014, and 2015, slowing down construction, and capped the award to $150,000 per home. A wave of contractor fraud took advantage of needy homeowners looking to rebuild; even the first consultants hired to run the New Jersey program, HGI, were quickly fired, which cost the state additional millions.

This back and forth sowed confusion for homeowners, who were stuck navigating various funds and programs and trying to figure out how high they needed to build their new homes. For many, the process took years, which meant that the rental housing assistance often dried up, creating a vicious cycle.

Funds initially awarded for recovery had to be used to cover rent and avoid mortgage foreclosures until other funds could be procured to help homeowners cobble together enough to finish their repairs.

For instance, Jody Stewart, another member of NJOP, was awarded $54,000 from flood insurance and $150,000 from RREM, and eventually spent $200,000 to elevate and repair her 1,200-square-foot home in Little Egg Harbor. It took a year for Stewart to receive her RREM grant, and she needed to spend another year in an apartment as her home was upgraded. Today, there are still thousands of New Jersey homeowners who aren’t home.

According to George Kasimos, a realtor who runs an advocacy group called Stop FEMA Now, his home in Toms River, New Jersey, was one of nearly 10,000 in town damaged by Sandy. During the course of his initial rebuild, he discovered that he needed to loft his home based on new FEMA flood-zone mapping. That meant an extra six to nine months of work, and, perhaps, an extra $200,000.

“I felt like I had been hit by two hurricanes,” he said. “The number-one problem is nobody is giving you the information needed to rebuild correctly.”

Kasimos says the miscommunication about flood mapping and insurance rates will be a huge issue going forward. FEMA, which created the maps used for the National Flood Insurance Program, has announced plans to bring maps up to date over the next few years. Homeowners fear increasingly expensive flood insurance premiums, making it more costly to stay in their homes, and potentially deterring future buyers.

Kasimos feels much of the limited federal flooding recovery money is simply going to waste. If, say, a house worth $300,000 requires $150,000 to properly elevate and prepare for the next big storm, is it better to spend years and hundreds of thousands of dollars to update, or to immediately buy them out and reclaim that land as a natural beachhead to help with future storm surges?

“You certainly can’t make everyone in the Jersey Shore leave,” he says, “but you can buy out a lot of people. These should be no-brainers. You can get three to four times more bang for the buck turning that home into green space, and putting money in that family’s pocket so they can start getting back on their feet.”

The current wave of repairs in New Jersey, for instance, backed by CDBG money, covers the bare minimum needed to meet flood insurance requirements. After a few rounds of changes to the flood zone map, Kasimos ended up elevating his home 9 feet, a foot over the FEMA recommendation. But he feels the additional height is more than worth it.

“Don’t elevate for today,” he says. “As much as I fight FEMA, I agree that if you’re going to elevate, you should be doing it 4 or even 5 feet above FEMA standards. Global warming is happening. If you’re getting federal funding, you should be worried about 100-year flooding and, currently, the CDBG money only gets you to a bare minimum.”

What Kasimos fears the most is coastal and waterfront real estate becoming a game of musical chairs. The wealthy and educated will stay away from the high-risk properties, or sell quickly before they drop in value. Eventually, he says, there will be two real estate economies in flood zones, and those without money and means will be caught when the music stops.

“Increases in flood insurance rates don’t affect all people in the same manner,” he says. “When the new flood maps are adopted, it’s like the IRS and the tax code. It’s very difficult to navigate.”

The system is changing, but is it fast enough in an era of increased flooding?

There are signs that some of the criticisms lobbed by advocates are being heard by lawmakers in D.C.: FEMA has rolled out its Risk Mapping 2.0 update to the flood mapping system, which would be implemented in October 2020 and aims to more accurately reflect flood risk in communities across the nation (though the steep, sudden rise in rates may cause financial strain). Federal funding for Harvey was released all at once, instead of in waves like Sandy.

Congress has also been debating a five-year extension to the National Flood Insurance Program, which has recently gone through a system of repeated temporary fixes and updates, and includes money for improved flood mapping and mitigation efforts. They plan to vote on the measure later this month. But these are small steps compared to what is ultimately required.

Devecka-Rinear suggests that, overall, the government needs better state and federal coordination, better mitigation funding, more coordination between programs, and more groups like NJOP that function like unions for storm survivors.

Every dollar spent on mitigation saves $4 to $6 in disaster recovery spending. Currently, much of the mitigation funding repays homeowners instead of providing grants upfront, which means only those with significant funding sources can take advantage.

“We just don’t have enough money set aside for this as a country,” she says. “We just don’t aggressively prepare.”

The story we tell ourselves about flood insurance, that we’re subsidizing homes in areas where people shouldn’t live due to climate risk, is old, Devecka-Rinear says. We need to think about how we responsibly move forward.

“What we learned from Sandy recovery is that working-class families, people of color, those on fixed incomes, the most vulnerable among us, get hardest hit,” she says. “We need to create an equitable program and mobilize our country to face a rising threat. It’s an incredible opportunity to come together, and frightening to think about the consequences if we don’t act.”


June 2019

Timothy Paule’s path to revitalizing vacant lots in his hometown of Detroit started with a persistent cough.

In the fall of 2016, the commercial photographer found himself sick and tired from a cold that wouldn’t quit. After a litany of medicines failed him, someone manning a stall at a local farmers market suggested he turn to raw honey. The natural curative worked: It turns out that honey acts as a cough suppressant, among numerous other medical benefits.

Soon, Paule and fellow Detroit native Nicole Lindsey had another idea based on the restorative power of honey: The city’s neighborhoods, which could use more local, organic food options, were also covered in a patchwork of abandoned and vacant lots, typically overgrown with weeds, wildflowers, and fruit trees left behind by former residents. That synergy—an excess of flowering plants and lots of cheap space for pollinators to make honey—helped birth Detroit Hives, a nonprofit that now runs the city’s only urban apiary, one that was recently featured in a National Geographic documentary.

Detroit Hives offers a creative solution for one of the most vexing challenges in urban America today: how to revitalize and reclaim an excess of vacant land. 
A collection of 32 beehives at a handful of sites across the city, Detroit Hives works on multiple levels, hosting science field trips and supplying restaurants like Slow’s BBQ with honey for their barbecue sauce.

“When we started around 2016, there were something like 90,000 vacant lots in the city,” says Paule. “They contributed to crime and injury, and we saw this idea as one of the low-cost, sustainable solutions, like urban gardens, that can reactivate spaces that are left behind.”

A collection of 32 beehives at a handful of sites across the city, Detroit Hives works on multiple levels, hosting students science field trips and supplying restaurants like Slow’s BBQ with honey for their barbecue sauce. But Paule sees it as part of a larger movement to turn blighted vacant lots into beautiful spaces—and, potentially, businesses.

The scope of the nation’s empty space

Detroit Hives offers a creative solution for one of the most vexing issues in urban America today: an excess of vacant land.

The intertwined issues of blight, abandonment, vacant lots, and mostly empty city blocks represent the flip side of the dominant narrative of current U.S. growth: Superstar cities, accelerated by tech money and high-end real estate development, are growing too fast, straining transit and housing infrastructure, and causing cities with the highest concentration of opportunity to become overpriced and unaffordable. And those are just the problems faced by the so-called “winners” in the global economy.

The problem of abandoned property—or what scholar Alan Mallach calls “hyper-vacancy”—is concentrated in areas that are losing jobs, investment, and economic opportunity. This isn’t about the occasional surface parking lot downtown or a few empty lots here and there (in cities like Austin or New York, those spots would be instantly seized by developers).

Concentrated in urban areas, especially formerly industrial regions of the country, there’s an archipelago of abandonment spread across the nation. As Hana Schank wrote on Fast Company, empty land has a different meaning depending on which side of the economic divide you stand: “The winners get reclaimed rail lines. The losers get high grass and weeds.”

Vacant properties create financial strain for cities: decreased tax revenue, greater maintenance costs, increased safety and crime issues (which require more spending), and blight that lowers the value of nearby properties. A press release from the St. Louis mayor’s office simply said, “Nothing good happens in a vacant building.”

Hyper-vacancy has become an “epidemic,” says Mallach. The term, which he defined in a paper for the Lincoln Institute of Land Policy as neighborhoods where vacant buildings and lots comprise 20 percent of more of the building stock, “define the character of the surrounding area.” By 2010, one out of every two census tracts in Cleveland, Ohio, could be considered hyper-vacant. In 2015, more than 49 percent of census tracts in Flint, Michigan, 46 percent of tracts in Detroit, and 42 percent of tracts in Gary, Indiana, had become extremely hyper-vacant, meaning a quarter of all units were vacant. “The market effectively ceases to function,” at such levels of vacancy, Mallach wrote, adding that, “the neighborhoods become areas of concentrated poverty, unemployment, and health problems.”

To combat these issues, cities across the nation have invested in policy solutions, blight-busting programs, and creative placemaking like the Detroit Hives method. But as Mallach recently told Curbed, vacant property is more a symptom than a cause, and thus requires systemic solutions.

“They’re causes, in that once vacancy starts to happen, it can make things worse,” he says. “But, ultimately, neighborhoods, towns, and cities are really dependent on what’s happening in the larger market and economy. One of the things that’s so frustrating in the U.S. is that you’re seeing larger and larger disparities between those regions making it in the global economy and those that aren’t.”

The solution on a local level, or at least the beginnings of one, requires strategies that help realize the value of vacancy, and see the land for what it is: potential economic value.

“In the end, it’s about being astute about what you can do, ideas that don’t rely on the larger market to change the game,” says Mallach. “You need to be very strategic about what market opportunities exist that you can really jumpstart.”

Policies and plans for these properties have begun to change along those lines, according to Terry Schwarz, director of Kent State University’s Cleveland Urban Design Collaborative, who has studied and launched programs invested in changing vacant lots. As she told Next City, “Now, the new policies that have the most long-term impact are less about fixing nuisances or problems and instead seeing land for what it is: real estate. Cities now want to see what ways they have at their disposal to extract value out of their growing inventories of vacant properties.”

How cities have set out to tackle vacant lots

The Great Recession—which worked as a propellant for pre-existing vacancy issues with its massive rates of foreclosure and widespread economic pain—was the beginning of today’s abandoned property crisis. Since then, cities have engaged the issue in a number of ways.

Some of the simplest, but most important, efforts sought to just get a handle on the issue: Numerous cities engaged in efforts to chronicle and chart rates of vacancy, engaging in local data-collection efforts, as well as creating means to get this land out of city control and back into the hands of citizens and investors. More than 150 cities formed land banks to sell lots at dirt-cheap rates, while others created what’s been called “mow-to-own” programs, which transferred ownership rights to whoever made the effort to oversee and care for abandoned lots.

Much of the research done at the city level only highlighted the need for more—and better—solutions. In Toledo, Ohio, a city research project found that vacant property was a drain on city coffers, costing $3.8 million in upkeep and other city expenditures, and $2.7 million in lost tax dollars. But the vacant lots created a much bigger drag on adjacent property, costing an estimated $98.7 million in lost property value, including $2.68 million in lost property tax value. Other studies found similar results: In Columbus, Ohio, researchers found having a vacant building on the block can reduce the value of nearby properties by 20 percent or more, and a 2010 Philadelphia study estimated that vacant properties result in $3.6 billion in reduced household wealth.

A number of new and ongoing initiatives have tried to turn vacant land into opportunities, or at least use the land to serve a greater community purpose. Mallach and Schwartz both admit that it can be hard to judge the efficacy of these programs in just a few years; many times, local residents invested in revitalization projects leave the area or move on to other things, and popular programs like urban gardening or farming take years to really take root. There’s also the issue of making enough progress to stem the tide of abandonment. A program in Baltimore has spent millions of dollars over the last eight years trying to return vacant land to good use, but has only succeeded in moving the official count of vacant buildings from 16,800 in 2010 to 16,500 in 2018.

“People are really doing something, they’re working hard, but they keep slipping,” professor Seema Iyer, a finance and economics expert, told the Baltimore Sun. “It’s like building a levee that’s not high enough to stop the floodwater.”

Programs that have shown great progress tend to combine long-term vision and continued support. Cities like Cleveland and Detroit have created planning guides for reclaiming and revitalizing vacant lots to help investors in the land bank program improve their results. In Philadelphia, a program called LandCare, run by the Philadelphia Horticultural Society, works with community groups as part of an expanded, mow-to-own concept. By working with organizations instead of individuals, the initiative makes sure that reclaimed lots don’t lose support. Right now, the program helps take care of roughly 12,000 of the city’s vacant lots, and adds a few hundred every year.

In New York state, the attorney general’s office has established a grant program, Zombies 2.0, to provide municipalities with money to improve code enforcement strategies and become more efficient at dealing with vacant properties, or “zombie homes,” all using funds collected via mortgage settlements.

Mallach also points to a nascent effort in Erie, Pennsylvania, to create a culinary arts districtamid an area filled with vacant properties. The idea is to turn empty spaces downtown into a collection of incubators, food courts, and restaurants, and the effort may even seek to tap into Opportunity Zone funding to make it happen.

“Is it going to work? Who knows,” says Mallach. “But we’re talking about a strategic, focused project that’ll shock the market, which is what it takes. You need something dramatic to change the game.”

Another way to recognize and realize the value of these properties is to think about resilience. Schwartz points to a pilot program in Cleveland that’s trying to help with overall stormwater management by establishing rules around recovering vacant lots. If the lot was once a stream or waterway, it should be reclaimed as such, or rebuilt with permeable pavement and other features that help improve water management. These kinds of programs can help cities refresh their aquifers and supplies of clean groundwater.

“One of the things about depopulating cities in the Great Lakes region is that we have very interesting and complex hydrology,” says Schwartz. “All of these cities, when they were booming and growing, abused their waterways, and as they grew, cemented over these tributaries and creeks. We can use this vacant land to improve and protect the water quality of the Great Lakes.”

A symptom, not a disease

While the externalities caused by vacant property, and most efforts to fix them, are local by nature, they could definitely use more assistance from the federal level. The Federal Hardest Hit Fund, a foreclosure prevention and neighborhood stabilization effort established in 2010 in the wake of the Great Recession, was a great asset for cities in need of funds to knock down vacant homes, but it was a one-time infusion of cash. While the affordable housing crisis coming to a head in cities across the country has finally started to get national attention and policy proscriptions, blighted urban land hasn’t been similarly addressed.

There’s definitely hunger for it: Detroit Hives’s Paule says that after the story of their project went viral this spring, they received advice and guidance requests from around the globe, including from lots of other cities in the Midwest.

“That’s where we want to take it, to help address the issues of vacant lots and help provide jobs and help the environment,” he says. “This can be a triple-bottom-line solution, impacting people, planning, and profit.”

Mallach hopes that more can be done on a federal level. While individual members of Congress have proposed ideas and programs, Mallach says there hasn’t been any leadership on this important issue from the Trump administration, nor has there been any new investment in programming or efforts to help solve this crucial problem. Considering the key role the Rust Belt played in the 2016 election, and the slow pace of recovery in many parts of the region, Mallach hopes that vacant properties and blight will become a larger issue in the upcoming election.


July 2019

Nearly everything about The 78, a massive redevelopment project reshaping an abandoned 62-acre parcel just southwest of Chicago’s downtown, is big. Vacant for 90 years, the riverfront property will be transformed into space for 24,000 workers, new corporate campuses, a high-tech research center, and 12 acres of riverfront parkland after an expected $7.2 billion construction process. Even the name screams outsized ambition: The city currently has 77 designated community areas, or neighborhoods, with this project gunning to be the latest added to the list.

“It’s the biggest thing I can think of in Chicago for years,” says Whet Moser, a Chicago author and urbanist. “As part of the return to the city and movement of companies back downtown, there’s a good reason to expect that you can sell that space to corporations, and all the stores and services and housing that come with having so many people working there.”

Like other big American cities, Chicago is experiencing a wave of megadevelopments: large-scale, mixed-use, multibillion-dollar projects. Lincoln Yards and the renovation of the Michael Reese Hospital endeavor to harness the desire for urban living to create new neighborhoods from scratch. And, like similar projects in other big cities, The 78 is being handled by a division of Related, a development firm that’s made a name for itself with megaprojects such as Hudson Yards and the Time Warner Center. As Curt Bailey, president of Related Midwest, says, the company operates at a scale that few can match.

“We are willing to operate on the fringes of real estate so we can get to these incredible parcels and do special things on them,” he told the Real Deal. “So yeah, we don’t do small as well as others. We don’t do easy as well as others. I think, given our history and our level of expertise, we do better when it’s big and complicated.”

The 78, the new Related Midwest-helmed megadevelopment, just broke ground in Chicago.
A rendering of The 78, the new Related Midwest-helmed megadevelopment that just broke ground in Chicago.

If the game of urban American real estate today is dominated by the megadevelopment—massive, city-changing projects that often marry public and private financing—Related has become one of the signature players. Owned by Stephen Ross, whose net worth is pegged at $7.7 billion by Forbes, Related, and its wide array of domestic and international divisions, has over $50 billion in real estate assets.

Coming off the opening of phase one of Hudson Yards, arguably the most talked-about addition to Manhattan in years, Related shows no sign of slowing, with the 78 ramping up in Chicago, a $8 billion Santa Clara megadevelopment in Silicon Valley planning to break ground next year, and a Frank Gehry-designed mixed-use complex in downtown Los Angeles, the Grand, pouring its foundation earlier this month.

Bigger and better isn’t a new real estate strategy, says author Steve Bergsman, who interviewed Ross in 2006 for his book Maverick Real Estate Financing: The Art of Raising Capital. But Ross and Related operate differently than their competitors. When Ross started and grew the company in the ’70s and ’80s, many developers were about transactions. Ross wanted to build an integrated firm that could do everything, from gather financing to plan mixed-use urban villages. It was an approach that would prove prescient for urban development.

The meaning of the megadevelopment era

More than a decade into the current economic cycle, demand for downtown real estate hasn’t abated. Since most of the easily developable land has been bought and sold many times over, cities and developers have been giving more complicated locations a second look.

The remaining areas ripe for redevelopment—such as waterfronts, rail yards, and huge abandoned industrial sites—are generally in prime locations and well-connected from an infrastructure perspective. But developing them requires expertise, capital, and planning. It requires being able to wait out years of approvals and planning meetings and navigate bureaucracy, to think big and master plan entire new neighborhoods, and to risk money for what can be a decade-long process.

Related has earned a reputation for being able to thrive on that complexity, thinking in “decades, not quarters,” according to Crain’s New York. The firm’s most famous deals, Time Warner Center and Hudson Yards, were both projects unsuccessfully pursued by other massive real estate firms (Mortimer Zuckerman and Tishman Speyer, respectively). When they couldn’t figure out how to close their deals, Related stepped in. These firms are far from the only ones who see potential in post-industrial landscapes. But when table stakes for such projects start in the billions, and require extensive negotiations with local government, only a few players can compete.

Related’s forthcoming Santa Clara project seeks to turn a 240-acre golf course into a combination of high-end homes, upscale retail, and office space for tech firms.
Related’s forthcoming Santa Clara project, which seeks to turn a 240-acre golf course into a combination of high-end homes, upscale retail, and office space for tech firms. 

Take Related’s forthcoming Santa Clara project, which seeks to turn a 240-acre golf course into a combination of high-end residential, upscale retail, public parks and a public square, and office space for tech firms, along with 170 affordable housing units. Related needed to weather six years of planning and a pair of lawsuits by the cities of Santa Clara and San Jose before even getting the green light. Kim-Mai Cutler, a Bay Area urbanist and partner at Initialized, says that development in the region is so lengthy and unpredictable, it’s very hard for small actors to survive the process.

“The Bay Area loves small, bespoke things, but if you make the process so onerous, only certain actors will have the wherewithal and resources to make it through,” she says. “Small players can’t take the risk.”

From affordable housing to a symbol of urban luxury

Born in Detroit in 1940, Stephen Ross was driven from a young age to become a business tycoon. His uncle, Max Fisher, a financier and oilman who made the Forbes list of richest Americans, loomed large over Ross’s childhood. He gave Ross’s family a secondhand car and showered gifts, such as prime seats for Detroit sporting events, on his nephew.

“Why is the University of Michigan business school named after me?” he told Town and Country magazine. “Because the Ohio State business school is named after him.”

Ross, who graduated as a tax lawyer, moved to New York in the late ’60s and worked on Wall Street for a few years before being fired from a job at an investment firm. He decided to try his hand at real estate and started the Related Housing Company in 1972 with a $10,000 loan from his mother (“everything is related,” he said at the time). Even that name shows Ross thinking big from the start: He decided against his initial name, First Housing, because he couldn’t register it in every state, as he could with Related. He also felt that naming the company after himself, like so many other developers, was a mistake. “People don’t want to work for a person, they want to work for a company and be part of a company.”

As Ross would tell Bergsman, he saw a huge opportunity in developing affordable housing. By focusing on financing and developing government assisted multifamily housing for long-term investment, and using his skills as a tax attorney to take advantage of government-backed financing and tax credits, he was able to, in effect, become vertically integrated. His innovation was being a creator of affordable housing credits, a mortgage financier, and a developer. Eventually, Related would manage capital for large institutions and pension funds, as well as sovereign wealth funds, attracting $4 billion in outside investment capital.

“I started in affordable housing so I could learn the business using my skills as a tax attorney,” he told the Real Deal. “Meanwhile, I was selling the tax shelters that accompanied the projects to wealthy investors. The financial arm eventually became the largest supplier of debt and equity for affordable housing.”

“He thought about it on a broader scale,” Bergsman tells Curbed. “Ross wanted everything under one umbrella, that was his big innovation. He’s an investment builder, not a merchant builder, he keeps the properties. He was able to grow like that because he had the financing capabilities. Most don’t have those deep pockets.”

As Ross built out his affordable housing business in the ’70s and ’80s—the company claims to be one of the largest owners of affordable housing today—the growing number of properties under the Related umbrella created a “river of cash” that helped the company weather real estate booms and busts. By the ’80s, Related had begun opening new divisions across the U.S. and the world, and started diversifying into retail and mixed-use projects, including CityPlace in West Palm Beach (recently renamed Rosemary Square).

A view of the Time Warner Center mixed-use development when it opened in New York City in 2004.
New York City’s Time Warner Center, which includes 350,000 square feet of retail and a restaurant and entertainment complex, in 2004.

A turning point with Time Warner Center

The turning point for the company was the Time Warner Center, the renovation of Columbus Circle in Manhattan into a mixed-use complex consisting of high-end office spaces, luxury residential living, and extravagant dining and retail. Opening in 2004, the complex would presage the next decade and a half of high-end development in the city and help open up the west side of the island to projects like the High Line; New York magazine’s Justin Davidson calls it “the most influential construction project in New York.”

While the twin towers of the Time Warner Center have become landmarks in New York City, at the time, the project was far from a guaranteed success. Ross, whose offices overlooked the site of what was once the New York Coliseum, a bland convention center, was fixated on the possibilities. His intuition, that New York could support a mixed-use project with an indoor mall, seemed daring at the time (Related Urban, helmed by Ken Himmel, has also been instrumental in the company’s push into this type of development). Since its opening, it’s been seen as a huge success, and the project that enabled Ross to later take on Hudson Yards.

“They were looking at what the economics could afford at the time,” Ross told Davidson. “The predominant use they had in mind was a convention center-hotel, with maybe some condos and rentals: very pedestrian. I saw it as a world-class site.”

The project also saw Ross wooing Time Warner CEO Richard Parsons, telling him that the opportunity “isn’t about real estate; it’s about showcasing your brand.” Architecture critic Ada Louise Huxtable, writing in the Wall Street Journal, said the result was “exactly what a New York skyscraper should be—a soaring, shining, glamorous affirmation of the city’s reach and power.”

Hudson Yards and the commodification of the city

If Time Warner Center helped show the potential of mixed-use downtown development at a larger scale, the $26 billion Hudson Yards took that several steps further, with a single developer creating an entirely new neighborhood. The gleaming constellation of new buildings, supporting office space, high-end retail, and residential projects, built atop a functioning rail yard, was one of the most complicated and costly projects in the city’s history, taking more than a decade to complete. It was “the last frontier in Manhattan,” according to Dan Doctoroff, current Sidewalk Labs CEO and founder, and previously a deputy mayor of development in the Bloomberg administration trying to realize the potential floating above this grid of train tracks.

The high-end city-within-a-city has been called “the Rossian lifestyle at a supersized scale,” and showcases the company’s diverse interests. Related and Ross own the Equinox Fitness luxury health-club line (the first Equinox Hotel opened in Hudson Yards) and was once a partner with Union Square Events, the catering division of celebrity chef Danny Meyer’s business. Ross’s own private investment company, RSE, which was launched in 2012,invests Ross’s capital into companies such as Momofuku, Milk Bar, and the reservations platform Resy, all dining options preferred by the wealthy millennials who are the prime audience for the new apartments at Hudson Yards.

Guests attend A Magical Summer Night At Hudson Yards Celebrating The Lifestyle Of 35 Hudson Yards on June 25, 2019 in New York City.

And Ross was able to devise the financial tools to make it all work, despite numerous setbacks. After winning a bidding process for the site in 2008, he lost his lead tenant when Rupert Murdoch pulled out, and had to cede to site to Tishman Speyer. Then, as the economy took a nosedive, Speyer pulled out and Ross was able to recover, restructuring the deal to include stalling mechanisms that allowed the company to wait out the economy. Related raised over $600 million for Hudson Yards through the EB-5 visa program, which gives foreign investors residency status.

Now that Hudson Yards has opened, Related may have its crown jewel. But as the company continues to break ground on new projects and diversify its business, fundamental critiques of this model remain. Are the public subsidies for these kinds of public-private projects, which help support private businesses, in the city’s best interest? Lincoln Yards in Chicagohas been pilloried for tapping into tax-increment financing, and the Amazon HQ2 development was pushed out of Queens by local advocates and activists against the notion of tax breaks for one of the world’s wealthiest corporations. Curbed critic Alexandra Lange called Hudson Yards a neighborhood for the wealthy, with “no weirdness, no wildness, nothing off book.”

Related and Ross would say that Hudson Yards creates big benefits for the city: In addition to adding more than 3,000 new affordable housing units and eventually paying off the bonds that funded a subway extension to the neighborhood, an economic analysis prepared for the company by Appleseed, a local consulting firm, estimates that Hudson Yards will add $19 billion annually to New York City’s GDP, 2.5 percent of the total, and contribute $477.3 million in annual city tax revenues.

During an interview at the recent Future of Everything Festival, organized by the Wall Street Journal, Ross said that critics of Hudson Yards have created an atmosphere hostile to business, and that labeling the mixed-use project as being too focused on wealthy customers is “newspaper talk” and “politicians trying to make an example of things.”

Ross, for his part, doesn’t think there will ever be another Hudson Yards. “But I think people will come and look at it, from a sustainability standpoint, and say, ‘I want a Hudson Yards in my city,’” he told Surface Magazine.

In addition to the projects in LA, Chicago, and Silicon Valley, Related announced a $3 billion urban senior living project with Atria, taking advantage of the “silver tsunami” of baby boomers entering retirement. As Ross and Related evolve on all fronts, the company continues to find new opportunities to meet the changing housing needs of U.S. cities.

“Real estate hasn’t changed since the Greek times,” Bergsman says. “Find your plot of land and build your Parthenon. But the people who succeed find something different in the obvious.”


September 2019

For Michael Pickens, a 31-year-old working in tech sales in the Bay Area, buying a home for his family isn’t an option. He lives with his wife and two kids in Campbell, California, the same town where he grew up, in an apartment across the street from the middle school he attended. He’s seen all the signs of an affordability crisis: Friends can’t afford to live in their hometown and have scattered to Texas and Arizona. He’s put in offers on $700,000 condos only to lose out to wealthy buyers making all-cash bids. The 1,100-square-foot house he grew up in, built in 1952 and barely renovated, now costs $1.2 million. Campbell is simply a “different town.” Even if Pickens could afford to buy a single-family home, he isn’t sure it’s worth the financial risk, especially in a downturn.

Pickens is among the many millennials priced out of homeownership in the expensive coastal city where he works. But that doesn’t mean he’s not in the real estate game. To the contrary, he and his wife now own six properties in multiple cities. Thanks to Roofstock, an online platform for buying and selling investment properties in midsize, emerging markets across the country, Pickens can buy buildings from Pittsburgh, Pennsylvania, to Memphis, Tennessee, via his laptop.

“It’s very video game-like, like buying stock,” he says. “I’m physically buying these buildings, and managing property from afar.”

Roofstock, which has overseen more than $1.6 billion in transactions since it was founded in 2015, allows Pickens and other users to choose rental properties with varying degrees of expected returns, based on numerous risk factors, including location and tenant history. (Each listing contains extensive photos and inspection records.) Pickens picked up his first buy, a duplex in Memphis worth $129,000, a year ago, putting 20 percent down. After taxes, management fees—a property manager recommended by Roofstock oversees the building—and the mortgage payment, he makes roughly $200 a month. He’s already picked up five buildings in five other markets and spends less than an hour a week operating his property empire. It’s so easy he compares the process to fantasy football; Roofstock’s 30-day property return policy makes it “like buying a pair of shoes.”

“I’ve never been to the places where our investments are,” Pickens says. “I know nothing about these towns or cities.”

Properties on Roofstock are all vetted, and rated via a number of criteria, including neighborhood ratings.

Making money with the real estate investment cloud

Pickens and others like him remain confident—even after living through the housing crisisand feeling the crunch of rising home prices—that it’s worthwhile to begin climbing the property ladder. And while investors have always picked up out-of-town properties, new technologies make it seem more natural than ever to buy a building on a block you’ve never seen. This technological ease has coincided neatly with larger real estate trends: rising costs in large coastal cities, the increasing appeal of midsize metros, growing interest in the idea of passive income and the cult of FIRE (Financial Independence Retire Early), and cynicism about the investment markets and the long-term fate of social security.

The old adage about real estate is that it’s all about location. That’s still true, but it’s less and less necessary for landlords to live in the same locations as their properties. Smaller cities and rising markets offer the best chances for more consistent monthly returns, and emerging investment platforms offer a channel for capital to flow from the coasts. According to CoreLogic, 11 percent of single-family homes purchased in the U.S. last year were bought by investors, the highest number on record and twice the percentage in 2000.

“We find that millennials see the investment landscape very different than their parents do,” says Alan Lewis, co-founder of DiversyFund, a site that lets users invest in large-scale multifamily developments online, and that controls roughly $100 million in assets. “They’re jaded by the homebuying story, they’ve seen people overpay during the peak and be upside-down in their homes, and they see stock market volatility and don’t have an appetite for it. They want something that offers a departure from the rollercoaster ride.”

These services aim to do just that. Whether they’re buying a stake in a new commercial building through real estate crowdfunding or investing in a unit in a building made for Airbnb, a new generation of investors suddenly has the tools to seize opportunities in dozens of cities. According to Gary Beasley, co-founder of Roofstock, before this era of innovation, roughly 70 percent of rental and investment property was located an hour’s drive or less from where the owner lived. Roofstock users have flipped that formula: Roughly 93 percent of investors on the platform are buying out of state, he says, and 75 percent are first-time buyers. It makes a lot more sense to buy a great home in Cincinnati for $120,000 than gamble on a $1 million starter home in Los Angeles.

“The idea of separating where you live and own has been happening for a while now,” Beasley says. “Since we’ve created the real estate investment cloud, you can plug into it and access opportunities across the country. The country is your oyster.”

Buying the dream home once the dream is gone

Due to the rising number of jobs that allow telecommuting, and the potential to have a career in a creative field even far from a big city, many young investors from places like Brooklyn or Boston are investing in second homes in rural areas. They’re using them not just as traditional vacation homes, but with the goal of turning them into short-term rentals, summer escapes, and eventually primary residences.

Alissa Hessler, a 37-year-old former public relations exec and founder of the Urban Exodussite, did just that, moving from Seattle to a property in coastal Maine and in the process creating her own career, which includes documenting others making similar moves. Today, Hessler and her husband offer creative services “based in Maine, available worldwide.” She works out of an office in a converted barn, and believes more and more of her generation will do the same thing, since rural property ownership, unlike urban property ownership, is still achievable on a creative professional’s income. In addition to dreams of authenticity, farmhouse living, and connecting with nature, a rural house offers a place to park money and actually turn a profit.

“Due to the golden handcuffs of having a high-paying job, people feel trapped in the city,” she says. “There’s also this general discontent from the millennial generation and the one behind it. We’ve always been sold this American dream: go to college, get a degree, move to the city, make a career, and have kids. But it’s just not possible. Cities are just too expensive, and young people are saddled with school debt. I have friends in their mid to late 30s who have multiple roommates.”

A multicolored, restored farmhouse with a mint green roof ringed with a small stone wall.
The Hesslers’ property in rural Maine.

Hessler’s work with Urban Exodus argues that it doesn’t have to be that way. Many of the couples she’s interviewed were cautious about the transition, but slowly eased their way toward being totally remote workers.

Hessler warns that those contemplating such a move need to be aware of significant risks, including the high cost of property management services for rental properties (up to 20 to 30 percent of a landlord’s intake) and the price of repairs and utilities. Hessler once had a $2,000-a-month heating bill for her farmhouse before adding adequate insulation, and when a fridge broke, she had to wait three months for the only local repairman to fix it. It’s all part of being in what she calls the “Pop Tart generation”: raised on conveniences, and unfamiliar with the kind of repairs and common-sense skills required to maintain property.

“It’s not as easy as people think,” she says. “I’ve had friends in this scenario dip their toes in the Airbnb market. While 85 percent of guests are amazing, 15 percent are awful. And that 15 percent can push people over the edge.”

Despite those hardships, she still feels like rural property is a good investment. She sees it in the part of mid-coast Maine where she lives: So many young buyers are coming from Portland, Maine; New York; and Boston.

“Maybe I’m being overly optimistic,” she says, “but because of telecommunication, desirable rural communities will become even more desirable. It’s possible to thrive in smaller areas. You can start something yourself; cities take so much investment capital and are so risky.”

A vegetable garden next to the side of an old restored house.
Alissa Hessler in her garden.

Investing in the cash-flow generator

While the millennial generation may be jaded due to the Great Recession and skyrocketing housing prices, the idea of investing in real estate is still extremely appealing to many millennials. They just need to find the right inroads.

Riley Adams, who lives in the Bay Area, in Pleasanton, California, and runs the Young and the Invested financial blog, says that real estate is an exceptional investment for multiple reasons. It provides rental income and cash flow, which can be partially shielded from taxation by numerous deductions, as well as relatively consistent returns over time. Adams has his own investment property in New Orleans, a studio condo downtown that cost him $100,000 and makes him roughly $400 per month after costs and mortgage payment are taken into account.

Smaller markets, Adams says, allow for greater monthly income for property owners. In expensive cities, it’s hard to charge enough monthly rent to cover the mortgage and expenses and still make a solid return. In cities such as New Orleans or Des Moines, Iowa, a landlord can charge a competitive rent and make a decent return on a much cheaper home. Pickens found the same thing with his Roofstock investments; he couldn’t find any properties in the Bay Area that provided solid cash flow.

In the major markets in the U.S., most money is made through appreciation of the real estate asset, not monthly cash flow. That’s why there’s so much institutional money in cities like New York or Los Angeles: Big players who can front millions of dollars see steady returns over time, but smaller landlords aren’t able to make the extensive initial investments required.

That’s why Roofstock, which now operates in 65 markets, has focused on properties in the Midwest and Southeast, says Beasley. The company finds that users, many of whom are tech-savvy early adopters, are concentrated in higher-priced cities.

“You can get a lot of house for your money, the rent money is very attractive, and the yield on these properties is pretty nice,” he says.

What about the tenants in these properties? The Roofstock system actually works to their advantage, Beasley argues. Since the new property owners don’t live in the cities where they own these apartments, they tend to hire professional property managers, who often do a much better job than inexperienced mom-and-pop operators. Roofstock often acquires property from the large portfolios of institutional investors and sells the units without asking renters to vacate. The transition is seamless, according to Beasley, without the need for showings that disrupt the renters’ daily lives.

“I bought a home through our site,” says Beasley. “I’ve never seen it, and I’ve never talked to any of our tenants. The tenant doesn’t know who owns it, could be me, could be anybody.”

How investment technology continues to evolve

Many of the tools and platforms allowing remote real estate investment expect the market to keep growing. It’s capital finding a way, allowing frustrated millennials to realize their ambitions to own. Lewis says DiversyFund has a lot of millennial investors, who are just starting to “dip their toes” into the investment world, and will eventually see more value in partnering with a service like his, where investors are guided by professionals and can take a more passive role.

“You see properties converting themselves into something of a hybrid, fluid enough to be lived in part of the year and rented out for another part of the year,” says Amiad Soto, a cofounder of Guesty, one of the world’s largest property management platforms. “Real estate is becoming more of a business, instead of something that’s fixed, and that’s enabling a lot more small- and medium-sized businesses to flourish, and for self-made entrepreneurs to grow.”

As more and more of this investment capital flows into these smaller markets and rural areas, it also brings displacement and rising prices. Hessler says that she’s conflicted about the idea of purchasing just for income: She wants to highlight those buying into an area to make a long-term investment and commitment, not just money. She’s seen how remote property owners can hollow out regions built on seasonal travel. Local owners have more competition for tourist dollars, and more speculation raises prices and turns vibrant towns into shells of themselves when locals can’t afford the rent anymore. It’s already happening in places like Joshua Tree, California, and Asheville, North Carolina.

“Make sure that you really love the place, if you’re trying to buy in that area,” she says. “The best investors are those involved in the community.”

“Filling a Roofstock-sized hole”

Pickens sees himself as a responsible property owner, one who is careful to find real estate that has been taken care of by tenants and to keep it in good shape.

“We don’t want to be renting out a bad place to a person in a bad neighborhood, barely making it or doing illicit things to make rent,” he says. “We don’t want to deal with the implications of those types of environments.”

That’s one thing Pickens loves about the service: It’s easily customizable (neighborhoods are rated on a five-star system, which takes into account a number of socioeconomic criteria at the census tract level). He can pick quality places in “quality areas,” while other investors can go for riskier locations, which possibly bring in more returns. He says a coworker who also uses Roofstock just wants to “be a slumlord,” and says he doesn’t care how terrible the house is—he just wants the highest possible return. (Roofstock doesn’t vet buyers: “As a marketplace open to all investors with the funds to invest we do not do independent vetting, but we do encourage investors who are not buying with all cash to get pre-approved by a reputable lender to signal their ability to perform,” Beasley says).

Pickens’s end goal isn’t to create a real estate empire. He simply wants enough passive income to provide for his family, and be able to work if he wants to, not because he needs to work (he declined to say how much he was currently making on these properties, or his final goal). So far, Roofstock has helped move him toward that goal. In a conversation with coworkers about what they were going to do with their bonus money last year, one looked at Pickens and said, “he’ll do what he always does: buy another house.”

“We had a Roofstock-sized hole in our life, and this filled it,” Pickens said. “We knew we wanted to invest out of state, but didn’t have the time to do it. It’s been a year of me interacting with people on Roofstock. I can say this is legitimately awesome, and everyone should do it. ”

When asked what his favorite property was, Pickens cited the Memphis duplex, his first purchase, which has offered great returns. When he was then asked what neighborhood it was in, he replied “That’s a good question. I don’t know.”