Renegade Capital

Increasing Diversity in Real-Estate Development Can Drive Systemic Change In Communities of Color with U.S. Bancorp Impact Finance

October 31, 2023 Andrea Longton, Ebony Perkins, & Leah Fremouw Season 3 Episode 3
Renegade Capital
Increasing Diversity in Real-Estate Development Can Drive Systemic Change In Communities of Color with U.S. Bancorp Impact Finance
Show Notes Transcript Chapter Markers

S3 Ep 3 | According to a new study, Black and Hispanic real estate developers together make up less than 1 percent of their industry. This gap in the real estate industry isn’t just a representation crisis, it’s also a huge missed opportunity – the study estimates a more diverse industry could create more than $100 billion in new revenue. Investing in systemic change could close this gap and actually bring lasting economic growth to many communities. US Bancorp Impact Finance, a subsidiary of US Bank, has taken a lead role in addressing systemic issues by investing in community development across the nation. In this episode Miranda Walker, US Bancorp’s Affordable Housing Impact Capital Manager, shares how they are creatively working with CDFIs and BIPOC led developers to uplift local communities.

About Miranda.
Miranda Walker joined U.S. Bancorp Impact Finance in 2022. In her role as impact capital manager, Miranda focuses on deploying capital to emerging developers of color. Prior to joining U.S. Bancorp Impact Finance, she managed the development of affordable housing in the Twin Cities. Her nearly 15 years of development experience involved feasibility analyses, site acquisition, entitlement, design development, construction management, financial modeling, tax credit application and financing, and permanent financing conversion. In addition to her affordable housing work, Miranda has served as a Planning Commissioner for the City of Brooklyn Park and as a volunteer for Hands On Twin Cities and Habitat for Humanity. Currently, she serves on the board of Alliance Housing and provides advisory support for Twin Cities LISC. Miranda earned a B.A. in Studies of Cinema and Media Culture and a Master's in Urban and Regional Planning from the Humphrey School of Public Affairs at the University of Minnesota.

Renegade Capital Tools & Tips.

A renegade not only listens but acts. We've consolidated a few tips from this episode for taking action to increase diversity in real estate development.

  • Invest in diverse and emerging developers: There are opportunities for investors at every level to use capital to support diverse and emerging real estate developers. Everyday investors can open accounts and place deposits with banks that drive this work, like US Bank and local CDFIs. Institutional investors, other developers, and philanthropists can look for partners and initiatives already committed to this work. 
  • Find the diverse developers in your community: Grove has published a map and directory of Black and Hispanic developers to assist those who want to connect and do business with these developers. Learn about the ongoing work in your own community and stay up to date on the current issues they face. 
  • Invest With US Bancorp Impact Finance: If your organization wants to expand its investment portfolio to include real estate that supports developers and communities of color, contact US Bancorp Impact Finance to learn how you can drive systemic change.

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This is Andrea Longton. This is Leah Fremouw. and This is Ebony Perkins and we are Renegade Capital. All views expressed in this podcast are our own we are not financial planners investment advisers or tax advisers the views that we have on this show do not necessarily reflect the views and opinions of the people who sign our paychecks. So please keep that in mind and always, always consult a trained Financial professional before you start moving your hard-earned money. Let's dive in. So Andrea what's going on in your world I feel like something big is about to drop it is my parents this morning sent me a text and said look what we found I'm like what it what is going on and they sent me a um a screenshot of Amazon on.com where my book is now available for pre-order I like oh my gosh I had no idea was there and I am like oh my gosh my parents just sent me this and then kle found it on Barnes and no no one was like ah this is real this is happening coming out is coming out oh this is so exciting congrats wait so the social justice investor I just Googled it it's at it's at tar as well it's linked there good reads has you linked wealth management.com has you listed as an author it does this is just from one Google like two seconds ago what what's the book about the book is about how to be a social justice investor and so it is written for everyday people so people who don't have a background in finance who want to invest in the potential of people through their financial decisions and don't know how to get started and this book lays out step by step how you can do that really what investing looks like how you can do it with an financial advisor or go it alone or do it through like your 401k planning and also because reading about Finance is boring and I've read a lot of Finance books and I totally understand that reading about Finance is boring with every chapter you get a little reward of a Chicken Soup for the Soul style story including two from Leah freal and Ebony Perkins about moments and leaders in this Field's lives where they faced a decision or they had this moment that affirmed or changed their lives in some way so it's like red dissection on how to hire financial advisor get a treat read a section on what is risk anyway get a treat so I wrote this in a way that is not boring and it's digestable and it keeps you going oh my God I love this I love this and you're out here like getting people ready and showing them how to do it you know what's cool though is that we don't live in New Zealand I mean because it's $44 44 New Zealand Dollars there and um a little bit cheaper here to order in the US so but in New Zealand I feel like you get earlier access to Blue episodes so you know there's a give and take in all things man that's awesome congratulations thank you it's like the machine is in motion because I didn't know that this was happening and all of a sudden it's out there oh I got my cover I'll have to um send you all a text into all of our readers as soon as I can share it publicly I can share the cover designed for it which we've been working on my editors and I have been working on it for a few weeks now and they keep refining it and refining it and every time it's like it's so cool um just seeing how it it shapes up and really creative people are putting it together and Stacy Abrams provided a an endorsement blurb for the front cover which like oh I melted like I was actually I was breathless there for a second so um yeah this is it's coming together it's four years in the making and it's coming oh my gosh it's crazy this is awesome you are inspiration I'm I'm loving this like this is giving me so much life y'all April 23rd 2024 it's coming folks it's coming it's coming Get Ready Get Ready Get Ready Get Ready y'all are very kind what are we talking to you today eonie my gosh I'm so excited about today's episode but you know what before we even dig in any deeper I got a big question folks you know systemic change is a buzzy phrase we hear about I've heard a lot about systemic change probably within the last 5 years you know I hear it thrown around when we hear others talk about all kinds of inequalities whether it's racial inequality gender inequality all of that fun stuff right but what does systemic actually mean and who exactly is responsible for the systemic change that we are demanding that we see so what do you all think I think about just systems and systems that work through our culture and I'm totally going to steal from Dr KY who wrote about it and how to be an anti-racist when he talks about the moving walkway and to me that systems piece of I always think about it when I'm at an airport and I'm like lugging my luggage along um and I'm like oh thank goodness there's a moving walkway and there's a whole system in place that helps me get from one end of the terminal to the other a little easier um and it's designed to help me move forward easier the whole system from like I'm going to overuse overplay the metaphor but like from the actual conveyor belt to all them that'ss in bolts inside to the electricity to the people who work on maintaining it and the money that goes into installing it and maintaining it that it helps you move forward and makes your life a little bit easier to the point where you don't even think about it until it's broken um and you recognize that oh it'd be a lot easier if I was able to use this thing over here that's designed to help me and then you think about what if you were working against that where the system wasn't designed to get you further along and having to work in walk against that and how much harder it is whenever you're working against a system that's designed to work against you systems when they're working for you can help accelerate your plan and can help accelerate how you want to achieve your vision but when the system's working against you it makes it so much harder to be able to achieve your vision and when everything is designed to go on One Direction and you're not allowed to get on that walkway or the walkway wasn't designed for you or you're just disc enaged from using that walkway whatever it is then that really sucks and similar to Leah who do I think is responsible once you've recognized there is a moving walkway to start walking in the opposite direction of it and to figure out how to get more people on the moving walkway or figure out how to reroute the moving walkway that's how I think about systems and systemic change I love that analogy I think a lot about what John holtzclaw said in one of our earliest recordings for Renegade Capital where to be Renegade is to be brave and being willing to be that first voice to say hey this isn't okay what can we do about it sometimes being that first voice can give encouragement and credibility to other people who want to raise their hands to and say I agree and sometimes I get intimidated to say something and that's really helpful for me whenever somebody else raises their hand and says this isn't okay and watching other people raise their hand and say hey this is this isn't okay gives me not permission but it just gives me confidence in my own agency and future issues or future happenings of just remembering hey that person did that that one time and this is the difference that it makes so I think I can do this in this time Leah's thinking hard I am because I'm usually I'm the talker in the meetings like or the and I can't say I'm that bold all the time though people that know me you know sometimes they wait CU they're like oh Leo eventually say something like sometimes it's not my place to say something even if I know something or I can it's like the speaking up or holding space in my mind there's a difference between me articulating something or creating space for someone else to share their experience or to share you know their perspective and how you balance that and also how you're try to be aware of that in those live moments that you may have lots of thoughts and opinions on what's happening in that moment but it's not something that impacts you directly and so is there an opportunity to empower someone else to speak um or to you know give voice or or again like I said hold space for that conversation even if you're not leading it um so I think there's not a passive but there's a quiet way to kind of push through and then there's the very vocal and like direct way too I don't know am I making sense yeah it sounds like you're saying sometimes you have to read the room yeah to get a Vibe of what's going on in others heads by reading facial expression or body language or things that people are wanting feels like they're thinking hard and want to say but might need a nudge to do it but also you don't want to put anybody on the spot and it can be hard to know when to say something and when not to I'm coming from my placees sometimes the only woman or one of the few women in the room and also as a white person and if I'm at the table the proverbial table have I gotten another seat next to me or do I give up my seat because I shouldn't be there anyway it's better served by someone so it's like kind of those different positions of privilege you know how do you bring other women in how do you create space for communities that you don't represent like I think that's all kind of wrapped up in your role in the system and back to my point earlier about awareness and like my own kind of like progression as my role in the system and where I benefit a lot from my well-being and my economic status and my race and all of that all of that stuff and and where I don't and you know it's it's I mean it's not black and white answer um for a lot of this but I think it's just the the acknowledgement there are systems that are broken and hurting people and then where can you where can you kind of break some of them open you from where you sit yeah this is Andrea lton this is Leah frow this is abony Perkins and we are Renegade capital and today we're talking about uplifting local communities and driving systemic change Renegade Capital podcast is proud to be sponsored by US Bank Corp impact finance a subsidiary of US Bank which is an industry leader in providing Financial Solutions that help create positive impact for communities and the environment for 35 years it's tax credit investments in syndications lending and other fin Financial Solutions have helped create affordable housing spur economic activity and underserved communities restore historic buildings develop renewable sources of energy and strengthen community development financial institutions or cdfis Nationwide learn more at usbank.com impact Finance and today we're joined by our friends at US Bank Corp impact finance a subsidiary of US Bank and something I'm super excited about our lead sponsor for the Renegade Capital podcast for season three as an industry leader they finance projects Nationwide that help build thriving communities and drive inclusive economic growth US Bank Corp impact Finance supports affordable housing Economic Development historic Rehabilitation environmental Finance and a growing syndications platform in order to create new sustainable Financial opportunities for everyone Miranda Walker is our special guest today and she serves as affordable housing impact Capital manager Miranda has nearly 15 years of development experience building communities and in her role at impact Finance Miranda focuses on deploying Capital to emerging developers of color prior to joining impact Finance she managed the development of affordable housing in the Twin Cities in Minnesota thanks for joining us Miranda by way introduction can you tell us a bit about yourself your work at impact finance and maybe a personal story about what ignited your passion for Community Development a bit about me I actually had a a somewhat circuitous route to Community Development maybe accidental one might say I really wanted to be an architect I really thought that's how I wanted to impact community and went through school graduated high school thinking I wanted to be an architect and then decided out of the blue that I wanted to be a writer and dropped out immediately because writers right as I told my mom uh through tears so I I I dropped out uh of college to write um gave myself five years in that amount of time I not only did not win an Oscar I was not even nomin ated for one so I decided it was time to go back to school and I didn't have any specific Focus I just was looking for a degree in that time I stumbled upon what was our studies of Cinema and media culture which came out of our comparative literature Department Hardy liberal arts degree um but it really changed my life Focus so it really was the study of media and the study of text and the study of culture and analyzing culture and understanding systems and was the first time that I really spent time understanding systems and understanding meaning and power and power dynamics and and really that major helped me to refocus so immediately after after graduation I had this new dedication to Community Development and impacting community and I joined americore went to the Mississippi Delta worked for a year came back in the middle of um the 08 9 economic Calamity um wanting desperately to work and to get involved in Community Development and having no outlet but I knew I needed to keep busy so I started volunteering and ended up volunteering locally at a place at a nonprofit called project for pride in living and accidentally was working on some um agricultural initiatives Urban agriculture initiatives and they had no place for me to sit um except for on the second floor near there affordable housing development team and I accidentally discovered the low-income housing tax credit or litec as we call it discovered housing as a community development tool and just never looked back I thought this is exactly what I want to do I have figured this out I thought that I wanted to impact Community by designing the buildings but I want to design all of it I want to impact Community by building the buildings that are there by understanding how those buildings are financed and understanding how those those buildings play and interact with other people in other spaces with other uh built forms so I went back to school studied urban planning uh and while I was an urban planning student I was an urban planning student with a focus on housing and concentration in housing and started my work then um even while I was in school working full-time at a nonprofit so started my career working on the development side of litech did that did all types of affordable housing projects 9% projects 4% projects historic rehabs um recapitalization you name it I did it senior projects and then I found that I'd done all of the projects I had this list and I thought well what will be a new challenge and I moved to a cdfi after that and understanding financing and really understanding the mechanics of Community Development and specifically the mechanics around housing I had worked again as a developer I'd worked across the table from US Bank and bumping into US Bank and all of the great cdfi work that I was doing and a position opened at US Bank that took the work much of the work that I was doing at the cdfi married it with the development work and gave a greater footprint um and so a year ago in June of 2022 I joined US Bank and have been excited to work with the US Bank team and that is my that is my circuitous wild crazy route into the Community Development space that didn't sound secutus that sounded like fate I accidentally sat next to this one group uh and that changed my life forever Miranda I don't think I've heard the um tax credit programs explained or even like kind of the 4% the 9% with so much energy and like like passion for it I think it's so interesting there's different programs so I appreciate kind of your your brain and your your heart wanting to like figure it out and like get into that world that's amazing I have found in my career that with with litech you find out very early um and I've had and I think that's great I've had colleagues that you know they start and within six months they know this is 100% not for me or this is 100 if you love puzzles I always tell people in the litech space we're starting with a problem the market doesn't have a solution for providing affordable housing specifically deeply affordable housing that's the starting point the starting point is this doesn't work go and either you love that or you don't I can't imagine it's it's funny I would have colleagues and we would occasionally when things get hectic and stressful complain why would you do who would do this who would take this kind of work on and then eventually by the end of the day we look at each other and say well what else what we do we love we love this on the worst days we love this so you love it or you don't so Miranda I'm gonna ask a question about the bigger entity so US Bank and and impact Finance because they've been in the game for 35 years um and they've been investing in Community Development all over the place for for decades it'd be understandable you know as a large corporation if they chose not to to pay attention to to the smaller communities right or to ignore the needs of the average person and they could have still been very successful what really sparked their interest in the average person in helping local communities more specifically bipod communities prior to our re rebranding as impact Finance it was US Bank CDC uh Community Development Corporation and I really think the name change to impact Finance highlights what we do and also our aspirations is to really make impact but we've been around as you noted we've been around for a long time and our Focus then on impact on community has always always been there the impact Finance group has always been focused on community um and specifically on on Community Development whether that's you know rural development Urban Development we really work across the country really work across communities to find out specifically what community these needs are because they vary from geography and and Community type and so we're we're deeply invested in understanding community and being partners with community and impacting Community I do think you know geography matters and I do think that while it's not new for us to operate in this space I do believe that our proximity to some of the Nations more more recent incidents of social unrest have really heightened our Focus so our impact Finance group is based in St Louis and I'm based here in Minneapolis which is where the bank is headquartered and so when you think about Minneapolis and you think about St Louis and you think about social unrest and the ways in which and the in the timing specifically over these last couple of years from the killing of Mike Brown to that of of George Floyd you know I I one of the reasons that I joined US Bank and one of the reasons I'm really proud to to work here is that that um you know we are hyperfocused I think on impact and on community and I do think that that our dedication has been reflected in our space I think our geography has impacted that I think sort of the ways in which um we as an institution as as employees have again been close to to understanding what some of those what some of those tensions are has really driven a lot of our work do you have a a story or an example or a borrower story of how you feel like your impact has been focused you know I would say that it really started even before my work at US Bank so again I've had history with the bank from from various seats and always had these great interactions and always had great interactions with members of employees of of US Bank but I was working on a project um and US Bank was um involved in the project US Bank was the lender and I just thought first I was surprised to see US Bank this was a tough deal and it was again a deal um led by an emerging developer of color and this was you know before many folks launched programs this is before um US Bank presented our impact Capital fund to the special purpose and it was characterized as a special purpose credit program but being able to sit so closely to US Bank as that deal moved forward and really you know I was on the phone probably with the folks from US Bank more than the actual developer you know trying to understand the deal points and understand are you all really gonna do this are you really gonna are you really committed are you really committed and seeing that deal move forward and seeing usbank was really um for me the deciding factor of joining US Bank I enjoy what I I was doing um but the ability to see an institution actually execute on a really difficult deal to see it move Beyond lip service it was a very difficult deal and I wasn't sure that that this particular de developer was going to find a lending partner that US Bank stepped up and not only was the development part but worked through some really difficult problems and was really flexible and was dedicated and committed to making this deal work to me that was the Difference Maker for me personally of seeing it and being able to see behind the scenes and say they're committed this isn't you know us having a conversation in US Bank giving me a number of bullet points or showing me a slide deck of commitments made or things that they want to do it wasn't conceptual it was very real before you joined we had our pre-interview talk with the the co-host and we were talking about what is a system and what is systems change and and what is an institution if not a group of people uh and so whenever you were talking about an institution it was that committed to making this deal work it just made me flash on it's an institution is a group of people who are willing to dig in U to roll up their sleeves and make the puzzle pieces work um because they're motivated by what is the impact on the ground what is this Finance going to do and how can this create systems change of how can this Finance fuel what we want it to fuel and Miranda when in your experience because that was it sounds like um impactful and you know um showed you a side of of the organization that you appreciated and could align with what does it look like when it doesn't go that way like what what is the the opposite of what you experienced um in deals like that I really feel like certainly we understand what hurdles exist in housing and affordable housing we don't have enough affordable housing we many of us are are over familiar with the barriers to diversifying uh the developer pool the folks who are developing housing and specifically affordable housing and I think one of the things that that that we forget to mention or is often left off of that list we talk about access to Capital because that's certainly a huge hurdle but it's also transparency in the process and is to to the earlier question that is something that I saw on the other side of the table but to answer your question Lei I often think that is what is missing when when deals go sideways is that it is unclear specifically to emerging developers of color who have so many hurdles it's a new shop it is a new entity it's a new Endeavor there are all of these hurdles there's a shortage of back office help there's a shortage of capital often of liquidity of just folks to do the work and so when a curveball is thrown when the process isn't made clear that can really derail a project I do think that we practice very well sharing with folks the the process these are the expectations this is the process this is the timeline and I think that is very helpful to help people then manage those those pieces is this timeline going to work for me will these hurdles work for me will these requirements work for me I think deals go sideways when there are surprises and those surprises are especially difficult for emerging developers to navigate Renegade Capital podcast is proud to be sponsored by Self-Help Credit Union and self-help Federal Credit Union which believe in the power of Finance to transform lives and communities are you an impact investor looking to make a difference look no further than self-help where your deposits can create POS positive change don't just invest for profit invest for impact visit self-help.org invest for impact today and start depositing into a money market or term certificate with Self-Help Credit Union where your money can change lives Self-Help Credit Union ownership and Economic Opportunity for[Music] all Randa you were speaking a bit of about developers of color and emerging developers can you talk to us about your work uh with these groups and also why it's important to you and why it's important to uh US Bank sure so my official title is impact Capital manager and I manage uh us bank's impact Capital fund which is specifically geared to funding developers of color emerging developers of color who are financing ltech Finance projects so it's a 250 million fund that we funded we've also been involved in similar initiatives um with Enterprise with NF for example and been investors in those projects but this is a fund that that that we funded and we purchase credits um with with half of that fund and then we provide financing specifically construction debt um to get these deals closed um and to increase the supply of affordable housing and so my job is to deploy those funds again specifically to to emerging developers of color what we found at US Bank is that again across the country there is just not enough affordable housing and we need to increase the supply of affordable housing we've also found as as I'm sure many of your listeners know the development space does not look demographically much like the residents of affordable housing is that there is this this real mismatch between the folks who are living in affordable housing and the folks who are developing affordable housing and given the the demand you would think this would be an easy onramp for a diverse group of developers but we're just not seeing that or we haven't seen that in the space and so US Bank recognized that and then really did the work of digging in and and really asking why why is there this this disconnect why do we see folks understanding affordable housing and the need for affordable housing and and particip in as tenants often so so we know that this exists but not necessarily as developers and we identified what some of those barriers were developers in terms of experience de um hurdles in terms of experience hurdles in terms of liquidity requirements and the ways in which these deals were underwritten that they really put new developers emerging developers and specifically developers of color at a disadvantage in participating in development the liquidity requirements the requirement to have completed a number of deals that are just like the deal that you want to you want to complete regardless of how rooted you might be in community and how well you you may understand the community and so we know that spe when we look at wealth specifically in Black communities for example we know that there is a an enormous gap between the wealth that black families have and the wealth that white families have and so for developers looking to get started and to tap into friends and family that's especially difficult if not only you don't have the capital that the folks around you the folks in your circle don't have that Capital so US Bank did the work of really identifying the disconnect being honest about that disconnect and that disparity and then identifying many of the of the hurdles why does this exist and then creating Solutions around that I was going to ask you to mention some of the solutions you talked earlier about a special purpose credit product uh which some of us know what that is and how that can can help a bank do lending differently um but then there's also the grants and things that you all have given to cdfis for their kind of technical assistance for the programs that they have because yeah the capital is one thing but sometimes it comes down to some of the like managing the cash the insurance and and things as these developers are scaling and growing and adding employees for the first time there's support that needed to set them up for success to take on debt and take on these bigger contracts and so you've set those up with some of the some cdfis across the country is that accurate or absolutely and I think you you rais a really great point is that there is much support needed across across the ecosystem so at US Bank we've had a number of responses so you know the work that I do is focus specifically on affordable housing and our impact Capital fund and affordable housing and so we pursued a a special purpose credit program and we presented that in July of 2022 and we've really been rolling with our impact Capital fund since then and that allows us to have flexibility in our underwriting requirements and our pricing requirements targeted to specific communities uh and so we've really been able to have an impact in those spaces but beyond affordable housing you know US Bank has its access to Capital commitment and so it's beyond just my my business line it's across business lines is this focus on providing help to expand wealth in diverse communities expanding access in diverse communities and it includes Outreach for example to cdfis which has been especially helpful um in the work that I do and to give you a really specific example of this is many of my developers again back to the previous talking point there is a great need for Capital at the very beginning of a project and there's great need for technical assistance and Consulting at the beginning of a project and that is often difficult to finance to sell Finance for again emerging developers of color so many of my developers are the my successful developers are successful because they have partnered with a cdfi or cdfi is partnered with them so before they come and partner with me there's really this connection that they've made with a cdfi both for referrals to other professionals um other practitioners and the space for technical assistance for Consulting but more specifically for that pre-development that really difficult to find predevelopment Capital so our CDF partners are usually coming in early in the process and making it feasible making the project feasible so that once a tax credit award is a tax credits are awarded that developer can then call me it takes a lot of work and a lot of capital to get that developer ready to make the phone call to me so we are quite dependent upon uh our cdfi partners partnering with folks in the community and so we as a bank not only do we do I recognize that individually um we have an entire department specialty finance that works with cdfis and provide cdfis with you know patient Capital recognizing that in the ecosystem that we're all we're all connected from your perch and this might be a big question what does success look like you know success I would say comes in in two different different ways and I I think I'm probably answering giving an A and A B answer but all technically the the same answer and and to me what it means is expanding and diversifying the space I think too often the the conversation is narrow and we think of diversity as taking this you know a slice of the pie that's occupied as opposed to expanding the pi so success to me looks like seeing more developers but seeing that growth come in diverse developers racially diverse developers and seeing more developers but specifically more developers of color I would say the bote to that for me is what I often see with developers of color is that they have a deep tie to community and they're also deeply engaged with community and also deeply dedicated to expansion also and diversity also and so I see often along their Capital stack that play out and so it's not just a developer of color that's receiving a developer fee which is really how we take a look at growth in our impact fund as opposed to say traditional lending where developers are tend to have to partner and are often as at a disadvantage given limited liquidity and lean balance sheets are often partnering and then taking a a small slice of the fee we look at Fe fee and we measure fee our impact Capital program allows developers to take advantage of the economics of the deal and larger portion of their fee but I'm also seeing that those same developers are are making diverse hires in terms of their general contractors in terms of their Architects their attorneys their accountants and so we're seeing it across the capital stack so success to me looks like expansion and seeing diverse growth across the sector not just in terms of developers but just seeing greater participation that those developers are driving greater more diverse participation across the industry it sounds like you're already starting to see that is that accurate I am and it's often you know it's often I don't want to say it's anecdotal but I I have observed to your point that many of our developers have great diversity again across their their Capital set and they're intentional about it you know they are looking to expand the opportunity that they have to operate in the space with other folks so Miranda what mechanics and tools have you found uniquely beneficial for developers of color is there anything in Spec like specifically that they they need compared to traditional guidelines yes I have a laundry list this is you know like the list you give Santa I have many many items on on my list so you know I I think there are a number of initiatives out there and again US Bank is involved as investors in a number of these initiatives but I do think there is a different ential I'm not familiar with all of the the initiatives and and we often partner and so make great partners with other folks who are operating in this space um but I do think there is a differential um with our impact Capital fund the way that our fund is structured again we are really focused on um allowing developers to build wealth you know the focus is on wealth building the ability for developers to take a larger portion to really to really benefit from the developer fee and to grow their businesses from taking that fee traditionally what has happened is developers who who lack liquidity or lack experience or lack um or have lean balance sheets have often had to partner with larger developers to provide a guarantee and in providing that guarantee those larger more established developers have taken a large percentage of the developer fee which has left emerging developers of color sort of perpetually in this state of emerging is that they're consistent stly taking 30% of the fee and then trying to reinvest that and taking 30% of that fee and they never quite emerge you know with the impact Capital fund we have flexibility through the special purpose credit program to allow those developers um to to guarantee their own deals and so they're able to take if they don't wish to partner and they meet our liquidity requirements which are more flexible and I think are a a fairly dramatic departure from what we've seen in the industry um and guarantee their own deals and take their own fee and take all of their fee if they don't partner for example uh and that allows them to grow their businesses to invest in Pipeline and I think that's what's needed you know there there there needs to be intentionality around growing the wealth within these organizations and Within These businesses so I think that's that's that's a critical component to success in the space is making sure that Developers are earning the capital and able to take the capital from the deals that they're doing I do think we were talking about cdfis earlier I also think securing predevelopment funds is is critical and getting developers even to that point is how can developers secure the funds necessary because these are Big deals you know and they are you know if you're doing a 50 unit deal and you know the average TDC per unit is hundreds of thousands of dollars per unit just to get that deal into application just to to to ask for the funds that you need you often need to go through entitlement you often need to have some measure of design and engineering and that can be hundreds of thousands of dollars and so the ability to get developers pre-development financing is critical to uh the success of these developers um and then I think ongoing support and we have found that is again sort of baked into this emerging piece is you're talking about smaller organizations smaller companies smaller entities and often I'll see developers and it's it's a oneperson shop or it's a a two-person shop or it's a oneperson shop and a handful of Consultants which means as big as these deals are as complex as these deals are there just often is a need a greater need for Operational Support just to make sure that these deals are moving efficiently sometimes just moving inefficiently a deal moving slowly picks up costs moving slowly and you can see how that starts to drag on a project it becomes more expensive as it goes for a developer that doesn't necessarily have the funds to support that and and it just becomes a a growing problem and so those are spaces where where I really feel like successful developers are seeing their when their needs are met in those spaces I'm also finding that data is really important and the ability to provide realtime data to developers so they have a a strong understanding of what appropriate costs look like what appropriate operating expenses look like what they can expect I think this gets back to the earlier note about transparency is so that developers have a space to understand you know you're only as good as as your performance only as good as the assumptions you include in it and so the ability to provide developers with appropriate numbers appropriate data appropriate assumptions so they can size their deals appropriately let's say you make all of those changes does does this remove all of the barriers that these developers face do they still have any challenges that remain even outside of of the work that just US Bank is doing there's a much larger industry I'm sure sure absolutely and I and I think this speaks to you know there are hurdles specific to again all of those all of those characteristics being emerging being a person of color being an emerging developer of color but then there are also just industrywide hurdles that this is an incredibly complex industry um and it's growing increasingly complex across States we're seeing State uh Finance agencies that are seeing an increased number of participants costs are growing we know what interest rates are doing and so everything is is moving in a direction to make these deals incredibly more difficult which is requiring more sources which is requiring more time which costs more money and so just across the industry there's a level of complexity that that seems to be growing just year after year and again developers of color are participating in this space a new but are not immune to those complexities this is really good information and what actionable items can our audience take if they want to support this work that you're you're doing I would say number one love your local developers they they need it they're in desperate need of bake them cookies they need support this is really this is really tough stuff um so so love your your local your local developer I I certainly think again cdfis have been great partners for us and I I think ways in which folks can support local cdfis the ways in which US Bank is supporting local local cdfis is helpful I really think understanding for the public to understand the difficulty and I can't I can't express enough how difficult providing affordable housing is you know back to the beginning of the conversation we start with a problem we start with what can't happen what the market can't do for communities to have a better understanding of how difficult that is um to put these deals together and and the need for communities to really support all of the players in that space whether it's US Bank that's supporting emerging developers of color whether that's cdfi that are supporting um emerging developers of color all of the entities that are involved um because there are so many across the board I would just say a a a blanket support of of these entities that support this developer because there are behind the scenes there's so many people sort of silently pushing behind the scenes to get these deals done awesome thank you so at the end of every episode Miranda we encourage our audience to join the movement if you will and become Renegades so how do you define renegade you know I would lean on the front part of of our conversation around systems I think of a renegade as someone who's sort of broken free from a traditional way of doing things and a traditional way of of thinking again I'm I'm really proud of the work that that impact Finance does and the space that they've provided provided me to really take a look at sort of back to the back to my Origins back to film studies back to analyzing systems and really being creative in problem solving and saying okay let's let's take a step away and take a look at this and let's analyze this um and let's figure out what's working and let's figure out what isn't and let's understand why to me that is what a a renegade is dedicated to doing is understanding what is what systems are at play and how is it working and how are the how is how is it not working and then how do we how do we fix what isn't working uh I would I would Define that as as a renegade DED dedicated to analysis and and creative problem solving thank you so much for joining us this was an awesome episode and I love the the system systemic approach that impact Finance is taking to address some of these really hard issues well thank you for the invitation I appreciated it I don't often get a chance to sort of nerd out if you will on on tax credit so it's it's been as fun for me hey this is Renegade Capital all nerds are welcome all the time I'm going to call dibs on the chocolate chip cookies um to to bake for my local developer um I don't know what what flavors y are going for but that's my go-to that and snicker doodles yeah I mean I I really like what they're doing I mean it's it's easy to ignore something and they are at least taking a a stab in in order to to figure out hey let's address this issue of only supporting um certain developers one thing that I really respect and acknowledge um that Miranda hit on is it's not just you're working with a developer they in turn connect with different suppliers um within that local community and so it's a ripple effect It's a larger community being impacted by the work and I don't think that can be denied so their work is widespread probably more than they are even reporting on because there's some things you just can't measure right I'm admittedly dated you know with banks and when they say special purpose credit product and you know I kind of go okay you know cool I'm glad you've taken that step but I think similar to how Miranda agreed to work there and has been leading that work it's like they're actually using that that product and the bank's ability to Target to underwrite differently it's I mean they're they are putting literally putting their money where their marketing in their mouth is like and it's refreshing especially with the word Bank in their title you know like I just like I said admittedly kind of you know expect different from from especially from large institutions um so this was this was great to hear um I'm encouraged that this is out there and and hopefully other large financial institutions can can learn from this and follow suit because it really is being willing to find the solution we know what the problems are we know how to underwrite deals but it's the willingness internally to get the special purpose credit products on the market and actually use them you know and and move the underwriting and work with risk and get the lenders goals right you know like I don't know it's like finding those internal Champions who want to make it happen who see that there's a problem and how do we fix it and regardless of what our organization has done in the past no regardless of what the our institution's name is associated with or peers that we're associated with how do we identify this have a solution and actually implement it well and it and it sounds like it was an organizational initiative because you can have internal Champions and they can run up against that brick wall over and over again and maybe one brick moves or maybe one like window opens but like this was an internal systems change to actually execute it what 250 million Ian that's that's not just some small Grant or one or two deals like that is a system internal system saying we are committed to this and it's rare and to see the ripple effect of that just in this interview I'm sure there is a great story that someone may share someday over Jinx and after signed NDA of how that happened internally and how to to move that to the point where you actually get a signature on it and you get a green light and get funding of go to then how do we create underwriting policies around this how do we get around those obstacles of liquidity and track record and experience to get the money funded on the ground so that these groups emerging developers of color are able to earn that larger developers fee are able to build wealth but also to hire um other Professional Services that are not Lily white who are also deeply connected to their community so to see that ripple effect all the way out from people who are listening to what's going on in the ground here's the problem and how do we push something forward how do we do what we can in our seats uh to create a systems change that was really cool to see how that all play out thank you for listening to this episode of renegade Capital if you like what you heard you can listen to previous episodes on your favorite podcast platform and be sure to follow us on social media at Renegade capital or check out our website www. Renegade Capital podcast.com to never miss a new release our show is hosted by Andrea Longton Ebony Perkins and Leah free out publicized by Elizabeth Gilbert kzel of narrator Studios and produced by Yours Truly chance l




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