I love reading something that really pulls me in and resonates with me, when I get inspired and excited. This is how I felt after reading “Preservation Green Lab’s Liz Dunn on the Economics of Urban Grain”. Sometimes I feel like the commercial real estate industry is such a machine, that it’s all about companies, investors, occupiers and developers just going about their business in a step 1, step 2, step 3 fashion, a little removed from it all, as in a third person kind of way, or like an out of body experience. There are actually lots of people in the real estate industry that truly make a difference in local communities, which truly care. A caring that goes beyond the bottom-line, that extends into the general well-being of inhabitants and residents and companies operating in communities. It can become wearing and old hearing about everything to do with fundamentals, ratios and calculations. The article, “Preservation Green Lab’s Liz Dunn on the Economics of Urban Grain” filled a void that I’ve noticed I had of late. Although I get excited about numbers and understanding the fundamentals, formulas and complex methods and processes involved in the real estate decision making process, I also yearn to garner more of an appreciation for the warm and fuzzy part of the real estate industry. The part where projects end up making such a positive impact in the lives of the human beings that live in and working for companies doing business in the neighborhoods of the greater areas, such as the Greater Seattle Area. I appreciate older, nostalgic and historic attributes of neighborhoods, so perhaps I am biased.
There is an opportunity here, a need for development companies that can satisfy a need but which don’t seem to be of interest to large-scale development companies. Are large-scale companies really only those who look for the most bang for their buck, in and out deals, maximizing the bottom-line to ensure they meet financial goals promised to their investors and stakeholders? We discussed the specific excerpt in class about “The scale and speed at which the larger pools of real estate money want to be deployed is mismatched with local infill opportunities in terms of size, timing, and geography… What’s needed is a locavore model for real estate investing, in which local patient money is connected with portfolios of smaller opportunities within a given district.” Not all developers are large-scale, there seems to be an opportunity for those mid–to-small sized development companies with a lot of local knowledge that are especially poised to execute on and establish a niche involving projects that satisfy a need and represent financial solvency, that make a big difference in the lives of those directly connected to the subject neighborhoods, while providing job satisfaction and gratification. Why aren’t these opportunities being snatched up? Did the financial crisis extinguish all those banks and developers that would otherwise be well positioned to step up to the plate? There is “the need for a network of community oriented financial institutions and development companies dedicated to the revitalization of disintegrating historic neighborhoods, distressed urban neighborhoods and rural economies”, as was said by our former President Clinton.
A good example of a solution is Shore Bank based in Florida but which targeted a community in Chicago. Shore Bank owned a bank, a real estate development company, a minority small business development company, and has a nonprofit community affiliate engaged in small business assistance, labor force development, and various community services all active in a targeted community. What if instead of a large entity picking a targeted community and forming subsidiaries with a common purpose, the government tasked states and counties with pulling together a task force, or an agency in each of the Greater Areas for identifying the necessary counterparts needed for accomplishing similar overarching goals, banding together and forming a liaison, becoming better as a part of a whole versus individually? This concept seems synonymous with the topic of how historic preservation, re-use of historic buildings and greening the existing stock is crucial to making our urban places greener, more livable and healthier. Tearing down and building anew not only accounts for 40% of carbon dioxide emissions, it results in the pricing out of residents and companies that can’t afford the costs associated with brand new stock. These individuals and entities must be considered first and foremost. Who better to address solutions to these needs and providing the necessary efforts than the local companies living and breathing it and the government responsible for overseeing? Wouldn’t this create jobs, increase revenues and improve general economic health while preserving historic neighborhoods and building sustainable communities?