Latest / ChangeMakers with Katie Goar / Episode 109 | Part One: Lisa Gutierrez, SVP and Director of Business Development for Affordable Housing, U.S. Bank

Transcript

Episode 109 | Part One: Lisa Gutierrez, SVP and Director of Business Development for Affordable Housing, U.S. Bank · ChangeMakers with Katie Goar

• 0:05
  Speaker 1: This is change Makers with Katie Gore finding the right
• 0:09
  Speaker 1: solutions for the affordable housing community.
• 0:12
  Speaker 2: This week's change Maker is Lisa Gaeterra As, the Senior
• 0:16
  Speaker 2: vice president and Director of Business Development for Affordable Housing
• 0:20
  Speaker 2: at US Bank, where she leads a team dedicated to
• 0:23
  Speaker 2: transforming communities through innovative financing solutions. With twenty years experience
• 0:30
  Speaker 2: and affordable housing and commercial real estate, Lisa has been
• 0:34
  Speaker 2: recognized as a twenty twenty three inductee into the California
• 0:39
  Speaker 2: Housing Consortiums Hall of Fame for her significant contributions to
• 0:43
  Speaker 2: advancing affordable housing. Lisa, Welcome to the podcast.
• 0:47
  Speaker 3: Thanks so much for having me. Katie.
• 0:50
  Speaker 2: You and I have traveled in several circles here and
• 0:53
  Speaker 2: I've been very impressed with what you're doing in several avenues.
• 0:57
  Speaker 2: So I'm so excited to have you as a guest.
• 0:59
  Speaker 2: It's a place than us. You're having you here.
• 1:01
  Speaker 3: Yes, thanks so much. I love the opportunity to talk
• 1:04
  Speaker 3: about the affordable housing industry and all the great work
• 1:07
  Speaker 3: that's out there.
• 1:09
  Speaker 2: Let's start talking about your career. You are leading a
• 1:13
  Speaker 2: national multifund investing team at US Bank. Let's start what
• 1:19
  Speaker 2: does that field like and what is your leadership role
• 1:23
  Speaker 2: there just kind of explain a little bit about what
• 1:27
  Speaker 2: you do.
• 1:28
  Speaker 3: Yes, So here at US Bank or Impact Finance, I
• 1:31
  Speaker 3: lead the affordable housing business development team that includes five
• 1:35
  Speaker 3: equity originators and four debt originators. It also includes a
• 1:39
  Speaker 3: team that's focused on our multi investor fund investments in
• 1:44
  Speaker 3: the affordable housing space. This really is the upfront, i'd
• 1:48
  Speaker 3: say sales team of our affordable housing team. These are
• 1:52
  Speaker 3: folks out there looking for opportunities to either lend or
• 1:57
  Speaker 3: invest to affordable housing.
• 2:00
  Speaker 2: So I love hearing this. They are looking for opportunities
• 2:03
  Speaker 2: to lend money for affordable housing. Lots of people think
• 2:08
  Speaker 2: that there are obstacles to developing affordable housing, and they
• 2:12
  Speaker 2: usually blame financing. So walk us through what that myth
• 2:16
  Speaker 2: is not looking like for you and your team then.
• 2:21
  Speaker 1: Yeah.
• 2:21
  Speaker 3: I mean at US Bank, we've been lending and investing
• 2:25
  Speaker 3: in affordable housing for over thirty years, so we are
• 2:29
  Speaker 3: not new to this space and have developed many, many
• 2:34
  Speaker 3: relationships with affordable housing developers as well as developing new
• 2:39
  Speaker 3: relationships with new entrance to the market every day. This
• 2:44
  Speaker 3: includes developers bringing us in usually on the early front
• 2:48
  Speaker 3: of when they're going to need financing for a development.
• 2:52
  Speaker 3: We're able to kind of work with them, be able
• 2:54
  Speaker 3: to assess projects along the way, assess budgets as well
• 2:59
  Speaker 3: as you know, expenses and income projections, and really it's
• 3:05
  Speaker 3: it's been Uh, you know, we've been very successful in
• 3:08
  Speaker 3: this space because of the relationships we've built with our
• 3:11
  Speaker 3: clients over the years and being a trusted advisor over time,
• 3:16
  Speaker 3: not just in and out of the market, really been
• 3:19
  Speaker 3: you know, true and tried partner in affordable housing for
• 3:23
  Speaker 3: many many years.
• 3:25
  Speaker 2: Do you have specific target markets? Are you just kind
• 3:28
  Speaker 2: of everywhere across the US?
• 3:31
  Speaker 3: We are lending and investing across the United States. You know,
• 3:35
  Speaker 3: obviously we are a bank, so we do have markets
• 3:38
  Speaker 3: that we focus on from a Community Reinvestment Act perspective.
• 3:43
  Speaker 2: Uh.
• 3:43
  Speaker 3: And those are markets that you know where we have
• 3:46
  Speaker 3: large deposit and market share in those specific markets. But
• 3:51
  Speaker 3: we have developments, both debt and equity opportunities that we
• 3:57
  Speaker 3: work gone across the country. What is the scale of
• 4:01
  Speaker 3: units we're talking about here? Do you have a total
• 4:05
  Speaker 3: number that you guys are achieving or maybe even a
• 4:08
  Speaker 3: goal number what you want to achieve. Yeah, So, I
• 4:12
  Speaker 3: mean I can talk a little bit about what we've done.
• 4:14
  Speaker 3: Since inception, US Bank or Impact Finances, provided about fourteen
• 4:19
  Speaker 3: point seven eight billion nationwide and affordable housing debt, including
• 4:24
  Speaker 3: six point eight billion in California and inequity. Since inception,
• 4:28
  Speaker 3: we've provided eighteen point one six billion in affordable housing
• 4:31
  Speaker 3: equity investments, and four point five six billion of that
• 4:35
  Speaker 3: is here in California, in my home state. So something
• 4:38
  Speaker 3: that we are very proud of over the past thirty
• 4:41
  Speaker 3: plus years in really making a name for ourselves in
• 4:45
  Speaker 3: this affordable housing lending and investment space.
• 4:48
  Speaker 2: So this is really impressive because a lot of times
• 4:52
  Speaker 2: people want to make the banks the bad guys, but
• 4:54
  Speaker 2: you guys actually have the tool by which you're delivering
• 4:58
  Speaker 2: some of this. Give us your approach to how you
• 5:03
  Speaker 2: do some of those partnerships you were mentioning in those relationships,
• 5:07
  Speaker 2: Like what's the strategy there by which you approach these things? Yeah,
• 5:11
  Speaker 2: you know, I think our team is really active across
• 5:15
  Speaker 2: the board, whether it's you know, from the day to
• 5:17
  Speaker 2: day work and finding opportunities to lend and invest, but
• 5:21
  Speaker 2: also leaning into our industry from a policy and advocacy perspective,
• 5:25
  Speaker 2: and that's where we meet our development clients across the board.
• 5:31
  Speaker 3: I think it's important to note that we lend invest
• 5:35
  Speaker 3: across the spectrum, from deeply affordable development serving individuals that
• 5:40
  Speaker 3: extremely low incomes, to workforce housing, serving everyday residents such
• 5:44
  Speaker 3: as teachers, public safety workers, and just trying to add
• 5:48
  Speaker 3: as many places for folks to call home because there's
• 5:52
  Speaker 3: many folks out in the nationwide that are ret burdened
• 5:56
  Speaker 3: individuals and families, and we're just trying to find a
• 5:59
  Speaker 3: way to house more folks.
• 6:02
  Speaker 2: What are some of those creative approaches that you use
• 6:05
  Speaker 2: to make it more affordable or accessible, Like, is there
• 6:09
  Speaker 2: a specific you know, without giving us too much of
• 6:12
  Speaker 2: the secret sauce here, is there like a specific approach
• 6:16
  Speaker 2: that you guys use, you know.
• 6:19
  Speaker 3: I wouldn't say there is a specific approach, but there
• 6:22
  Speaker 3: is a specific program here at the Bank that we
• 6:26
  Speaker 3: are particularly proud of, which is our Access Commitment initiative.
• 6:30
  Speaker 3: It's a long term approach to closing the wealth gap
• 6:33
  Speaker 3: for underserved communities and including communities of color, and it
• 6:38
  Speaker 3: really redefines how we serve employees, clients, and communities. And
• 6:42
  Speaker 3: through Access Commitment, we believe that we're making measurable change.
• 6:46
  Speaker 3: So specific to the affordable Housing Group. We have our
• 6:49
  Speaker 3: Affordable Housing Impact Capital Program, which we launched in twenty
• 6:53
  Speaker 3: twenty two and it's approved special purpose credit program, a
• 6:57
  Speaker 3: two hundred and fifty million dollar tax credit, equity and
• 7:01
  Speaker 3: debt find aim to supporting emerging developers of color. So, Katie,
• 7:05
  Speaker 3: when I think about the affordable housing industry, lending and investing,
• 7:10
  Speaker 3: there's many folks that do this in the market, but
• 7:13
  Speaker 3: there's not a lot of folks who can kind of
• 7:17
  Speaker 3: innovate and also meet the market where it's at, which
• 7:20
  Speaker 3: is really lending and investing to emerging developers of color
• 7:25
  Speaker 3: and trying to find a way to serve these developers
• 7:29
  Speaker 3: who are working deeply within the communities that they've been
• 7:33
  Speaker 3: living and trying to serve the community for so long.
• 7:38
  Speaker 3: So I think that's something that when I think about
• 7:42
  Speaker 3: US Bank or impacts andands, that's something that we are
• 7:44
  Speaker 3: particularly proud of putting in place over the last few years.
• 7:49
  Speaker 2: That is phenomenal. Can you speculate how many developers or
• 7:55
  Speaker 2: what's your metric there? Is it quantity or is it
• 7:58
  Speaker 2: the dollars that the two hundred and fifty million? What
• 8:02
  Speaker 2: are your success metrics that you're seeing?
• 8:06
  Speaker 3: Yeah, well, we have been really working towards kind of
• 8:10
  Speaker 3: building a bench So we have a handful of folks
• 8:12
  Speaker 3: that we've worked with thus far since it's twenty twenty
• 8:16
  Speaker 3: two is when we launched it. But I can tell
• 8:18
  Speaker 3: you that we are on track to really meet our
• 8:21
  Speaker 3: goals over the next three years.
• 8:23
  Speaker 2: I applaud your efforts. I mean, this is truly one
• 8:27
  Speaker 2: of the ways that you can both accomplish affordable housing.
• 8:30
  Speaker 2: But like you said, you can start building in some
• 8:34
  Speaker 2: real economic wealth and some expertise. What were some of
• 8:38
  Speaker 2: the initial challenges or maybe even challenges that you're still
• 8:42
  Speaker 2: seeing when you try to structure some of these deals.
• 8:47
  Speaker 3: Yeah, I think it just really takes a thoughtful approach,
• 8:51
  Speaker 3: you know. I think what we want to do is
• 8:53
  Speaker 3: make sure that we are providing enough time inside thought
• 9:00
  Speaker 3: and really being there again, like I said, as a
• 9:03
  Speaker 3: trusted advisor along the way in the various benchmarks of development,
• 9:08
  Speaker 3: not really trying to just get a final package from
• 9:11
  Speaker 3: that developer and taking a look at the project and
• 9:15
  Speaker 3: whether we're going to lend or invest. This is really
• 9:17
  Speaker 3: coming in from the very beginning, you know, whether that
• 9:21
  Speaker 3: developer has even gone to the state to get there.
• 9:24
  Speaker 3: Various layers of funding available. Being there from that front
• 9:29
  Speaker 3: part of the conversation and being able to add value
• 9:33
  Speaker 3: along the way has been a key success to the program.
• 9:38
  Speaker 2: I'm curious you also have some advocacy components here, and
• 9:44
  Speaker 2: maybe advocacy is not the right word here that two
• 9:47
  Speaker 2: guys use, But what are you've seen is the financial
• 9:52
  Speaker 2: landscape for projects right now?
• 9:54
  Speaker 3: Yeah, you know, I think that there are many challenges
• 9:58
  Speaker 3: facing affordable housing. You know, I'll talk a little bit
• 10:01
  Speaker 3: about you know, from at the state level, there are
• 10:04
  Speaker 3: funding short shortages, but we're making you know, good progress
• 10:09
  Speaker 3: and need to continue to find ways to stretch state dollars,
• 10:12
  Speaker 3: federal dollars with innovative funding sources and attract new investors
• 10:17
  Speaker 3: into the affordable housing text credit space. And you know,
• 10:20
  Speaker 3: that's one thing if you hear me on a panel
• 10:22
  Speaker 3: out there, I'll always say, we welcome new entrance to
• 10:26
  Speaker 3: the affordable housing investment space, and we all, we all
• 10:32
  Speaker 3: need to continue with the storytelling about projects and developments
• 10:36
  Speaker 3: that we are we are involved in in order to
• 10:40
  Speaker 3: kind of attract new entrance into the space. I'd also
• 10:44
  Speaker 3: say that innovations in housing to drive development costs out
• 10:49
  Speaker 3: cost is an issue. We've seen the cost per unit
• 10:52
  Speaker 3: increase substantially since I got into this business in two
• 10:57
  Speaker 3: thousand and six. We've seen the cost per unit go
• 11:00
  Speaker 3: from two hundred and fifty thousand per unit to build
• 11:04
  Speaker 3: housing all the way up to in some coastal markets
• 11:07
  Speaker 3: over a million dollars cost per unit. So, however, we
• 11:11
  Speaker 3: can find ways to build housing quicker, more sustainable, and
• 11:16
  Speaker 3: in a lower cost fashion, I think is something that
• 11:19
  Speaker 3: we definitely need to employ upon ourselves within the affordable
• 11:23
  Speaker 3: housing space.
• 11:25
  Speaker 2: You know.
• 11:25
  Speaker 3: Another thing is entitlements, especially in those coastal markets. The
• 11:29
  Speaker 3: entitlements process at all levels is a challenge for developers,
• 11:34
  Speaker 3: and so fast tracking affordable housing approvals and finding a
• 11:37
  Speaker 3: way to focus on the housing without adding many layers
• 11:41
  Speaker 3: of approval and requirements can get housing built faster. It'll
• 11:45
  Speaker 3: save on pre development costs, and it will also increase
• 11:49
  Speaker 3: housing supply exponentially. You know.
• 11:51
  Speaker 2: Insurance.
• 11:52
  Speaker 3: Insurance is big, you know, and we'll definitely need to
• 11:55
  Speaker 3: work together collectively as an industry or as an industry
• 12:00
  Speaker 3: to lobby for you know, insurance costs to go down
• 12:04
  Speaker 3: and just keep telling those stories.
• 12:07
  Speaker 2: Maintenance, you know, we just went.
• 12:09
  Speaker 3: Through a period of COVID where you know, in unit
• 12:13
  Speaker 3: inspections and you know, maintenance at at developments kind of
• 12:17
  Speaker 3: was put on hold for one to three years, and
• 12:21
  Speaker 3: so really kind of going in now and seeing what
• 12:24
  Speaker 3: we have and being able to do that maintenance at
• 12:27
  Speaker 3: the project level. That's adding additional costs because some of
• 12:30
  Speaker 3: that has kind of added up over the years, uh, you.
• 12:33
  Speaker 2: Know, administrative expense.
• 12:35
  Speaker 3: And then the biggest one is residence services. I think
• 12:38
  Speaker 3: when you're trying to find a way to fund residence
• 12:41
  Speaker 3: services through rent real estate, you know, rental income, that
• 12:47
  Speaker 3: serves to be a challenge, especially when you're dealing with
• 12:49
  Speaker 3: the special needs developments, formerly homeless, you know, folks living
• 12:54
  Speaker 3: with mental illness, veterans, you know, that's that's something that
• 12:59
  Speaker 3: is deaf an ongoing issue that that residence services budget
• 13:03
  Speaker 3: is continuing to grow, and we need to find a
• 13:05
  Speaker 3: way in order to try to find a permanent source
• 13:10
  Speaker 3: for that funding of residence services.
• 13:13
  Speaker 2: Yeah, there seems to be like a theoretical or conceptual
• 13:17
  Speaker 2: divide here whether people are just building houses or whether
• 13:20
  Speaker 2: they're actually also trying to meet the needs of the
• 13:23
  Speaker 2: person in the house. I don't know. I guess I
• 13:26
  Speaker 2: would venture to say that there's been so much emphasis
• 13:29
  Speaker 2: on just building, building and maintaining that as an industry,
• 13:33
  Speaker 2: we haven't really embraced some of those other dynamics of
• 13:36
  Speaker 2: what's going on, and you know, we want to have
• 13:39
  Speaker 2: that long term sustainability. So it's a it's an interesting
• 13:44
  Speaker 2: policy shift, if you will, that conversation, isn't it It is?
• 13:48
  Speaker 2: You know, I think we have so many.
• 13:50
  Speaker 3: Smart individuals in this in this industry who have been
• 13:55
  Speaker 3: you know, working in affordable housing for twenty years, and
• 13:59
  Speaker 3: then we have folks that have entered our space that
• 14:02
  Speaker 3: have been here in the last two to three years,
• 14:04
  Speaker 3: bringing a lot of thought, leadership and innovation, especially when
• 14:08
  Speaker 3: it comes to kind of building, you know, unit types,
• 14:14
  Speaker 3: unit makeup. So I'm hopeful that we can find some
• 14:18
  Speaker 3: of the solutions to some of these issues.
• 14:21
  Speaker 2: Given your experience with text credit, I'm just curious. You've
• 14:26
  Speaker 2: seen a lot of state and local programs and probably partnerships.
• 14:30
  Speaker 2: Do you see various programs more effective in addressing the
• 14:34
  Speaker 2: housing crisis or I know that's a big broad brush
• 14:39
  Speaker 2: question here, but given your experience of what you've seen,
• 14:44
  Speaker 2: are there definite things that need to be amplified either
• 14:47
  Speaker 2: within the text credit or maybe you've seen something at
• 14:50
  Speaker 2: the state and local level.
• 14:52
  Speaker 3: Yeah, most definitely. I think the biggest winner that we
• 14:55
  Speaker 3: have seen over the last couple of years is various
• 14:58
  Speaker 3: states rolling out new state tax credit programs.
• 15:02
  Speaker 2: This has been a.
• 15:03
  Speaker 3: Game changer for you know, for example, states like Arizona,
• 15:08
  Speaker 3: States like Colorado where you had unused bond capital sitting
• 15:14
  Speaker 3: on the table and we weren't using that towards affordable
• 15:17
  Speaker 3: housing because there wasn't other soft subordinate funds in order
• 15:24
  Speaker 3: to be paired up to get to make the capital
• 15:26
  Speaker 3: stack work. And these state tax credit programs have been
• 15:30
  Speaker 3: a game changer all the way to the point where
• 15:33
  Speaker 3: the bond cap in Arizona is I think they're going
• 15:36
  Speaker 3: to They're finally going to hit their limit this year,
• 15:40
  Speaker 3: uh in issuing bonds, which I think, you know, that's
• 15:43
  Speaker 3: a double edged sword, right. The program was successful, more
• 15:46
  Speaker 3: units are getting built, but then there's still you know, uh,
• 15:51
  Speaker 3: there's still a need for housing, and there's still lots
• 15:53
  Speaker 3: of developments that are going to see in their line
• 15:55
  Speaker 3: and wait for that bond cap to be available. But
• 15:59
  Speaker 3: without those state tax credit programs that has been you know,
• 16:04
  Speaker 3: has you haven't been able to use that bond cap
• 16:06
  Speaker 3: so that's been a huge win for the industry.
• 16:08
  Speaker 2: Are there any trends within the multifamily housing as far
• 16:12
  Speaker 2: as innovations that you're excited about or that you're seeing
• 16:15
  Speaker 2: as well.
• 16:16
  Speaker 3: You know, I think we're continuing to watch kind of
• 16:19
  Speaker 3: building innovation. I'd say, uh, you know, the modular space
• 16:23
  Speaker 3: has really taken off, and I think that we've definitely
• 16:26
  Speaker 3: seen we're starting to see the success of the you know,
• 16:31
  Speaker 3: modular developments, especially if you're building in a place that
• 16:34
  Speaker 3: you're trying to you know, you're racing to the clock
• 16:37
  Speaker 3: on weather in cool temperatures, or just speed to market
• 16:41
  Speaker 3: to get more units on the ground quicker. I also
• 16:44
  Speaker 3: think that there's been a lot of innovation in workforce housing.
• 16:48
  Speaker 3: We've seen some new entrants, mostly in the tech space.
• 16:52
  Speaker 3: You're seeing Amazon and Microsoft and others come to the market,
• 16:56
  Speaker 3: you know, most specifically in markets where they have you know,
• 17:00
  Speaker 3: have a lot of employees and putting dollars into affordable housing.
• 17:05
  Speaker 3: You know, with with levels of affordability, uh, you know,
• 17:09
  Speaker 3: from fifty and sixty percent annual meeting income all the
• 17:12
  Speaker 3: way up to eighty percent annual meeting income. So it's
• 17:15
  Speaker 3: also serving a need for that workforce type development.
• 17:19
  Speaker 2: They're also starting to see hospitals and certain organs like that, nonprofits,
• 17:24
  Speaker 2: larger nonprofits being coming into the space to build as well,
• 17:28
  Speaker 2: which is I think exciting and inspiring too.
• 17:32
  Speaker 3: I think so too, And I think definitely for you know,
• 17:35
  Speaker 3: they've they've seen the success of housing individuals, especially in
• 17:39
  Speaker 3: that formerly homeless or special needs population. They've seen the
• 17:43
  Speaker 3: success of you know, having folks have access to safe, clean,
• 17:48
  Speaker 3: affordable housing is keeping them out of the you know,
• 17:52
  Speaker 3: chronic healthcare system and in hospitals, and I think that
• 17:55
  Speaker 3: that's great that because they're seeing that success, they're wanting
• 17:59
  Speaker 3: to go all in and help as well.
• 18:01
  Speaker 2: And you've done your part in helping transform communities, which
• 18:05
  Speaker 2: has earned you some well deserved accolades. We'll discuss this
• 18:09
  Speaker 2: more in the second part of our conversation coming up
• 18:12
  Speaker 2: on change Makers. Lisaka Terras, Senior Vice president and director
• 18:16
  Speaker 2: of Business Development for Affordable Housing at US Bank, shares
• 18:20
  Speaker 2: her insight about the women's affordable housing network and its
• 18:24
  Speaker 2: vital role to the industry.
• 18:26
  Speaker 3: Just to bounce ideas off of folks, I think, especially
• 18:30
  Speaker 3: other women who have probably gone through maybe a similar
• 18:34
  Speaker 3: point in the road where they needed to pick you
• 18:37
  Speaker 3: from one direction or not. And being able to have
• 18:40
  Speaker 3: that insight while you're making those important decisions, I think
• 18:44
  Speaker 3: is amazing.
• 18:46
  Speaker 1: Thanks for listening to change makers with Katie Gore. To
• 18:49
  Speaker 1: find out more about Katie, go to quad l dot com.
• 18:52
  Speaker 1: That's quad el dot com. This has been a production
• 18:58
  Speaker 1: of Forbes Books Radio