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What Is CORE—and Why Capital Matters · Own the Block

• 0:04
  SPEAKER_04: Welcome to Own the Block, a show about community-owned real estate, the capital behind it, and the people building the infrastructure that makes community ownership possible.
• 0:15
  SPEAKER_04: For our first episode, we're starting with the big picture.
• 0:19
  SPEAKER_04: What exactly do we mean when we say community-owned real estate or core?
• 0:23
  SPEAKER_04: How is this work different from conventional real estate development?
• 0:27
  SPEAKER_04: What does it take to finance these projects?
• 0:30
  SPEAKER_04: And after years of experimentation with community land trusts, cooperatives, neighborhood trusts, community investment vehicles, and other ownership models, where's the field actually heading?
• 0:42
  SPEAKER_04: Join me with Kurt Lyon, Ahmed Mori, and Nikitka Eingar of the Guild.
• 0:48
  SPEAKER_04: Three people who have been thinking deeply about how community ownership works in practice, how the ecosystems around it are developing, and what needs to change if this work is going to grow.
• 1:01
  SPEAKER_04: We're talking about what makes this work tick, where the capital fits, the structural questions the field still has to solve, and what they see coming next.
• 1:11
  SPEAKER_04: Let's start at the beginning.
• 1:13
  SPEAKER_04: What is community-owned real estate?
• 1:17
  SPEAKER_02: I'm Ahmed Mori.
• 1:18
  SPEAKER_02: I'm the co-director of the Community Ownership Learning and Action Lab, or COLA Lab for short, at the University of Miami.
• 1:25
  SPEAKER_02: The lab is a national research and field building initiative that aims to strengthen the community ownership and democratic governance of real estate.
• 1:37
  SPEAKER_02: And we do so by conducting community-rooted research alongside the people and the communities who are leading this work on the ground, while also helping lenders, policymakers, public institutions, and others really understand how to support the growth of this work.
• 1:55
  SPEAKER_02: And our goal in doing this is to help build a more connected community ownership field while also offering knowledge and insights and tools to help guide future projects and investments in community ownership.
• 2:09
  SPEAKER_01: Hi, I'm Kurt Lyon, Executive Director of Transform Finance.
• 2:12
  SPEAKER_01: Transform Finance is a nonprofit organization that provides insights, uh, actual strategies and field building for all of the stakeholders who are trying to replace uh traditional capital uh products and strategies with those that are transformative and really shifting kind of the role that investors play in driving social change.
• 2:34
  SPEAKER_01: Uh and in this context of community own real estate, we're doing a lot of work uh with investors, with funders, community development lenders to help understand how is community ownership financed, what's the current state of the field, who needs to be involved, and really getting down to it, what needs to happen in order to get more capital flowing to these projects and to really build out this field.
• 2:58
  SPEAKER_04: So let's start by defining the field, Kurt.
• 3:01
  SPEAKER_04: When we say community-owned real estate, what are we actually talking about?
• 3:07
  SPEAKER_01: Yeah, so I will have an answer to this.
• 3:09
  SPEAKER_01: And then if you talk to five people, you might get five different twists on the on this definition.
• 3:15
  SPEAKER_01: But for us for Transform Finance, when we're talking about community-owned real estate, we are thinking of projects, whether that's commercial, housing, any kind of land or real estate ownership that has a meaningful portion of ownership and or governance by community stakeholders.
• 3:35
  SPEAKER_01: So there are a lot of terms there that are uh kind of broad.
• 3:39
  SPEAKER_01: But when we say meaningful, this is not a uh black and white definition.
• 3:45
  SPEAKER_01: There's kind of a grayscale of how much participation community leaders can have.
• 3:50
  SPEAKER_01: And it's just really important to say that the outcomes of a project really need to be dictated by community stakeholders in order for us to consider it core community-owned real estate.
• 4:03
  SPEAKER_01: And I think that is the case whether we're talking about ownership, kind of more focused on shares that build wealth and that kind of uh asset ownership, or talking about governance.
• 4:14
  SPEAKER_01: So we're talking about decision making, who kind of holds the power in dictating how a project is created, shaped, and maintained.
• 4:22
  SPEAKER_04: And Kurt, what makes core meaningfully different from conventional real estate, or even from real estate that simply has a community-serving mission?
• 4:33
  SPEAKER_01: Yeah, so right off the top, a lot of these projects have ownership, actual stakes, equity shares of properties by community stakeholders, whether that's residents, small business owners in a commercial space, maybe even the broader uh residence of a neighborhood or of a city.
• 4:49
  SPEAKER_01: And that ownership creates this unique opportunity to build wealth, you know, the value of this thing, the this real estate property, this land, increases, and that is actually shared with who that building is or or land is intended to benefit rather than investors who might not even be uh you know located in that geography.
• 5:11
  SPEAKER_01: And then the second piece, thinking about decision making, uh, is really, really fundamentally important.
• 5:18
  SPEAKER_01: The process of how a lot of these projects come together looks so different.
• 5:24
  SPEAKER_01: It looks like community organizing just in a different context that's bringing in different stakeholders.
• 5:30
  SPEAKER_01: And as a result, you get a lot of really, really powerful changes that everyone involved with these projects goes through.
• 5:38
  SPEAKER_01: It creates this entity that uh has real community buy-in that teaches a lot of skills and builds experience for organizations, for individuals involved.
• 5:49
  SPEAKER_01: And then on the capital and funding side, you have uh all the supporting actors like community development lenders, like uh impact investors, municipal stakeholders that are actually shaped by these processes that are involved and really in that process of ceding decision making and control to uh you know community stakeholders, they are uh really seeing a totally different way of doing real estate development.
• 6:16
  SPEAKER_04: Love that.
• 6:17
  SPEAKER_04: Let's move on to Ahmed.
• 6:19
  SPEAKER_04: You know, if you're giving our listeners a state of the core field, community-owned real estate field, in 2026, what would you say?
• 6:29
  SPEAKER_04: Like how mature is this field today, and where are you seeing momentum?
• 6:35
  SPEAKER_02: It's a wonderful question, and I think to some extent a bit of a confusing one to answer because it depends a little bit on some of the things that Kurt was saying, which is how you define the field.
• 6:46
  SPEAKER_02: But I think intuitively what I would say the community ownership field today or core has serious momentum.
• 6:53
  SPEAKER_02: So, you know, by some measures or by different measures, I should say there are thousands of community ownership projects across the country.
• 7:01
  SPEAKER_02: I haven't found estimates of that total, partly because there's a boundary question of what is or isn't community ownership.
• 7:08
  SPEAKER_02: But through our work at the Cola Lab, the Bridge Span Group actually took a map of maybe a little over 300 organizations.
• 7:17
  SPEAKER_02: This map was created by the Center for Community Investment and estimated that these organizations collectively account for more than$10 billion in real estate assets, right?
• 7:26
  SPEAKER_02: And that's spanning housing, manufactured housing communities, and a growing set of commercial and mixed-use holdings.
• 7:34
  SPEAKER_02: Now, to think about all of these models together, and that's now we're speaking about what's core in terms of what the state of the field is.
• 7:42
  SPEAKER_02: We think about this, is this is, I guess, a recent way of interpreting the little bit of data that is out there and really bringing them together under a banner, whether it's community ownership, whether it's core shared ownership, and sort of different corners of the field use different terms.
• 7:58
  SPEAKER_02: But there have been efforts, right, to cohere this growing and increasingly maybe less amorphous field.
• 8:05
  SPEAKER_02: But it has made it so that the field is sort of moving from a collection of perhaps relatively separate models or traditions, community land trusts here, housing co-ops here, you know, uh resident-owned manufactured home communities here, different commercial projects like real estate investment co-ops or community investment trusts toward a sort of broader community ownership identity.
• 8:28
  SPEAKER_02: And it's in the process of doing so, it's expanding beyond housing, and we're seeing an expansion into commercial real estate, more expansion into cultural spaces.
• 8:36
  SPEAKER_02: And depending on how you define community ownership, we could think about renewable energy and infrastructure, right?
• 8:40
  SPEAKER_02: If we're really thinking about a big tenth definition of this, there's also more infrastructure today, I think, than there were, you know, maybe a decade ago, than there was a decade ago.
• 8:49
  SPEAKER_02: So more specialized intermediaries, more technical assistance providers.
• 8:54
  SPEAKER_02: There are more peer networks today than there were even maybe six years ago when I first tried, uh, was first working on trying to launch a real estate investment co-op.
• 9:03
  SPEAKER_02: There's you know, research, right?
• 9:05
  SPEAKER_02: Research projects like these, I think also greater recognition by philanthropy and definitely CDFIs.
• 9:10
  SPEAKER_02: A lot of momentum also around local and state governments, right?
• 9:14
  SPEAKER_02: Beginning to treat community ownership as a policy objective.
• 9:17
  SPEAKER_02: Uh, sometimes transferring public land, sometimes you know, contributing to acquisition funds, adopting tenant or community purchase rights, or you know, maybe attaching permanent affordability or certain community control requirements to some cities, right?
• 9:30
  SPEAKER_02: So, for instance, in Richmond, Virginia, Maggie Walker Community Land Trust became the first community land trust to be a land bank in the US.
• 9:39
  SPEAKER_02: Cities from St.
• 9:40
  SPEAKER_02: Paul, Minnesota to Nashville, even are earmarking funds for community ownership projects.
• 9:45
  SPEAKER_02: The City of Chicago used ARPA funds to launch a really exciting community wealth building initiative that not only provided resources directly to community ownership projects, but also used resources to help connect all of the different actors, you know, that would be or are currently an ecosystem around community ownership.
• 10:05
  SPEAKER_02: And of course, policy efforts like uh Community Option to Purchase Act, San Francisco, the advocacy that's going on in New York right now.
• 10:12
  SPEAKER_02: And then even recently, right, one that's made a big splash is Measure ULA or the mansion tax in Los Angeles, which is also also has this set aside for alternative ownership models.
• 10:22
  SPEAKER_02: So, you know, and we see the momentum in the field by, or as exemplified, I should say, in these recent efforts to articulate what community ownership is from so many different places and so many different kinds of voices.
• 10:35
  SPEAKER_02: Right?
• 10:36
  SPEAKER_02: You have folks like Right to the City and New Economy Coalition boasting more and more community ownership projects within their membership.
• 10:42
  SPEAKER_02: Uh, New York City Community Land Initiative, right?
• 10:44
  SPEAKER_02: Nicely, as a coalition that, you know, CLTs and organizing groups that really shows the power of community ownership becoming or at least transitioning to coordinated political demand.
• 10:54
  SPEAKER_02: You know, Grounded Solutions Network has done a lot last year hosting investor convenings, for instance, to bring together philanthropists, impact investors, banks, CDFIs, you name it, to sort of think through what scaling investment looks like.
• 11:07
  SPEAKER_02: And, you know, but Center for Community Investment, too, right?
• 11:10
  SPEAKER_02: The Center for Community Investment has had wonderful efforts or has put together wonderful efforts to convene funders, interested in community ownership, and intermediaries across different places that are playing these really important roles as connectors within their ecosystems.
• 11:23
  SPEAKER_02: But I think to wrap this question up, there's uneven maturity, right?
• 11:28
  SPEAKER_02: In vulgar real estate terms, we can think about community ownership maybe as an emergent asset class or investment category.
• 11:34
  SPEAKER_02: So if we take the bridge span stat, that 10 billion in assets across 300 organizations, and we compare it, say, to Ligek, I was talking about this recently in a presentation.
• 11:44
  SPEAKER_02: In 2021 alone, investors invested over$42 billion in Litech properties, right?
• 11:49
  SPEAKER_02: So if we really look at the differences, you know, there's a lot of room to grow, but is what makes it exciting.
• 11:54
  SPEAKER_02: Now, the growth is happening within these kind of almost three overlapping orientations.
• 12:00
  SPEAKER_02: Right?
• 12:00
  SPEAKER_02: There's we think about community ownership or ownership is this economic outcome.
• 12:04
  SPEAKER_02: Who holds the asset or who owns, right?
• 12:06
  SPEAKER_02: Who receives income?
• 12:08
  SPEAKER_02: Who is entitled to appreciation?
• 12:10
  SPEAKER_02: Who owns, yeah, who owns the block, right?
• 12:12
  SPEAKER_02: Uh, who's entitled to generating profits or appreciation, right?
• 12:16
  SPEAKER_02: So there's the economic outcome, there's ownership as a political process.
• 12:20
  SPEAKER_02: And I think Kurt was getting to this when really talking about deep organizing within these projects and why that's so important, right?
• 12:26
  SPEAKER_02: Whether residents actually organize, whether they're making consequential decisions, uh, whether they're developing the capacity and the orientation to govern something together.
• 12:35
  SPEAKER_02: And then lastly, ownership as a means to a larger political end.
• 12:39
  SPEAKER_02: So we're using ownership to prevent displacement, to preserve cultural space and cultural memory in neighborhoods, to redistribute power within neighborhoods, or to build a base for broader action, right?
• 12:50
  SPEAKER_02: So almost like a broader politics around this.
• 12:52
  SPEAKER_02: So we're seeing, you know, this a field develop around most of these three different areas, and I'm sure different folks would conceptualize them differently.
• 13:01
  SPEAKER_02: It's an exciting position to be in, right?
• 13:03
  SPEAKER_02: So, you know, a field's growth really not only is a technical process of adding all these projects, but it's there are political decisions here about what counts, right?
• 13:12
  SPEAKER_02: Does a community need governing power?
• 13:14
  SPEAKER_02: Who constitutes the community?
• 13:15
  SPEAKER_02: What rights must that community actually possess?
• 13:17
  SPEAKER_02: And I think what makes community ownership powerful is that deep imprecation with community.
• 13:23
  SPEAKER_04: I love that.
• 13:24
  SPEAKER_04: I love that.
• 13:25
  SPEAKER_04: So, you know, in core, we talk about this sort of ecosystem steward for organizations and people who connect community priorities, projects, capital, technical assistance, and and even institutions.
• 13:41
  SPEAKER_04: So tell me, I'm gonna move to Kurt for a second.
• 13:44
  SPEAKER_04: Who is playing that role today and how important is that connective infrastructure to whether individual core projects actually succeed?
• 13:56
  SPEAKER_01: Yeah, and this is this is a really important question, and I have to credit uh Center for Community Investment, uh, who Transfer Finance has worked with in a few different ways for really uh like understanding this term ecosystem steward and the work that they are doing with folks all across the country and supporting their capacity to do this kind of work.
• 14:14
  SPEAKER_01: So the interesting thing about ecosystem stewardship and that kind of connective tissue role that you mentioned, Julia, is that it's not just one kind of organization that can fill that role.
• 14:26
  SPEAKER_01: Looking uh across the country to different cities, neighborhoods, or even like broader regions, you see groups like uh community land trust networks, like in California, there's a statewide California uh CLT network that is doing some really innovative work, helping to support policymakers, lenders, and projects on the ground.
• 14:47
  SPEAKER_01: In some places, like uh in uh Los Angeles, Little Tokyo Service Center is an amazing grassroots community organization that is really at the center of all of this, all of the uh community ownership work that is happening there.
• 15:01
  SPEAKER_01: Whether they are directly involved with putting that project together, they are still in a position to kind of uh share knowledge, help make connections, and leverage the experience that they have.
• 15:11
  SPEAKER_01: And so that's when you talk about what's important.
• 15:15
  SPEAKER_01: One, there's a lot of practical pieces that when you have a key ecosystem steward in a place, things kind of get a little smoother.
• 15:22
  SPEAKER_01: You know, uh they might know the right lawyers to help structure documents.
• 15:27
  SPEAKER_01: They might already have relationships with lenders or other types of investors to help, you know, kind of make that track record for a new developer, a new project just a little easier by having that, you know, relational uh connection to make an introduction.
• 15:42
  SPEAKER_01: But there's also a lot of kind of intangible pieces that ecosystem stewards really bring to community ownership by maintaining and retaining knowledge and experience in place.
• 15:53
  SPEAKER_01: This is really critical.
• 15:54
  SPEAKER_01: We see this, of course, at a national level where stuff is happening all over the place, and there's a lot of really, really juicy learnings that aren't necessarily spread to other projects because that's just not being facilitated yet, as a lot of the stuff is new.
• 16:09
  SPEAKER_01: But we see this even happening in place where you might have on the other side of town uh there are two two community land trusts who are uh working to uh you know structure their their first deal, and there might not be communication and collaboration between them.
• 16:26
  SPEAKER_01: So when you have a group that is is playing that role, you get this kind of facilitation and uh retaining of ecosystem-specific knowledge that you know is different in in every place.
• 16:41
  SPEAKER_01: We convened with uh CCI, the Center for Community Investment, a group uh kind of cohort of ecosystem stewards earlier this year.
• 16:48
  SPEAKER_01: And it was it was just really amazing to see that the shared problems that that folks are working on.
• 16:54
  SPEAKER_01: You have the shared services, uh creatively developing capital stacks, but then also you know, what is like, oh, this is not a problem for me, and you guys are all talking about.
• 17:03
  SPEAKER_01: You know, we have relationships with our city government and they're actually very, very friendly and have provided funding.
• 17:10
  SPEAKER_01: So you know, when you have have this term ecosystem steward, I think it's really important to think about the verbs rather than just the nouns.
• 17:17
  SPEAKER_01: Like, what does ecosystem stewardship look like?
• 17:20
  SPEAKER_04: Love that.
• 17:22
  SPEAKER_04: Okay.
• 17:22
  SPEAKER_04: Um, I'm gonna run to Ahmed.
• 17:25
  SPEAKER_04: You know, we've talked about um what's at the forefront, building momentum, but let's talk about really what is and is not working.
• 17:36
  SPEAKER_04: Where are you seeing genuine progress, whether in financing models, partnerships, local ecosystems, or policy?
• 17:44
  SPEAKER_04: And where does it feel to keep running into the same structural barriers?
• 17:50
  SPEAKER_02: Yeah, and it's an important question to answer, right?
• 17:52
  SPEAKER_02: And I and I think you know, listening to Kurt discuss ecosystem stewards is part of what makes me excited about what I feel is working, or in some cases maybe developing.
• 18:05
  SPEAKER_02: Because, you know, one of the things we're seeing more and more of is how intermediaries like these become stewards when or what we've or I guess we should say it originates with demand, right?
• 18:19
  SPEAKER_02: You have projects on the ground that need to solve particular problems for their projects and are working with partners and bringing them into the fold.
• 18:27
  SPEAKER_02: Now it's who remains, right?
• 18:29
  SPEAKER_02: That is a is a really kind of interesting and juicy question and why, right?
• 18:34
  SPEAKER_02: What organizations remain, and to Kurt's point, it's not one type of organization, it's based on function.
• 18:40
  SPEAKER_02: Who is willing to adapt their roles and functions to the work that's going on?
• 18:45
  SPEAKER_02: And by seeing more and more momentum at the local level in different places, what it's telling me, what it's signaling to me is there is more supply being created specifically to help meet the needs of community ownership projects on the ground.
• 18:58
  SPEAKER_02: That to me is very exciting because it looks a little different, say, from you know, community development ecosystems, right?
• 19:05
  SPEAKER_02: Some of the functions are pretty similar, still looking at capital, we're looking at attorneys, we're looking at TA providers, but these are folks who are approaching it specifically modeled for community ownership projects.
• 19:16
  SPEAKER_02: And I think this is for me real progress and particularly a subset of these stewards or intermediaries that are creating programs or even entire organizations explicitly charged with convening community ownership ecosystems, which is I think is a function that's sometimes hard to quantify, but it's extraordinarily important in terms of holding space for folks in the ecosystem.
• 19:40
  SPEAKER_02: And to the extent that I'm seeing growing philanthropic recognition that this connected work is fundable and it's important to fund it.
• 19:46
  SPEAKER_02: So I'm excited to see organizations, say like the community web in Chicago and their emergence and their aim to explicitly connect and resource and advocate for community ownership projects in the ecosystem, or organizations that are proactively creating roundtables, right?
• 20:02
  SPEAKER_02: Like Nexus Community Partners and St.
• 20:04
  SPEAKER_02: Paul is one of these organizations that's really doing this.
• 20:06
  SPEAKER_02: I mentioned the Nicely Coalition earlier, New Economy Project, right?
• 20:10
  SPEAKER_02: And how the work that they've done to help build out the infrastructure for community ownership in New York.
• 20:15
  SPEAKER_02: Other and there are many other forms of ongoing convening spaces, right?
• 20:19
  SPEAKER_02: One of our I should have mentioned this earlier, shout out to Transform Finance.
• 20:22
  SPEAKER_02: We are partnered through the Cola Lab project at the University of Miami, COZET or the Community Ownership Stewardship Impact Table.
• 20:29
  SPEAKER_02: They're another ongoing convening space right now, you know, living online, but seeing the impact of practitioner networks and what they can do when they get together, I think is also very important.
• 20:40
  SPEAKER_02: And I think future-facing, I'm excited to see what national efforts or whether national efforts congeal and maybe even culminate in the types of federations we see in analogous fields, right?
• 20:50
  SPEAKER_02: The US Federation of Worker Co-ops is an example for worker co-ops and developers.
• 20:55
  SPEAKER_02: Now, the other side of this, right?
• 20:57
  SPEAKER_02: So I think, you know, what perhaps isn't working as well as we'd like, I should start by saying, you know, I think we're seeing pretty meaningful policy experimentation.
• 21:06
  SPEAKER_02: I meant I mentioned measure ULA earlier, you know, measure ULA taxes, high value real estate transfers in LA, direct some of that revenue towards affordable housing acquisition and pathways to you know community ownership.
• 21:18
  SPEAKER_02: Um analogously, I should say like Seattle created a one time, it's not quite community ownership, but we can think, I think we can learn from this, created this$30 million strategic investment fund that enabled 13 BIPOC-led organizations to uh to buy up land in neighborhoods that are facing displacement.
• 21:35
  SPEAKER_02: And I think these kinds of efforts are really exciting.
• 21:39
  SPEAKER_02: However, you know, the reason I think they're exciting is because they're subsidizing projects after the fact, right?
• 21:45
  SPEAKER_02: So they begin to change who gets access to property, right?
• 21:48
  SPEAKER_02: Who even has the capacity to access property ahead of time.
• 21:51
  SPEAKER_02: But the devil behind these things is always an implementation.
• 21:54
  SPEAKER_02: And so I think a purchase right, for instance, that gives a community organization an opportunity to compete, right?
• 22:00
  SPEAKER_02: So much advocacy around COPA, so much excitement around TOPA and COPA.
• 22:03
  SPEAKER_02: Without rapid acquisition capital, or without subsidy, or without technical capacity, without a viable operating model, it becomes this right that lives in the books but isn't exercised, right?
• 22:13
  SPEAKER_02: It becomes a challenge to exercise it.
• 22:15
  SPEAKER_02: And so, how do we think about policy implementation more broadly in that way?
• 22:19
  SPEAKER_02: And bring, for instance, co-governance into community ownership when we're thinking about policy and really changing the enabling conditions under which community ownership operates.
• 22:30
  SPEAKER_02: How do we do that alongside our community ownership organizations and the communities that they work with?
• 22:34
  SPEAKER_02: And that I think is key to sort of thinking about, not so much thinking about policy as just these stopgap measures, but really thinking more holistically about it.
• 22:44
  SPEAKER_02: So community ownership really needs policy supporting the entire life of a project, right?
• 22:49
  SPEAKER_02: We're talking about how these community ownership projects specifically reinvent the idea of who real estate is for and how it's used and its purposes and what benefits.
• 22:58
  SPEAKER_02: Then part of it is also reinventing the entire regime of conventional or speculative real estate, dare I say.
• 23:23
  SPEAKER_02: And there's enough trust for that.
• 23:24
  SPEAKER_02: It's operating reserves and for rehab.
• 23:26
  SPEAKER_02: And what safeguards exist against privatization, or I should say, against you know, properties re-entering the speculative market.
• 23:33
  SPEAKER_02: So I think the big challenge, like facing community ownership moving forward, or a huge challenge facing community ownership, is how you assemble these different fragments into a coherent vision for a different policy environment or a different enabling environment, as some of us would say.
• 23:49
  SPEAKER_04: And how do you make sure that black and brown people or the people in these neighborhoods that are being displaced are still within that scaffolding and still at the table?
• 23:58
  SPEAKER_04: I think, you know, one thing that that keeps coming up is durable at scale, right?
• 24:05
  SPEAKER_04: So we know communities can successfully own individual buildings and individual projects, despite what some um may think.
• 24:14
  SPEAKER_04: What would have to change for community ownership to become this durable part of the real estate system, not an exception that has to reinvent the capital stack one deal at a time.
• 24:28
  SPEAKER_02: I'm gonna start with a kind of a comment around defining success or you know what does that mean, right?
• 24:35
  SPEAKER_02: Because let's say let's say success means that community ownership begins to reproduce itself, right?
• 24:42
  SPEAKER_02: That the work itself becomes repeatable.
• 24:44
  SPEAKER_02: And you know, you have a project that may experience it may produce leaders, resident leaders who you know develop experience.
• 24:52
  SPEAKER_02: Now you have lenders who understand the model, right?
• 24:55
  SPEAKER_02: You have uh attorneys that now have drafted templates they can reuse.
• 24:59
  SPEAKER_02: Uh you have you may have local government officials that now know which approvals are needed or what subsidy pools exist, and maybe an intermediary or two that are capable of helping the next group, right?
• 25:09
  SPEAKER_02: So now we're really kind of looking at this micro level and the notion of ecosystems growing around them that have partners across the field, right, that can begin to advocate, you know, for different policy regimes.
• 25:21
  SPEAKER_02: That's there, but some, you know, as I mentioned earlier, I would call the enabling environment.
• 25:24
  SPEAKER_02: But to really improve the policy and governance terrain for this work to flourish.
• 25:28
  SPEAKER_02: So under this definition, now problematizing scale a little bit, scale can mean more buildings under community control for sure.
• 25:35
  SPEAKER_02: It also means accumulating the relationships, the knowledge, the institutions, the political power, right, to make subsequent projects easier.
• 25:42
  SPEAKER_02: So having kind of thought through that, what does this look like in practice?
• 25:47
  SPEAKER_02: Right.
• 25:47
  SPEAKER_02: So if we have an apartment building or a mobile home park, right, or say a commercial site within a neighborhood that goes up for sale, residents can receive advanced notice.
• 25:58
  SPEAKER_02: There could be a trusted organization that helps them evaluate the opportunities to whether or not it's worth it's a worthwhile purchase.
• 26:04
  SPEAKER_02: Uh you know, and I'm dreaming right now, right?
• 26:07
  SPEAKER_02: So, like, how do we have revolving funds that can make offers quickly, right?
• 26:11
  SPEAKER_02: And speed up the time to acquisition.
• 26:13
  SPEAKER_02: Standardize legal and lending documents, right?
• 26:17
  SPEAKER_02: They can reduce transaction costs, they reduce time.
• 26:20
  SPEAKER_02: And what public subsidy can fill the gap, right, between market price and what residents can afford.
• 26:25
  SPEAKER_02: If public land is involved, then now you know what does it look like to have, you know, say a community-controlled entity receive preference rather than having to outbid, you know, highly capitalized speculative developers.
• 26:38
  SPEAKER_02: So after acquisition, now we have a, again in a dream state, a project that receives operating reserves, right?
• 26:44
  SPEAKER_02: And so much, this is something that comes up so, so often is how do we fund stewardship after the fact, right?
• 26:49
  SPEAKER_02: After we close, after the development, after acquisition, how do we fund ongoing stewardship?
• 26:53
  SPEAKER_02: Because it is a way of thinking about how to shift the subsidy, right?
• 26:57
  SPEAKER_02: And so, how do we continue to provide operating support and governance support to our to our projects, you know, with folks understanding that so much of what makes success within these projects are these governance metrics and stewardship, right?
• 27:09
  SPEAKER_02: Not only funding for stewardship, but that, you know, how do we continue to build capacity around that?
• 27:14
  SPEAKER_02: Right.
• 27:14
  SPEAKER_02: And that's from an optimistic view, I think there are some early pieces of this as an economic arrangement that already exist, or at least that are underway.
• 27:23
  SPEAKER_02: So we've talked a little bit about COPA and TOPA, you know, in DC, and this is not at all to say this is the exemplary program, but TOPA is creates an acquisition opportunity for tenants.
• 27:35
  SPEAKER_02: So we all what this looks like.
• 27:37
  SPEAKER_02: You know, Seattle.
• 27:38
  SPEAKER_02: They've had it for years, right?
• 27:39
  SPEAKER_02: And they've had it for years, right?
• 27:40
  SPEAKER_02: I mentioned Seattle earlier, so you know, funding community organizations to purchase land in neighborhoods that we know are prone to displacement.
• 27:48
  SPEAKER_02: And we have indicators that can tell us 15, 20 years back when a neighborhood might be prone to displacement.
• 27:53
  SPEAKER_02: Uh, in Miami, for instance, one of those is when higher elevation parcels in the year 2000 or so began to be sold at or began to grow in value at higher rates than sea level elevation parcels, became a strong indicator for what is now climate gentrification related displacement.
• 28:09
  SPEAKER_02: Um, mentioned Richmond earlier, right?
• 28:11
  SPEAKER_02: So having a community land interest is not only as a land bank, but working with other counties to have to sort of obtain preference in the disposition of public land.
• 28:19
  SPEAKER_02: And so durability at scale, right?
• 28:22
  SPEAKER_02: That phrase really means connecting these kinds of policies into a standing sort of system, right?
• 28:27
  SPEAKER_02: It's a really an entirely different way of looking at at least local government scaffolding.
• 28:31
  SPEAKER_02: But I have to say, you know, I have to like really reinforce this.
• 28:35
  SPEAKER_02: And it's not only about moving more capital.
• 28:38
  SPEAKER_02: And sometimes I'm afraid about conversations in the field that, you know, focus so much on movement of capital without thinking about the other elements that make that make this work tick, right?
• 28:49
  SPEAKER_02: So we've we're talking about public policy a little bit here, right?
• 28:53
  SPEAKER_02: Subsidizing governance.
• 28:54
  SPEAKER_02: What does policy look like that accepts limits on extraction, right?
• 28:58
  SPEAKER_02: Like that is willing to subsidize for that.
• 29:02
  SPEAKER_02: And it's I mentioned this earlier too.
• 29:03
  SPEAKER_02: Conventional real estate already has its enabling environment, right?
• 29:06
  SPEAKER_02: We have mortgage guarantees, we have all sorts of tax advantages, public infrastructure, legal protections, right?
• 29:11
  SPEAKER_02: So it's building an intentional and enabling environment around community control and economic democracy.
• 29:16
  SPEAKER_02: And at the foundation of it is changing our common sense about the built environment, what it's for, and who it's for, right?
• 29:24
  SPEAKER_02: And so, you know, understanding that community ownership is not a charitable exception, right?
• 29:28
  SPEAKER_02: It's not something that uh that exists under 501c3 necessarily, right?
• 29:32
  SPEAKER_02: That's not the purpose of it.
• 29:34
  SPEAKER_02: It's not this exception for communities that were failed by the market or a form of market correction.
• 29:38
  SPEAKER_02: It is a reshaping of the market and not thinking about our communities as beneficiaries who receive affordable space.
• 29:44
  SPEAKER_02: We have to understand ourselves, our communities, as capable political and economic actors.
• 29:49
  SPEAKER_02: And that as political, economic, and political, as capable political and economic actors, we're entitled to govern assets, we're entitled to shape development so that development doesn't happen to us, but instead it happens by us.
• 30:02
  SPEAKER_04: If you two had a magic wand and you could build three things nationally over the next five years capital products, policies, intermediaries, technical infrastructure, even institutions, what would you build?
• 30:17
  SPEAKER_04: Let's start with Kurt.
• 30:19
  SPEAKER_01: The first thing that comes to mind for an institution that I wish I could just will into being is a I'm sorry, Ahmed, I'm gonna go with a capital answer.
• 30:30
  SPEAKER_01: I know it's not the only thing that's needed, but a a large pool of flexible capital that is specifically tied to existing government programs.
• 30:41
  SPEAKER_01: This could be at a state or a national level.
• 30:43
  SPEAKER_01: Like if you think of uh, you know, kind of like a public-private lending pool that partners with HUD, that is designed to experiment so much of the activity in the community ownership field right now is just one sliver of flexible capital from being able to pull all of the other 100% necessary pieces, but they might have those pieces.
• 31:09
  SPEAKER_01: And, you know, if if a community organization is facing down the question of, oh, do we take a really short-term high interest rate loan as and that's the only way we're gonna get over the finish line, it's sometimes actually better to not take that loan.
• 31:25
  SPEAKER_01: But who's gonna step in and fill that gap that spot?
• 31:29
  SPEAKER_01: I think if there was a watch and learn pool of capital that was just just to help government agencies and and lenders really like say, hey, we're watching this, it's not that bad.
• 31:42
  SPEAKER_01: The risk is actually not what we see.
• 31:44
  SPEAKER_01: It is it is working, we can do this.
• 31:47
  SPEAKER_01: I truly think in many cases, not all, that that's gonna get folks over the line in terms of funding these projects.
• 31:55
  SPEAKER_01: So that's one.
• 31:56
  SPEAKER_01: I'll leave it there.
• 31:57
  SPEAKER_04: Okay, and let me ask you, Kurt, just a follow-up.
• 32:00
  SPEAKER_04: You know, Ujima's raising 10 million for fund two.
• 32:03
  SPEAKER_04: I think KCT is raising 20 million.
• 32:06
  SPEAKER_04: How big is is big for this fund?
• 32:09
  SPEAKER_01: Right now, I think we could deploy, I think we could deploy like 250 million.
• 32:16
  SPEAKER_01: I'm gonna say that, but this this is a right now piece.
• 32:19
  SPEAKER_01: When you we get to fund two, I think, you know, Ahmed, you were you were going into the numbers of Bridge Ban saying there's one billion in assets.
• 32:27
  SPEAKER_01: I think we could probably deploy that number every year.
• 32:30
  SPEAKER_01: I think there's enough demand.
• 32:32
  SPEAKER_01: And as as one piece of this you know, multi-legged stool scales, you get the other pieces, you get policy to support, you get community organizations building capacity and experience and doing this more and more.
• 32:45
  SPEAKER_01: You have experts sharing their expertise and their legal templates and all that.
• 32:48
  SPEAKER_01: These sorts of things snowball, but you need a uh a lubricant to really get it going.
• 32:54
  SPEAKER_01: And I think that big pool of flexible capital may be guarantees, credit enhancements, just very long-term debt, loan interest debt.
• 33:03
  SPEAKER_01: I think we could we could make it happen.
• 33:05
  SPEAKER_04: I love that.
• 33:06
  SPEAKER_04: But now in this current administration, you know, the treasury funds pulling back for CDFIs, um, the SBA has changed some of their policies on lending.
• 33:18
  SPEAKER_04: We won't get into that here.
• 33:20
  SPEAKER_04: But, you know, in ARPA's dried up, it's gone.
• 33:23
  SPEAKER_04: So where where are we going, Ahmed?
• 33:25
  SPEAKER_02: The reason why I really like this line of questioning, I should say, is because it forces us to think about what future we want to see.
• 33:35
  SPEAKER_02: And I think that sometimes, speaking for myself, I get so caught up in the weeds of the day-to-day that I forget what it's that this is still at my core belief about core.
• 33:45
  SPEAKER_02: You see what I did there, is that it's ultimately and fundamentally a political project.
• 33:50
  SPEAKER_02: And sometimes it becomes so difficult for some of us to think about what the future state we want out of that political project is, right?
• 34:00
  SPEAKER_02: Particularly as we become more well-versed, say, in financing products or in the legal structuration of these models or in the community organizing strategies necessary for this work to go on.
• 34:13
  SPEAKER_02: And so I think part of the second or hot with the your add-on to the question there, Julia, does speak to our political situation quite a bit.
• 34:23
  SPEAKER_02: And so, and I should say, Kurt, I think the capital conversation is enormously important, right?
• 34:28
  SPEAKER_02: We need to resource this work.
• 34:30
  SPEAKER_02: What I've I've always been concerned with is less, you know, bringing more resources into the work, but more so trying to weigh out the promise and the danger of standardizing, you know, financial products around what is still a pretty bespoke field.
• 34:44
  SPEAKER_02: And I think what is beautiful about community ownership is how bespoke it is, right?
• 34:48
  SPEAKER_02: The entire field is not only built on these different models, but bespoke relations with communities, right?
• 34:53
  SPEAKER_02: No two blocks are the same in some neighborhoods.
• 34:56
  SPEAKER_02: And so, really, how do we accommodate something at a broad scale, right, a movement-like scale, that maintains that faith to community, right?
• 35:07
  SPEAKER_02: And maintains the rootedness in its communities.
• 35:09
  SPEAKER_02: How do we standardize while at the same time, you know, in order to attract more capital without leaving grassroots projects behind?
• 35:19
  SPEAKER_02: And I know, Kurt, for years of like for our years of conversation, this is something that's very top of mind for you as well.
• 35:25
  SPEAKER_02: And so for me, if I if I had my wish or any kind of magic wand, I really did have to think about this after you said it.
• 35:32
  SPEAKER_02: I have to go back to something I said earlier that was just kind of spontaneous, but I spent some time with it while Kurt was speaking, which is what a national political infrastructure for community ownership, something like a federation, right?
• 35:43
  SPEAKER_02: A federation that does connect, you know, these different models across the field, resident-owned communities, and that's top of mind now because it's some organizing work I'm doing in a mobile home park.
• 35:54
  SPEAKER_02: Uh, land trusts, co-ops, right?
• 35:57
  SPEAKER_02: A lot of the commercial vehicles, but also bringing together organizers and a lot of these local or regional coalitions and really trying to determine what a shared agenda looks like, uh, what meaningful standards look like for, you know, what is community ownership?
• 36:10
  SPEAKER_02: Who is it for?
• 36:11
  SPEAKER_02: You brought this up earlier, Julia, ensuring that black and brown communities, working class communities actually have a meaningful say uh in terms of what's what's happening in all these different policy experiments that we mentioned and all that, great.
• 36:23
  SPEAKER_02: But how do we bring co-governance into it?
• 36:25
  SPEAKER_02: How do we ensure that folks are at the table when decisions are made?
• 36:28
  SPEAKER_02: And really thinking about a national vehicle that helps facilitate that, particularly in a hostile political moment like this one.
• 36:35
  SPEAKER_02: So it's almost going back to some extent to the fundamentals that Kerr raised earlier.
• 36:39
  SPEAKER_02: Just like we organize, it's organizing the organizers, organizing the projects, federating the projects, and maintaining an organizing ethos throughout, but really taking advantage of the kind of scale that a national political organization or political infrastructure can create.
• 36:54
  SPEAKER_02: So, you know, thinking about coordinating campaigns for purchase rights at a much larger scale or public land control, or, you know, uh an avenue for a national voice that can contest the real estate lobby, right?
• 37:07
  SPEAKER_02: That's that's something I want to see too.
• 37:09
  SPEAKER_02: Really bringing community ownership in as a recognizable political demand.
• 37:13
  SPEAKER_02: What is the politics of community ownership, right?
• 37:15
  SPEAKER_02: Is it sort of like a fundamental question here?
• 37:17
  SPEAKER_02: And ensuring that folks in communities, in our communities that we work with, have a part, you know, have a say, a real say over who owns, you know, who is housed, who operates in the neighborhood, you know, and who owns these essential assets.
• 37:30
  SPEAKER_04: Who owns the block?
• 37:32
  SPEAKER_04: All right.
• 37:33
  SPEAKER_04: Thank you both.
• 37:34
  SPEAKER_04: I appreciate you, Ahmed and Kurt.
• 37:37
  SPEAKER_04: Thank you for all you do for this field.
• 37:39
  SPEAKER_04: You are both an ecosystem stewardship, and I appreciate you for your time today.
• 37:46
  SPEAKER_04: Thank you.
• 37:47
  SPEAKER_04: Nikitka, I want to talk to you for a few minutes because the guild gives us a chance to take some of these big field-level ideas and see what they actually look like on the ground.
• 37:59
  SPEAKER_04: You're not just talking about community ownership as a theory.
• 38:02
  SPEAKER_04: The guild is really developing property, experimenting with ownership structures, organizing residents, supporting entrepreneurs, and building a fund specifically designed to capitalize this work.
• 38:16
  SPEAKER_04: So I want to use the guild as kind of a window into where the core field may be headed.
• 38:22
  SPEAKER_04: Let's talk about it.
• 38:23
  SPEAKER_03: My name is Nikishka Ayengar.
• 38:25
  SPEAKER_03: I use sheher pronouns, and I'm the founder and CEO at the Guild.
• 38:29
  SPEAKER_03: We are a worker-owned cooperative building community-owned models of land, housing, and real estate as a means to build self-determination with um black and other communities of color and poor and working class communities.
• 38:41
  SPEAKER_03: Uh, I am also a lecturer currently at um the urban planning department at the Harvard Graduate School of Design.
• 38:49
  SPEAKER_04: So, Nikishka, the guild takes what you describe as a systems approach.
• 38:53
  SPEAKER_04: You're developing real estate, organizing an ecosystem, supporting entrepreneurs, really designing community ownership structures and raising capital through ground cover from actually doing all those things at once.
• 39:06
  SPEAKER_04: What have you learned about the infrastructure around the deal that really has to exist for community ownership to work?
• 39:15
  SPEAKER_03: Yeah.
• 39:16
  SPEAKER_03: Um I think one of the biggest lessons that we have learned through our work at the guild, because like you said, we play, you know, we play several different roles in the ecosystem and we do take that systems approach.
• 39:28
  SPEAKER_03: Um I think the biggest piece that I found that is like the number one core component that's necessary is um, or at least uh, you know, makes things more favorable is a an organized community or some level of infrastructure around community organizing.
• 39:48
  SPEAKER_03: Because I think oftentimes in our world of community-owned real estate, we're so focused on getting the deal done and like getting the project built and converted to community ownership that we forget what happens to the project after when it is community-owned and it needs to be community governed.
• 40:05
  SPEAKER_03: Um, I think like a big missing piece often is the infrastructure around organizing to sustain a community-owned project over hopefully generations.
• 40:16
  SPEAKER_03: So I'll say that just kind of at the outset, because that's the orientation as well as some of the challenges that we're you know navigating.
• 40:24
  SPEAKER_03: And then I think some of the other sort of infrastructure pieces that's necessary is the sort of continuum in technical assistance, right?
• 40:33
  SPEAKER_03: And what I mean by that is you do need, you know, an organization, whether that's like a community-based, you know, CDC community development corporation or some form of nonprofit or just a developer, um, somebody to play that development role who can who understands what it means to go all the way from acquisition to like receiving your certificate of occupancy to like operate a you know a building.
• 40:57
  SPEAKER_03: So somebody that can play that role start to finish, including managing a GC and all of that, a general contractor for construction.
• 41:06
  SPEAKER_03: Um, you also need like the right capital.
• 41:09
  SPEAKER_03: That's an obvious one, but like the right forms of what we call integrated capital.
• 41:15
  SPEAKER_03: So different forms of capital that can be layered on to support community-owned projects at an ecosystem level.
• 41:22
  SPEAKER_03: And so that could look like, you know, CDFIs, community development financial institutions, that could look like philanthropy, that could look like, you know, family offices, uh, individual wealth holders.
• 41:35
  SPEAKER_03: It could take different forms, but you need a pretty robust um capital ecosystem that understands that capital for community-owned projects is different from like conventional real estate and like understands what it means to underwrite projects like that and what it means to ultimately fund community-owned projects.
• 41:55
  SPEAKER_03: So, yeah, I would say organizing, capital, and then other forms of technical assistance that go along with it, like development, but it also could mean, you know, property management, tenant stewardship, all of that.
• 42:07
  SPEAKER_04: So let me ask you: are you at the guild moving at the speed of trust, or are you having to move at the speed of gentrification and displacement?
• 42:18
  SPEAKER_03: Yeah, that's a really good question.
• 42:20
  SPEAKER_03: And like we often frame our work both at the guild as well as our fun ground cover, is that we have to play like a bridging role and moving at different speeds.
• 42:32
  SPEAKER_03: So there's moving at the speed of trust of our community, which means there are some things that will take longer by design to make decisions around, to bring to fruition.
• 42:43
  SPEAKER_03: Um, but where there's like yeah, one space in which we have to move at that speed, and then another one where I wouldn't say moving at the speed of gentrification, but moving at the speed of reality that's unfolding around us and like making sure we can meet the moment in a way that carries integrity to and accountability to our community, right?
• 43:07
  SPEAKER_03: In order to move at the speed of trust of the community, you have to continuously earn and retain that trust.
• 43:14
  SPEAKER_03: And that means sometimes that means, or oftentimes that means delivering on the vision that you set out to do, which means grappling with the sort of reality and the speed at which the market is moving at.
• 43:26
  SPEAKER_03: And so we try to breathe that bridge.
• 43:28
  SPEAKER_03: Um, and that's why like the types of capital that our fund ground cover takes in.
• 43:33
  SPEAKER_03: Um, and it's a lot of organizing we do around capital holders as well, whether those are CDFIs or you know, conventional capital holders, where like, hey, if you're interested in community ownership, you have to have a completely different orientation to time horizons and how you do your investment if you understand that community ownership is a response to historic and ongoing harms that are happening in our community.
• 43:56
  SPEAKER_03: And if you understand that, then you understand that you're unfortunately.
• 44:00
  SPEAKER_04: um having to solve for um like i said generations and centuries of of harm and so that means moving at different speeds at different times right and meeting meeting each moment where it requires us to so yeah I love that I love that so the Guild's Community Stewardship Trust brings together democratic governance neighborhood investment and long-term stewardship in one structure with community members participating as shareholders and stewards what does designing the financing around those goals require you to do differently from a conventional real estate developer and where have you found capital providers most struggle to understand the model?
• 44:47
  SPEAKER_03: Yeah um there's a lot of different pieces there I'll say that the model itself like you broke down it it combines different elements it combines governance with ownership primarily and it's structured as um just sort of as a legal structure it is a public benefit corporation so the community stewardship trust functions as a public benefit corporation with the larger community as its shareholders and the financing mechanism that makes all this sort of work is we assemble capital, what we call reparative capital on the front end that you know takes properties off the speculative market, develops those properties to meet the needs of the community and then ultimately turns those properties once it's developed into community ownership.
• 45:35
  SPEAKER_03: The community stewardship trust uh like you mentioned Julia it combines different elements of both democratic governance as well as like the ownership and financial return piece.
• 45:45
  SPEAKER_03: And so the a big part that of what the model hinges on is this mechanism called a buyback mechanism.
• 45:53
  SPEAKER_03: So what's happening in the community stewardship trust is um the CST or the developer that's acting on behalf of the CST is acquiring and developing properties with you know some assemble capital on the front end that is more reparative is not market rate capital.
• 46:10
  SPEAKER_03: It's like you know capital at um lower interest rates, for example.
• 46:15
  SPEAKER_03: And what it's doing is over time community shareholders are purchasing shares of the trust and they're buying back the equity that the trust has in each of these properties over a period of time.
• 46:27
  SPEAKER_03: And so what that allows you to do is um again to your earlier question of like meeting you know the the needs of the community at different levels or and meeting the needs of sort of our current moments is that um the community buyback mechanism it allows properties to get developed, right?
• 46:46
  SPEAKER_03: And and over a period of time it allows people who are otherwise either low income or what the SEC deems like non-accredited investors, investors who otherwise maybe don't have as many investment opportunities available to them, especially investment opportunities that are in that are going towards economic development in their own neighborhoods, it allows folks who've been traditionally excluded from these spaces to make an investment for as little as$10 a month.
• 47:14
  SPEAKER_03: And so they're buying back that equity over a longer period of time that was assembled on the front end.
• 47:21
  SPEAKER_03: So any sort of upside from the development that happens um because you know we are doing this work in neighborhoods that are gentrifying right so property values are going up but that upside is then captured by the community shareholders who bought into the CST.
• 47:36
  SPEAKER_03: It requires funders whether they're you know philanthropic funders or CDFIs or banks especially right to understand that buyback mechanism and to understand that essentially what they're doing is they're seeding an investment that ultimately they are not going to be extracting the returns out of.
• 48:43
  SPEAKER_03: And so we want any of the sort of upside in the development to go back to community shareholders.
• 48:48
  SPEAKER_03: And so that's like I think a big piece that it just takes you know traditional capital providers some some reorienting reorienting to do.
• 48:57
  SPEAKER_04: So definitely definitely not your traditional deal um but you know we keep coming back to this idea of making community ownership durable at scale the guild has said pretty explicitly that a deal by deal approach is not enough really Nikeshka what what does moving beyond deal by deal financing actually require yeah I mean a big piece that it requires is some aggregated capital, right?
• 49:28
  SPEAKER_03: Like that's a really big piece it's why we launched um our fund ground cover because as we were playing that development role and and seeding different community owned properties we were like yeah if we keep going deal by deal and have to fundraise at the deal level each time we're trying to do a project it just takes way longer and it and you're kind of repeating the same sort of underwriting that you have to keep going through for each deal um and and it's a huge like time, energy and and um opportunity cost suck, right?
• 50:01
  SPEAKER_03: So us even creating our fun ground cover, it took us to aggregate we're continuing to fundraise but$30 million of capital on the front end that is at terms that the market might call concessionary but we call reparative is at that zero to two percent rate, right?
• 50:19
  SPEAKER_03: So and it's it's capital that has longer horizons so at minimum seven years, but really like if capital can go up to 15 years, like the longer the better because A, not only does real estate just traditional, I mean you know it just takes longer to do, especially if you're doing ground up construction or some other forms of construction, the real estate cycles are a little bit longer.
• 50:43
  SPEAKER_03: Plus again when I say you know our orientation to community ownership is that we are using it as a tool to build economic democracy to address and redress the harms that have been caused via urban development for literally centuries.
• 51:01
  SPEAKER_03: And so we ask our you know capital providers to take sort of like that generational outlook and we we try to to sort of explain that you know all finance is like hinge hinges on the risk return paradigm, right, for the most part.
• 51:16
  SPEAKER_03: And we always assume that the the capital providers are carrying the most risk and so they need the most return but we never ask like what the risk is of somebody losing their house because the neighborhood gentrified and either their property taxes went up if they were legacy homeowners or their rents have gone up now because private equity has come in and bought a bunch of the neighborhood buildings, right?
• 51:37
  SPEAKER_03: Which is all the the realities that are currently unfolding in our neighborhoods.
• 51:41
  SPEAKER_03: You know, we don't ask like what is the risk of when a new development goes up in a neighborhood who is actually bearing the risk of that new development like sure the capital provider is fronting some risk because real estate development is a risky endeavor.
• 51:54
  SPEAKER_03: Like projects sometimes start and never finish and so there's some risk associated with it.
• 51:59
  SPEAKER_04: However that is not the same as losing your home and so how do we get capital providers especially providers that you know they're either wealth holders or institutions that are philanthropic or philanthropic adjacent that have more like the you could lose a little bit you could lose a little bit of your return and you would be okay but someone losing their home wouldn't and so just thinking about who deserves the financial returns from the development at the neighborhood scale the capital provider is playing one role but and so us as ground cover is playing you know one role but it's the stewards of these actual projects right so we have a building that has uh a grocery store coming up three black owned restaurant kitchens an event space and an affordable housing on top and the people that are going to be creating value in that building are the people that come patronize the restaurant kitchens they are the ones that come shop for their groceries at the grocery store like these are people that are the neighborhood residents who are using these services and and um patronizing these um businesses out are the ones that are creating value and so like how do we under the rethink how we think about value and risk and return and sort of yeah rebalance all of that so when you sit across from a foundation an impact investor or another capital provider how difficult is it to get them to actually price that idea into the deal rather than simply agree with it philosophically yeah that's a great question and I'll say that like as a field um we've gone through like a little bit of a a roller coaster in the last I'll say like community ownership real community owned real estate as a field I don't know what you would date it as there it obviously has a longer sort of h historical tail I guess to it but I'll say as a field like it only sort of came together as a field in the last decade would you say yes the last five to ten years.
• 54:03
  SPEAKER_03: Yes right and and in the in that decade when we started you know we had the pandemic as sort of like this defining moment and everything that came during the pandemic with the sort of you know post-George Floyd protests and everything else that came with it you know in the form of DEI and pledges from philanthropy and all that other stuff.
• 54:24
  SPEAKER_03: So just to situate us for a moment in terms of where the field has been, that's where we're coming from.
• 54:30
  SPEAKER_03: And so I say it's a roller coaster because in in prior to 2020 we've been doing this work since 2015.
• 54:38
  SPEAKER_03: Now prior to 2020 when I talked to anybody about community owned real estate especially like I would try to speak to philanthropy first and foremost and they were like well like real estate that's not charitable like we know like that's something over there.
• 54:52
  SPEAKER_03: They understood affordable housing you know because they you they would fund affordable housing projects but they weren't understanding community owned real estate as an intervention to a sort of larger crisis that has been looming for a long time.
• 55:08
  SPEAKER_03: And then 2020 hit and suddenly people were making different connection points between various issues right like people understanding that like actually housing justice is a public health issue you know not social determinants of health.
• 55:21
  SPEAKER_03: Right, right.
• 55:22
  SPEAKER_03: So all of these like you know the the weaving was happening in people's minds and so then we had a moment when we would say community ownership and we would talk to philanthropy we would talk to CDFIs um we were even talking to some banks and everyone was like yeah like this is it you know and so it was less hard of a sell then even though we you know we would have to still ultimately get into the level of a pro forma and make sure everything sort of like pencils for them.
• 55:49
  SPEAKER_03: But there was this brief moment in time where people at least had the political will so to speak to be able to figure out how to finance community owned deals.
• 56:00
  SPEAKER_03: And then now here we are like I don't know six years from the pandemic or six years from that moment through a second unfavorable presidency that is throwing all sorts of things our way and suddenly it's like again it's become very hard to talk to people who are financing things whether that's philanthropy whether that's CDFIs whether that's traditional banks you know everything it's like everyone's in sort of hermit like protection mode and no one is wanting to try what might be considered like more experimental riskier deals that ultimately will have deep impact but in this moment in time like there's a risk averseness so having to make the sell to funders across the spectrum has been a lot harder.
• 56:51
  SPEAKER_03: And so it does take a lot of yeah they they agree philosophically with us and then you look at where interest rates are right now it's like yeah I agree philosophically with you but like the Fed rates are at this you know we can come down a few basis points from it but we can't do anything more or CDFIs who've been hit by this administration as well right you know and so they're in understandably a more risk averse um space because of all the attacks coming down but there is a mismatch in the capital projects like ours need and the availability of that capital right now.
• 57:24
  SPEAKER_04: You know, I just think it's no longer in vogue to protect black and brown communities.
• 57:29
  SPEAKER_04: It seems as though we've reverted back to dogs and cats as our main recipients of funds and that's unfortunate in this time but let's dig into what does non-extractive capital mean in an actual deal.
• 57:46
  SPEAKER_04: So the guild describes ground cover as a reparative integrated capital fund that has intentionally sought capital such as grants recoverable grants PRIs the whole game low cost uncollateralized debt with longer investment horizons.
• 58:05
  SPEAKER_04: When you say non-extractive or reparative capital which you have a few times already what does that mean in concrete financial terms?
• 58:14
  SPEAKER_04: And what what does that change in the term sheet for you?
• 58:18
  SPEAKER_03: Yeah um that's a great question so number one in terms of concrete terms of what that means is and you said it is that the capital is uncollateralized.
• 58:28
  SPEAKER_03: So we take in capital that on paper is loan capital.
• 58:34
  SPEAKER_03: So it's debt um it's not an equity stake it is debt and it is at like I said earlier zero to two percent so that we are like anything more than that is not meeting the communities uh that we work with at least where at where they're at so nothing more than 2% for ground cover.
• 58:55
  SPEAKER_03: Now we might we will take CDFI capital in a deal so ground cover functions as acquisition and pre-development capital to then unlock other forms of capital.
• 59:05
  SPEAKER_03: So it's the first in capital basically and then hopefully catalyzing other more traditional market capital to follow.
• 59:13
  SPEAKER_03: And so we think about it in that catalytic function but the number one thing is the money that we take in and the money that we put out into the deals is uncollateralized.
• 59:22
  SPEAKER_03: And that is big because when we talk about reparative capital collateralization and subsequent like foreclosures are have been one of the biggest ways black wealth and black land has been essentially stolen by our system, right?
• 59:37
  SPEAKER_03: The neighborhoods that we're doing work in right now have still not fully recovered from the 2008 crisis and we know the sort of numbers and data around what the foreclosure crisis did to black families around the country or black communities around the country.
• 59:51
  SPEAKER_03: And so so you know starting with that understanding um and not just the 2008 crisis but obviously before as well is we make sure that the notes are uncollateralized.
• 1:00:01
  SPEAKER_03: And so something were to go south we have a loan loss reserve to protect us and we don't seize the asset.
• 1:00:09
  SPEAKER_03: So that's one number two is like I said the 0 to 2% rate so nothing more than 2% in order to be catalytic.
• 1:00:17
  SPEAKER_03: And then what it makes possible both of those things the uncollateralized piece and the the zero to two percent the not collateralizing the note means that in the deal the capital stack of the deal ground cover looks like equity to a traditional lender.
• 1:00:36
  SPEAKER_03: So now a CDFI capital because we don't you know we're kind of last in line for returns after the community has got his return.
• 1:00:44
  SPEAKER_03: So so you know a CDFI or a bank might look at it and be like oh this is equity because there's no collateralization here's a first position or or really even a mezzanine position in it.
• 1:00:55
  SPEAKER_03: And so they can come in and it helps us unlock like I said more traditional capital because we look like equity in the stack.
• 1:01:02
  SPEAKER_03: And then what the zero to two percent allows us to do is again serve that sort of like I'll call it like productive redistribution of wealth.
• 1:01:14
  SPEAKER_03: And so if we taking in capital at zero to two percent um which means that's all it has to get you know paid back at any upside like I said from the deal goes to our community shareholders that are buying back that equity over a period of time.
• 1:01:28
  SPEAKER_03: And so the the majority of the wealth creation that happens both through like the net operating income of the properties but more significantly the actual like the the land values going up in these neighborhoods like that sort of upside remains with the community shareholders.
• 1:01:47
  SPEAKER_03: So if community shareholders buy let's say they buy shares at$10 a month on in year one by year three or four that might their shares might be worth I don't know twelve dollars is an example whereas the capital we got on the front end is just is repaid back that zero to two percent.
• 1:02:04
  SPEAKER_03: And so that's really what reparative in the way that we look at means in the deal.
• 1:02:10
  SPEAKER_03: And then the last thing I'll say is just like that that horizon.
• 1:02:13
  SPEAKER_03: So we're not taking capital at five years where we're possible we don't take short-term capital.
• 1:02:19
  SPEAKER_03: We're looking at ideally 10 years sometimes even longer for that capital to not just go through like a lot of the projects we're investing in are like our new construction deals.
• 1:02:32
  SPEAKER_03: So like there is a life cycle of even you know just zero to five years of just getting through permitting and construction and stabilization.
• 1:02:42
  SPEAKER_04: And so we we ask a lot of the the investors that we work with that put money into ground cover to kind of at least stay with us through stabilization and beyond until we can then unlock you know some kind of permanent mortgage on the deal love that okay so final thoughts we've got about two minutes left but I want to ask you based on what you've learned at the guild in Atlanta and your work nationally um what have you learned what does infrastructure um in the core field still not have what do we need and then and then final question if you could build three things nationally over the next five years capital products policies intermediaries institutions what would you build oh okay you said I have two minutes and you gave me these like really big questions but let's see so I think like what does a core field not currently have you know I'll go back to what I said in the beginning around community organizing like I don't think the core field has enough infrastructure or has built the muscle for organizing and community governance.
• 1:04:01
  SPEAKER_03: I think we have learned to do the case making for community ownership really well.
• 1:04:08
  SPEAKER_03: I think we've you know played around with maybe even like experimenting with different types of deal structures and return structures and find just sort of like what financing term sheets should look like.
• 1:04:21
  SPEAKER_03: We have not figured out how to and that we do that we think about financing specifically to get the project done but we have not yet figured out the financing for long-term stewardship.
• 1:04:33
  SPEAKER_03: And I think because this field is pretty like you said it's like we're talking about 10 years at most five years in which it's really been a lot of new projects emerging across different cities, et cetera, new funds emerging all of that we have not yet seen a full cycle of what long-term stewardship even looks like and ultimately that is going to require a lot of community organizing.
• 1:04:57
  SPEAKER_03: And yeah we just like I would say our field in particular doesn't have obviously there exists community organizing other aspects of this work but our field in particular I think have to get better about building bridges not just with the capital providers not just with the technic technical assistance providers but with grassroots organizing groups and there's a case to be made there too and and we do some of this with our other model of community ownership the community our People's Community Land Trust where we partner with a local our local tenant organizing group called Housing Justice League and the idea with that partnership is like hey we can be the the back end infrastructure partners we can we know what it means to acquire real estate to to develop it to do you know make sure the property is sustaining and is healthy and can sustain its tenants long term or its homeowner's long term we we figure that part out and they're really good about pushing policy or organizing tenants to think about hey you're not just a tenant in a traditional like rental or apartment complex.
• 1:05:58
  SPEAKER_03: You're a tenant who Who has ownership and governance rights in all of this, right?
• 1:06:03
  SPEAKER_03: Like, what does it mean to exercise those rights?
• 1:06:05
  SPEAKER_03: What does it mean to collectively steward the asset versus the traditional, like, there's a property management company and then there's the tenants, and that's the the relationship and power dynamic that continues to exist.
• 1:06:17
  SPEAKER_03: It's like, no, we actually want to break the silos down and figure out what is in what does it take to build long-term stewardship.
• 1:06:23
  SPEAKER_03: And I think that's like really missing from the field right now.
• 1:06:26
  SPEAKER_03: And so I think what I would what I would build, one institution that I might build is an institution that does some of that, more concretely, does some of that bridge building around, I would say, like bringing a lot of radical movements or grassroots movements on the ground to think about like, you know, what we call the resist and build strategy, right?
• 1:06:51
  SPEAKER_03: Like, how do you not just fight for what you don't want and resist the harms that are coming down the pike, but you're also building the the world we want to see and community ownership of our assets is like one of the one of those ways to get to that world.
• 1:07:05
  SPEAKER_03: And so, like, what does it mean to organize on both fronts on the on the build side as well, and then have more like intentional partnerships with groups like us, with groups like Kenson and Corridor Trust, with groups like EB Prec, like all of our peers that are building community-owned real estate, right?
• 1:07:23
  SPEAKER_03: Like, how do the organizing and resistance arms kind of link up with the with the building and developing work?
• 1:07:31
  SPEAKER_03: So, yeah, I'll say that.
• 1:07:33
  SPEAKER_04: Love that.
• 1:07:34
  SPEAKER_04: Thank you so much for your time, Nikishka, and your expertise and for what you do for the field.
• 1:07:39
  SPEAKER_04: I appreciate it.
• 1:07:40
  SPEAKER_03: Likewise, you too, Julia.
• 1:07:42
  SPEAKER_03: Thank you.
• 1:07:43
  SPEAKER_04: Community-owned real estate is about more than changing the name on a deed.
• 1:07:48
  SPEAKER_04: It asks us to rethink who gets to make decisions about land, who benefits from real estate investment, how value is shared, and what kinds of capital we design to support those goals.
• 1:08:03
  SPEAKER_04: Kurt, Ahmed, Nikishka, thank you for helping us set the table and giving us a picture of where the core field stands today and where it could go, especially with your magic wands.
• 1:08:16
  SPEAKER_04: Over the course of this season, we're going to get much deeper into many of the questions we raise today.
• 1:08:24
  SPEAKER_04: Who actually gets to own the neighborhood?
• 1:08:27
  SPEAKER_04: How the capital stack comes together and where deals fall apart, who fills the gaps, and what investors, funders, lenders, and public partners need to do differently.
• 1:08:42
  SPEAKER_04: Because if we want communities to own the block, we need an ecosystem and a capital system built to make that ownership last.
• 1:08:52
  SPEAKER_04: If you're building towards community-owned real estate and this is your first time listening, there's more where this came from.
• 1:08:59
  SPEAKER_04: Go back and listen to the rest of the series.
• 1:09:02
  SPEAKER_04: And subscribe wherever you get your podcast so you don't miss what's next.
• 1:09:08
  SPEAKER_04: And if this conversation was useful to you, leave us a review.
• 1:09:12
  SPEAKER_04: It helps other organizers and funders find the show.
• 1:09:16
  SPEAKER_04: I'm Julia Parker.
• 1:09:18
  SPEAKER_04: Until next time, this has been On the Block.