Michael Yorba of Advance Community Fund: How We Are Helping To Make Housing More Affordable3/7/2022 An Interview With Jason Hartman It’s not as easy as it sounds. This is a bigger problem than most people realize. When you actually start working on the logistics, geopolitical influencers and the pure economics of the task you start to get to know the intricacies and the agendas of each part of the solution. In many large cities in the US, there is a crisis caused by a shortage of affordable housing options. This has led to a host of social challenges. In this series called “How We Are Helping To Make Housing More Affordable” we are talking to successful business leaders, real estate leaders, and builders, who share the initiatives they are undertaking to create more affordable housing options in the US. As a part of this series, we had the pleasure of interviewing Michael Yorba manages. Michael Yorba manages the day to day operations and growth for the Advance Community Fund. The Advance Community Fund is a mission-driven, nonprofit organization developed with the primary focus of alleviating poverty and transforming distressed neighborhoods. Working with local leaders, residents, businesses and government organizations. Michael also interviews the front-page Titans about the latest in capital markets, CEO milestones, trading tools, acquisitions and market trends. It’s a fast moving, high-energy show that presents technology trends, crowd funding and impact investment insights in a new light and keeps the audience asking for more. Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
Anold friend asked me, “What’s your Legacy”? They gave me a tour of Southern Dallas to show me the condition the neighborhoods are in. That’s when it really hit me! I have always wanted to make a difference in humanity. My forefathers founded California in 1769..That changed a Nation, Guess it’s in my DNA..) Having been in the investment world since 1980 then later in the media industry since 2020, It’s time to give back to the community and leave a legacy I can be proud of. Not everyone gets the opportunity to change the world for the better. Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different?Are there takeaways or lessons that others can learn from that? We are at that point now. Banks & Private Equity Impact investing Funds are starting to find us. 1st, Make a good plan, 2,Stay the course, 3,Be ready to adapt to new ideas to make a good plan a Great Plan.) None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful who helped get you to where you are? Can you share a story about that? Gregg Holmes, Bill Lowe and Robert Flowers. They put their money where their mouth was!! Greg gave us the 1st $25K. We only had a business plan, no bank account, no attorney and no accountant. So Greg said I believe in your plan and I believe you. “Here is $25,000 go open a Bank account.. Bill the CEO of Texas Brand Bank enabled us to do the 1st 5 affordable home loans. Robert put us in front of the right people then guided us through the proper legal processes. Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life? Never Give up, Winston Churchill. There is lots of adversity to changing the way things are, to the way things could be for the better. Ok super. Let’s now shift to the main part of our discussion about the shortage of affordable housing. Lack of affordable housing has been a problem for a long time in the United States. But it seems that it has gotten a lot worse over the past five years, particularly in the large cities. I know this is a huge topic, but for the benefit of our readers can you briefly explain to our readers what brought us to this place? Where did this crisis come from? For several generations no one wanted to admit that there was an issue except the people living in the lower income areas. Here are some responses to the question from the Chairman of our Community Advisory Board Jasmond Anderson and Ed Baxter. In large cities, attracting talent and corporate migration to areas with lower to no taxes, and incentives cities and municipalities gave corporations to relocate to the major metropolis cities. In exchange, the real estate market became inflated due to corporate migrants that need a place to live, and have moving stipends or other incentives to help them relocate. The local market is shocked into submission, being interested in growing its corporate tax base, property tax base, and workforce. Areas that were once considered ‘sketchy’, now have a full blown gentrification occurring, which affects the existing residents tax base. The existing residents are then faced with rising property taxes, while often living on fixed-incomes. With the new interest in ‘old communities’, reverse ‘white flight’ is happening, which affects underrepresented communities and the availability of homes in underrepresented markets. Advancements in multi-modal transportation, the attraction of urban amenities and underrepresented markets. Advancements in multi-modal transportation, the attraction of urban amenities and — get this- low property values create an opportunity to make a dollar on new homes. Considering construction costs are the same anywhere you build, land values are the biggest culprit in creating the crisis. Depressed values, redlining, the lack of access to mortgages with terms that are agreeable to a different demographic of stakeholder, and the perception of housing developers assuming that money can bulldoze communities and displace people, is what kicked off the crisis. The refusal of housing developers to make ‘less money’ on affordable housing developments, pushed the crisis along. The lack of a community investment plan brought new stakeholders into communities that had no consideration for the existing fabric and stakeholders. The Area Median Income promoted for the City does not reflect the actual Area Median Income for all communities in the City. Moreover, the notion of ‘Affordable’ Housing is mislabeled, in my opinion. Affordability in underrepresented community has been described by simply having 4 walls, a floor and a roof. This has led developers down the road of minimizing construction costs and maximizing profits on housing developments, and calling them affordable. The result, however, is communities with ‘comps’ that continue to depress property values, with a lack of design consideration. This also results in the stagnant growth in home prices for low-income communities. Many residents cannot qualify for homes in underrepresented communities because their income is too high for the available homes in the area that are subsidized. Every community should be mixed-income with options on affordability. Affordability should be defined locally, for each community. This would give each community the ability to create mechanisms to increase affordability for itself, as well as create pathways to job creation that gradually increase their ability to purchase a home in their community. We should note the Economic Development Policy in Dallas, is the most comprehensive approach to economic development, housing, and health disparity we have seen to date. Policies like it should be created and adopted that ensure an equitable distribution of homes, opportunity and wealth. Here is an investment banker’s perspective from Ed Baxter, another member of the Advance Community Fund team. Beginning in the post housing crash years, institutions figured out that owning the homes vs packages of random mortgage paper made more sense, offered less portfolio beta and less real time exposure to changes in rates in the bond market. With this in mind, large private equity, family offices, endowments and specialty “buy/build for rent”” investors started coming out of the woodwork. (See American Homes For Rent https://www.ah4r.com/) Recognizing that “people needed somewhere to live” and that the associated vacancy risk was less than that of multi-family, they all dove in. With the need to beat hurdles rate and the need to chase yield, rates on individual mortgages represented better real returns than bonds and the related increases in home prices offer very attractive capital gain opportunities. Because of this change in investment thesis, these “non-traditional” players in the home buying market have driven up prices to the point that many families cannot afford to live within city centers or many of the suburbs. These buyers have large funds that require deployment and make individual prices irrelevant. In my view, this phenomenon is the catalyst for this explosion in what we call “Landlord Nation” and the lowering of the affordability index. Can you describe to our readers how your work is making an impact to address this crisis? The City of Dallas put it correctly in their statement “Community sustainability plays a vital role in strengthening the resilience of the local economy. Through interwoven connections consisting of both social and economic conditions, creating a climate for citizens and business alike to reach their full potential is vital for the City of Dallas to flourish socially and economically. Investing in an inclusive, creative, multicultural city of complete communities where all people can thrive and feel safe strengthens the resilience and vibrancy of the local economy.” We are providing the basic building blocks for a better quality of life by bringing sustainable community assets that these communities have been without for generations. Can you share some of the initiatives you are leading to help correct this issue? We are financing Affordable homes and Community assets like medical facilities and grocery stores where they don’t exist currently. IE… I built the home I live in, I built the Urgent care I work in…I built the grocery store I work in. Can you share something about your work that makes you most proud? Making a Difference In your opinion, what should other home builders do to further address these problems? Get involved in the process. It’s that simple. Can you share three things that the community and society can do to help you address the root of this crisis? 1,Recognize the problem, 2, Participate in the solution. 3, Promote more entrepreneurial enterprise. Can you give some examples? Fund small business in the communities left behind. If you had the power to influence legislation, are there laws which you would like to see introduced that might help you in your work? Promote and create greater incentives for CDFI initiatives in place now. What are your “5 things I wish someone told me when I first started leading my company” and why? Please share a story or example for each.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? Completing our business plan in Dallas and then taking our template to other cities that need it. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? Dr. Ben Carson. He has faced the adversity we have now and can see the small and big picture. He or she might just see this, especially if we tag them. :-) How can our readers further follow your work online? www.advancentx.org, https://www.linkedin.com/company/71359479/admin/, https://www.facebook.com/Advance-Community-Fund 105921188120673, https://www.instagram.com/advancecommunityfund/, https://twitter.com/advancecommuni3 This was very meaningful, thank you so much, and we wish you only continued success.
0 Comments
Leave a Reply. |
|
|
Advance Community Fund is a non-profit organization (501c3).
© Advance Community Fund. All rights reserved.