About This Episode
Every episode of this podcast is special and everybody who appears on the podcast means something to me, either personally or through the work that I do. But this episode is a bit different because for the first time it features work that I'm doing. Not work that I've done in my past, but work that is a current part of Schafran Strategies, my consulting firm, and a partnership that we have been building with California Community Builders for the last year and a half.
The subject of the report [Multifamily Homeownership: Pathways to Addressing the California Housing Crisis] is multifamily homeownership. It was released last week and coming in webinar form on May 31st at 10:00 am PT. Please join us!
So what is Multifamily Homeownership (MHO)?
Sometimes it looks like a condominium, sometimes it looks like a community land trust, sometimes it looks like an intergenerational family living together in a home where the lines of who owns what are sometimes a bit blurry.
This is a subject that is near and dear to my heart, something that comes out of a long engagement with housing tenure, which was the subject of the most recent Substack newsletter [Housing Tenure 101]. It’s a real pleasure to work with somebody like Adam Briones, this episode’s guest, and California Community Builders, on a real exploration. We talk in the podcast about how we dug into material that we didn't fully understand and that we still don't fully understand. It's one of those rare research projects where we didn't necessarily know the answer when we started doing the research.
Stay tuned for my interview with Adam Briones, one of the nicest, smartest and most dedicated people in California housing (anybody who knows him will tell you that). It’s a real honor to have him not only on the podcast, but as a research partner, and somebody I'm really excited to work with on housing issues in California for many years to come.
This Episode’s Guest
Interview Transcript
Alex Schafran: Adam Briones, welcome to the show. It's great to have you here.
Adam Briones: Hey, Alex, it's great to be here. Thanks so much for having me.
Alex Schafran: So this is the first episode of Housing After Dark to feature somebody that I am actively working with. I’m really excited about having you here and to talk about our Multifamily Homeownership Report. But like with all of the guests, on Housing After Dark, I want to start with you. So you're from Oakland. How did you become a houser? Tell us a little bit about your journey that I know takes you to New York City, like so many of us. How did you get here?
Adam Briones: So my family has been in Oakland for 100 years. We left Northern Mexico and were just like, Oakland’s the place for us. I’m a third generation Oaklander. I went to undergrad at UC Santa Cruz. When I got back, I fell into a job at the Greenlining Institute and stayed there for about four years which is where I got my start on housing issues. I've always, even if I don't come off this way, consider myself a racial justice activist or social justice activist. For me, housing has always just been like an interesting, cool thing that just fits.
My dad and all of his brothers were contractors and builders. My dad's from San Bernardino and his family's been there as long as my mom's family’s been in Oakland. When my dad changed careers growing up, he was fixing up houses for a little while. So I have a lot of distinct memories of playing in the front yard of random Oakland houses as he and his brothers fixed stuff up. Housing has always had a real emotional, DNA aspect for me.
Then I was lucky enough to work on an affordable homeownership development out in Fresno County, in Firebaugh, when I was at Greenlining back in 2008/2009. Then I went to grad school for urban planning. At that point, I was like, “I'm going to be an affordable housing developer, that's gonna be my career forever”. So, I took a bunch of classes and felt really bad about myself, because I didn't know math and had to learn Excel and all this stuff. But I learned a ton, and then did a fellowship in DC for a year with a Congressional Hispanic Caucus, then another fellowship with the New York City Housing Finance Agency. I spent the remainder of the decade in affordable housing finance and development in New York.
I came back to Greenlining after about a decade. I decided that I really missed advocacy and public policy. I was lucky enough to be invited by John Gamboa, who founded Greenlining and the organization that I run now, California Community Builders, to take over CCB after he retired. So that's the long and short of it. It feels like a winding career path. But my wife reminds me, I've basically been doing mostly the same thing the entirety of my career.
Alex Schafran: I spent a lot of time with housers and talk to them about their origin stories. We’re an incredibly diverse field, but there are certain themes that you start to hear. One of these themes is this history and tradition of families in the business. Now, this is something that can be good or bad. Sometimes the real estate industry can be really, really insular. You talked about your family being in the business and I have a similar story with my grandfather. He grew up in the business working on a construction site in Bayonne, New Jersey. It was his uncle's business and something that as immigrants from Europe had gotten into when they moved to the United States.
There's also this commonality of New York City. I think there's something about housing in New York that's just different from housing and most of America. I think a lot of us who are interested in housing end up there.
Adam Briones: I do think it's interesting that homebuilding and housing in general, seems to be a career that a lot of recent immigrants take up. If you want to work really hard and grind it out, it’s a real career that you can build for yourself. A lot of folks I’ve talked to tell me that when they came to the United States, that's what they did [build a career out of homebuilding and housing].
Alex Schafran: There is a certain kind of global commonality to it. You might have to learn how to build with wood rather than with cement and other things that change. But it’s a really important thing. And it's something that's accessible too. I think it's also the diversity of all the different jobs and tasks that we have in housing from building, real estate, selling, renting to building maintenance and management. It's a very open and big space.
So you mentioned Greenlining. I know that a lot of your work in housing connects to your origin story and questions around access to wealth, credit, banking and all of the parts of the economic system that Greenlining has brought a really important racial justice lens to. Tell me a little bit about how you approach things when it comes to the racial wealth gap and how you see homeownership playing a role in this question.
Adam Briones: We live in a really complicated world and we do need fairly diverse and complicated solutions. I really do think that to make a difference for communities of color, and other folks that have been systematically marginalized, we need a couple of different things.
Everybody needs a safe place to live, point blank. Everybody needs a roof over their head. And that place needs to be affordable, safe and of high quality. But then, because of the society that we live in, and the economic system that we have, it's really hard to get ahead, unless you have some amount of wealth. Because of the way our economic and social and political history have played out, people of color have really been denied that opportunity in almost every instance throughout our country's history. And so the work that we do, at bottom, is to really just give people of color an opportunity to build wealth to have the same opportunities that most other communities have had.
We've honed in and focused on this really imperfect, but powerful solution of homeownership, because of the importance it's played in our society, because of the way in which our economic system is really oriented, and built to support it in general. That’s the area we see ourselves making the biggest difference in and I feel really good about that work, because it's also just played such an important and central role in my own family's history.
Alex Schafran: I really appreciate how you bring this to your work on homeownership. There’s a blog you wrote about homeownership late last year where you talk about how homeownership isn't inherently good or inherently bad, how it can do real harm, but that it can also be brilliant for many people. I am a homeowner myself now, I grew up in a homeowned house and it's been a wonderful thing for me, for my parents and my grandparents. My grandparents were both children of immigrants born in Brooklyn, the Bronx and the Lower East Side and homeownership was really transformative for them.
But you're not shy about admitting the challenges. How did you get to this point where you are able to talk about homeownership or talk about these things without either having to paint a rosy picture of it, or always being kind of overly critical and overly negative?
Adam Briones: In some ways, maybe it's just me intellectualizing my own self doubt, but I do feel like I have an instinctual distrust of any idea that's presented as “This is it. This is how we fix it. This is the way to go”. I do think that like everything in life, most things are complicated, most things have trade offs, and most solutions have some amount of gray area.
And similar to you, and maybe that's why we overlap so much in terms of our policy interests, my parents were the first homeowners in their family, and it created a really good stable situation for me and my sister. I think if you look, broadly speaking, at the past 20 years and the period between 2008 and 2010, there are a lot of people that didn't have a good experience with homeownership. And I think that's really important to acknowledge, and it really does a disservice to the work that I do, you do, and a lot of people do, to pretend like we have this perfect solution.
But I do think that overall, when we think about what it is that builds wealth in America that people have access to, and that provides the most benefit with the least risk and actually provides real tangible benefits, I can't find anything better than homeownership. And I think, to me, it doesn't, you know, detract from the overall benefits to acknowledge the drawbacks and the ways it doesn't work.
I can think of a lot of people that don't support homeownership, or at least don't support it as a broad based public policy, that I agree with. They bring up a lot of good issues that need to be solved. I think that the only difference is that for them, that's where the conversation ends and then they put forward other policy solutions. And for me, it's like let's identify and acknowledge those defects and those problems, and then let's fix them. And let's make it as good for people of color as it has been for everybody else.
Alex Schafran: Yeah, I couldn't agree more. And this has been a huge theme in a lot of my work. We have a tendency in America to create these programs or these massive projects like homeownership, or suburbia, and we do it in a really racist way or environmentally insensitive way, or both, like the production of suburbia.
People recognize that and they rebel against that, and they push back and they critique. But instead of just replacing that with a less racist and a less environmentally insensitive version of the same, we kind of blow up the system. And then it becomes this big ideological fight between homeownership is good and homeownership is bad. It doesn't get to the fact that if we just fix the system, and make a homeownership system that is less racist and less environmentally exploitative, then we would be able to produce some really great things.
When I went out to start researching The Road to Resegregation, it was the same story. The foreclosure crisis was the same sort of story of creating another racially unequal part of the housing system. It was a reaction to the post war era, which was also dysfunctional, also really racist. That was really sad to see history repeat itself in just a very different geography, deep out in Antioch and various other places as opposed to primarily in inner city America.
The other thing I've always appreciated about your perspective on homeownership, which is why I think you and I now work together on this project, is that we both appreciate the diversity of homeownership types. Homeownership is, can be and should be a lot of different things to a lot of different people. It's not just single family homes and suburbia, there are a lot of different ways to own a house. And there's a lot of different ways to create homeownership, which is what I think brought us together around multifamily homeownership. So before we get too much farther on this thing called multifamily homeownership for our audience, how do you define multifamily homeownership? What does it mean for California Community builders?
Adam Briones: So we have a formal definition in the report. But to me, it's really when two or more households, two or more families, come together and own a share a portion or a unit in the same building that they all live in. So it can look a lot of different ways. But as long as we stick with that basic definition of two households, two families, two friends coming together, buying a portion of the building they all live in for themselves, then I think that's something that we can all kind of get behind as a definition.
Alex Schafran: So this is a definition that's based on the number of families, not the number of units you can have multifamily homeownership in a single family home?
Adam Briones: Exactly. When I think about my parents and their road to homeownership, one of the ways that they started down that journey was by buying a house with their friend and, and splitting it down the middle is an example of informal homeownership. And that's something that's actually been pretty central to my family's history.
Alex Schafran: For those that are following along, we will have a webinar on May 31, that folks are welcome to take a look at there's a lot of information in the multifamily homeownership report. If some of the details aren't entirely clear from this podcast, please take your time, come visit us on the webinar, take a look at the report. And you can always get in touch, and we'll talk more about it.
So multifamily homeownership may be something relatively small, may be something informal, for instance a single family home that's owned by a couple of different families. But it also includes more standard definitions like condominiums or community land tracts. Can you tell us a little bit more about all the different types of multifamily homeownership that are out there?
Adam Briones: It’s a lot of what you just mentioned. The most common example of multifamily homeownership that you'll find here in California, and throughout the United States is a condominium. It's a building where households buy a unit in the building, they own it. But there are shared walls, and there's a homeowner's association. But you have a traditional mortgage, you pay taxes. It's a pretty straightforward process in that respect.
Then you have things like community land trusts, which can be something like one family owns a share in a building, or they own a unit in the building and the community land trust owns the ground underneath it. Then there's things like tendencies in common in which a family owns a share of a building with other families. And then you have things like informal homeownership. Perhaps me and my sister someday would buy a home together or with her partner and my wife, and we all agree that when we buy the house, we each put in 50% of the cost and when we sell the house, we get 50% of the profits. Something like that. So we can look at it in a lot of different ways. But fundamentally, it's when people come together and buy something together.
Alex Schafran: One of the things that was most enjoyable and exciting about doing this report is that we discovered different types and forms of multifamily homeownership. I discovered it all throughout my neighborhood and talking to friends and colleagues, both in terms of people who had actually created these things informally or who are struggling with the realities of being a multifamily homeowner in the current era.
It’s really opened my eyes to all the different and diverse ways in which people are living. One of the things that's in the report that I encourage people to take a look at are the eight reasons why multifamily homeownership matters.
And one of them that is important to me is the fact that this is a relatively under researched, understudied area. You won't find as much data in this report, as I think either you or I would have liked to have put, because so much of the data just isn't captured.
I’m working with our colleagues at the San Francisco Federal Reserve Bank on a more in depth data study that pulls the best data that we can find on it, but it's still something that is relatively hidden and under appreciated in California and throughout the United States. What are some of the other key reasons why multifamily homeownership is so important and why CCB has put its time and energy and resources behind?
Adam Briones: Well you've already listed one of the main eight. We've spent so much time on this report (happily), that the other seven are very much drilled into my brain.
First and foremost, the biggest issues for us is that it's just how a lot of Americans live today. It’s accepting reality for what it is, which is that for plenty of Americans, their form of homeownership is multifamily homeownership. We should really accept that as a very valid and productive way to create wealth for all Americans.
Second, when you look at the national landscape, it's really prevalent in communities of color, you know, the Asian American community, Black community, Latino community. This is a form of homeownership that we feel comfortable with for economic reasons, cultural reasons, what have you. While the numbers are a little different here in California, it's not quite as common for African Americans and Latinos as it is in other parts of the country. It is just something that I think really speaks to communities of color for a lot of different reasons.
Another big one is that it’s a real key part of these conversations we're having around the path forward for California in terms of the housing crisis and land use reforms. Fact of the matter is, we need more housing everywhere and we need different types of housing. But not every plot or site is going to make for an economically viable rental development. Some areas, because of the price, market, or community, are fundamentally better situated as homeownership opportunities. We want to make sure that when people think about homeownership, they're not just thinking of single family homes. They're thinking of this denser, more accessible form of homeownership.
Somewhat related to that. As anyone who has spent even a minute in California's housing policy ecosystem, these are contentious issues. They tend to drive people who otherwise agree about social issues about policy issues apart. We really think that this could be an issue that brings people together. We think it could bring together folks that are pro housing, pro housing production, bringing together folks that really care about wealth building and communities of color, folks who really care about the environment who want to see more environmentally sustainable development and frankly, business. There are folks out there who want to build more houses, units, and make more loans. There is a way for most everybody to win in this and we really want to see people come together in sort of big tent issue, or big multifamily homeownership issue, if you will.
Finally, and this is very much related to why we think it's important for communities of color, multifamily homeownership units just tend to be less expensive. And there's nothing magic about it. These units are a more efficient use of space. When you're a family that's buying an MHO unit, you're not buying as much land, you're not paying for as much house overall. This gives an opportunity for folks that want to get into homeownership, that want to buy their home, but don't perhaps have the money or the ability to take on a mortgage for the traditional single family home. It gives us an opportunity to have what other folks have.
We think that while there's no magic bullet, there's no one tool that solves every problem. This is a really important tool to have in our state's toolbox around creating wealth and providing homeownership for families. Overall, we think there are a lot of great reasons and many more that we didn't even get to, about why people should support multifamily homeownership.
Alex Schafran: I really appreciate the emphasis at the beginning on how this is how a lot of Americans are actually already living. One of the reasons why I was so excited to work with you on this report is that it’s a report about types of housing tenure, which is something that we housers need focus on right now. Tenure is that legal and cultural glue that binds us to our housing and then for those folks who want a little bit of a kind of housing tenure 101, the most recent substack that was written on this.
Often when we write ideas about types of housing that can make a difference in the housing crisis in California, or in the racial wealth gap, or in so many of our related housing issues, we're trying to sell a certain type of tenure: “Oh, hey, if only we would all do it this way.” And that's not what this report does. This report starts with, “Hey, we're already doing a lot of these things. We're doing it informally, we may be doing it without a lot of support. It's hard to do it this way. It's not what most people are building or what most people are able to buy or what most people don't know about.”
That's such an important part of the vibe of the report, that it's really starting with the housing system that we have, and asking questions about how we can make these tenures more available and secure. Some of them are already “naturally more affordable,” and they can even be made to be even more affordable. As you said, if we take this attitude, this approach of asking more questions about homeownership, about who owns homes and finding different and diverse ways of making homeownership possible, it can be a bit of a unifier in divisive housing politics. There's something in here if you believe land use regulations are a big part of our housing crisis. There's something in here if you believe community ownership is a big part of the solution to our crisis. And I know that those two groups are not always aligned. But I think both of them can benefit from our perspective on multifamily homeownership.
So I’m hoping this “political unity” thing is an outcome in terms of what people can get from this report. For you and CCB, in addition to this hope for unity, what are some of the other things that you're hoping will come out of this report? And who are you hoping will really take a look and dig in?
Adam Briones: That’s a good question. I hope I'm not undercutting my own expertise on this issue, but part of why we took this report on and why we've spent so much of our own organizational time and energy working with you on it, is that we needed to educate ourselves. Before we can educate our community or stakeholders, I needed to make sure that me and my colleagues at CCB really understood this issue.
I was not born an expert on multifamily homeownership. If you would have talked about it, in my head, I would have thought we're going to write about condos. But through this report, I really got a chance to learn a lot more about condos, which is not something I had an insane amount of expertise on, but also the other ways in which people can own homes together and the other opportunities we have around community land trusts, tenancies in common and informal multifamily homeownership. First and foremost, it really was making sure that as we advocate for these issues, CCB can be as educated as possible on the things that we think are very important that we understand are very complicated.
Number two, as you mentioned, housing policy in California, is divisive. People argue, it can be intense. But I think there are a lot of reasonable people out there who are looking for solutions. And my hope is that, especially for those folks that are in politics and public policy advocacy and organizing, can take a report like this and take bits and pieces that really speak to them, get curious about some parts maybe they weren't as familiar with and think about how it could apply to their own work, be it in housing, production, be it in wealth building, be it in environmental justice.
Maybe this document is something that that helps them think about their work and issues a little differently or is additive to their work, and then helps them think about ways in which they can come together with other folks who may not agree on everything that they work on or who may not be in the exact policy area they are but but who perhaps would be good allies on a specific issue.
And thirdly, one of the things we want to make sure that we always do at CCB is that we're educating ourselves and other policy and political leaders. But we're also educating our community. At the end of the day, if communities and specifically communities of color don't understand the work that CCB is doing, broader issues around housing, homeownership and wealth building, then what are we doing it for? At times, you can really see the impact of leaving people of color out of these very important policy discussions, making it so that we're on the table, not at the table of policymaking.
I hope we created a document that lays out, from a certain perspective could be a complicated policy issue, housing tenure in a way that is hopefully as plain English as possible. And in a way, that is something that my mom, dad and cousin who's a 21 year old welder understands. Even though I probably am not going to get him to sit down and read this report cover to cover, he'll get the eight reasons and it’ll maybe make him a little curious about some of the things that I work on and the way he thinks about housing. He’s getting to an age where he's thinking about what home he's gonna buy. Maybe he's going to leave the Central Valley and move closer to work. And maybe this is an idea that can be attractive to him.
So those are the three three areas: educating CCB, educating other policy, political and advocacy stakeholders, and educating the communities that we advocate for.
Alex Schafran: I can't say enough about how wonderful it is as a researcher - and sadly kind of rare - to engage in a project, especially a project that has a client and that has a little bit of funding behind it, that is really so open ended. Both parties were really committed to learning and opening our eyes from day one, and I think we both learned a ton.
I wish all housing research that I did was the same way. I'm trying to build a no bullshit space about housing. I think there are other housing researchers who listen in or read and I know many of us have had experiences where you put a lot of really quality work into proving something that we essentially already know and that we've proven before. This was really different for me.
I hope that folks approach this report with an open mind. I don't think other reports have covered this territory in the same way. It’s partly because you and CCB gave us the space to do that, and encouraged us to do that. And it's just been a really fantastic partnership. And I really appreciate that openness.
So as a final sort of step on helping people understand what's in the report: What are some of the highlights for you? Are there a few slides you think that people should look at? Are there a few facts that you think people should know? Beyond the eight reasons, what else should people dig into the report in hopes that they're gonna find?
Adam Briones: One of the more interesting things that we did here and that was accomplished is breaking this into different buckets around the kind of economics of multifamily homeownership. We have the market rate section, and that's primarily focused on condos. Then we have the (capital A) Affordable income restricted section focused on CLTs and other areas and then we have the more informal side where we're really just thinking about people that come together, in as you would guess, a less formal structure to buy a home.
What came out of that that was really interesting is how we pay for all this stuff. So really thinking through on the market rate side: do banks want to lend for this type of product? And what’s the mortgage situation like? Is it more expensive to get a mortgage for this type of thing? How do banks think about underwriting for a mortgage for multifamily homeownership versus a single family house?
And then on the affordable side thinking through what funding really exists to build this stuff and what's available (sneak preview, there's not a lot of money out there). On the informal side, thinking through hearing people be interested in MHO anecdotally, and the dearth of information that’s out there. There is opportunity for more study that has really kind of come out of this work.
Looking at some of our recommendations (there are plenty), I'm really thinking through things around condo defect issues. This idea that once people come together to own a building together and once the units are sold, the government and the lender and the private sector sort of give a kind of pat on the back and say, “I hope it works out for you.” How do we manage these buildings? What are the guardrails we put in as government, as society, for people to come together to do this? And what are the ways we could maybe do it better?
One of the things that we've seen, unfortunately, around the country is when things like homeowners association and groups of folks owning things together don't work out, they don't work out in a fairly spectacular manner.
There’s both more research and more policy and just more thinking in general that can be done around how we structure the shared ownership situations. What can we do better? What can we learn from other places? And so to me, that's a really exciting opportunity that came out of this report.
Alex Schafran: It is fascinating and a bit terrifying when we dig into some of the challenges that multifamily homeownership presents. The system that is out there that is designed to support these households is thin, is under supported. If our goal is to really ensure that these types of housing tenure and these types of homeownership are safe and secure and beneficial to folks, we must realize we don't yet have that support network out there.
It's gotten me thinking about what a supportive homeownership system would look like, beyond some of the sort of basic pieces we have inherited from the post war era. We have some pieces of the support system out there, like certain types of financing we have the mortgage income tax deduction, the HUD homeownership counseling system, there are a lot of very trained realtors out there. But does it all add up to a system that supports a very diverse set of homeowners and homeownership types in the United States?
That’s what I am hoping that folks can really take from this, especially folks who are experienced in this world. I think if you're new to housing or if you're new to thinking about homeownership, or housing tenure, I think there'll be a lot of really interesting things that you might not have thought about in terms of how housing is owned. But if you're somebody who's been a realtor or a builder or in the real estate industry or homeownership counselor, I hope that you are willing to work in partnership with us to design a more supportive system.
There are a lot of really important opportunities out there for community based organizations, nonprofit groups, affordable housing developers, community land trusts, realtors, small builders, large builders and needed major investors, to partner and participate in building a more supportive, multifamily homeownership environment that makes not only the American Dream and certain types of homeownership available to folks, but make it more secure for those who already have it.
I think it also creates a lot of interesting opportunities in the middle. One thing we maybe don’t talk about enough in this report is how multifamily homeownership can also be a really great way of providing ample and affordable rental opportunities for folks. These things (renting and owning) are not mutually exclusive. But there's some work to be done. We talk a little bit, for instance, about how some of the Fannie Mae and Freddie Mac rules (the government sponsored entities who play a very important role in the housing market by buying mortgages from the mortgage originators like banks), often will have limits on the percentage of condominium units that can be rented. Let’s try to find a way in which we have that fluidity and we have that diversity of tenure and both are secure and if that's the type of tenure that works for you, that it’s available.
I'm hoping folks that have experience in the real estate industry will see some possibilities for them, and for the rest of the industry, to maybe do things a little bit differently with regards to multifamily homeownership. There's a lot of real opportunity to grow businesses and while we're also at the same time growing the number of homes that are available in this way.
One of the things is when we talk to people about this report, people always want to kind of get down to the brass tacks. What for you are some of the next steps or actions that folks can take, whether it is research or policy advocates, or industry itself? If we're going to realize some of the dreams in this report, what do you think that we need to do?
Adam Briones: This is another area where I think the collaboration has been really good, between CCB and Schafran Strategies, because I think you really push us to get away from this “X plus Y equals more condos, coops, and tenancies in common”. You push us to think a little bit bigger about the kind of ecosystem in which all this stuff exists.
First and foremost we need more research. What we don't know can hurt us. And right now, I think there's a lot we don't know about this type of housing. I think part of the problem is because the industry itself is minuscule compared to the larger single family home homebuilding industry, there's not a lot of economic incentive on the private side to fund and push this type of research.
I think we can jump into a few sort of solutions around looking at states that do a better job around creating multifamily homeownership. What are some ways that California is different? What lessons do we have to learn? And what are some areas where perhaps we are more of an outlier? And it would make sense for us to be a little bit closer to what other states do in terms of the way that they structure multifamily homeownership.
So for instance, how do we think about the defect period that drives a lot of insurance costs and builder calculations around condos and other multi family homeownership? I don't know that we have the perfect solution at the moment, but I think there's some work to be done there. One issue that we call out that I think is really important, and that there needs to be a significant amount of work done on is, how we govern and how we maintain these properties. The issue of homeowners associations is one of, if not the biggest weaknesses of the way in which multifamily homeownership plays out, it's certainly an area that I think has the most need for growth and maturation. I'm someone that is very happy going to as few meetings as possible. But when you own a building, with neighbors that you don't have any other relation to and perhaps none of you are professionals in the commercial real estate industry, there's a lot of opportunities for things to go wrong. The way in which we structure that we govern or that we regulate that we need to take a hard look at it. And I think that there's a lot of room for improvement in that space.
Alex Schafran: The other thing that I'm hoping for is that our report starts to shift some minds of folks in the development community. Just (the other) night I was at an event with a lot of real estate developers talking about the housing crisis. Every single developer talked as if all multifamily buildings were automatically going to be rentals. It was as if the concept of condominiums or coops or multifamily homeownership didn't exist. It was kind of terrifying.
Some of this is, as you said, are things like construction defect laws, the way that financing and insurance and all of these other issues have made it so we simply just do not build condominiums in the way that we used to or we build them, or we build them to potentially become condominiums, but they become rentals for a very long time.
There's an important shift that we have to make both in terms of the conditions on the ground, but also in some of the mentality in the development industry about what is good. And I'm hoping more and more developers start to see themselves as people who make housing and then sell it to the people who will live there, or sell it to people who will, as individual investors, will maybe rent their house out at some point, and maybe live in at some point.
There’s been this steady march towards the production of new housing as almost exclusively rental, whether it's affordable rentals or unaffordable rentals or market rate rentals, however you want to call them. We've just not been prioritizing the construction of multifamily homeownership for a really long time.
Adam Briones: I agree. And the only thing I would add to that is in some ways, I think one of the simpler equations in this whole process, and problem, is that I think once we create some amount of incentive for private sector builders, private sector lenders, private sector investors, to frankly build a business off of creating more multifamily homeownership opportunities. I think we'll see. Whereas there are plenty of philosophical differences to work through on the policy and advocacy side. For better or worse, I think that the homebuilding industry on the private sector side is more than happy to follow where the returns are.
Alex Schafran: I think this is one of the key things that comes back to the benefits if you're real systematic, one size fits all doesn't approach doesn't work. If you want to realize the kind of transformation in multifamily homeownership that we talk about, we've got to deal with insurance, we've got to deal with finance, we've got to deal with aspects of labor. You have to deal with how the development industry is organized, how it is regulated, how it's supported, and even how it's imagined.
We talk a little bit in the report about this question of: Is America culturally ready for multifamily homeownership revolution? Could the American Dream be broadened to include owning a condominium or owning a two family house with your cousin? I think it's going to take this kind of holistic approach.
So if you're a holistic housing thinker, and you're looking for holistic housing, particularly holistic housing challenges, we welcome you to multifamily homeownership. I think it's a great space to make a lot of small little changes that I think can result in some really big transformations.
So let's look ahead a little bit around MHOs. We've talked about why it's important and what some of your hopes or dreams are with regards to who will take a look at it and what people will get out of it. Let's imagine California a year from now or a few years from now. What are some of the things that you're hoping that will come out of this report concretely, this could be pieces of legislation or growth in multifamily homeownership opportunities? What do you want to see happen in California over the next few years?
Adam Briones: For CCB, first and foremost, we want to see multifamily homeownership, and its myriad of forms, treated and supported just like every other form of homeownership. We want to see it treated on the same level as single family housing. We would like government entities, private sector, lenders and builders, to treat it and push for it just like we do other types of homeownership and other types of housing.
We really hope that it enters into the government, business and cultural lexicon in the way that we really think it should. We want to see more units produced, period. We at CCB believe that we need a whole healthy housing ecosystem that's inclusive of rentals and for sale of property. And if there are families that want a single family home, that's fantastic. We think the market where it exists serves them well. But, for families that want to buy something that is shared with others, the market is not there, the government support is there, and there could be a lot more done in that respect.
We would like to see those units produced, those buyers treated as other buyers are, and this type of housing will be pushed forward as a society. If we're going to accomplish our social equity goals, our climate goals, our transportation goals, this type of housing should be treated, supported as other types of housing should. It’s a great opportunity for the state.
Alex Schafran: I do want to come back on a final note to this question of the racial wealth gap and to some of your kind of initial motivations. What does success in this space in the housing space look like for you? You think about a lot of things on a day to day basis. And often in very detailed solutions, we need to do X, Y, Z. But a few decades from now, what's the type of success? What's the type of California that you're hoping to build?
Adam Briones: That's a great question. And one that I sometimes sit around thinking about late at night. It’s complicated, because on the one hand, you know, you mentioned Schafran Strategies as a small company. CCB is also quite small, although we work very hard. We try to be extremely ambitious in the work we do, but modest in our expectations in the short term.
Closing the racial wealth gap is going to be a generational endeavor. And it's going to be one that I'm going to hand off to my nieces and nephews and kids, should that happen. Realistically for me, the change I'm hoping to see in my career is first and foremost, that I fundamentally want to see more people of color driving decisions in the public policy space, in the housing space, in the business space and all spaces.
California is already a state that has a majority people of color. By 2040, it'll be 70% people of color. One of the things we see in every policy area, not just housing, is oftentimes we are not at the table. People speak on behalf of our communities, and the solutions proposed are not actually ones being put forward by us and our communities and in our best interest. That’s sort of unrelated to housing that's unrelated to multifamily homeownership, but a crucial thing I like to see through the work that I do, and particularly through our Leadership Academy.
Second, more specific to housing. I think one thing that would be amazing is if we could have a more complicated, nuanced discussion about this incredibly complicated and nuanced topic. So often the issues that we work on get boiled down to their essentialness, and to the one or two things that we are funded to do. When in fact, this problem that we're all trying to solve was created over the past 100 years due to a multitude of things, some of which are specific to California, some of which are specific to federal policies, some of them are accidents of history, some of them are much more intentional.
But my hope is that eventually we can get past some of the more heated simplistic rhetoric, and get to a point where (especially the folks that I think fundamentally agree), get to a point where we work together on the things that we agree, and we find good heartedness on the other side of the table when we disagree, and are more curious about where those intentions and feelings are coming from. We treat the complicated problem with the attention and nuance it deserves.
On the more technical side, like, I honestly hope we can build more housing. We as Californians, at least in my heart of hearts, embrace immigrants. We as Californians want to want more people to come to the state, we want more people to come to our cities, we want more people in our neighborhoods. People are good, fundamentally.
I think to the extent that we are a welcoming, open state, that everyone wants to come to and can come to, is the ultimate dream of California Community Builders. To do that, everyone needs a place to live. People that were born here, people that come here should be able to find a safe, affordable place to live and hopefully, eventually a place that can help them and their families build wealth and and to me, that's the real California Dream.
Sometimes saying that homeownership is the American Dream or the California Dream, is a little too simplistic. What that dream really is, is safety, security, flexibility, and happiness. When done right, housing and homeownership can get families to a lot of what they're trying to get to. That’s my dream.
Alex Schafran: Well, thank you so much. I couldn't agree more. And thank you so much for being on the show, for having me and inviting me to be part of this work. Again, stay tuned on May 31 for the debut webinar of our multifamily homeownership report.
Thank you so much to everybody for tuning in to Housing After Dark.
Adam Briones: Thank you.
Share this post