Episode 70, 47 min listen
Have you wondered how we can create a local economy that works for everyone? I believe it happens when we make different choices. Different choices in how we show up in our communities, in how and where we shop, what we buy, what we build, and how we invest. This episode is about someone who decided to show up and make a difference in their community by choosing to put their time and money where their heart is and creating a way for others to join them in that work. Note: This interview was previously published on Next Economy Now.
AUDIO PLAYER
You can access this episode wherever you listen to podcasts via our pod.link.
ADDITIONAL REFERENCES
Learn more about Lift Economy.
Learn more about or invest in New Way Homes.
Learn more about Yes In My Back Yard (YIMBY) organizing at YIMBY Action.
Learn about the EquityVest Platform mentioned in the interview and browse investment opportunities.
Interested in learning more about local impact investing and the power of community capital? Visit or join the National Coalition for Community Capital.
SIBLEY'S BIO
Sibley Simon is the President of New Way Homes, a nonprofit operating an Impact Investment Fund to develop workforce opportunities and affordable housing.
FULL TRANSCRIPT
-Introduction
Ame Sanders 00:11
This is the State of Inclusion Podcast, where we explore topics at the intersection of equity, inclusion, and community. In each episode, we meet people who are changing their communities for the better, and we discover actions that each of us can take to improve our own communities. I'm Ame Sanders. Welcome.
If you've been listening to State of Inclusion this past year, you know that several of our episodes have focused on creating an economy that works for everyone. But how does that happen? I believe it happens when we make different choices--different choices in how we show up in our communities, different choices in how and where we shop, what we buy, what we build, and how we invest. When I heard this interview on the podcast Next Economy Now, I knew I wanted to share the episode with you guys. It is a great follow on to my interview with Judy Wicks about the Philadelphia Circle of Aunts and Uncles.
Today's episode is another example of an individual who decided to show up and make a difference in their community by choosing to put their time and money where their heart is and building a way for others to join them in that venture. So, I reached out and asked the folks at Next Economy Now if they would be willing to let me share their episode. And they said yes. So, the interview was so rich and interesting that I haven't changed a word. I hope you'll enjoy learning how crowdfunding is being used by today's guest to create more affordable housing in his community of Santa Cruz.
-Guest Host Intro and Welcome
Kevin Bayuk 02:00
Hi, I'm Kevin Bayuk, a partner and worker owner at LIFT Economy. My guest today is Sidley Simon. Sibley is a social entrepreneur and president of New Way Homes, a nonprofit that operates an impact investment fund to develop workforce opportunities and affordable housing. Previously, Sibley co-founded the 180/2020 Initiative in 2012 that has housed over 1000 chronic and veteran homeless individuals across Santa Cruz County in California. He also was formerly a board member and treasurer of Housing Matters for nine years, and a founder of two innovative technology companies, Stream Sage and the Electric Sheep Company. Sidley, welcome to Next Economy Now.
Sibley Simon 02:42
Thank you, Kevin. I'm thrilled to be here.
Kevin Bayuk 02:45
Sibley, tell us about your story. What brought you into what you are up to today?
-How it Started
Sibley Simon 02:49
Yeah, well, when I took some time off of tech startup world, needed a break. We had a baby girl, which was great and I was taking care of her. I got into some community volunteering and one of the longtime challenges in our nation, for sure, and certainly in our little world of Santa Cruz California, is long-term homelessness. Ended up volunteering a lot around that and helping start that initiative with other nonprofit leaders locally who knew a lot about homeless services. I was there just with enthusiasm and business experience and helped start that initiative and learned a ton through it. Where we were trying to help get individuals, and in some cases, families, that have been long-term homeless, into housing and a more sustainable direction in their lives. It really took a very business approach of, how do we help more people every month and have long-term success and retention with their housing and move forward with their lives, et cetera?
We really hit a ceiling, a lot of success. We were just learning from what worked elsewhere. We weren't inventing anything. We were learning from New York and Los Angeles and many other places doing that, but we really hit the ceiling of the number of people per month to get out of homelessness. And homelessness was increasing, and it really became clear that was about the housing, and it was not just people experiencing homelessness. It's people who were employed in social services right in front of us who are really struggling to afford any housing. It happens that the Santa Cruz market is, by many measures, the most expensive market in the nation, if you compare housing costs to typical wages, whether that's buying a home or renting so. Then you know, you start not having enough school teachers in schools when school teachers can't afford to live here and on and on.
So, it really is from the very bottom, we don't have enough social safety net through the middle class not working in a community. Not having essential jobs and workers filled because all down to housing--scarcity driving a market that was extraordinarily expensive and getting more so over the last 15 years. It's nothing unique to where I live, but it was unusually acute and being just a bit worse than a bunch of other places that are also getting worse and worse on housing affordability. So, I just felt as a serial entrepreneur, and I really wanted to do work more that impacted my home area and also that I cared a lot ethically about, wasn't just interesting in the way that I had been interested in tech startups, but was really going to help people in the community, and was long term, and could also be work I enjoy. And so I really dove into this topic of housing.
-How We Build Housing Today
Kevin Bayuk 02:58
Great, and this led to imagining this New Way Homes and founding New Way Homes. Tell us about New Way Homes and how are you approaching solving or resolving the conditions of this problem of houselessness and/or providing for affordable housing. What's distinct about it? What makes it different than other efforts that you witnessed?
Sibley Simon 06:06
Yeah, well, when you see a whole industry, and you're new to it, of course, you have a lot of naivete, but you also do see things that maybe people down in the weeds, working in that industry are not stepping back and really seeing. What was immediately clear when not unique to me, but when people look at this, you see, oh, we develop housing in two ways primarily.
One way is what we're calling market-rate housing. But what's more important about it is, how is it funded? It's funded generally one project at a time by big investment funds who see it as risky to do real estate development, and therefore the money that is deployed to do it one project at a time is capital that is dedicated to getting a very high rate of return. So, talking about, you know, big national funds that have gathered up money from lots of investors and pension funds and all that stuff, and then they're just looking at the numbers and saying, is this plan have an 18% IRR? We might not achieve that, because there'll be bumps in the road, because it's a really risky thing, you know? So, if you do that, you can only really build either high-end sprawl houses these days with costs of doing everything, or downtown condo towers with some exceptions here and there.
But that's pretty much what you can fund in that way. So, that's the market rate housing. That's dominantly what we get through that. So, that's one way housing is created, and it does add to housing supply. In so far as it does that, it's a good thing. I'm not into the sprawl because part of my motivation is the environmental issue of less sprawl, more infill housing where there's jobs and walkable neighborhoods and public transit, all those things, but it gets housing in terms of the market.
The other way, the second way we build housing, is a totally publicly funded direction: affordable housing, low-income housing tax credits, this really complicated, Byzantine system of getting many different sources of funding together and fully paying for the cost of construction, and then having your operations paid out of much lower rents. That is fantastic for addressing very low-income housing, low income housing, so these different income levels, some permanent supportive housing for folks who have been long term homeless and need support in various ways. So, it builds a bunch of that kind of housing. The problem is there's nothing in between of any significant size, and those models don't serve everybody.
-How To Build More Affordable Housing
So, what I realized is, even a lot of affordable housing can be done without what we call subsidy, the public dollars, if it's a mix of incomes, including some middle class housing, folks who are still struggling to afford housing and some lower income housing. It takes a bunch of things to accomplish that, but the primary thing is just having investment dollars that are not looking one project at a time, seeing it as very high risk, and demanding an 18% IRR, you know? So, I started at the charitable end of that spectrum, but with that idea of saying I went to folks who I know had donated a lot to homelessness. I went to some foundations, etc. That's why I started New Way Homes as a nonprofit. And said hey, are these parties where, especially for the earliest stage of the development, is the riskiest stage, finding the sites and getting your entitlement, your planning permits and stuff.
Especially 10 years ago, that was very risky in California. The state legislature has really de-risked it, and the market has not caught up to that. And we said, okay, how can we get very low? I said, "How do we get very low return capital funding that?" Because they care about the mission of this is needed for healthy communities. It's needed for saving lives. So, put together a New Way Home role first and foremost in this development system that we've ended up creating is as an impact investment fund that folks have put in long-term capital, typically 10 years, made a loan to New Way Homes and get an annual interest payment that's modest, and that by taking the what's seen as the riskiest stage of the housing development and funding it with mission-driven impact investment capital, then we can bring other sources of capital in later, but none of them are driving to maximize profit. They're not seeking a high return, and they're not seeking to maximize return. And those are two key things. So to just really quickly summarize, what's unique is we're trying to build affordable housing, which we've defined broadly, from permanent supportive housing to just even middle-class housing, rental housing, that's below market rate in expensive markets, trying to create that with as little public subsidy as possible. It's not to say we never have public subsidy for some part of some project, but most of it doesn't have that. The cornerstone of that is this impact investment role.
But there's other things, and the number two piece of that, and then I'll stop, but then second, the biggest piece of making that work is that we've ended up with most of our sites that were working to develop apartment buildings are already owned by nonprofits. Churches are the biggest category of that both social services, nonprofits, schools, churches, others saying they want to have their land used in this mission-driven way. They may want a fair financial return for that in some cases, but you don't have to go out and compete with the market to buy a super expensive site that happens to be vacant or have a little building you got to tear down in order to build an apartment building. So, that is an other big model. That's the step we kind of discovered along the way, is like, oh, that works really well. And there's particularly so many churches interested to have an impact like this and not fully using all their real estate.
Kevin Bayuk 12:03
So, let me recap, and I have some follow up questions on each of those pieces in terms of the patient capital. So, this impact investment capital, so like 10 years and there's some interest, what range of interests are you talking about?
-Investing and Returns
Sibley Simon
Yeah, so foundations have all chosen--that we've done with to date--to invest at 3% return. We offer to individuals and we often have, like, right now, we have a crowdfunding offering going.
So, on the EquityVest platform, people can invest and get a 4.25% return. So, these are the kinds of things. So, we've got investors from 0% to 4.25% return in that pre-development fund in different offerings. Then at a later stage of the project, once it gets planning permits, not only can get construction loans, of course, from banks and other nonprofit lenders, but we can get then individuals can come in and own a part of a project. Different kinds of investors can come in and have equity ownership. They can get a bit higher return where they don't get annual interest payments. It's just being a part owner, a limited partner, and we're seeking to get a 6-8% return for investors who come in at that stage.
Kevin Bayuk
Can I ask some follow-up questions so I'm tracking? When I say something wrong, say, "No no no, you didn't get it." So, in the pre-development type of entitlement phase and so forth, where it's "riskiest" finding those impact investors, whether it's foundations at 3% or individuals maybe a 4.25%, and they get an annual payout of interest. Is it liquid? Do they get the interest back?
Sibley Simon 13:39
No, we send out checks or electronic payments.
Kevin Bayuk 13:42
So, you send out a check. Okay, yep. Then those are, like, 10-year kind of notes or something. So, at the end of 10 years, theoretically, the project that they put the money in for the pre-development and so forth, the project or projects have now, some of them have come to fruition. There are rent payments or something coming in. Is it that you refinance them at that stage? So, how do you pay the principal? How does the principal come back to those investors?
Sibley Simon 14:08
Great question. When people are investing in that pre-development process, they're loaning money to New Way Homes, the nonprofit. So, it's this interest-only loan that gets paid. We actually seek loan money to New Way homes for 10 years. We seek to use that on multiple projects within that 10 years. So, then New Way Homes loans money into a project to get it started. Then, once it gets far enough, it pays New Way Homes back with interest. That money comes from a construction loan and the equity investment that comes in later to actually own the project.
Kevin Bayuk 14:49
So, then those investors get liquidity across multiple projects, and then those projects, as they get construction loans or equity investors, that's where the money comes to pay back that principal. Then, conceivably, as you scale or grow, more opportunities emerge, then you can maybe do another crowdfunding or equity crowdfunding or find other foundations to do some of that "higher risk" impact oriented, patient, pre-development private debt.
-Wealth-Building and Transferring Equity
Then I'm interested in the ownership piece, because other projects we've talked about on Next Economy Now are looking for ways to transfer the equity or the ownership to the community for community wealth-building purposes. So, let's say you get a construction loan for a project. You've got it entitled, it's all permitted, kind of all ready to go, architect, all the engineering, and you all to do all the stuff that you need to do to get an apartment building started. So, now you go and get a construction loan and maybe some equity, and you said that those equity investors might be able to get 6-8%. But walk me through the liquidity for those investors. Because say they put in, I don't know, a couple million dollars or whatever. You pool together some equity investment, and you said they might get 6-8%.
Walk me through how that happened at that piece. Because they're owning equity in the project, but you're trying to keep the housing affordable, right?
Sibley Simon 16:08
So, yeah, they're part owners. They do get some cash flow. So, I'll get into that a little bit more. But an important thing is their return is actually capped, and the project has the right to refinance at some point down the road. You know, maybe they're part owners for 15 years, the project refinances, and it pays them back out, buys out their shares. So, a bank who's given you a permanent mortgage say first you have your construction loan. Then once you're done building, you lease up, you show the finances of the apartment building, and then just then, you get a long-term mortgage, a lot like someone gets when they buy a home.
So, then you have 30-year loan, and that takes out the construction lender. Sometimes, there are lenders that'll convert one to the other, but one way or another, yeah, you go to this permanent mortgage. Then you're making fixed payments to that mortgage, and then you're covering, and your apartment building collects rent, yes, generally, mostly or entirely at below market rates. Which is covering the mortgage payment and covering other operating expenses, property taxes.
Although one of our tricks in our bag of tricks is that if we can make a project entirely lower income, there's a lot of good jobs that still qualify as low income, then we don't have to pay property tax in California. Different states have different exemptions and all that kind of stuff. So that's your number one operating expense. So sometimes we can avoid that, but in any case, a bank that has that long-term mortgage, or whoever that lender is, is going to require you to have cash flow that beyond your expenses and beyond your payments to them. Because they want some cushion to make sure you can pay. That cash flow then goes out to investors. So, they're getting some cash flow. Not very much in the first year, but it gradually goes up.
We typically model rents going up at 2-3% a year, you know, as low as we can do in there. Sometimes that's a rent going up when there's turnover, or sometimes some rents will go up a little bit every year. So, but a lot of that increase, some expenses increase, but a lot of that goes to cash flow. So then over a few years, you start being able to pay back the investors toward their target rate of return. Then you can do a reset on your long-term mortgage at a time the interest rates are good. You have flexibility. You refinance that take out some more and buy out investors. Who's buying out investors?
-Community Ownership
Well, one of the ways we are for sure, setting projects up to have "community ownership" is that when we're partnering with a land owner who's a local nonprofit--and again, we've got a lot of churches, a diverse set of churches that we're working with, but others types of nonprofits as well--then they're the only party that has the unilateral right to buy other owners out, and the equity, when those cash equity investors are bought out, goes to that nonprofit. So, they can have a path. We just really like that, because we're working in a few different communities.
We're working with Black churches in East Oakland. We're working with churches in Santa Cruz. We're working with schools, different groups. They know their community, the needs they're trying to serve better than we do. We see ourselves as the enabler of their mission. As much as possible, we're the enabler of their mission, instead of they're providing land for our mission. So, the more we can return them to have this long term sustainable picture for that neighborhood, the more happy with it.
Kevin Bayuk 19:33
Conceivably, if they capture, if they're able to get the investors out and they own all the equity in the project, even with honoring the bank finance payments again, if you refinance strategically with the right interest rates, they might conceivably be able to reduce rents over time, or at least stabilize them, not even increasing at 2-3% but something.
Sibley Simon 19:56
Yeah, absolutely. You can have all kinds of trade-offs with that increased cash flow, where you can say now we're going to have one more unit that's very low income instead of moderate income. Or, you just have the rents that go up far slower than the market rate. So, you know, there just becomes a bigger delta. Yeah, absolutely. And then we have one or two projects eventually that we're working toward creating that are not that kind of partnership. We've done another interesting thing, which is purchase sites that have contamination, modest amounts of soil contamination because they used to be a gas station or a car wash or something like that, that are just sitting there often in low-income communities not being used and no one wants to buy them. So, we can get them inexpensively. That's one place we have gotten public subsidy, which is cleanup dollars. They'll pay for that cleanup. Then we can redevelop with something that's a great fit for the community and very much needed. So, working a couple of projects like that, and thinking with some of those that are not otherwise publicly subsidized, how we can have ownership that accrues to tenants, because there's a little bit of that that's happened around the country, and it has a pretty positive effect.
Kevin Bayuk 21:13
We featured a number of those projects here on Next Economy Now where, especially where, if you can hold the land in trust and then provide some type of lease share equity building kind of but limited equity kind of opportunity for the residents, but equity nonetheless, at least it's transferable, and wealth building so that there is a sense of there is an actual ownership of an asset for the residents that are making a rent payment, but they're actually building some portion of that rent payment is contributing to their asset building.
Sibley Simon 21:44
We're not reinventing the wheel on that, but same as you're describing, looking at what other people have done and seeing how we can do some of that here as well.
-Building for Sustainability
Kevin Bayuk 21:52
Good. Yeah, and what about the housing itself? So you know, one of the challenges in a building is we're not quite there yet with ideal materials, so we've worked with some projects and featured them on Next Economy Now that are doing net-zero development, looking at the embodied carbon of the materials in the housing itself, looking at efficient design, diversified renewable energy, edible landscapes, conservation, hydrology built in for rainwater capture and all that type of green infrastructure. How are you thinking about or what's possible is probably the more appropriate question in your development. How are you thinking about the full resilience of these assets and their contribution to a more livable future?
Sibley Simon 22:38
Yeah, so part of making this all work well has ended up that integrating more of the functions and development into a single system. And what I mean by that is I became a principal company at a called Workbench, which was a local design-build company here that was very interested in those topics. You just mentioned every single one of them, and also helping the housing crisis. So, now our Workbench team, which I've been a part of growing, and we have our own architectural design team here. So, we're signed on to the 2030 challenge in the architectural industry. We really try to stretch every project with all of those topics. So, it's low water use, it's water reuse.
We're blessed in a lot of the areas we're working here is central and northern California, at lower elevations, where we can actually, realistically get to net zero energy, even on projects where we're financially fairly tight. So, I really, really want to get apartment buildings done that are passive house you know. Obviously it's happened a lot in some regions of the country, but not that much in California yet and multi-family. And then we're using modular construction a lot, which has side effects on the topics you mentioned, in terms of being a little more efficient with materials, but also just helps us with cost. Then, working on making that a system that can be greener, you know, in general.
So, you know, I think the wood, we're very interested in mass timber for taller buildings. Also, it still has a ways to go in our seismic zones where we're working and stuff, but we're very interested in that so that we can do more than five stories of wood frame, which is just way more sustainable than the concrete and steel. So, I would be happy to talk more about all of those topics.
We're helping get updates to the plumbing code passed. You know, we end up in this work, and some of my favorite parts of this work is like, yes, we have so much work just to develop, permit, oversee construction, finance of these apartment buildings. But we love spending some of our time on policy and advocacy because that really helps move the needle as well and opens up possibilities for us. So, we've gotten to draft a state law that got passed on churches sharing their parking with residences. It's their little niche, but it was almost impossible to make happen under local city rules across California, and so we fixed that problem. But also get involved in the environmental side as well.
I was one of a number of people who helped start the Alliance for Climate and Housing Solutions in California, where a lot of the major environmental organizations are starting to cooperate with the pro-housing advocacy organizations so that we're doing less sprawl and more infill housing and making that more feasible and protecting more land. So, just land use policy that's better, but we also look at all these things that affect costs, that affect impacts of housing. So, there's a few of my favorite topics, but it's just, yeah, every single project, we do an analysis on it and say, "How can we stretch it further, and how can we learn from what's working out there?"
Kevin Bayuk 25:56
I love it. Yeah, that's the right attitude.
-Sibley, Walking the Talk
Sibley Simon 25:58
I will say, you started with asking about me, I'll just say, I live off the grid. I live in a very experimental version of that that we're not allowed to fully build for everybody else. But I live off the grid with composting toilets and commute by bike every day. And I'm always messing around with how, you know, we can push the envelope on sustainability in our lifestyle. Yeah, absolutely.
-Yes In My Back Yard (YIMBY)
I mean and as far as speaking to the listeners, I encourage everybody you know, however, with a light touch or heavy touch, to get involved with a YIMBY organization in your area. So, there's a national network from YIMBY action, for example, chapters of YIMBY organizations across the country. Because those issues.
Kevin Bayuk 26:22
Thanks for sharing that. Never be afraid to share our Next Economy Now about your personal life design and the commitments that you're making to adapting your lifestyle to a live full future. And you know, and there are, there's a lot of interest from Next Economy Now listeners about kind of that pushing and stretching and I suppose there might be a variety of rabbit holes that we might go down, and we don't have to pursue them to their end. But if you could wave a magic wand thinking about zoning, thinking about different policy initiatives that are either environmental or related to housing or even something like compost toilets, like you mentioned, there's ordinances and policies that are inchoate and nascent, but if you could wave your policy magic wand, what would be some of the things that you would love to see happen, or that the Next Economy Now listeners could start getting behind. I'm sure there's 1000 of them, so you could just pick which ones are top of mind or alive in you.
One caveat--I'd be remiss if I didn't for those discerning listeners, is watch out for YIMBY orientation that is, you mentioned the 18% IRR market rate return, project by project, build baby build, but only for the high-end of the market, which won't resolve the issues as inadequate. That's part of the New Way Homes. So you've recognized the inadequacy of that. There is, and you probably know this as well, but within the YIMBY movement, if you will, a faction that is advancing housing supply, but is somehow narrowly defining it in the ways that are conforming with business-as-usual norms, in terms of investment expectations. So, just making sure if anybody is going into that YIMBY movement, making sure they're greeting it with a whole systems perspective.
Sibley Simon 28:36
Yeah, and one of the messy things about grassroots movements is if you have chapters across the country that are really their own little group, it's just people, right? You're going to get every wacky perspective and or lack of perspective. So, yes, you're absolutely right. So, if local groups are not the right fit for you, you know, just other things.
-3 Separate Housing Crises
But you're absolutely right that I actually want to take that moment, since you brought that up, to say what I think is really important and talk about all the time is that there are three separate housing crises in our country and in places where things are too expensive. But really it's one of them is that just total supply crisis.
There's not enough housing, and things in California is missing 2 million units of housing to have a reasonable housing market. Even just the housing per capita that the rest of the United States has, if we were to equal that level, we'd have 2 million more homes. So, there is a big supply problem.
But separate from that, everywhere, even that has enough supply, has folks who can't afford any safe housing. That's a social safety net problem. If we had enough supply such that a lot of folks who have jobs could afford safe housing, you know, we still need to do more--that is the more financially efficient thing to do in our country, as well as the moral thing to do to help deal with homelessness, deal with mental health, you know, etc. So, there's a social safety net problem.
Then absolutely, completely separate from those two issues is a huge racial equity problem, and that is housing has been a topic of racial discrimination greater than most other topics. So, you know, we have not gotten over the redlining. There are even systems in place today, like how property tax is assessed in many places where low income neighborhoods and neighborhoods of color, even independently of that, are assessed higher property taxes relative to their value than others. I mean, you could just go on and on. So, we have racial equity problems in housing in particular, and those are three separate things.
So, I judge every solution by is it not only advancing at least one of those solutions to one of those problems but is it also not making the others worse, right? So, you can add supply and displace through gentrification, you know, you can all those things. So, I just think any conversation about housing, I think, needs to lay that out. So, yeah, going back to waving the magic wand, you know, it's still the case that the vast majority of our residential land in the United States is single-family home only. That's the only residence that's allowed to be on that land is single family homes. Now, some places, some states, are starting to add, oh, a little backyard unit, that kind of thing.
-Single Family Zoning - A Racist Past
But you know that policy of single-family home only, it was invented in Berkeley, California, specifically to keep people who are Black and Asian out of certain neighborhoods when it became illegal to do so explicitly. And it spread really rapidly, and many times for that reason, sometimes for other reasons. And then it became an aesthetic thing that people accepted. We're the developed nation in the world that separates people, where people live by class, more than any other developed country. Really the mechanism for doing that is that number one mechanism for doing that is that policy of single-family home zoning being the vast majority of our land that allows residential use. So, we absolutely need to change that, and we need to do it intelligently. So, do it not in a sprawl, car-centered way, right?
If our most outlying areas that are single-family homes only were the ones that now got to have small apartment buildings mixed in, you know, we would just exacerbate the long commute problem and all that stuff. But we need to solve that. We need to allow, like some of our neighborhoods have, because they were built before the 50s and 60s, when these policies all went into place, and are still lovely, lovely neighborhoods. The way many countries around the world do it, where many neighborhoods have a mix. They have single-family homes. They have duplexes, triplexes. They have a little two or three-story apartment building, and then more single-family homes all mixed in. So that is the thing I would just like to take care of that problem and have a certain amount of density that's up to that that's allowed in infill locations that are not way outlying from where jobs are.
-Transportation is Key
So that's one, and the other is transportation. I say I'm a housing developer because I want people to have affordable housing. Then I spend just as much of my time on transportation. Which transportation is wonderful, but most of my transportation time is on, like, parking and things like that. I just quoted that thing of like oh we need 2 million more homes in California. But if we built all those with the same transportation expectations, you know, everywhere would have gridlock. We can't afford from a climate change point of view, let alone infrastructure cost point of view, to be as car-centric in our development as we were in the 20th century. It's just absolutely the way it is. It doesn't matter if we're going to electric cars. You still can't meet our climate goals if we have the same per capita vehicle miles traveled with electric cars.
So, we got to build all this incremental--doesn't mean we can't let people live where they live now and use cars, you know, fine--but we got to build our incremental new housing that we need to speed up and build more of it in the walkable places, bikeable places, around public transit, you know, etc. There's such a hunger for that. It's wonderful to work on something. I don't have to convince anyone that they want that. Of course, there's people who that's not where they want to live. Totally fine. But there's so many more people who want to live in that situation than there is developed today. So, the demand is there.
So, to answer your question, you know part of that is the mix in lower-density areas, like I talked about, but part of it is not having parking requirements for development, and getting the financing industry to be willing to loan to projects that are developing apartment buildings and condo buildings in neighborhoods without parking, where there are very walkable, and there's public transit and stuff. There's so much of the funding system that's like, "No, you gotta have one and a half cars per apartment, or we don't loan to it."
So, that would be my number two thing is, you know, and there's lots outside of the housing, outside of the zoning, where it's just like, we need to keep doing complete streets. We need to keep adding multi-modal public transportation. All those things. We need to have vehicles that are between today's e-bikes and today's, you know, 3000-pound electric cars. We need to have a range of options that are right for people in different situations. More shared vehicles. Different things. So those would be my top two areas.
Kevin Bayuk 35:35
So, my recap, make sure I got it. So, the zoning--great irony for listeners who might wonder if they've been on Next Economy Now, one organization we've worked with at LIFT economy, Opticos Design, out of Berkeley, California, is one of the major proponents, they wrote the book on missing-middle housing and form-based codes and kind of working with municipalities in different jurisdictions to change zoning to allow for multiple forms of housing. They have been some of the people I've learned the most about the obscenity of single-family home zoning in terms of as a racialized front to an equitable society. But they happen to be out of Berkeley, California.
That zoning work is really critical, and I hear you on that, and then the transportation, both the finance infrastructure that recognizes the need for a housing that doesn't necessarily have parking quotas attached to it, that housing that is oriented around a transit or multi-modal transit orientation, whether that's e-bikes, bikes, mass transit and more so in this kind of infill, make sure the finance there. And then there's the policies and municipal investment, either by capital or by policy, to support equitable transportation, so that we can both have beautiful, livable housing and be able to affordable and to be able to get around to where we need to go.
-Impact of Climate on Housing Need
A few more questions. I do want to come back to this, I like how you said that there's multiple issues in housing. It's not one housing crisis. There's a crisis or a set of intersecting factors, and that any solution or any project can be evaluated on does it exacerbate any of the other factors? I will support the observation that there's probably a need for more supply in housing. I do think if we look at the existing housing stock in terms of either vacancies or short-term rentals, the total aggregate number we can argue over but I'm not going to argue that there needs to be more housing, especially because of our climate chaotic future.
You know, California has lost over 36,000 housing units over just the last four years from catastrophic wildfires, and that's going to only continue every year for the rest of our lives. As sea level rises come around, say, coastal California and the various bays. I think there's 37 sewage treatment facilities because of gravity that are just within a foot and a half a sea level rise just around San Francisco Bay, with the estimated total cost of migration is billions and billions of dollars. There's going to be a strategic retreat from the coast and towards the poles over the next century. So, whatever housing shortage we have today is only going to get worse. We're going to need to actually rebuild entire cities and settlements on if you take a century view or longer.
-Other Models & Co-Housing
So, we need to get good at making resilient, transit-oriented housing settlements that are equitable, accessible to everyone, permanently affordable. So, we're on a long journey, even though there's pressing problems today that need to be addressed.
Curious if that hunger that you've said of people who want to live and there's a lot of preference--some people like the maybe the sprawl suburban archetype, that might be true. We definitely sense a latent desire for community. There's an epidemic of loneliness that is associated with that suburban kind of land use and has this idea of housing. In the United States, the last I checked, and that may have changed, there's something like 400 co-housing settlements. This idea of like some shared assets, maybe a shared kitchen space, but also or even shared assets, like shared cars or commonly stewarded areas within kind of a settlement, but also autonomy. Maybe each unit has its own or units have their own kitchen facilities and other things as well, so that you can have autonomy if you need it, but community in a frictionless way. Denmark is loaded with, you know, co-housing units. But in the United States, there's just a gap in the collective imagination, I think. And maybe it is zoning. I'm curious if that's ever come up from any of the constituencies that you work with, or the people that you serve.
Sibley Simon 35:45
Oh, 100%. There is some of that around here in Santa Cruz. In fact, you know, I'm here at our offices, and across the street is a senior co-housing building that's maybe about 15 years old, and it's fantastic. Condos and community space and frequent potlucks. I've been a guest speaker there a couple times. There are others in Santa Cruz. There are other family-oriented, other co-housing, little mini villages. The property I live on, there's seven units with no boundaries between the units, and we all share chickens and some things like that. So, it's around here, but it's not nearly as much of it as, again, that there is demand for. I've had so many people come over the last 10 years and be like, "We had a few families who want to live together?"
We have a project now with a church here in Santa Cruz, where a part of the units we've designed is we call it co-living, because they're rental, they're not ownership units. But we can rent them by the bedroom, and it's a much more intentional and a little differently designed version of a group house, right? Which I spent, I don't know, at least eight years living in group houses at one point my life. Met my wife there and we wanted a continued sense of community as we moved on with our lives.
So, in that project, we're going to have little pods where it's like, there's units that has an apartment that has four to five bedrooms, but really outside of that unit, but private from the rest of the building, you have three of those units that are share a really big dining room, kitchen and living room. So, you'll end up having a little community of 12 to 15 people, and they'll help select each other coming in. Yes, a lot of them are students and young professionals, but there'd also be couples and things in them too.
So, that's just a first step. It's just one design, but we're trying to incorporate that, and we've thought about more ambitious versions of that in different configurations as well. Certainly, with the extraordinary cost of construction now, and we're trying to do extremely high-quality buildings with low environmental impact, all those things, you also have a financial incentive as trying to figure out these projects. How do you have more amenity space and less private space to make it really livable, really fun. People love being there, but not so expensive, because you're duplicating space for all these purposes. You know, maybe there's a co working space in the building, rather than a small office in every apartment unit, you know, things like that. So, it's definitely part of our thinking, and it hopefully will keep evolving.
Kevin Bayuk 41:51
Wonderful. Well, thanks Sibley, for sharing kind of the vision and the work you're doing with New Way Homes. Some Next Economy Now listeners will be glad to hear that you're thinking about all these various factors, and yet, not just like in the abstract, in science fiction, thinking about them. You're taking action. You're developing projects. And you know that's challenging work to make something real, to serve what are truly pressing needs, while keeping in mind all the things that you want to have possible, and I wish I could grant you all the magic wands. We're fresh out.
But as a movement, the Next Economy movement is working to change all those conditions so that all the amazing things that could be in our settlement patterns and provide for an equitable, livable future for humanity are possible. They're very challenging. They're fraught right now in the context of the business-as-usual economic system. So much appreciation to you for doing something and while doing it, keeping your eyes open and scanning for all the other pieces that are critical.
-EquityVest Platform
One thing I'll add just in the kind of you mentioned in the impact investing piece as a fund that enables, you've mentioned a crowd for EquityVest, was it the platform?
Sibley Simon 43:55
Yes. If anybody comes to newwayhomes.org they'll find it.
-Conclusion
Kevin Bayuk 44:01
That's an intriguing thing that we do hear a lot at Next Economy Now, where people are talking about, what can I do with my self-directed 401k, or my personal savings in terms of investments that feel more in alignment with my values? My understanding of EquityVest, and again, you could get all the information and the details from the New Way Homes' website. But in this equity crowdfunding world, there are these opportunities, and New Way Homes would be one of those for everybody to look into if you're curious.Anything, Sibley, you want to add kind of close-out message, or anything else that we should have said in this interview?
Sibley Simon 44:38
Thank you so much, not just for this opportunity, but for sharing all these kinds of messages. Because I'm a huge fan and believer that none of us know what the economy should be, but we know that there are improvements to our capitalist system that need to be made, right? So, I love that there are podcasts and things like this where we feel like we're not alone in that opinion, and maybe can be inspired by what other people are actually doing. So I'm a big fan of also, as you just said, you know, putting your money where your values are, and finding other things out there to invest in, or products to buy, you know, instead of alternatives, so that we can push the innovation and achieve a new economy. So, thank you. I'm thrilled to be a part of it.
Ame Sanders 45:27
So, wasn't that a powerful and inspiring interview? Thanks to Sibley Simon. Our world needs more of the kind of community building that you're doing. Also, thanks again to the folks at Next Economy Now for allowing me to share their wonderful episode. If you're interested in ways to build a more inclusive and equitable economy, one that works for everyone, check out some of their other episodes at the Next Economy Now podcast and learn more about their work at lifteconomy.com. As usual, I'll have links and more information in the show notes. This has been the State of Inclusion podcast. If you enjoyed this episode, the best compliment for our work is your willingness to share the podcast or discuss these ideas with others. If you'd like to hear more about the practice of building an inclusive and equitable community, head over to theinclusivecommunity.com and sign up for our newsletter. Also, feel free to leave us a review or reach out. We'd love to hear from you. Thanks so much for listening and join us again next time you
CONTRIBUTORS
Guest: Sibley Simon Interview with Host Kevin Bayuk
Host: Ame Sanders
Social Media and Marketing Coordinator: Kayla Nelson
Podcast Coordinator: Emma Winiski
Sound: FAROUT Media