This MLK Day, will you join me in (re)prioritizing "People over Profits"?
As featured in Inman News.
Do you know the pivotal moment that has allowed anyone on U.S. soil to imagine their dream home?
Hint: It has to do with today’s federal holiday. For a quick primer, learn more in this 1-minute video lesson: click here
As our nation recognizes today the life and legacy of the Rev. Dr. Martin Luther King Jr., and for those of us who are setting (and re-visiting) our intentions for 2024, I want to challenge us to be the walking billboards of how Dr. King's legacy is being lived out.
How?
Shedding the R.E. Industry Stigma of "Profits OVER People" with Bestselling Authors Richard and Leah Rothstein
Did you hear about the comedian and actor Mike Epps buying the block in the neighborhood where his family was once evicted?
There was quite the Twitter/X conversation on Epp’s inspiring journey while it was trending over the holidays, ending 2023’s tumultuous real estate climate on a high and hopeful note. This is a refreshing, sensical celebrity trend (see this and this as examples) that ideally will gain more traction.
But here’s the thing: U.S. homeownership history (recent and bygone) has shown us that the simultaneous uplift of people and profits is not an automatic outcome. There must be “Just Action,” in the words of Richard and Leah Rothstein, to ensure profits do not come at the expense of people.
I have never doubted that some – dare I say many – real estate pros (from real estate investors to attorneys to mortgage brokers to sales agents) want to be beacons of housing hope while making a living (while others may not). In other words, there are those of us who celebrate people AND profits – they are not mutually exclusive to us. We celebrate the flourishing of “haven-esque” homes for everyone in our communities, including (not exclusive to or absent of) ourselves.
The adage "people don't care how much you know until they know how much you care" is deafening in our industry as copycat lawsuits continue to crop up. Thus, showcasing a more nuanced stance of "profits and people" that reinvests in legacy communities is essential to one's personal career – as well as community – improvement and distinction (as opposed to extinction).
How can we, who make our “bread and butter” in the real estate industry, ensure people, particularly legacy residents, are not left out of the real estate equation?
To answer this question, here is Richard and Leah Rothstein’s informative hot take:
This is such an important question, Dr. Lee, and we devote a lot of our book, Just Action, to answering it. The segregation of African American families into communities that were then deprived of resources resulted from decades of unconstitutional government policy. To right that wrong and address the consequences of those policies, we must increase investment in those communities. But we know that when that occurs, often gentrification follows, putting ‘profits before people’ as long-time residents of those neighborhoods are priced out by incoming tenants and homebuyers willing to pay a lot more to live there.
The efforts by Mike Epps and other celebrities to whom you refer are commendable. They are investing in their neighborhoods while ensuring that their projects help the legacy residents of those areas, rather than force them out. Others should follow their examples. But we can’t rely only on well-meaning celebrities with deep pockets to do this work. There is a lot that we, as residents of our communities, can do to advance these goals as well.
For example, we can advocate any number of policies and programs that can prevent some of the displacement that results when an area gentrifies.
Tenant Advocacy
We can pass local ordinances to protect renters from rapidly increasing housing costs by capping how much rents can rise each year. We can also pass just cause eviction rules, to ensure that tenants can only be evicted for good reason, such as failure to pay rent or massive property damage. This can protect legacy residents from being forced out by landlords who see an opportunity to get higher-paying households in their units. We can also start right-to-counsel programs to provide those facing evictions with free legal representation. There are communities all across the country that have implemented one or all of these measures and more should do so. Each of these policies can help ensure that long-time residents of African American communities can remain in their homes and benefit from increased investment.
Land Trusts
Another strategy that can help prevent displacement and create homeownership opportunities is starting or supporting a land trust. Land trusts are community-led nonprofit organizations that create permanently affordable homeownership and rental opportunities in areas with rapidly rising housing costs. They often start by acquiring vacant or unused land, sometimes through land donations by local governments. In neighborhoods that are beginning to gentrify, there are often many vacant properties that can be used this way. The land trust then fixes-up the homes and sells or rents them at affordable rates. For sales, the land trust keeps ownership of the land and sells only the houses. It then restricts future re-sale prices so that the homes will always be attainable for lower and moderate income households. Over 300 communities around the country have a land trust. Residents of those communities can advocate that their local government donate vacant land and support the work of their local trust. Those in areas that don’t yet have a land trust can support forming one.
Down Payment Grants
One last example, and there are many more in Just Action of how we can put people over profits, is provision of down payment assistance to long-time residents of gentrifying communities to ensure they can afford to buy homes in their neighborhoods, especially as those homes become more expensive. As a result of the policies that segregated these areas and then divested resources from them, residents often lack the intergenerational wealth or access to capital they need to be able to purchase a house. With the help of a down payment assistance program, many can qualify for a mortgage and become a homeowner. They then can remain in their neighborhood and benefit from the increased investment that gentrification can bring. Down payment assistance can take the form of a loan or a grant, can come from public sources like cities or counties, or from private entities such as banks or nonprofit organizations. If every real estate agent donated a small fraction of their commissions to these types of programs, we could take steps that narrow the black-white homeownership gap.
As you can see, there are so many actions we can take to minimize displacement when a previously under-invested area starts to see an influx of resources. We need the visionary actions of those like Mike Epps, and we need the methodical and incremental efforts of residents working together to take just action and change local policy. All are necessary. We just need to get started.
Have you ever needed the “Cliff Notes” version of fair housing? Well, move over Spark Notes!
The Starting Point: How to Be a Fair Housing DECODER Guide https://books.bookfunnel.com/learnwithdrlee
It is available to download for a limited time at no fee. Score!
This condensed workbook (based on the nationally acclaimed workshop) offers Dr. Lee's novel concept of being a Fair Housing DECODER© who skillfully and proactively advocates --not alienates-- for equitable access and opportunity in real estate for EVERYONE.
“Interesting approach on the topic of fair housing that I have not seen offered to Realtors.” --Maria, Broker/Owner, REALTOR®
“I have the Realtor GRI designation and they should make this part of that designation. This is THAT good. THANKS, Dr. Lee!” --Michael, Broker/Owner, REALTOR®
Hurry, download (and share with others) today while complimentary supplies last!
Sound off - I would love to hear from you! Give me a shout on Instagram and YouTube. Or, get your "training on" with these on-demand classes. Here's to your success! #LearnWithDrLee
