CEO at Funnel Leasing, bringing renter-centric solutions to the antiquated property management software market.
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This April marks the 53rd anniversary of the Civil Rights Act of 1968 (also known as the Fair Housing Act), which “prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, [and] sex.” Brave individuals fought for something we often take for granted, like the Rev. Dr. Martin Luther King, Jr., whose assassination was a catalyst for the final passage of the act, and Senator Walter Mondale, the future Democratic Party’s presidential nominee who championed fair housing for years.
But perhaps a name you haven’t heard of is Senator Edward Brooke. Ed Brooke, the first African American popularly elected to the U.S. Senate, co-authored the amendment that would prohibit housing discrimination. Senator Brooke worked across the political divide with leaders like Senator Mondale to enact the Fair Housing Act as law.
I’ve recently wondered how these heroes of American history would view the state of “fair housing” today. Studies show that while overt discrimination has dropped over the decades, less obvious forms of discrimination persist. People of color, for instance, are shown significantly fewer, and less appealing, rental properties in blind studies. According to the Urban Institute, Black and Hispanic renters are shown 11.4% and 12.5% fewer rental units, respectively, than white renters. Housing has ramifications in other related aspects of life such as health, education and job security. For example, communities of color often grapple with poverty and subpar schools.
I believe that there are two ideas that a new generation of real estate leaders can pioneer to help build on the fair housing platform that Senator Brooke and others began.
1. Change the business model for good.
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Real estate is a big business, as is my segment of the industry, proptech. And that big business is booming. The stock prices of “blue-chip” multifamily REITs have generally fared phenomenally well through the pandemic. Multifamily software giant RealPage recently set a high watermark in proptech when it sold to Thoma Bravo for $10 billion in December 2020.
And while real estate leaders have made philanthropic donations for years, there is a massive opportunity to do more — much more. Real estate executives can follow the lead of other companies whose entire business model is dedicated to giving back, for example:
• Lemonade Insurance: Excess coverage revenue is donated to a cause specified by the insured party.
• Cotopaxi: 1% of all revenue is donated to grantees including poverty-stricken communities of Latin America.
• Salesforce: Donates 1% of revenue, 1% product and 1% employee time to charity.
In my two decades in the industry, I have found real estate and proptech leaders to be wonderful men and women with big hearts. But what if instead of simply giving the occasional giant check (especially for photo ops), we built a recurring and sustainable business model? A model where every transaction gave back a fraction of the revenue to those in need.
The answer to that question is simple: We could generate millions upon millions of dollars for causes that we as an industry care about, like fair housing, affordable housing, military housing and special needs housing.
I firmly believe that one of the first and most important things we need to do to promote more housing equality is leverage business as a force for good and generate the type of philanthropic capital needed to properly advance this cause.
2. Multifamily leadership needs to look more like the multifamily resident base.
In his 2007 memoir, Senator Brooke wrote: “My fervent expectation is that sooner rather than later, the United States Senate will more closely reflect the rich diversity of this great country.”
This same sentiment rings true in multifamily real estate. Our communities, across all asset classes, are vibrant examples of diversity, the kind of diversity that spurs inclusion as people from all walks of life share experiences. However, our board rooms — including my own, I acknowledge — look nothing like these communities.
I am heartened to see the concerted efforts of both the National Apartment Association and the National Multifamily Housing Council, two of the leading associations in our industry, drive this issue into the conversations of every multifamily owner, manager and supplier. These issues will not be fixed overnight. In fact, it will take generations of effort to address our lack of diversity. But through intentional and humble leadership, we can make steady and significant progress. We must do that by looking outside our network and offering opportunities to those who do not look like us and who have different life experiences.
I cherish the opportunity I’ve been afforded to work every day in the U.S. real estate economy. Getting to play a small role in helping others find their home is a responsibility I take very seriously. It is my hope that through ideas like these we can make greater and greater strides to truly implement fair housing standards and protocols into the American renter process.
Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?