Happy Thursday —
Here are 3 things from others, 2 things from me, and 1 picture related to incremental real estate development and my projects at Village Ventures.
Enjoy!
🎥 👀 —
New TikTok video @ 501 Main as we get further into demo.
👉 THREE THINGS FROM OTHERS
I. Reimagining Affordable Housing
In 2019, Oregon became the first state to ban single-family zoning.
This means that duplexes, triplexes, fourplexes, and “cottage clusters” are now allowed on parcels that were previously reserved for single-family houses. Though only in cities with more than 25,000 people.
Two years later, C Street Co-op—a 0.1 acre development of 6 one-bedroom suites across a main house and an accessory dwelling unit (ADU)—opened its doors.
C Street Co-op combines a limited equity housing co-operative and a community land trust (CLT) to offer permanently affordable housing at a fraction of the subsidy required for traditional “capital A” Affordable housing (i.e. relies on Low Income Housing Tax Credits). Ownership of the co-op is split amongst the homeowners living on the property.
The developer—Square Villages—is transparent with their model and hopes to see it replicated elsewhere. They even created a dedicated website to guide other communities through the process.
Here’s how they did it.
First, a CLT is established/identified to take ownership of the land (I profiled a CLT project last week and gave an rudimentary overview of how they operate). Land acquisition is made possible by donation or grant.
Using traditional funding sources (debt and equity), a partner developer completes the design and build. A housing co-operative is then formed and shares are sold to future homeowners. The capital raised through selling shares is used to pay off development costs (construction debt, developer fees, investor equity, etc).
Once all the shares have been sold, members of the co-op own and manage the housing and improvements on the land. A modest recurring fee is paid to the CLT by the co-op—the co-op effectively leases the land from the CLT in perpetuity in exchange for guaranteed affordability of housing shares.
When a co-op homeowner wants to sell, they can list their unit on the open market alongside traditional homeowners. And, although there are caps on how much the co-op unit can be sold for (hence, permanent affordability), homeowners are allowed to earn a modest return on their initial investment.
The project financials speak the loudest though. Take a look at the numbers:
$100,000 per unit is certainly affordable. And only 20% of the project was subsidized via grants.
That said, one hurdle I foresee is finding investors willing to accept 2-6% IRR on a construction loan. This requires a level of social impact investment that could prove difficult to obtain without the right developer credentials or community support.
Regardless, this is a model that deserves more attention.
For more, take a look through this deep dive on the C Street Co-op project.
I’d also highly recommend checking out the Village Model website that the project developer created. It’s a great resource to deep dive on CLTs, co-ops, and reimagined affordable housing.
II. The Project for Lean Urbanism
The Project for Lean Urbanism provides free tools and low-cost strategies to promote local business and small-scale real estate development.
The nonprofit is well known for helping create Pink Zones—or areas where red tape is lightened, barriers are lowered, and it’s easier, faster, and cheaper to tackle small projects. Pink Zones are a tool for municipalities to test new policies and ideas in situ before rolling out at a larger scale.
Taking another step forward, The Project For Lean Urbanism recently released its free Lean Urbanism Toolkit.
In addition, they’ve assembled a wealth of actionable guides and use cases from other sources:
Los Angeles’ pre-approved ADU plans and streamlined permitting process
Portland’s design guide for medium density infill development
Minneapolis’ small-developer training program
Every town interested in promoting small-scale development should have the Lean Urbanism Toolkit in their back pocket. Both as a source of inspiration for new programs and a reference for smart policy and planning.
III. An Inspiring Story Of Downtown Revitalization
Less than a decade ago, Water Valley, Mississippi was a forgotten small town with 18 empty storefronts and plenty of decaying homes for sale.
In the last seven years, the town of 3,500 residents has completely transformed as a result of community action—88 new downtown jobs, major renovations of 29 buildings, addition of quality housing, and 26 new businesses including four new restaurants, three art galleries, one grocery store, one doctor’s office, and one brewery.
Here’s the inspiring story of how the residents of Water Valley turned their town around.
👉 TWO THINGS FROM ME
I. Year 1 @ Brick + Mortar
I just hit one year writing Brick + Mortar.
That’s hard to believe. Not for any romanticized reason. More so because my background in chemical engineering, physics, and business doesn’t often lend a hand to any sort of sustained journalism.
I posted my first article about ADUs and their rise to prominence. While I still have yet to build one, I have nevertheless become a more outspoken advocate for ADUs as time goes on.
Since that first article, though:
450+ folks like you have signed up for my weekly(ish) newsletter
I’ve written and shared 34 pieces of content (over 40,000 words!)
The blog has accumulated nearly 30,000 views
One of my articles was published in Strong Towns (Lessons From Mount Morris)—a publication I deeply respect and admire
Brick + Mortar has morphed since Day 1. Natural growth, perhaps. And, as it’s grown, I’ve become more in tune with why I write.
I can boil it down to three reasons:
Sharing. There is a massive void in small-scale developers as a profession. I think this is often due to lack of knowledge, capital, and/or interest. For what it’s worth, I want to help bridge that knowledge gap by sharing my journey after jumping head first into the industry last year. If I can make a run at it without prior experience, I hope others will feel confident knowing they can, too.
Networking. Writing has proven to be a fantastic way to meet people. From new investors, to accomplished developers, to other aspiring developers, to community members, to entrepreneurs. I’ve met over 25 inspiring people this past year through the blog, many of whom I keep in touch with on a regular basis.
Learning. Writing about a topic forces a level of understanding that I find I miss when just reading the headlines. This process of concerted research and digestion has opened my eyes to other (often overlooked) aspects of real estate development beyond return on investment, such as social equity, affordability, and downtown revitalization. These learnings continue to inform how I operate my business.
Thanks to all of you that give me a platform and lend an ear to my weekly antics.
II. Year 1 @ Village Ventures
It also happens to be one year since I formally left my job in consulting to start Village Ventures.
I came across this quote that resonates as I reflect on the past year:
“Most people overestimate what they can do in one year and underestimate what they can do in ten years.” — Bill Gates
Real estate development can be painfully slow, even at a smaller scale and despite best efforts to move quickly. This is particularly true when you’re in the driver’s seat and navigating the process for the first time.
Take 501 Main as an example—I spent over a year planning, entitling, and securing funding for my first ground-up development after initially anticipating six months. Granted, I’m sure I could achieve that now after already bludgeoning my way through the process. But there’s always a tangible cost for education.
Not that I’m disappointed with how the year went, though. In fact, I’m extremely proud of what I accomplished.
Here’s a taste of what my Year 1 looked like:
Formed three partnerships and purchased three properties:
A 5-unit turnkey rental property
A 3-unit rental property in need of major TLC—this building will be turned into seven rental units
A vacant piece of land on Main St
Worked with four partners and community to create a killer commercial development concept that could help accelerate revitalization and growth along Main St—this is the Chapman’s Place proposal I shared a few months ago
Learned how to craft compelling grant applications—a skill I didn’t know existed up until a year ago. I was awarded $80,000 for the redevelopment of 501 Main and we recently applied for $800,000 to support the development of Chapman’s Place (still pending decision). Both are projects that would not be feasible without grant funding
Successfully navigated the entitlement, planning, and financing process for my first ground-up development (501 Main). If you’ve been following progress, you’re familiar with the ups and downs along the way. And many painful lessons learned (mostly due to errors on my part) that will make for a good blog post soon
Underwrote, developed concepts, drafted scopes of work, made offers, and conducted due diligence on 15+ projects that never made it to the light of day. I now treat these as a cost of business, where each one is a learning opportunity rather than a waste of time. Or else I would have lost my sanity by this point. To put it in perspective:
Looking ahead at the next 12 months, here’s what I’m focused on:
First and foremost, knocking my two active projects out of the park (501 Main and 61 N Pleasant)
Tackling more projects that align with small-scale, walkable, dense development in Fairlee and Bradford village centers
Exploring and implementing new housing models beyond the traditional market rate rental play, such as the co-op example above or ADUs
Expanding Brick + Mortar’s audience and producing more educational content. Ideally, that means hitting 1,000 subscribers, producing at least 40 more pieces of writing, and releasing regular short videos of my ongoing projects
Growing my network of others in the space—developers, investors, tradesmen (and women), business owners, potential partners, and community members. Anyone with a passion for driving smart growth. If you haven’t yet, please reach out!
Year 2 here we come!
👉 ONE PICTURE
I.
Referenced at the top of the post, C Street Co-op established a scalable model for developing resident-owned, infill housing on typical residential lots, permanently affordable to people with low-incomes.
📍 Eugene, OR
Source: SquareOne Villages
That’s it for today. Thanks for reading. If you haven’t yet, go ahead and subscribe here:
About me: I’m Jonah Richard, a small-scale real estate developer in Vermont. With my company, Village Ventures, I’m currently getting my hands dirty developing Missing Middle housing while trying to pick apart and replicate what makes other communities thrive.
Connect with me on LinkedIn and follow my projects on TikTok.