Developers: Diversity Helps Build Communities

CHARLOTTE, N.C. – Egbert Perry believes there is a difference between commercial real estate and community development. Perry, chairman and co-founder of Atlanta-based Integral Group, elaborated on his philosophy last week in his keynote at Integral's "The Future Scape: An Equity in Real Estate Development Symposium" at Queens University of Charlotte. Integral Group, founded in 1993, the Black-owned business earns annual revenues of $200 million. The company is known for innovating mixed-use and mixed-income communities as a holistic approach to neighborhood development.

"Out of the 112,000 real estate firms in the U.S.," Perry said, "less than 1% are Black owned. That is a staggering number. And not a single could be viewed as the level of stature with revenues of over $50 million or more."

Perry encouraged attendees to think about the systemic nature in which wealth in the United States is created and preserved.

"Wealth begets wealth," he said. "If you were locked out of the game in the first instance, the machine keeps going. People in this room know that we have to secure a seat at the table. We have to change the game to get on the playing field in some meaningful way."

The United States is facing a housing deficit of 4.5 million units, according to the real estate marketplace company Zillow. Last month, the U.S. Census Bureau reported that 4.6 million Black households spent more than 30% of their income on housing in 2023. Perry said housing prices have increased 47% since 2020.

"We actually are at a pivotal time in this country," Perry added. Vice President and Democratic presidential candidate Kamala Harris promised to build 3 million new homes if elected, and former President Donald Trump announced various incentives to lower inflation. "Whichever one wins," Perry said, "I'm certain that housing will be on the agenda."

Perry described migrating to the U.S. from the Caribbean nation of Antigua, which is more ethnically and racially diverse than America, giving context to a metaphor he delivered about "heavens and hells," where heaven is reserved for people of a higher economic class and the hells are reserved for people of a darker complexion and the impoverished.

"Two generations ago, everybody in this room that's Black, I know you were poor," Perry said. "As things evolved, industries were created and wealth was created, and you were never supposed to be involved. You did not have market permission to be at the table. When you look through the lens of race and class, it changes every conversation."

Perry said that there isn't an affordable housing crisis, but "a crisis of not having housing affordability in communities where people live." To change it, "you have to decide if you're in the commercial real-estate business or if you're in the community development business," he said. "If you're in community development, you're trying to transform community."

The symposium also gathered panelists from local and national real estate and private equity firms to discuss the difficult issue of community development from different perspectives.

Panelists said that listening to the communities they serve is imperative. However, bringing multiple partners like cities, counties, states and the federal government to the conversation can present challenges, especially when it comes to environment, building and zoning code regulations as well as financing projects.

"Sometimes developers can be condescending," said Jordan Jones, senior development executive of Integral Group.

Rusty Mills, deputy director at LISC Charlotte, said building trust with communities is important for a project's success. Justin Kearnan, managing director of City Collective, says that there are tradeoffs.

"These are the most complex, complicated places to develop in," he said. "You want to be a trusted partner, but there are inherent tradeoffs and not everybody can have everything."

Christina Szczepanski, president of the Reinvestment Fund, a community development financial institution, said the flexibility that organizations like hers can lead to innovation.

"Because CDFIs are not regulated by banks, the flexibility we have allows us to support more projects. It's not just thinking about projects, but impactful thinking about who we're serving and who we're building wealth for," she said, adding CDFIs prioritize funding developments with safe housing, childcare, schools and mental health and wellness services. "I don't care about just closing a loan with you. I care about the community impact."

Other panelists set the stage of Egbert Perry's speech by discussing the importance of navigating these spaces as Black people. LaToya Kyle, vice president of the Low Income Investment Fund, another CDFI, explained overhauling and creating more opportunities for Black developers. LIIF had the explicit goal of investing in more people of color to make them wealthier.

LIIF previously didn't have a presence in the region, so Kyle launched the Southeastern regional team. So far, they have lent out $500 million, three quarters of which has gone to people of color, primarily Black developers.

"We wanted to start with what was the hardest," she said. Jeff Lawrence, managing director of Berkadia, and Aaron Hancock, vice president of Artemis Real Estate Partners, also discussed the rarity of Black people in their spaces. "It's important for people who look like us to impact human decisions," Hancock said. Lawrence said he was the only Black man on a team of 35 and didn't want his children to have the same experience when they join the workforce. "My job is to open doors and to leave them open or prop them open so others can come through, too," he said.

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