Sweat the Details with Rob Hahn, Take 2

For this episode of the podcast, we are joined again by Rob Hahn. If you’re a regular listener, a couple weeks ago you would have heard an episode where Rob, and Jim and Keith spent probably far too long talking about some of the issues surrounding fair housing, and current market issues. Several topics came up that we promised Rob we would get back to, so today we’re addressing those and more.

Rob Hahn, the Notorious Rob, is a Strategy Consultant in the real estate space who works with some of the largest companies and organizations in it. A lawyer by training, but not in practice, Rob is one of the most well known and outspoken voices in real estate today.

You can listen to this podcast here, and subscribe to the podcast here.

Highlights:


Transcription

Keith:
Welcome to Sweat the Details. This is Keith Davis, I’m here with my partner Jim Duncan from Nest Realty, and we are joined again by Rob Hahn. If you’re a regular listener, a couple weeks ago you would have heard an episode where Rob, and Jim and I spent probably far too long talking about some of the issues surrounding fair housing, and current market issues that are going on. We came up with several topics that we said, we promised Rob we would get him back on the air, and we wanted to do that today.

Keith:
It started with school districting and fair housing, and some of the tweets that have been coming out of Washington as of late. We’re recording this on a Thursday afternoon, and yesterday there was an article that came out in Inman News that I thought we would start with Rob, if that’s good with you.

Rob:
It is.

Keith:
That related to an issue of a neighborhood that had racial covenants placed on it when the subdivision occurred, decades ago. In this article, the blame if I will, is being placed on a bank, a national bank that still exists today, and a real estate firm that still exists today, and the developer who is still in business today. It is calling for reparations to be paid to the Black homeowners that were not allowed to live in that neighborhood, because those homeowners would have had an opportunity, at price appreciation, that they were blocked out from. This is pretty common throughout the US during the middle part of our last century, and just wanted to start with this question of reparations. You’ve read the article, Jim’s read the article, and we’ve all looked at it.

Keith:
Just wanted to give a thought to this is all based on The Color of Law, and Richard Rothstein’s work. In fact, he was instrumental in this one claim that’s now coming up. And wanted to start a conversation on thoughts of reparations to homeowners who never had the opportunity to own a house.

Rob:
First of all guys, great to see you all. Thanks for inviting me back, I actually can’t believe you did. I’m shocked that you want me back, but happy to be.

Rob:
As I was mentioning during the pre-show, okay we’re going to get into the white guilt hour. I suppose in real estate, I’m one of the very few who don’t suffer from that issue, seeing as I’m an Asian immigrant, so I don’t have that problem.

Rob:
All right, but more seriously. Listen, as far as the article goes, first of all, Rothstein has done some great scholarship, he’s the guy that actually wrote The Color of Law. In terms of the idea, it’s like okay, do whatever you want. What he did, that I don’t mind, is he called for a private initiative. It’s not like he said, “We need reparations, and the government should take a bunch of money from these companies.” He didn’t do that. He said, “These companies ought to do that.”

Rob:
Just to clarify for our listeners, anybody that’s going to read this article, it’s not the national brokerage that still in business, they acquired the original brokerage.

Keith:
Right, okay.

Rob:
Same thing with the national bank, they acquired the original racist bank.

Keith:
They’ve acquired the assets, and thus have taken on the guilt of that bank.

Rob:
As far as the developer, there’s a quote right from the guy’s grandson. Listen, this was a different time, I think all of us … well, not me. But, you guys might have grandparents or people in your family who held different views at a different time. I appreciate that he came out and straight up said this was categorically wrong, it’s racist. He admitted it, so good for him from that standpoint.

Rob:
I think the real issue is this. If you read the article, it talks about it. The homes we’re talking about, which is in San Mateo, we’re talking one of the most expensive areas in the world in terms of housing prices. You could set up whatever fund you want, the fact of the matter is, these homes, I think the article said the average price is $1.4 million.

Keith:
Yeah.

Rob:
In the article it mentions these grants that were provided, where the bank is providing $30,000 to families who are low income families. I’m like, 30,000 doesn’t get you anywhere, when the house is 1.4 million. Do you know what I mean?

Keith:
Right.

Rob:
The idea is we need to somehow integrate, somehow do away with the legacy of this racism back in the whatever, when these things were done, ’30s, ’40s, ’50s, whatever it was. 30 grand ain’t going to cut it, right? Just a down payment is going to be $280,000. Are we doing that?

Keith:
Well, but I think Rob, everything that we road in The Color of Law and what we’re talking about … and I’m not suggesting that a $30,000 reparation is going to close the gap here. What we’re talking about is the fact that generations of African-Americans have not had the ability to have financial gains in generational wealth accumulation.

Rob:
Absolutely.

Keith:
That is based on our racial covenants that we put on properties, back decades ago.

Rob:
Absolutely. All I’m suggesting is, and I think this article actually really points to the real difficulty here … Because at the end of it, Rothstein, the author of the original op-ed, as well as the author of The Color of Law, he straight up admits … I’m going to read from the article.

Rob:
“Rothstein points out that in San Mateo, no grants have been provided for home purchases.” And I quote, “It is unlikely that the program could ever be adequate to give Black families access to neighborhoods that the American Trust Company helped create was whites only. Facing up to this is what addressing the full spectrum housing issues involves.”

Rob:
He didn’t mention it, but the reason is because, again, these homes are 1.4 million. Even if you were to say … Listen, are we talking about cash purchases? Because if I am a low income family, how am I affording a mortgage on this house? What are we talking about? Are we talking about helping wealthy Black families get into these homes? Are they still racist? No, it’s pretty clear. San Mateo is California, it’s the Bay Area. I’d be shocked if they found the type of stuff in San Mateo as Newsday found in Long Island. I’d be shocked. Maybe it happens.

Rob:
Those things we can address, but this idea of we’re going to take care of this financially, I guess, which then brings it back to what we talked about the first time I was on the program. We do have to do something about this inequality. As I mentioned, I personally don’t know that we actually have enormous amounts of systemic racism in this country, except in real estate. I think we still have systemic racism in real estate, which then leads to every other thing we think about as systemic racism. On all the things you just mentioned, like generations of wealth gain that were just not available, the culture of these marginalized areas, and the economic opportunities that are available in those areas, I get all of that. The fact is, we’re still maintaining that.

Rob:
We went into this in huge depth last time, but the fact is unless we’re willing to tackle zoning and school districts, even these cash reparations, I don’t know how they help. It doesn’t really do anything. I don’t know that we are ready as a country, as a society, to tackle zoning and school districts.

Jim:
Go after that school district thing for a bit. What do you mean by addressing school districts? I think that, from my perspective, it’s one of the top three … NAR’s done study after study, and the top three things that buyers are not willing to negotiate on.

Rob:
Correct.

Jim:
My clients who are young with kids, middle age with kids, old with no kids, they all recognize that school district matters with respect to home valuation and resale.

Keith:
Of course. Let me also interject, though. It’s not just about home value, it’s also about where your child will be in 30 years. The number one factor is where they grew up, it’s the neighborhood that surrounds them, in large part because the school district to which those kids are assigned. That’s the future.

Jim:
[inaudible 00:08:50] so.

Rob:
I’ll start off by saying I haven’t seen that research, the number one factor is where the kids grow up. I’ve always thought the number one factor is whether the kid had two parents in the house. But right after that might be where you grew up, for exactly the reasons you mentioned.

Rob:
Jim, I think that’s exactly the issue. You guys have read my blog post about this, where the school districts are really arbitrary. My brother was forced to transfer from a really great school to a really crappy school in suburban Long Island, because of an arbitrary school district line that placed him 300 feet where one … There’s all of that.

Rob:
From my standpoint, I think it is the school districts are created, originally, and I think you can prove this, to keep Black kids out of white, suburban areas. It’s part of that whole segregation, it’s part of that whole legacy we have as a country. Okay, now we know what. What do we do about that? Same thing with zoning laws, they were created to keep Black people out. What do we do about that?

Rob:
Racial covenants, we’ve already said these are no longer valid. You still have deeds, today, that have these racial covenants in them. But, no court anywhere has ever said, “Oh, that’s valid.” No. They’re like, “This is invalid, this is racist. No, we’re not doing that.” We know that zoning laws were created for the same purpose, to keep Blacks out of white neighborhoods. But, we’re keeping zoning. We know the school districts were created, largely to keep Black kids out of white schools, we’re keeping that. That’s the point at which I have to say okay, why aren’t we getting rid of those?

Rob:
We can get rid of those very easily, Jim. All you have to do is really implement school voucher programs across the country. So a Black family that can’t afford to buy an $800,000 house in a top-rated school district can go buy $150,000 house halfway across town. And as long as they’re willing to arrange for transportation, their kid can go to the school of the $800,000 house. You know and I know that that would be opposed by every single homeowner in the $800,000 house school district. Because what’s the value of this house, if anybody from around the city or wherever can attend that school?

Jim:
I don’t know if you’ve heard the podcast, but the team that did Serial a couple years ago did a podcast-

Keith:
Nice White Family, or Nice White Parents?

Rob:
Yeah, yeah.

Jim:
Nice White Parents. I’ll put that in the show notes, because I am three episodes into that, I think?

Keith:
I just started it, yeah.

Jim:
It is a fascinating and heart-wrenching story about how schools were impacted when good intending families did that. They created opportunity for multi-races to come together in one school, and how that changed the dynamics of the school, and the school system.

Jim:
I don’t know, Rob. I think that the naive, and the empathetic, and the human part of me would like to think that if you were to do that, then everybody would be okay with it. But, I also recognize that humans are horrible sometimes, and very selfish by nature. I think that there would be pushback to that. Where does that shift come from? Does it come from the parents, from the, God forbid, politicians? Is it top down, bottom up? What does that shift look like, to erase districts?

Rob:
I wrote a post about this. I think my theory, at this point, is that this is going to come from technology, and I think it’s going to come from online education. Because of COVID, now we have schools that aren’t open. They are “open,” but they are all virtual, and I think that changes the game. If this becomes the new normal, and your child could take virtual classes, then why is your child limited to take virtual classes from the school half a mile down the road? When he could just as easily take a virtual class from a teacher five miles down the road?

Rob:
At that point, the school district thing, then, really comes down to how we fund the schools. We fund schools through local property taxes right now, in just about everywhere I can think of in the United States. There have been proposals. I remember in Houston there was some proposals to do it in a different way, like maybe a state levy. Do you know what I mean?

Jim:
Right.

Rob:
And allocate funds that way. I’ve got to tell you, all those nice white families went ape shit. They said, “Abso-fucking-lutely not.”

Jim:
Frankly, that is also, though, where you get the next bend, which is you go from school choice to being school voucher. As soon as you go voucher that’s usable in a private school setting, now you have private schools say, “Oh wow, everybody’s got a $10,000 voucher. We can bump it by 10 grand, and keep the exact exclusivity that we always had, and collect an even greater part of our wealth.”

Rob:
Yeah, it’s possible. On the flip side, the nice thing is they don’t have some sort of monopoly. There’s bound to be competitions, different schools are going to offer different things.

Rob:
I’ve been saying this more and more in recent weeks, and I don’t know why it had to do with real estate, but I’ve always said that there’s room for Walmart and for Neiman Marcus. Some parents are going to want the Walmart, some parents are going to want the Neiman Marcus. Let that be their decision. I’m personally for that, I just don’t think it’s going to happen politically. I don’t think it happens top down.

Jim:
No, but I think one thing, Neiman Marcus filed for bankruptcy in May.

Rob:
Well, that’s true. Wrong example.

Keith:
There may not be room for Neiman.

Rob:
Or Mercedes, other people want …

Jim:
I was talking to an administrator at a local [inaudible 00:14:48] school the other day, and she was talking about how, in this world of online, they brought their kids back for 15, 20 minutes recently. Or, whatever, during the shutdown. She and the kids were both struck by the fact that the kids really missed that place. They missed the sense of place. I think that there’s an enormous value in having that shared space and place, for the community. I think that’s not something that you can necessary replicate in the online, COVID world we’re existing in now.

Jim:
I think that you’re seeing the lack of touch, if you will, the lack of belonging, is manifesting itself both in schools, and in, frankly, the professional world. I think that there has to be balance of technology as a filler, but also you need that home place, home base if will.

Rob:
Oh yeah.

Jim:
I don’t know. I think that’s something that there could be a hybrid model.

Rob:
Let me clarify. I’m not suggesting that we should go to a virtual only.

Jim:
Right.

Rob:
I agree with you, place is important. I miss seeing you guys, in person, and having a drink. Here we are, over Zoom. I get that. I was just answering what could change this. I don’t see politics changing it, I just don’t. Therefore, it has to be something outside of politics, and the only thing I could think of this social upheaval and change we’re having right now, and it’s the application of technology to the unique COVID situation. That’s all I’m saying.

Rob:
I could see it coming from bottom up, because at the same time, you’re right. Everything you said is true about place, and the kids miss it. At the same time, we’re starting to see stories about these pods that are popping up in very wealthy neighborhoods. We’re starting to see these things like private neighborhood initiatives, things like that. I’m like, it’s going to happen. There does come a point where middle class families, or even less wealthy families, lower income families, they want the same thing for their kids that the rich people want. I just believe that. I don’t think low income families are somehow like, “Screw the kids.” No, everybody loves their kids. If the Ritchie Riches across town are doing these neighborhood pods, and doing that, “Why can’t we?” The availability of technology makes that possible.

Rob:
That’s why I’m saying I think it ends up being more bottoms up. The issue then, at that point, and there is where the politics are going to come in, is where the way that we do school funding and these local school districts are going to become more and more unsustainable politically, because people are not going to want to pay those taxes, support a small school. It just changes the whole dynamic there, that’s all I’m saying. [crosstalk 00:17:49].

Keith:
You’re bringing up a bigger question of the entire, how do we fund education system in America?

Keith:
Getting back to where you were on the school choice question, there are multiple ways we can impact school choice. Number one, you can do exactly what you suggested which is everybody within a specific municipality can select the school of their choice, and it’s a lottery based on who wants to take their kid to which school. That may be one extreme.

Keith:
But, the other piece is right now, we have done such an extraordinary job over the last 60 years, of zoning wealthy people into one area within a city, and zoning low income, moderate income into another, that people who are doing school districting in really are forced into either cross town busing, or racial zoning because the school is closes to this neighborhood, and that school is closes to that neighborhood. The way to adjust, then is … And Virginia had this proposed and it died off in Committee this year, in the state legislature. Oregon has gone through with it, I believe. California, Jim have they passed it, that you can no longer have single family zoning? I know Oregon did it.

Jim:
No, not yet. Not yet.

Rob:
Minneapolis did it.

Keith:
Minneapolis did it, so some localities have done it.

Rob:
[crosstalk 00:19:08] talked about it.

Keith:
Yeah. But you do that, and immediately it introduces if you wish to have accessory dwelling units on your property, you can add that. It allows for people within the private industry to take it upon themselves to integrate neighborhoods. When I say integration, I’m not speaking just to racial, but socio-economic integration.

Rob:
Which is the more important thing.

Keith:
And with it bring, a lot of times, a racial side, yes.

Rob:
Yeah. There’s a racial element. You go up to Stockton, there’s a giant Filipino community out there, they’re not rich. It’s not just a Black white thing. It’s just socio-economics, period. That’s my point.

Rob:
So the thing that I’m opposed to, and the thing that I do feel like maybe we, as an industry, could struggle with is getting rid of the anti-growth zoning, and the related anti-growth environmental regulations that prevent this from happening.

Rob:
Look, I’m okay with zoning that’s industrial versus residential. Clearly, nobody wants a coal plant next to an apartment complex.

Keith:
Except for the coal executive, yes.

Rob:
Yeah. I’m talking about the zoning that we’re all familiar with, like minimum lot sizes, and no multi-family, and no ADUs, that kind of crap. That’s bullshit, to be honest.

Jim:
Well, it is, and I think it goes to the whole NIMBY conversation. I think that we’ve seen, in every market that we’ve been in across the country, you see this where you have a part of a town that redevelopment comes in to be adjacent to it. The immediate response, broad brush, most often, is from people who live nearby saying, “You can’t do that because it will change the character of our neighborhood.”

Rob:
That’s right.

Jim:
The undertone of that is, often, “We don’t want those kinds of people.” It’s not a Black, white, blue, gray, whatever.

Rob:
It’s a poor rich thing. Yeah.

Jim:
Correct. There was one locally that I remember vividly someone said, in writing, they said, “We don’t want townhouses next to us because we don’t want our kids playing with those kinds of people.”

Rob:
Yeah.

Jim:
In writing, with their name attached to it.

Rob:
That’s my point.

Jim:
But I think the challenge is, and getting super local in every locality, is that when these things come up, we need the YIMBYs, the yes in my backyard, we need the YIMBYs to come out as vocally if not more so, as the NIMBYs. I hate putting the one versus the other, but that’s where we are.

Keith:
Well, we’ll talk just about local stuff. Rob, I know you don’t know Charlottesville City Council, and Albemarle Board of Supervisors, but we have-

Rob:
Oh no, I appreciate [inaudible 00:21:49], I freaking love it, man.

Jim:
I think that dynamic is everywhere. It’s not just city of Charlottesville, or Albemarle County.

Keith:
By the way, Rob, the breakfast joint we took you to last when you came to Charlottesville has shut down during the COVID, which is just such a complete disappointment.

Rob:
Hey man, they’re one of the 60% that’s going to shut down.

Keith:
I know. I know, it’s awful. We loved that place.

Rob:
[inaudible 00:22:11] and Applebee’s everywhere.

Keith:
Here, wee have real estate proffer system that requires that developers pay into a housing fund. Or, they can put socio-economic diversity within the housing offering. They can either do that through guaranteeing certain numbers of houses to low income, they can work with some of our non-profits to do that, but it has to be built into the neighborhood. Or, they can simply just donate $10,000 per house to this housing fund that continues to allow for segregated neighborhoods. That is the choice that many developers have taken over the years.

Rob:
Of course.

Keith:
But, we’ve got one of the largest developments going on right now in the city of Charlottesville that the developers took the exact other tact. They said, “We’re going to place eight lots for Habitat For Humanity into the first phase of construction.” Or, second phase of construction, it was the first that went into the city. I think Jim, tell me if I’m wrong, but it’s probably 50 homes in that second phase, total, 60 homes.

Jim:
Yeah.

Keith:
Eight of them were designated for Habitat For Humanity. They’ve all been built out, they’ve all been sold, the partner families are in. The average new home in that neighborhood is probably 600 to 700,000, home prices have gone up to 1.2 million. Yet, there are eight Habitat homes, and in the next phase there are going to be another batch of Habitats placed. This is an explanation of … By the way, they also do allow accessory dwelling units in the neighborhood, there are several … This is where homeowners can vote with their pocketbook and say, “We want to buy a house in a neighborhood that has diversity. We want to live in a place that has walkability, we want to live in a convenient location.” That shouldn’t be exclusively a wealthy right.

Keith:
I think this is one of the solutions, it’s when the private industry goes with the population and says, “This is something we’re willing to buy into, and we’re willing to invest in.” To me, that seems like a natural extension, that’s where this goes.

Rob:
Yeah. Let me ask you about that, because again, to your point, I don’t know the hyper-local Charlottesville area.

Keith:
Sure.

Rob:
So eight lots out of how many?

Keith:
I think there were 50, probably not even 50.

Jim:
50 or 60.

Keith:
Yeah.

Rob:
All right, 50. Okay. Why couldn’t they, instead of building eight lots, take the land required for those eight lots and build a four story multi-family?

Keith:
The zoning would not allow four story construction in Charlottesville.

Rob:
Bingo. Bingo.

Rob:
In other words, you’re right. The private industry is likely the best solution. But, the fact of the matter is the racist zoning laws prevent that from happening. Because if you really want a diverse neighborhood … Okay, it’s great you have eight Habitat For Humanity, so eight low income families can move into this neighborhood, surrounded by a bunch of millionaires. Which by the way, as having been that kid, who was the poor kid in the neighborhood because my parents were pastors, I ended up living in the parsonage, with zero money and getting my clothes from Goodwill, hanging around a bunch of millionaires’ kids, it sucks. It absolutely blows.

Rob:
So having said that, a way better thing would have been to put up 300 units of low income condos or apartments. But to your point, that’s not allowed. That’s not allowed.

Jim:
No, it’s not allowed. There was another part of the city, about five, or six, or seven years ago, that a developer came, a downtown Charlottesville location. He said, “We want to build 300 small units.”

Keith:
They were micros.

Jim:
Downtown, it would have been perfect. The people in the other apartment buildings nearby were particularly vocal in shutting it down, because it would change the character of an urban, dense, downtown location.

Keith:
Keep in mind, the people in these other apartments had only been living there three years themselves. They were just moved there as well.

Jim:
Now, it’s going to be an office building. I think that it is politics, it is zoning, but it’s also the people who are vocal.

Rob:
Right, because politics is people. This goes to your point, Jim. If the YIMBYs outnumber the NIMBYs, then yeah you’ll have these things.

Jim:
Let me take a different tack. Should realtor political action committees, should they be ones pushing for YIMBYism?

Rob:
I think so. I think so. Now, maybe not because this maybe goes to why does the Realtor Political Action Committee exist in the first place?

Jim:
Right.

Rob:
Why do realtors organize into the state, local, and national Association of Realtors?

Jim:
Right.

Rob:
Because you could make the argument that the role of the realtor organizations is to protect the realtor. In which case, no, you can’t go with this YIMBY thing. You can’t, because it’s going to drop property values, it just is. That’s just math, it’s economics. But, if the idea that if the realtor parties exist for the benefit of society as a whole, then yeah, of course you have to do that. I think so.

Rob:
NAR just hired a diversity VP, and they’re making race, and diversity, and all this stuff a really big thing. I’m like, “It’s cool that you guys are doing that, and good for you for taking that step.” Everyone says, “Let’s take small steps, let’s get the wins we can.” I get all of that. But, we’re still not going to tackle what is clearly a racist policy that prevents the type of private initiatives that Keith was talking about, like these anti-growth zoning, the density laws, all of that stuff. Then, what are we talking about? It’s cool, we made some progress so we’re going to have more MLS and association executives who are not white. Okay, great.

Keith:
But here’s the thing, Rob. Let’s jump to the next step of this, I know we’ve already spent more time on this than we expected, which doesn’t surprise me.

Rob:
Always seems to happen when I talk to you guys.

Keith:
It doesn’t surprise me or Jim in the slightest, and that’s why I love the fact that I have a 1.5 times speed on Overcast when I listen to pods.

Keith:
But out of Washington, we got a tweet saying, “Hey suburban housewives are going to love me forever, because I’m going to do away with integrated neighborhoods,” basically is what the President’s tweet said. My question then is, how can RPAC, how can the National Association of Realtors, if they are going to even remotely pay lip service to fair housing, and act like this is something that’s important to our association, how can RPAC not absolutely condemn those actions, those words, and that process? How can you act like fair housing matters, if we’re going to support that type of a policy, and those types of executive actions?

Keith:
To say that … what was the word that they used? It wasn’t disappointed, Jim. Was it disappointed?

Jim:
It might have been. I saw more vigorous and strong opposition to what he said from local and state organizations than I did from NAR.

Keith:
Absolutely.

Jim:
NAR, necessarily, they have to play, God I hate saying both sides, of this. They have to be in the position of maintaining the political voice so that when they have a need, the politician answers their phone. But, I think that our local association had a very strong statement against it. The state one did as well.

Rob:
What was local’s statement against it?

Jim:
It was essentially saying that we vigorously disagree with what he said, we are for integrated neighborhoods, we are for humanity. But, it was said in a very, very thoughtful but pointed way.

Rob:
Is the idea, then … Let’s just carry this to the next thing. Will your local realtor associations push for forced integration of neighborhoods?

Keith:
Forced integration? No.

Rob:
Yeah, here’s the thing. First of all, [crosstalk 00:30:39] Trump … If we’re talking about Trump, we’re going to get into bizarre territory because the man is freaking bizarre. But, one of the things that I was curious about, because on Facebook people when ape shit. I’m like, “Is he wrong?” People read that as meaning is he morally wrong. “Of course it’s morally wrong!” I’m like, “No, no, I’m talking politics.”

Rob:
What he said was, “Suburban housewives are going to vote for me, because I am preventing the forced integration of their suburban neighborhoods.” I’m like okay, you could say that’s disgusting, you could say that’s racist, and I could agree with everything that you said. All I’m curious about, will suburban housewives actually vote for him because they don’t want their neighborhoods actually integrated?

Rob:
This, then, goes right back to the NIMBY thing. You guys are in Charlottesville, it’s a pretty liberal town because you have UVA right there.

Jim:
It’s 85% blue. Yeah.

Rob:
The issue is, and this is what I think realtors, and then the RPAC, local, state, Federal, and national, y’all have to deal with this. How many of your clients want Section Eight housing in their neighborhoods?

Jim:
Keith?

Keith:
Well …

Rob:
Keith, by the way, I don’t mean eight lots out of 50 of Habitat For Humanity, I’m talking Section Eight housing voucher.

Keith:
Well, first off, in Virginia we actually just passed a law that now it is a fair housing violation to look at source of funds when making a determination for rental. So yeah, actually Section Eight housing vouchers are now allowed in every single rental property in the state of Virginia that is owned by somebody who owns more than four properties for rent.

Rob:
Okay.

Keith:
Any professional investor is now bound by Section Eight, so Section Eight, the question of housing vouchers is no longer stigmatized to specific neighborhoods. It’s no longer …

Rob:
Okay. So do they want rental units in their neighborhoods?

Keith:
Yeah. I mean, I can tell you that there are more and more neighborhoods … There are plenty of neighborhoods being developed now, some of which do have short term rental exclusions. You can’t do Airbnbs in a lot of neighborhoods. But, nobody’s prohibiting people from buying properties and renting them, and the state law now prohibits you from making a determination on source of incomes.

Jim:
Keith, I’ll push back on that because, to Rob’s point about systemic racism in real estate, purely from a rental perspective.

Keith:
Yeah.

Jim:
Yes, there are restrictions. If you go to buy a condo in-

Keith:
That’s FHA. That’s a financing question, though.

Jim:
It’s a financing question. But by virtue of the lending laws, if you have 100 units and X percent are renters, the loan is going to be more expensive if there’s X percent of renters in that development.

Keith:
But I would come back to that on Jim, is that I think what you’ve just said entirely supports the Richard Rothstein argument that the Federal government has been the hand that requires that integration not occur. What you’re saying is that the FHA is still supporting segregation. That has nothing to do with what the actual capitalist pricing strategy is.

Rob:
Hold on. Hold on Keith, you’re skipping over the most important part of this, though. If the neighborhoods want more rentals in their neighborhood, all they have to do is go to City Council and vote out the council members who are not willing to change the single family zoning regs. We just talked about this. Eight lots out of 50. Why not build a 300 unit multi-family?

Rob:
My point is if people really want low income housing in their neighborhoods, all they have to do is go to their council and say, “We want you to allow multi-family development in our neighborhood.” My question is, how many of your clients are willing to do that?

Jim:
You know what, Rob? I’m going to go ahead and cut it on that, and leave a cliffhanger because we can have this discussion again in two weeks.

Rob:
If this podcast goes out to your customer, your clients-

Jim:
It does.

Rob:
I would encourage them to contact Jim and Keith and say, “I will show up at a rally to get rid of single family zoning in my neighborhood.”

Jim:
I think that that’s part of it, though.

Rob:
That’s yes in my backyard, right there.

Jim:
I think that we need to see more people vocalize it.

Jim:
I will close on this. There was a development recently in the urban ring of Albemarle County. I saw the conversations online saying, “This is where this should happen. We need people to show up and speak in support of this development.” Naturally, I’ll make up, 50 people spoke in opposition, and three were in support of it. It’s the people who show up and voice their opinion are the ones who are going to drive the change.

Keith:
Rob, can I just point out that Jim is the one who said I’m going to cut this conversation off, and then brought up another topic.

Jim:
And on that …

Rob:
Seriously guys, we should just Joe Rogan style and go for four hours.

Keith:
No, because that’s your podcast with Greg.

Rob:
I wish. We try to cut it to an hour. But, I keep thinking some of these issues in real estate are some complex, and so multi-faceted, maybe it is worth, one of these days … maybe I’ll host it, and I’ll invite you guys, and just do four hours. Or, however long it takes. Because these are really complicated issues, and I feel like we’re just still scratching the surface.

Jim:
We are. I think that the one thing I think that we do need to [inaudible 00:36:10] here. We’re at 37 minutes now.

Jim:
I think that one of my big takeaways is the fact that, for our listeners out there, we have some systemic issues that are endemic in real estate. We have highly intelligent and passionate realtors out there who are, frankly, becoming more aware of the history of how we got to where we are. As we have this awakening, if you will, to how we go to where we are, you’re having more realtors, and more non-realtors, looking to execute change on a local, state, and national level. This is not something that’s going to go away, or get changed, or fix in the next two to five years, but it’s something that we’re looking at. We got to this from a generational perspective, and it’s going to take generations to address it.

Rob:
Yeah.

Keith:
I’m going to close with one other thing. Rob, this is your second time you’ve been on this round, and I’m sure that in the future we’ll have you back again. But, I do want to give you a big thank you. But also, we’ve got different listener bases, and if anybody’s enjoying this conversation, let me just say that the style of this conversation fits very much in line with Rob’s other podcast, which is Industry Relations, that he does with Greg Robertson of WNR, and a fabulous podcast.

Keith:
Rob, thank you for the time, thank you for the thoughtfulness. We’ll look forward to doing this again, and hopefully we will be in-person at some point within the next few months and year, and we’ll get you in for a larger Nest conference so you can actually connect directly to our people.

Rob:
It was a real pleasure, guys. Always fun talking to y’all.

Jim:
Awesome. Stay safe, Rob.

Keith:
Love it. Thanks, Rob.

Rob:
Bye.

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