Earlier this month, Strong Towns hosted its first ever regional gathering, an event designed to start local conversations and help strong citizens connect and inspire each other to action. The North Texas Gathering combined speakers, panelists, and workshops to drive civic engagement on a variety of topics that have both regional and national relevance. Couldn’t make it? There’s no need to feel FOMO. As a follow up, we want to share some of that discussion with you.
Derek Avery spoke at the recent North Texas Gathering about an often contentious topic: the relationship between revitalization and gentrification. He owns COIR Holdings with his wife Bianca. At a glance, the company might look like any other developer, but they are committed to providing middle- and low-income housing in struggling neighborhoods. And not only that: when building in a neighborhood, they don’t stop at housing. They take a holistic approach by building education resources and investing in community.
Derek’s background is in real estate, while Bianca Avery has a background in education. Together they’ve developed a way to invest in neighborhoods without displacing the people who live there. What’s especially significant is they’re not a nonprofit. Derek believes you can run a sustainable business and be committed to the people you serve, and he thinks more businesses could follow their practice. I had a conversation with him about how that works. (This conversation has been edited and condensed for clarity.)
Aubrey Byron (AB): I was so happy to hear your talk at the Gathering in Plano because this is such a great conversation. Being from St. Louis, it’s definitely something that is really relevant here, especially because we are a high crime city—the task of trying to make communities safer while also preserving the character of those neighborhoods. So can you tell me more about your business and how you try to go about navigating that?
Derek Avery (DA): Sure. Our company is COIR Holdings, LLC, owned by my wife and I. Her background is in education. I’ve been in real estate most of my career. I’ve been in almost every aspect of it. One of the things we settled in on is that to affect education and the social changes that we want, we have to approach it from the base level of how we design neighborhoods.
Typically we do projects in those high crime areas, close to the central business district. They are majority black neighborhoods. We said what we really wanted to do was activate the community and involve them in the revitalization. Because it’s easy to build houses. Everyone told me I was crazy for going there and building houses that were a little more expensive. They said I would be told I’m gentrifying, but the only thing that works is mixed income. That’s been proven time and time again. You can’t have concentrated poverty, but you can’t displace everyone. You have to preserve what’s there, but also bring in things in a controlled manner to inspire reinvestment.
That’s primarily what we do. We buy infield lots and we build houses. We go in and represent people with their property taxes on existing houses. We also help make repairs, so we’re not just building one house and leaving. We’re coming in to enhance what’s there. We hire from the community as well. We’ve made partners to do a training program so they’re involved in the physical rebuild of their neighborhood.
AB: Do you tend to buy one property in a neighborhood or several?
DA: I always try to do multiple. Doing one property is not going to work. You can’t really effect change with one hand. I commit to a street or two and start there.
AB: Then do you have a set formula for the redevelopment, say that x amount will be low income and x amount middle income?
DA: So I control it by what I build. For example, the Fair Park neighborhood in Southern Dallas is a neighborhood that a lot of people are eyeing to come in to basically displace people. But it’s also a neighborhood that is very historic, and one where a lot of people who are from there are interested in moving back. The issue is they didn’t have the supply there. So it’s a mix of people who want to move back and then people who want to move up in the neighborhood.
That’s usually the gap, particularly for historically African American neighborhoods near a central business district that have been dilapidated. There’s usually people wanting to move back, but no one is develop the quality houses at different price ranges.
So percentage wise, it’s almost 50/50. I usually start with a higher end, more middle class-type house first. I found at that if I do that first, that gets the interest in the area. People are like, “Oh my gosh, I didn’t know I could get something so nice for that kind of price.” So usually that gets people interested, then I follow that up with two or three more. Then I do two or three affordable houses that are of the same quality. Usually they’re just smaller. I’ll fit it in with the architecture style of the neighborhood, so it stands out but still fits in the place. At the end of the day, it usually turns out to be 50/50 because I try not to make the neighborhood overpriced.
AB: You talked about doing community outreach and getting people involved. How does that side of things work? I assume maybe your wife’s education background plays into that.
DA: Yes, I was going to mention that next. Basically, I saw that there was always a gap when a developer comes in to build property in a new neighborhood: they only look at things as one-sided. I call them “spreadsheet developers.” I’m not a spreadsheet developer, I’m a community developer. So that’s what my wife and I subscribe to.
I look at the business side to see if there are businesses and nonprofits there working in silos. A lot of times there’s no space designated to create collaboration, to bring those community groups together. That’s why in Fair Park, we partnered with a local church to make the Selah Center for education and empowerment. What it does is combine several solutions in one place. There are meeting rooms and conference rooms there. There’s an auditorium where people who are into theatre can put on small productions. There’s also going to be a co-working space there. There is no co-working yet in that particular area. The goal is to bring in social enterprise, where people are trying to grow and also provide collaboration. It also builds revenue for the church, utilizing the space that isn’t being used and providing services for the community.
With that, it endears us to the community because we’re building relationships. My wife has already been to all of the schools in the area and done outreach with them, like classroom evaluations.
This allows us to get their input. Because when you come into a neighborhood that you’re not from, you can’t just always impose what you want. You know what probably needs to be there from a real-estate standpoint and a community standpoint, but you get opinions and take your expertise and tie them together. You involve them in that process, and I think that’s one of the things that’s been missing. Sometimes even just knocking on someone’s door and having a conversation. When we make those direct relationships and we provide opportunity for input but show we have a full scale plan, it’s been helpful.
AB: How do you decide what neighborhood to build in?
DA: That one’s pretty easy. One of the first things I look at—this is just for us in general being that I’m African American, because we always talk about Dr. Martin Luther King—I look at MLK Street in every city I go to. For me, that’s where I typically start. Because, in my opinion, MLK Street in any city should be a developed place where you see thriving businesses and communities. You see generations being upwardly mobile within the neighborhood. It should never look dilapidated. It shouldn’t have high unemployment, high crime, shouldn’t be redlined. It should be somewhere we directly lend. If we’re honoring Dr. King, that area should be a popular part of town, with people who have been there being successful.
That’s the first thing I go to. After that, I look at where we are needed the most. People will contact me or my wife to say, “Hey, we want you to come look at this area and help us figure out how to revitalize it.” Typically we look at MLK first, then from there by invitation.
AB: Do the businesses there play a role in the revitalization effort?
DA: Absolutely. The ones that are there, we always go to first to figure out what they’ve been doing and what’s been working, what hasn’t worked, and how we can help. Usually they’re extremely helpful, because they want to keep the business there and keep growing.
AB: And do you do only residential properties, or commercial as well?
DA: We do commercial as well. We’re actually going to be working on a project pretty soon that’s mixed use. So we’ve been focusing on being able to create affordable commercial space to incubate small businesses. We’re working on a financial mechanism to help these businesses, as well. A lot of times these areas have been redlined to the point that they’re considered risky investments.
AB: Does the legacy of redlining still present a challenge in getting people to invest in these neighborhoods?
DA: Absolutely. That’s the biggest challenge. If you examine the banks that are in those areas and you look how well they’re adhering to the Community Reinvestment Act, they’re almost always failing. The legacy of redlining is the reason. They haven’t relaxed standards to make it available to business owners. They haven’t made home loans available to potential owners that have a vested interest in making sure that area grows. For me, it’s almost always an outside investment, either from work we’re doing or creating a financial mechanism. I almost don’t even want to call it a “legacy” because it still exists. It’s just taking a different form because now it’s a risk assessment based on the median income or the credit scores of the area. The thing is, if you redline an area for forty years, that’s what happens. If you don’t feed something, it doesn’t grow. If you don’t provide consistent capital to an area, you’re going to create those problems.
AB: So you said the next step is a new strategy for financing. Can you tell us more about that?
DA: I can give a little detail on that. I can’t talk specifics because there’s still some things in the air. The plan is to create a financial mechanism to fight redlining. Basically, it’s going to focus on people in those areas, getting them in a position to be more financially self-sufficient. It’s going to provide investments in businesses in those areas. Then it’s going to provide for new projects in the area. When other folks aren’t providing solutions, you create your own.
AB: Since you have a real estate background, I’m curious what you hear from colleagues. Is there a rhetoric of, “Well, this is nice, but we don’t have the time or resources to do this”? What do you say to people to make them interested in the responsibility of investing in neighborhoods they’re developing?
DA: Sure. Absolutely there are people who won’t want to put the time in these areas because it’s not an easy investment in their opinion. They’re looking at just one aspect, the financial part. I don’t know if you remember from my presentation, but there are five things that encompass the bottom line for me. One of them is financial, but the second one is it has to be environmentally friendly. Third, it has to create a positive social impact. Fourth, it has to create intergenerational wealth. Fifth, it has to align spiritually with my beliefs. Basically, I’m not going to build something that isn’t ethical.
With that being said, in trying to get through to people who are just looking at the financial side, where I’ve been successful is explaining the story of how it got that way. I say to them, if you only invest in areas that are simple to do or make financial sense, you’re missing out. If you look at an area where you put a little more work into fixing other issues, it will actually be more financially rewarding. Plus you’re doing something that hasn’t been done.
Where I’ve had success is showing the reaction to one of the first projects we did—how many phone calls we had from people who wanted to live there. There wasn’t data to say there was an upward trend because there was no supply. But as soon as we put the first house there, demand was through the roof. I call it “shadow inventory” because people don’t realize how much people want something because there’s no physical demand due to the lack of supply. By actually doing a project, and taking the risk, we got 300 phone calls on one house. Saying that is more effective than trying to convince people to do the right thing.
AB: Do you have advice for people interested in taking this approach as to where to start?
DA: Yes. If you’re interested in taking this same approach, step one is form relationships—genuine relationships—in the community. In my opinion, people don’t spend enough time doing that, in a lot of aspects of life, but particularly in development. Because if you don’t understand the history of the area, you don’t understand the current residents or past ones, and you don’t have a genuine relationship with stakeholders in the community, it’s going to be very difficult. You’ll meet a lot of people who are against it. When you start forming those genuine relationships, you get more information about what was there and what people want. You also have people who are willing to help you.
I would also get used to hearing no and people being angry. You have to have a high level of emotional intelligence. Whenever you’re trying to do something innovative, there’s always going to be a level of distrust, particularly when you’re not from that neighborhood.
Then you have to prove yourself. Do something so people can see it done. Even if it’s something as small as a temporary bike route, some tactical urbanism, just do it. Because the best way to explain something to someone is to show them. That would be the advice I would give.
AB: Is there anything from your talk that we didn’t cover that you’d like to add?
DA: I think historic preservation should always be thought about and mentioned. That’s something really important. I’m from Houston, TX. I moved to Dallas about five years ago. In the fourth ward, if you go to it now it’s called Midtown. They rebranded it to make it palatable for more affluent people and completely swept the demographics. Before that, it was Freedmen’s Town. In Texas we celebrate a holiday called Juneteenth-- June 19th. That’s when we found out in Texas the slaves were free, two years later from when the Emancipation Proclamation was signed. Freedmen’s Town is where a lot of the free slaves settled in Houston. They built that neighborhood literally brick by brick. There are original bricks from the freed slaves on several streets in Fourth Ward, which was Freedman’s Town. After someone bought some of the properties and the city was heavily involved in this, they hired a contractor to tear down some of the buildings, but the bricks were to be preserved. Someone didn’t get the memo. They didn’t pay enough attention. They ended up destroying the bricks. They ended up in a landfield somewhere. They literally destroyed the last physical representation of the history of that area. There was really no recourse, because once it’s gone, it’s gone. So for me, understanding the history of an area and making that of high importance to preserve what I can, making sure the neighborhood always has some type of identity with that history, is extremely important. A lot of times developers only look at one part of it-- they only look at the money. “This is a good piece of land.” They don’t look at the significant historical relevance to people who are from here and their decendents. Even if you go in to revitalize an area, you have to learn the history and be sensitive to those things or you’ll get a mistake like what happened in Houston, which is one of the most egregious things I’ve ever seen.
AB: Thanks so much for taking the time to talk with me. I look forward to hearing more about your projects!
DA: Thank you.