This piece is part of a two-part series on solutions for economic mobility in Detroit. Read the other story on training Detroiters for work with living wages here.
Chase Cantrell had arrived, and his credentials showed it. He graduated from the premier Renaissance High School, went on to graduate from the University of Michigan undergraduate and law schools and began working in corporate America for a major law firm in Detroit, helping to close client real estate deals.
But upon his arrival, he noticed others had yet to arrive. And he wanted to do something about that.
“I’m a native Detroiter and thought I would come back and practice law and then run for office,” Cantrell told Detour Detroit. “I was doing real estate and corporate law, and I was placed on some of the more complex transactions. And going through all of these was a light bulb that I’m in a [majority] Black city, and all of our clients were white men. This was a pretty stark realization for me that this isn’t Black-led.”
Instead of practicing law and becoming a politician, Cantrell quit his corporate lawyer job, lived in Paris for a year and then came home to Detroit to delve into real estate. Though he was making a lot of money and helping his clients do the same, he wanted more. In particular, he wanted equity in neighborhood development. He talked with mentors about neighborhood equity and began to explore ways to ensure Black folks got in not just on big real estate deals but also those in their own neighborhoods.
In 2016, Cantrell launched Building Community Value, a nonprofit community development organization designed to focus on development projects the community needs, with an aim to get residents involved. He had already begun through BCV to develop projects. Soon, his work got the attention of Janell O’Keefe at the University of Michigan, who heard about BCV, and told Cantrell about a class the university was offering for Detroiters who want to engage in community development in their neighborhoods.
Cantrell was inspired to change BCV’s direction after sitting in on the class. He realized it would be better to teach people what he knew, so he and other minority developers could bring a greater concentration of community development projects to neighborhoods — not just to make money but to offer value to the community.
Cantrell’s desire to help Black developers fits a vast need. According to lender Capital Impact Partners, between 2006 and 2015, only 10% of minority-led development projects in Detroit received financing from the $152 million loaned during those years. And the national real estate organization Urban Land Institute says fewer than 5% of its members identify as Black or African American.
To help Cantrell change this dynamic, Peter Allen, who taught the Michigan class, gave Cantrell the course’s curriculum for BCV.
To ensure this new vision would reach his target community, Cantrell applied and won a $150,000 Knight Cities Challenge grant from the Knight Foundation to develop and execute the real estate development course Better Buildings, Better Blocks. Today, Knight and Ford foundations are major funders. Members of the public also donate.
Accepted applicants pay $100 for the three-month course. The money enrollees pay also helps fund a $3,000 award to the student who develops the best project while in the course. After all students present their projects, students pick their favorite project and Better Buildings, Better Blocks staff tallies those votes. The staff then takes the top four or five projects and a panel of invited judges and teaching staff picks from the list based on the top picks that the students made.
Applicants to the Better Buildings, Better Blocks course are selected from each of the seven districts in Detroit and from Highland Park and Hamtramck. BCV taps prospective participants, primarily those already into real estate development, who have lived in their neighborhoods a long time and are passionate about their community. They not only want to build a business but also control the vision of their neighborhoods. Cantrell said many who enter BCV are concerned with wealth being stripped away from their communities and the difficulty of purchasing city land, but they have persevered.
BCV accepts cohorts twice a year, in the fall and winter, and averages about 20-30 participants.
BCV is “a program that has become more successful every year,” said Cantrell, noting that its last cohort was the best group yet. “Their projects were polished. Their numbers made sense. Every cohort, we get better at teaching. As new things arise (in the industry), we are able to incorporate them in our teaching.”
BCV teaches its students to know the cost of real estate development projects, work with government entities like the Detroit Land Bank, understand what developers need to present to banks for funding and be aware of barriers that exist for developers.
‘There is no room to fail for Black people’
While BCV is filling a need, Cantrell acknowledges that challenges remain.
“I think the biggest challenge is what happens when someone graduates from the program,” Cantrell said. “There aren’t a lot of financial resources at these (financial) institutions for these projects. Folks can’t get the funding they need.”
Cantrell said BCV has spoken to local banks and Community Development Financial Institutions (CDFIs) to lend to more nontraditional clients, and “we have not found an institution wanting to take on the risk. A lot of time, risk is a code word for systemic racism. There is no room to fail for Black people.”
He said even though CDFIs, which government institutions created to lend to those in economically disadvantaged communities, are supposed to take more risks than traditional banks, it doesn’t always work that way. Even though some of their funding comes from larger banks for the express purpose of lending to those in neighborhoods, in reality, CDFIs have high-interest rates and operate much the same way as banks, Cantrell said.
To combat these barriers, Local Initiatives Support Corporation LISC launched its $250 million Black Economic Development Fund in May to fuel Black-led entities, including banks and real estate development companies. The fund, which raised capital from 11 public and private corporations, has already invested in Black developers in Columbia, S.C., Houston, Jacksonville, Fla., Washington, D.C. and Pittsburgh. Locally, Capital Impact Partners has since 2017 offered Black real estate developers training and finance opportunities.
Keona Cowan, executive vice president of lending for Invest Detroit, a mission-driven CDFI lender that has supported Detroit development projects for more than 20 years, said access to capital for Black real estate developers is a real challenge. That’s mainly because people of color disproportionately lack generational wealth and access to those who do. Generational wealth and connection with the wealthy are two of the main ways to fund projects.
“What has changed over the last five years, but especially in the last 18 months, is the deliberate effort and recognition that there is a glaring difference between our community and other communities,” said Cowan, who is Black. She attributes the growing recognition of inequities between communities and efforts to rectify the disparities to the nation witnessing the killing in 2020 of George Floyd by the knee of now-former Minneapolis police officer Derek Chauvin.
“There has been an overall challenge in why minority developers haven’t had access to capital. That’s starting to truly change by way of programs, communities, and people,” Cowan said, noting Invest Detroit real estate and loan programs and the CIP Equitable Development Initiative Program, a mentorship and training program to give local developers of color the skills and knowledge they need to scale up.
Ian Weisner, CIP director of business development in Detroit, said, “Development is an expensive thing. It takes a lot of cash. If you don’t have generational wealth or networks that can invest in your projects, that’s the biggest barrier.” Other barriers like access to land and projects, rising construction costs and Detroit’s low rental rates make it difficult for investors to receive great returns on housing developments, Weisner said, all of which the CIP program is seeking to combat.
Cantrell said that although these are helpful initiatives (Cantrell has done business with CIP), systemic change needs to happen to provide consistent impact.
“We need to change the underwriting culture at banks so that Black people and neighborhoods aren’t seen as risks,” he said. “There are projects in Black communities that are not risky. Buildings can be rehabbed, rented or sold, and you will see a bit of a profit and pay off a bank. They are not hard to find.” Though the average rehab cost is $50-100,000, Cantrell said, “the amount of money needed in the real estate development ecosystem is a lot. The housing shortage is a Black city problem.”
Cantrell also believes combining resources from BCV, financial institutions, philanthropic partners and the federal government would provide the funding needed to tackle the housing shortage. Cantrell sees an expansion of his mission to facilitate talks among these entities by “making sure I’m showing up as an advocate for the mom and pop developers.”
Graduating from the classroom to multimillion-dollar developments
In the meantime, about a quarter of the folks who come through the program self-fund their projects. So far, BCV has 315 graduates. Though BCV doesn’t collect numbers on how many alumni have started projects or how much funding they’ve been able to leverage for projects in recent years, Cantrell said BCV does receive updates from alumni. From these, Cantrell estimates that about a quarter have completed or have made substantial progress on projects. He also says BCV looks at other positions people have in the real estate ecosystem, with graduates covering real estate as journalists and working for the government, community development organizations, and other development and architectural firms.
Darius D. Barrett is one such developer. Barrett, 31, a mechanical engineer by trade, delved into real estate “to attain some self-sustainability. I didn’t want my life predicated on going to a 9-to-5.” So, when the Detroit resident heard about BCV from a friend on social media, he jumped at the chance to apply. “I was doing things on my own and relying on my own understanding. In order to move ahead, I knew it would be on someone else’s shoulders.”
When Barrett joined a BCV cohort in 2019, he owned six single-family homes. He is now working on multimillion-dollar projects that he never imagined.
“The training taught me how to be strategic. I learned how to buy in specific neighborhoods by looking at the development cycle, how neighborhoods transition.” His most recent properties are in the Bagley and Fitzgerald communities and right outside of Boston-Edison. Building is important, but even greater for him is helping communities.
“I was born and raised in Detroit. When I was growing up, I didn’t really pay attention to our circumstances,” Barrett said. “Our living conditions aren’t up to standards. I figured if I could make money by helping other people, then why not.”
In addition to gaining technical skills, Barrett gained connections with teachers advanced in real estate development and classmates, many of whom he works with on real estate projects. Barrett said he appreciated BCV being “more of a classroom setting that allows you to connect to resources. A lot of classes give you high-level information. These (teachers) are experts.”
Barrett acknowledges the barriers for Black real estate developers but said, “I think your biggest barrier to success is your mindset and how you feel about yourself. You have to believe that you can do it and that you deserve to be in these rooms like everyone else.”
“Everyone else” means large, well-heeled, experienced developers, who Cantrell said often say Detroiters don’t seem to welcome or appreciate their investments in Detroit.
“They don’t understand contexts and what has been taken from Detroiters. Homes that were lost in foreclosure were homes of Black folks,” he said. “There’s a question of equity, justice and repair. There has been a true injustice and harm done and we need to work to rectify that.”
BCV graduate Ajene Gailliard, who, with her husband Guy, owns Pure Legacy Property Group, said they have been able to work around what they call “universal real estate investment issues, like lower appraisals for the city,” by asking “for a proposal review and preparing our own market analysis to present to the appraiser.”
Guy is also a real estate agent, equipping them to know how to word their market analysis and respond to appraisers. As far as funding their projects, they receive monies from private small investors, families and individuals.
The Gailliards have been able to work around their obstacles, but Cantrell knows his work needs to continue so small developers dealing mostly with homes in urban areas don’t have to create those type of workarounds.
Cantrell feels grateful to be using his time and talents in this way. “I’m just proud. I kind of stumbled into this work. It’s not often easy, but it’s fulfilling to see Detroiters care for their city so much.”
This story was produced with support from the Solutions Journalism Network.
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