IncDev folks in a familiar setting, (a bar after one of Invest Atlanta’s Community Builder classes).

I have been getting a fair number of inquiries about recent changes at IncDev, so this is probably as good a time as any to put up a blog post on the topic. The Incremental Development Alliance was started back in 2015 as an educational nonprofit dedicated to teaching folks how to do small scale incremental development projects in their neighborhood. The expressed goal at the time was to cultivate 1,000 new developers who could do the modest scale projects their communities need.

Over the past 6 years, IncDev faculty, staff, and board members created and refined a curriculum for seminars and for two day boot camps. We traveled all over the US delivering the the workshops, seminars, and boot camps. In 2020 we ended travel and in person training and worked with folks in virtual session on Zoom.

Starting a non-profit while holding down a day job is tough. It certainly has been an adventure. A healthy organization has to be focused upon its mission and the people who do the work and guide the organization should support that mission. The founding members of IncDev, Gracen Johnson, Jim Kumon, Monte Anderson, and myself, have all moved on, one at at time to focus upon other work. I think that is a sign of a healthy nonprofit.

A national nonprofit doing important work should stay well clear of becoming a cult of personality. (That can be a challenge because everyone involved in the early days of IncDev has a pretty big personality and strong opinions).

The IncDev board will be selecting a new Executive Director soon. The pool of applicants was genuinely impressive. I think that either one of the two final candidates will do an excellent job leading the organization. (seriously).

As me, I need to stay close to home for a host of reasons. I am focusing on our local projects and helping to build a local small developer cohort here in the Atlanta Region. I think that there is plenty of room for improving the collaboration between small developers after they get some initial training. The Atlanta crew is serious about building a local support system which could be useful to folks in other parts of the country. I enjoy the teaching and coaching work and engaging at this local scale feels like the right thing.

Commodity detached suburban houses

REITS and Asset Management outfits are assembling capital to invest in suburban single family (SFR) rental portfolios.

This is not a surprise, since rents for SFR properties went up 11% in June.

Let's keep an eye on this. When Big Money make big mistakes, the impacts are often felt by other people and by neighborhoods far away from the offices of the REIT managers compensated base upon the amount of capital under management. Keep in mind that the REITS and private equity shops who bought loads of houses out of foreclosure in 2009-2012 never figured out to to do single family hose property management at scale. They made money on the arbitrage between what they paid during the recession and the eventual sale prices in 2018-2020. It was not a rental portfolio play it was speculation on distressed assets they hung onto until the prices recovered.

I think the current industry segment that is building detached suburban houses to be rented is the same song, different verse. They are speculating on houses they build now in when they sell them in 5-7 years. The rental income covers their debt service and operating expenses during their holding period. They are speculating on commodity housing that will be more expensive in 5-7 years. That is a pretty safe bet, given the low inventories, high demand, shortages of skilled construction labor, and the unlikely prospect of anything serious getting done with immigration reform.

The incentives for a single family rental REIT are in the wrong places. This is a particular problem in a time when housing inventories across all types and tenure are going to be really short of demand. If you get wind of an outfit like this starting to acquire houses or commission construction of houses I recommend that you run don't walk to build/rebuild in places they will not go.

https://therealdeal.com/2021/07/19/tricon-residential-lines-up-5b-single-family-rental-venture/