Community-Owned Real Estate 101

Yessica Holguin 0:02

Hello. My name is Yessica Holguin. Welcome to The Wealth We Build, a show that uplifts the voices of community leaders, entrepreneurs, organizers, and institutional champions who are taking bold collective action to close the racial wealth gap. At a time when so many feel isolated or uncertain, this show is a powerful reminder that real change is possible when we move together with a shared purpose. We not only have the power to reshape our economic future, we have the responsibility to build systems rooted in community ownership, dignity, and shared prosperity for generations to come. Today, we're going to talk about one of the key facets of our work, community-owned and benefiting real estate. One of the most powerful tools to build lasting community wealth. When the land and buildings in a neighborhood are owned by the people who live and work there, the benefits stay local. Instead of wealth flowing out of through rising rents or outside investors, it circulates within the community, supporting small businesses, creating stable spaces for services, and helping families build long-term security. Community ownership turns real estate into from a source of displacement into a foundation for shared prosperity. So I'm really excited to be here today with Paul Bindel. Paul, tell me a little bit about yourself and what does community wealth mean for you?

Paul Bindel 1:33

Thanks for having me. I'm so glad to be here. I've been at Center for Community Wealth for the last five years. The way I think of Center for Community Wealth, or well, the way I think of community wealth, whenever you have individual wealth, you really have assets that appreciate.

Yessica Holguin 2:02

Thank you. So why are you so passionate about community ownership personally?

Paul Bindel 2:10

I'm so passionate about community-owned real estate because I've lived in it and I've seen it work in many different people's lives. So back whenever I was in grad school, I um lived in a student cooperative in Oregon and I saw firsthand the value of affordable community-owned real estate and what that was like. A lot of student cooperatives got started in the 1930s in a student housing movement in between the World Wars. And so I was a beneficiary of that, and I actually got to return some of my student loans because I didn't need them. And I was paying $390 for food, utilities, and rent at that time. And I know that sounds like, oh, those are like yesterday's numbers, but I looked it up recently, and currently people pay $465. So, you know, whenever people own real estate, um, they they don't have, whenever they are their own landlords, they don't have to charge more than they need. They don't have to uh extract value from people who are using the land. So I think community-owned real estate is aligned with a lot of visions for social housing that position and and think of housing and real estate as a human right. Um where it's a little different from social housing is it goes beyond just housing alone and thinks about commercial spaces and asks, like, how can we create affordable commercial spaces to preserve the kinds of culture production, the kinds of businesses that are locally owned and operated. Um can we preserve those in our neighborhoods for the long term?

Yessica Holguin 3:48

Yeah, that makes sense. And as we all know, community ownership is such an important piece of controlling our own destinies, right? Um tell me a little bit about the strategy at Center for Community Wealth with community-owned and benefiting real estate.

Paul Bindel 4:03

I like to say we're operating at four different um levels. The first is really at the individual level in people's pockets. So we're in the process of creating a fund that individuals will be able to invest in. And we want to create some sort of structure. We haven't done it yet, but we want to create and imagine some kind of structure that everyday folks can join and invest in buildings in their neighborhoods and say, like, we want to preserve this building and we want to have a small dollar investment in that. Um and you know, there are different ways to do that. We can use crowdfunding, we might be able to do some other offerings, but we're trying to explore that and work with neighborhood level individuals on that. The second level is really at the building level, and so this is identifying where are the key strategic places in community that people want to preserve. And it's working not just with those community investors that I mentioned, but also with our small businesses who either currently operate in those buildings or who seek to find a place to operate. And so, as you might imagine, a lot of commercial space has to be rehabilitated and reconstructed anytime a new business moves in to adapt to the needs of that business. And so we want to we want to try to imagine and create things with our business owners that we work with in our other programs so that they have the space that's right for them and that is still affordable. And then the third level that we're operating at is really in the corridor level. And so we're partnering with five different uh place-based organizations in different neighborhoods throughout Metro Denver to roll out this vision, right? So we're gonna be based in Five Points as an example, and our first building that we'll be, you know, securing in that neighborhood is at 29th in Welton. So that will be the Collective Economics Innovation Hub. And I'm really excited for us to not only have office space that we can use, but small business space where people can sell their goods, where they can have markets, where they can also operate or meet with clients, maybe also have meetings, you know, with their team, and also develop marketing materials. So we're trying to imagine like a place that serves small business in that building. But in the future, we could potentially, you know, partner with other uh building owners to expand like the number of places where businesses can operate. Um we're, like I said, in the different corridors, we're partnering with other place-based organizations because we don't believe we can do this alone. It's it's going to take all hands on deck to reverse some of the trends that we're seeing in our city. You know, many of our neighborhoods get just like hit really hard by large investors who have lots of capital and who put businesses there that are maybe outside, you know, outside corporations or larger, more successful chains. And what we're trying to do is create the conditions where we can protect the businesses that have been there for a long time, and we can also ensure that they have a legacy and that they have a future in their neighborhood. And so the last level that we operate is really on national networks, and those are networks, I would say more broadly. And that includes both our community of practice, which is Metro Denver. We have 12 different organizations that are actively learning with each other and developing strategies together. One of those strategies is the fund that we're trying to build. Um, the second network that we're really working in is a national network where we are trying to connect practitioners from around the US and a little bit beyond to understand what are the policy things that we can do together, what are the narrative strategies that we can pursue together to help people understand this story? And also what are the financial strategies that we can implement together? So there's a lot of collaboration. Um, it's something that I get energized by and that like fills me with a lot of excitement. Um yeah, I hope that's clear.

Yessica Holguin 8:24

Yeah, there's a lot of opportunity, and it sounds like community-owned and benefiting real estate is really the tool that can help us preserve the fabric of our communities in Denver.

Paul Bindel 8:36

... and when we think about community-owned and benefiting real estate, like I tend to think of it as it is a set of tools. It's a set of legal tools, it's a set of or legal agreements, financial tools, um, it is you know, community organizing, it's um people who develop skills and relationships to hold it and manage things together. But essentially, it can take many different forms. Um, we could have buildings that are commercial cooperatives, we could have a commercial community land trust, um, we have a mint in Denver, we have mobile home parks that are owned by community. I think of it really as any kind of real estate development tool that you're using that in that involves three or more people and that includes a high amount of democratic governance and participation in the management and also financial benefit for all the participants.

Yessica Holguin 9:33

Right. When we think about a community of owned and benefiting real estate, what is the opportunity that we have in front of us? And and

Yessica Holguin 9:44

perhaps if I can help you, if you can help me think through what is the risk of not doing it?

Paul Bindel 9:51

I think of all the places that make Denver so unique, you know, um, we've seen some of our neighborhoods change under like underneath our feet. And there's still some that are very special, you know, and that hold it either historic place or cultural significance to this day. And so I think figuring out ways, if we if we don't take action, if we don't figure out ways to steward these places collectively, then they will be bought and sold to the highest bidder. And so when I think of the opportunity before us, it's really like how can we preserve five points so that it is true to its character and its like historical resonance? How can we preserve Little Saigon and make sure that that corridor is like protected and that it serves Asian uh Americans for the for the long term? And how can we protect places like East Colfax, you know, that currently do have a lot of affordable housing as well as a lot of small businesses from just becoming another, you know, corridor that has big box stores, you know? Um so all of those I think are are really um, you know, the vision is really aligned with putting control into local people's hands rather than extracting wealth and and giving power to people who already have it.

Yessica Holguin 11:17

Yeah, and sometimes sending our wealth outside of our state, right? When you think about community-owned and benefiting real estate, what are some of the challenges that you face?

Paul Bindel 11:29

I think the most significant challenge that I think is challenging not just in community-owned and benefiting real estate, but in all commercial real estate is the cost of um acquiring it and also the challenges that come with maintaining it and rehabilitating it. So it is not cheap to get into commercial real estate, which is why, you know, the majority of Americans do not ever own it. Um but for us, um, you know, we're we're working really hard to identify um sort of investors who are willing, not only at the grassroots level, but at the institutional level, um, who are willing to take a risk and who are who are interested in supporting um diverse entrepreneurs and these these unique corridors in Denver to ensure that they can retain their special um their special significance.

Yessica Holguin 12:27

So tell me a little bit about these investors who care about social return on investment. What do those look like?

Paul Bindel 12:35

A lot. They they could look lots of different ways. There are folks who um have inherited wealth who may want to um put that to some sort of social purpose. There are DAF holders, so those are donor-advised funds, and those are individuals who have set aside money that will go to a charitable purpose, but it can be invested in the meantime. And so we're interested in figuring out okay, would you consider investing in commercial real estate and supporting small businesses in their journey to acquiring it? Um there are also anchor institutions that have expressed interest and openness to looking at our fund. Um, and that includes, you know, hospitals and potentially universities who have the ability to put a portion of their assets into local investing.

Yessica Holguin 13:27

Wow. Imagine the possibility if that can happen. Imagine not just the financial return that can stay in our communities, but the social return on investment that our communities can benefit from.

Paul Bindel 13:40

Yeah, I think one thing that's really different or unique about our vision is that we are hoping to acquire these, you know, these properties, but our goal is not to be the long-term owners. Like we're trying to figure out pathways so that they can be purchased by the businesses that operate there. And so we're trying to do a dance, right? Um, that is a challenge, right? Because to acquire most real estate, you need 25% down, usually minimum. And so a lot of our businesses are not there. So how can we create

Paul Bindel 14:13

- kind of like a stepping stone so that it's possible for them to ultimately become owners?

Yessica Holguin 14:19

Are you what national models are you seeing experience success?

Paul Bindel 14:27

The group that I think a lot of us look to is in is in Philadelphia, the Kensington Corridor Trust. They're a slightly different market in that their um you know real estate values are a bit lower, but they've been able to pull off a lot of really cool things with the purpose trust model and the perpetual purpose trust model that has really been able to just get commercial real estate off the market. In the Bay Area, the East Bay Permanent Real Estate Cooperative has been able to take both housing, you know, multifamily apartments, uh, commercial spaces like um Esther's Orbit Room. Uh it's like a jazz club, um, as well as you know, single-family homes off of the speculative market and preserve them for East Bay residents and folks that are going to use those cultural spaces. Um I'm inspired by the Guild in Atlanta, uh, who has been developing not just a community land trust arm, but also a community stewardship trust arm where they've allowed everyday folks to invest in commercial space in Atlanta that they're redeveloping. So I think there's many different approaches that people have taken and we're trying really hard to learn from each other along the way.

Yessica Holguin 15:47

Yeah, so tell me more about opportunity for community members to invest. These are people that may not have the millions of dollars uh to be accredited investors,

Yessica Holguin 15:59

but would be interested in investing. What do those tools look like?

Paul Bindel 16:02

The most common tool and the most easy tool that people can use is um regulation crowdfunding, which was created by the Jobs back during Obama's presidency. And that really allows people to invest, you know, small amounts, I believe it's less, a little less than $3,000, probably like $2,500 or less. And that can take the form of a loan, that can take the form of equity, it can take the form of a convertible note where it starts as a loan and then it becomes equity. But that is like one of the most common pathways that people use. There are other pathways, so a lot of people um have also used a tool. It's called a regulation 506B. This is very nerdy, but um basically it allows up to 35 investors who have everyday funds to invest some of their assets into a shared fund. And, you know, the federal government and the security exchange commission has um different categories they label people. So there's um accredited investors and unaccredited investors. And accredited investors have a lot of money. They make, you know, six figures multiple times over, they might have a million dollars in assets, not including their home. Unaccredited investors is most of us, right? So um we're trying to figure out ways for unaccredited investors to participate. Um, and that may be either of those two things that I mentioned. It may also be a real estate investment co-op where people purchase a share in a co-op directly that owns the real estate. Um I'm a resident of a housing co-op and I've helped create a housing cooperative where people own the real estate directly. And so that might be another pathway forward with commercial.

Yessica Holguin 17:56

Wow, that sounds really exciting. And it's not only securing the real estate uh for generations to come, but it's also providing an opportunity for everyday people who may not have a lot of money to invest in their own neighborhoods. And so I think about the um the potential impact that that has with small businesses. Because I if I am investing in the coffee shop uh in down the street, I'm gonna go and I'm gonna support that coffee shop, right? Because it's not only because I love them, but it's also because it's in my best interest.

Paul Bindel 18:28

So exactly. And like when I also think of community investment, like the thing that gets me excited is instead of our dollars and our interest going to banks, it's going to us, right? And so the wealth that is generated is not just going far away into someone else's, you know, bank account, it's going into our bank accounts. Um, and that's really the goal with all of this is figuring out, you know, ways of aligning the economy and aligning everyone around shared goals of prosperity.

Yessica Holguin 18:58

Yeah, and that's such a really exciting opportunity. The the way that I like to describe it with my family is that, you know, when you think about how much money you're paying just in interest to your mortgage company, what

Yessica Holguin 19:10

if that were divided with all of our family members? If we're all to pitch in, and that's when it becomes real for them. It becomes a real possibility that this can actually happen. So really exciting because I think a lot of people think about investors as the people that we don't even know, that we've never met. But in reality, collective collectively, we can have the resources to actually shape our destiny, which is really exciting.

Paul Bindel 19:35

Yeah.

Yessica Holguin 19:35

Yeah. So let's uh think big for a bit. Let's future cast and dream. What could Metro Denver look like 20 years from now if we do this right now?

Paul Bindel 19:48

Um the things that I would love to see are that certain neighborhoods have commercial community land trusts that make it more accessible to start a business and to own real estate that would take 30% off the purchase price of real estate. Um I see I could see um groups of people that are experimenting and learning community investment, you know, developing that and growing that um even more and like and and developing more infrastructure around that so that everyone understands it and there's more of a cultural conversation about what it means to really, you know, have a stake in your neighborhood. Um I think most of all, like the places that we know and love, we won't be always writing newspaper articles and and you know, listening to podcasts where people are mourning that this business that has been there for 50 years is now gone. And we will be able to be proud of our city. And I think I think a lot of our business owners will hopefully get a break so that they can um invest more in their own business and innovate in their own business instead of just constantly having to put all of their extra income into rising rents.

Yessica Holguin 21:04

Yeah, I think about the opportunity that we have right now. I I mean the best time would have been 20 years ago, but the next best time is now, right? And so imagine what it would look like to have healthy businesses because they don't have to worry about rising rents, because they don't have to worry about where the next customer is gonna come from. Imagine the ripple effect that that can have in our communities, and that energizes me.

Paul Bindel 21:34

I think the biggest thing, you know, this is like a this is a factor not only with real residential real estate, but both both residential and commercial real estate. That um when rates are always going up and when the margin of like what it takes to live in Denver is like, you know, increasingly thinner and thinner of like what we have left over, it reduces our creative capacity. We become less able to dream. We become less able to imagine other worlds. We become less of cultural creators. And so my dream for Denver is that, you know, instead of a thinning of our culture where we have a lot of breweries and dispensaries and bars and burger joints, not to say any of those are bad on them their own, but like that we have a proliferation of culture because people have the room and the space to create because their whole paycheck isn't going to real estate, right? And so that's my dream is that like there's more of there's more space for people to be able to create culture and to make this a valuable place to live and an interesting place to live.

Yessica Holguin 22:45

Imagine if all of the extra resources that are going for rent right now could go to invest in people, to invest in communities, to invest in the real wealth that

Yessica Holguin 22:58

creates healthy communities, right? Um yeah, there's so much opportunity, and I I know that the it feels like an uphill battle at this point, and yet we know that we don't necessarily have a choice. We need to figure something out because at the rate that we're going, we're gonna lose the fabric and uniqueness of what Denver is known for.

Paul Bindel 23:20

And like I think, you know, throughout the world, cooperatives um as a tool and even community land trusts, they kind of create these little islands of protection where they're protecting specific properties or protecting specific groups of people. And I know sometimes people feel um discouraged, you know, like, why isn't this wholesale? Like everyone is doing this, you know, and it's it is hard to have to work step by step and to have to work person by person in building assets at that level. But I think um it will compound. And I think all of us are interested in finding ways to scale it and to figure out ways that make it easier for people to get involved and to participate. So even the people that um are hearing this right now, I hope will see themselves and see like that they have a um a role to play in making this shift from you know a traditional real estate into a more community-centered real estate?

Yessica Holguin 24:23

When we think about from an investor perspective, from a community perspective, from a landowner perspective, from a business owner perspective, from anchor institution perspective, we have so many opportunities to align our resources to and work towards the outcomes that we want to see in communities. Yeah. Is there anything else that you would want people to know about community-owned real estate?

Paul Bindel 24:49

I think the thing that sometimes I think about, like often when we think about affordable real estate, the first thing we think of is like how can we put all of our pennies in a pile, you know, and purchase it so that we can finally get it. So we think about bringing a group of buyers together to be able to reach the price that it's at. But I would challenge and invite people who own assets, right, that the other way of creating affordable real estate is just also not selling it as high as you have to sell it or as high as the market might bear. And by selling it under market, you can create not only affordability in the short term, but if you're selling it to a community land trust or some other tool like we've been talking about, you're creating a longer-term solution. And so I think it really comes down to our definition of what is enough. And when we're operating from this sense of fear that I will not have enough in the future, and I have to maximize my individual benefit above all else, um, it kind of creates a little, you know, it puts pressure on the whole system when all of us are doing that. And so we have to come to the conversation, we have to come to the table with like a sense of like, how can we create something longer term? How can we benefit not only myself but the community?

Yessica Holguin 26:17

Paul, thank you so much for being here today and for sharing about your work and your passion. (To audience) And thank you for tuning in today. For more information on Center for Community Wealth, please visit our website, communitywealth.org, or find us on social media, "CCW Denver" on Instagram and Facebook, and "CCWB" on LinkedIn. Thank you.

Julie Jackson 26:38

The Wealth We Build is produced by Center for Community Wealth and hosted by Yessica Holguin. This episode's featured guest was Paul Bindel from Center for Community Wealth. This episode was directed, produced, and edited by Julie Jackson, with crew support from Jameson Johnson and Tara DeCluette. Music and graphics by Motion Array with theme song Playa Trip by Diego Martinez. Special thanks to Patrick Jackson and Elena Vasconez, and Center for Community Wealth Board of Directors, Asia Dorsey, Kayvan Khalatbari, Cecilia Ortiz and Jeff Shanahan. For more information, visit our website, CommunityWealth.org, filmed and recorded at Denver Community Media. All rights reserved.

‍