Conversations with members of the Harvard and Radcliffe Class of 1992.
Hosted by Will Bachman.

Episode: 70

David Block, Architect and Affordable Housing Developer

Share this episode:

Show notes

David Block, a graduate of Harvard, had always been interested in cities since he was a child. He decided to explore his interest in cities and their physical aspects. But since Harvard does not offer undergraduate architecture major,  so he took a year off from Harvard to study at Columbia University’s program, “The Shape of Two Cities,” which offered a comprehensive introduction to architecture, urban planning, and urban history. The program was divided into two parts and took place in both New York and Paris. He decided to apply to architecture, so upon graduating, he applied to architecture schools. He went to Princeton for one semester, but dropped out due to the program’s focus on post-structuralist or literary thinking. He eventually returned to the Midwest and transferred to Washington University, where he enjoyed a more pragmatic and focused program. David’s journey to becoming an architect was marked by a shift in focus from making cities and buildings to power dynamics and the influence they can have on society. 

 

David was hired as a graduate student staff for the Mayor’s Institute on City Design Midwest, a program of the National Endowment for the Arts, designed to bring mayors of cities of all sizes around the country together. They covered 12 states and worked with city planners, council people, and economic development specialists to identify key economic development and urban development challenges facing midsize cities. The program was held at Washington University each fall and brought together nationally recognized experts in architecture, urban planning, and economic development. David graduated from the School of Architecture and later returned to Boston, where he worked for several firms. 

 

Working for a Affordable Housing Developer

 In 2000, David moved to Providence, where he could afford a house. He was hired at the Providence office of the nonprofit affordable housing developer, Community Builders. He spent five years working at the Providence office and worked on several projects around New England, including the Hope Six redevelopment, Dutch Pointe complex, Mill Village revitalization project, and a new library. In 2006, David moved to Chicago, where he joined the growing Chicago office of Community Builders. He was hired at TCB where he was involved in several of the phases of projects, including the development of a rec center and many mixed-use urban developments. He worked there for 12 and half years before he was offered the opportunity to really help build a new, national, affordable housing development practice at Evergreen Real Estate in Chicago. He became involved in adaptive reuse projects, converted old ice cream factories into loft housing, and converted former Art Deco hospital buildings into senior housing.  One of the most exciting projects is the one that created the biggest splash for Evergreen in terms of national growth. David’s department was selected by Mayor Rahm Emanuel to do buildings that combined a new Chicago Public Library neighborhood branch with affordable senior housing on prominent sites in several neighborhoods in Chicago. He worked with talented architects, including John Ronan, who was the only Chicago-based architect to be a finalist for the Obama Library. He also worked with Perkins and Will, an international firm based in Chicago, on a small neighborhood project in his hometown. David believes that his projects have had an important impact on cities and neighborhoods, providing much-needed affordable housing opportunities in markets where there is a growing need for affordable housing. 

 

Barriers to Building Affordable Housing

Barriers to building affordable housing include the involvement of minority groups (NIMBYs) and the “not in my backyard” backlash. Some states, like St. Paul, Minnesota, and California, are considering creating opportunities for developers to override local zoning concerns to get affordable housing done, however, David is a big proponent of working with local communities to find a solution that everyone wants to see. However, sometimes, people’s concerns are not rational and cannot be rationally argued. In such cases, additional tools involving state involvement in local zoning may be needed. He also talks about the impact of COVID on the supply chains and labor shortages that impact construction. 

 

Barriers to Single-Use Occupancy Buildings

David explores the concept of single room occupancy (SRO) buildings as they were once viable for people who were homeless or unstable. However, zoning restrictions have made it difficult to build such buildings, making them more expensive. The current thinking is that housing for a homeless or near homeless population should include services to address underlying issues, such as mental health or drug addiction. The challenge is to find funding and staff for these services in an incredibly resource-constrained environment. National statistics show a $3-7 million dollar shortfall in housing units nationally, and the vulnerable, homeless, mentally ill, or drug addicted population are the ones who are least able to compete for housing. This leads to a massive societal crisis. 

 

Cost of Construction and Development of a Housing Unit

The primary system for building affordable housing dates back to the Reagan tax reform of 1986 and the creation of the Low Income Housing Tax Credit. Back then, a housing unit could be built for under $100,000, and the tax credit functioned well in that model. 

However, today, construction and development of a housing unit is approaching a million dollars, even in Chicago. The financing model for affordable housing is at a crisis point, with regulatory requirements, union and prevailing wage requirements, and the sheer layers of financing involved. The question of whether the government should follow the old public housing model of the 1930s and 1940s is a question that has been answered by the better-maintained housing built with tax credits, market exposure, and oversight by banks and regulatory agencies. In conclusion, the current model for affordable housing is at a critical point, and it is unclear where to go from here. While the intentions are right, the financing model may be at a breaking point, and there is no definitive answer to where to go from here.

 

The Issue of Empty Commercial Real Estate Post-COVID

Post-COVID, many cities are experimenting with various opportunities for redevelopment. In Chicago, the city’s Planning Department has put out an RFP for the redevelopment of several buildings along LaSalle Street, which is known for its historic 1920s and 30s Art Deco buildings. These buildings need significant work to adapt to residential use, particularly the newer ones. Cities are offering varying degrees of funding to address these problems, with the city of Chicago offering significant TIF tax increment financing. San Francisco is struggling with this issue, with a giant shopping mall in the middle of the city that the owners have just handed back to their lender. David talks about ways to follow a career path in urban development, however, he states that it is crucial for individuals with an extremely broad range of interests to understand the challenges and opportunities in repurposing these buildings for residential use.

 

Influential Courses and Professors at Harvard

David, an English major at Harvard, credits his English classes with inspiring insights into English literature and poetry. He took three classes with Helen Vendler, an expert on Yeats. These classes opened his eyes to the importance of artistic and creative matters in advancing meaningful conversations. Another professor was Derek Pearsalll, who taught Chaucer. David’s passion for great design for housing and working with talented architects has led to the creation of beautiful buildings that can be part of urban neighborhoods. He believes that the ultimate test of his work is whether it will stand the test of time, as he believes that buildings that stand the test of time are a work of art.

 

Timestamps:

08:45 Working as an architect in Boston

14:43 Working at TCB.Inc in Louisville, Kentucky

24:44 The impact of zoning restrictions on development

30:00 Permanent supportive housing

33:10 Why affordable housing is so expensive

36:08 On empty commercial real estate post COVID

38:57 The difference between older buildings and newer buildings

39:34 Architectural code rules on light and air 

Links: 

Website: https://www.evergreenreg.com/

Get summaries of each episode, hand-delivered straight to you inbox

Transcript

 

92-70. David Block

SPEAKERS

David Block, Will Bachman

 

Will Bachman  00:01

Hello, and welcome to the 92 report conversations with members of the Harvard and Radcliffe class of 1992. I’m your host will Bachman. And I’m here today with David block. David, welcome to the show.

 

David Block  00:15

Thank you. Well, nice to be here.

 

Will Bachman  00:16

So David, tell me about your journey since graduating from Harvard.

 

David Block  00:23

Well, I had always been interested in cities. Since I was a little kid. You know, I think they started my grandparents lived in, in New York and queens, and we would take trips there, when I was a little kid, and my father took me on a on a trip to Manhattan. I was probably 10 or 11 years old at the time, and I just, there was something magical about it. And it just sparked something in me. And so I knew that I wanted to be involved in cities and making cities, probably the physical side of cities, rather than then the other aspects, the people or the economics particularly. So you know, when I got to Harvard, it, it was difficult, because Harvard doesn’t particularly have a major dedicated to urbanism, there was, you could roll your own major and do a sort of special concentration. Or I suppose I could have tried to concentrate in VDS, and do a little bit of architecture. But Harvard, of course, doesn’t have an undergraduate Architecture major. And I thought that architecture was the main way that I wanted to explore my interest in cities. And so one of the things that I did when I when I was an undergraduate is I actually took a year away from Harvard, my junior year, Columbia University had a fantastic program called the shape of two cities. And essentially, you spend the fall semester in New York at the Columbia campus and the architecture school, and the spring semester in Paris. And it’s really just a kind of comprehensive introduction to architecture and urban planning, and urban thinking, a little bit of urban history, had some fantastic history professors in both New York and Paris. And as you can imagine, you know, tours of both New York and Paris being led by these incredibly accomplished expert historians was was really fun as a, as an undergraduate. And, and so I gradually came to understand that, alright, maybe after, after college, I should go and try to become an architect. And so when we graduated, it was a fairly minor recession, at the time, but for architects, it was maybe a little more of a severe recession. So I started knocking on doors toward the end of of our senior year. And the response that I got from most of the architects that I reached out to was, Hey, kid, you know, we’re laying off senior people, why don’t you just go to school and, and maybe by the time you get out, the recession will be over. So. So I did, I decided to apply to architecture school. And I had a little bit of a detour when I when I first graduated, so I applied to a number of architecture schools. And I ended up going to Princeton for really for one semester, and Princeton, the School of Architecture, there’s a very small program, there are only nine of us in, in that graduating class, what was the class in 1995? Because it’s a it’s a three year master’s program. And of that initial nine of us, four of us dropped out, this was this was kind of the beginning. Or maybe it’s, it’s actually the height of the architecture as post structuralist or literary thinking. And so it was not quite what I expected going to architecture school, and instead of really thinking about making cities and making buildings and and the influence that those things can have on society, it was much more some of the things that I had done at Harvard as an undergraduate which is reading Foucault and Derrida and thinking about power dynamics and this and that, and I just said, and my roommate and now one of my best friends who also dropped out, was there With me had been with me in, in New York and Paris as well, like, what are we doing here. And so he and I and two other members of our class left Princeton, and we all kind of scattered to the four winds. So I ended up going back to the Midwest, I’m I’m from St. Louis, I grew up in St. Louis. And I think my, my parents at the time saw that I was pretty unhappy at Princeton. And so they bought me a plane ticket to St. Louis to go visit but also to go talk to the people at Washington University, about potentially transferring, and so I brought my portfolio materials and ended up getting into to Wash U and that all worked out. So I transferred to Wash U and I spent the next two and a half years at Washington University really enjoying the program was very different than than what I had at Princeton. It was much more pragmatic and focused on the real world. And I got involved as even as a first year graduate student in a fantastic program. I was I was sort of the hired graduate students staff for a program called the mayor’s Institute on city design Midwest. And this was a program of the National Endowment for the Arts, that was designed to bring mayors of cities of all sizes around the country. So there was a national Medicine Institute for the big cities. And then there were a series of four regional Institute’s that were for smaller cities. And my job for three summers, when I was a student was to take a big map of the United States, we had 12 states that we covered. So it was a pretty big territory from Minnesota to Ohio. And essentially cold call and reach out to midsize cities in this 12 state area. And talk to city planners talk to city council people, economic development specialists, and try to identify the key economic development and urban development challenges that each of these little cities was facing. And we would sort them in different ways and ultimately come up with a final list of about seven to nine cities that would participate in this institute that was held at Washington University each fall. And we would also identify a series of nationally recognized experts in, in architecture in urban planning in economic development. And we would bring those people together for a three day conference in St. Louis. And each city would present a case study that I helped draft for the mayor to present. And the mayor would present this and this panel of experts would help discuss it. And then there were a series of talks by other people and some tours of things that were happening in St. Louis. It was just a fantastic, basically a first job for somebody who was right out of college, just just a year into graduate school. And it really helped me solidify my my interest in cities. It also probably made me think, well, maybe being an architect was not exactly the right thing for me. But I finished my program because the program was at the School of Architecture. So I got a master’s in architecture. And when I graduated, I had a choice to stay in St. Louis, or to go explore elsewhere. So I ended up going back to Boston. And I lived in I lived in Boston for as a young architect for about six or seven years. And I worked for a number of well known firms in Boston, Goody Clancy, final de Alexander, doing really interesting stuff I tried to focus on on housing because I that That, to me, was the quickest way to be close to the kind of urban development side of things. But when I was working as a young architect, I had just enough contact with the clients because typically, in an architecture firm work, the the senior people are the ones who interact with the clients. And the junior folks are the ones who mostly sit at their desks and do the scut work. But I got to interact a little bit with clients. And I realized I really liked what those those people were doing. I liked that they were thinking broadly, they were thinking not just in design terms or in terms of building code or zoning issues, but they were thinking in broader economic terms. They were thinking political strategy for how to get projects done. Don and through the system. And I thought what they were doing was pretty exciting. And in the meantime, as a young architect, I liked what I did but but recognize that as a young architect, you need to spend years and years and years doing some stuff that is not super interesting. You’re you’re working on building code, research, your drawing, toilet, partition details, all of the stuff that helps you learn to think as an architect, but it, it takes an awfully long time to become an experienced architect. And maybe I didn’t have the patience, or maybe I realized that my heart was was a little bit of a different direction. So in the meantime, this was around 2000. I met my wife in Boston, and we realized that we were basically priced out of the Boston housing market, we wanted to, we wanted to buy a house and so so we moved to Providence, and where we were, we could afford a house. And I continued working for Goody Clancy, the firm in Boston that I had, that I started working for a couple years before, but it’s a long commute from Providence, it’s more than an hour on the train. And it was, you know, 15 minutes on the back end, and probably of 20 to 25 minute walk on the front end. So I was commuting more than three hours a day at that point. And that was just the pits. I didn’t I didn’t want to keep doing that. And so I suggested to my bosses at the firm in Boston, hey, could I work at home for one or two days a week? And this was obviously well before COVID and zoom and all of that. And they said no. So I said, Okay, I can’t do this anymore. I need to leave and and I looked for a job in Providence, and I happen to find a job at the Providence office, which was a small office of a large Boston, nonprofit affordable housing developer called the community builders. So the community builders or TCB, is based in Boston. It has been around since 1964. And TCB, was one of the firms that was really instrumental in the redevelopment of big parts of the south end in Boston. They were heavily involved in some major redevelopment efforts in New Haven and in Worcester, and became more of a national firm as they grew, and so there was a growing presence in the mid atlantic there was also a very fast growing and pretty successful office in Chicago. And so I spent about five years working for the community builders out of the Providence office and I worked on a number of projects around New England. So I worked on what’s called a Hope Six redevelopment, which is a federal program for the redevelopment of failed public housing projects. So this I worked on the Dutch Pointe complex in Hartford, Connecticut, just south of downtown Hartford. I worked on Mill Village revitalization project in a small town in northern Rhode Island, on the Blackstone river that ultimately ended up redeveloping an old mill building and building some senior housing and building a new library. And so I really got exposed to some great stuff. And then, in 2006. We had had a we had our first son a couple of years before and realized we wanted to be closer to Susan, my wife’s parents who are we’re in Chicago. So we decided to move to Chicago and because the community builders had a growing Chicago office, the company was fine with me coming out here and joining the work out here. So, so we moved in 2006. And I got involved in some really exciting, larger scale projects. When when I came out to Chicago for TCB. The redevelopment that Hope Six redevelopment of the former Madden wells Darryl public housing site, which is one of the largest public housing sites in the country, is kind of a 30 to 50 year project. And I arrived at maybe year 15 of that. So I got to be involved in several of the phases of that project, including the development of a rec center. That was a pretty great I’m building and also a great amenity for the neighborhood senior building, I was working on projects in Louisville, Kentucky. And I developed a project here that had up a grocery store. And some restaurants and banks and other retail combined with housing, which was really the thing, I think that kind of most sparked my interest in doing mixed use urban development, but also working at a really high level architecturally providing great design as part of what I did. And I so I was at TCB, for 12 and a half years, and I tell people that I had, you know, I was there for 12 and a half years and I had 11 good years there. Toward toward the end, you know, there was a change in management. And it was no longer quite the fit that it was. But when I first arrived at TCB, I thought I had died and gone to heaven, that that it was the the job and the career that was absolutely the best fit for me that it was it was to us a little bit of a cliche, you know, drinking from this firehose of of complex knowledge about these these incredibly convoluted financing programs involving tax credits, and federal subsidies and state subsidies, learning not just about the basics of the economics of these projects, but all of the regulatory complexity that goes into them at multiple levels across local state and federal government, and putting them together where I was working with architects, but all of a sudden, I was that guy that I had. So wanted to be when I was a young architect, I was the client. And so I had, I had architects who were working on my projects, and I got to be in dialogue with them about what the building would be, and how we would shape it and how it sits on the street and what materials we were using. But I wasn’t the one who had to do all the code research and draw the toilets and all of that, that somebody else got to do that. And I got to be the one who ultimately ended up making most of the decisions, which, which was very exciting for me. So, you know, I knew that this was the right career for me, and for many years, TCP was was a great place for me to be but you know, all good things come to an end. And so after 12 and a half years, I changed gears and I had an opportunity to really help build a new development practice at Evergreen real estate here in Chicago. And evergreen has been around for about 20 years. So I’ve been part of that for for roughly half of its life. But it did not have much of a new development practice when I started. And so my charge was to build the company into a player in the national affordable housing development space. And I believe I’ve done that. We started with a small group of projects. So we’ve done some pretty interesting adaptive reuse projects, we converted an old ice cream factory in, in Milwaukee, into loft housing, we converted a beautiful former Art Deco hospital building out in Chicago’s western suburbs and Aurora into senior housing. And we’ve done a number of really interesting new construction projects as well. I think the projects that that I am most excited about and happiest with are other projects that also created sort of the biggest splash for us in terms of national growth. So we were selected by through a program that Mayor Rahm Emanuel had initiated back in 2016, when he was mayor, by the Chicago Housing Authority and the Chicago Public Library to do buildings that combined a new Chicago Public Library neighborhood branch together with affordable housing, in our case, senior housing on fairly prominent sites in a couple of neighborhoods in Chicago. So we got to do two of these buildings. And working with the Chicago Public Library and with just about every department in the city of Chicago to do these projects that were the mayor’s pet project and to work on a very aggressive timeline and to have somebody from the mayor’s office sitting in on just about all of our meetings, kind of making sure that that things were happening according to to the way the marijuana them they happen. It was it was stressful. It was exhausting, but it was also exhilarating. And in the end, these are these are fantastic buildings, I got to I got to know. And I got to work with some incredibly talented architects. So John Ronan is homegrown, Chicago, sort of star architect starchitects. He, he was the only Chicago based architect to be a finalist for the Obama Library here. He’s done some some truly wonderful buildings. And he was the architect of our independence library housing project. And then working with Perkins, and will, who is an international, firm based also in Chicago, they’ve done incredibly prominent international projects. But this was a small neighborhood project for them, but it was in their hometown. And so we really got some, some excellent design thinking from them as well. So these projects have have turned into other opportunities for us. So we’re doing another library housing project, on a somewhat larger scale in Denver, with the Denver Public Library and the the city and county of Denver, and maybe things coming full circle, we’re actually one of eight firms that is competing to do a similar project in Boston, right on Cambridge street. So so we’ll see if, if that actually happens or not. But it would certainly be gratifying for us to, to do that. So you know, coming coming back to where I started. I don’t build stadiums, I don’t build convention centers, my projects tend to be a little bit smaller. But I do feel like they have important impact on cities, and particularly on neighborhoods. And I like to think that the work that that that we’ve done over the last few years has not only had some really good impact on neighborhoods, but also provides much needed housing opportunities, affordable housing opportunities, in a number of markets, where there is huge need for affordable housing, a growing need for affordable housing. And, you know, more and more, everybody reads about housing affordability crises in the newspaper, you know, five years ago, nobody was paying any attention to it. Today, people are realizing how critical it is. And I’m just glad that that I’ve had an opportunity to be part of of helping to solve this problem, you know, in in the small ways that I’ve been able to do it and so you know, that’s that’s basically what I’ve been working on. Since since graduation. I

 

Will Bachman  22:48

hear a lot you kind of ended there about with affordable housing, what you know, I read a lot of Madi, Matt Iglesias and his slow, boring newsletter and other places you read about how there’s a lot of just barriers to building housing and cities. Talk to us about you know, as a practitioner, trying to build affordable housing. Give us some examples of the, you know, the barriers, the regulatory barriers, the other types of barriers that you face, even if you can get the capital? Like, what are some of the things that just you know, are difficult to overcome when you’re trying to build affordable Low to low income housing or rent housing of any of many affordability?

 

David Block  23:29

Yeah, well, I think the most obvious one that people read about in in mainstream press is the involvement of NIMBYs in in these developments. So, you know, NIMBYs I think most people know are, you know, not in my backyard. People who, and they’re mostly good liberals, right, the people who say, Well, of course, it’s important that that we have affordable housing, but not right here. Right, not not next to my house, because I’m concerned about what it will do to my property values, or typically they couch their concerns about traffic and children’s safety and things like that. And so I think that that politicians have only recently awakened to the potential negative impact that that this approach, the the non my backyard approach, has had on constraining any growth in new supply of affordable housing. And so some states like I think, St. St. Paul, Minnesota has done this actually the entire state of California is considering this is looking to create opportunities for developers who are doing affordable housing to override low For zoning concerns in order to get that housing done, I see that as a pretty draconian solution. I’m always a big proponent of working with local communities to try to get to a solution that everybody wants to see. But sometimes, people’s concerns are just not rational and cannot be rationally argued. And it is just a kind of fear of the unknown or a fear of change. And in that situation, some of these additional tools involving state involvement in local zoning may be what’s needed. We try to stay out of those fights we’ve had, we’ve had some I had one project, also in Chicago’s western suburbs that actually did not go forward because of a local zoning fight. And that was, you know, almost an 18 month battle. That got very ugly, and, and very frustrating all around. So, you know, I seen the impact of of NIMBYs on development of affordable housing. So that’s one obstacle. But as you say, it’s it’s, you know, the resources and the capital stack as well. And unfortunately, I think that the impact of COVID has not been fully felt on the construction industry until the last 18 months or so. And what we’ve seen is a huge impact on supply chains, leading to a huge run up in the cost and availability of construction materials. And also, labor shortages, not necessarily as a result of COVID. But actually going back, I think, to the 2008 financial crisis, there was a significant attrition, from the construction trades of skilled and experienced workers, who, many of whom lost their jobs or lost their primary sources of income in 2007 2008 2009. And just decided, you know, what, I can’t live with this kind of uncertainty and an economic disruption, I need to find something else to do to make a living. And so you had a number of people just drop out of the trades. Not necessarily so much the best paid trades like electricians, and plumbers, but drywall hangers, and even iron workers, steel workers who are building buildings that there was a real drop in the labor force. And we’re still dealing with that today, because it drives up the cost of construction. And you combine that today with interest rates that are essentially double what they were two years ago, and all of a sudden, you have some pretty serious headwinds against the need to build anything, but certainly the need to build affordable housing is part of that as well.

 

Will Bachman  28:09

Well, one specific example I want to ask you about is like single room occupancy type buildings. So I mean, I think it used to be the case that you could build a building, where each individual room was just like, a tiny little bedroom, and the bathroom would be down the hall. And there might be a kitchen, you know, somewhere in the building, but every individual apartment would not have its own, like kitchen, you know, and this was, you know, college students in college dorm rooms are perfectly lit perfectly fine in rooms like that. But my understanding is you are not allowed to build buildings like that, and a lot of places because zoning restrictions, and the idea, of course, is to make sure that, you know, housing have a certain quality, but on the other hand, it kind of makes housing a lot more expensive, and a homeless person might be better off in a single room occupancy type building than living on the street. Talk to talk to me about that a little bit.

 

David Block  29:05

Yeah, it’s it’s a complex dynamic. And you’re you’re right to kind of, you know, bring homelessness into the discussion, because, in general, the buildings that were an SRO type model is viable, is housing for people who either come directly in off the streets off of homelessness, or are very housing unstable, so are, you know, living on a relative’s couch for months before they’re able to get a unit. And, in general, this kind of housing is the current thinking on this is that it needs to be not just housing but housing together with services. So this is called permanent supportive housing or psh. Where, because typically, at least the current thinking today is that homelessness is often a symptom of underlying issues, whether it is mental health or drug addiction or a combination of those things. And so the notion is that housing for a homeless or near homeless population needs to provide services to help address the underlying issues faced by this population to get somebody back on stable medications, so that they are actually able to, if not hold down a job to just sort of function on a day to day basis, somebody who has addiction issues to help address those medically, and so on. And so the challenge is, not only do you need to build the housing, and often that takes like an SRO type form, but you need to find the funding, and the staff for the services, and be able to do that in an incredibly resource constrained environment. So it is, it’s a real challenge to do it, and states are prioritizing it. But clearly, I’ve heard national statistics that say we have somewhere between a three and a $7 million dollar shortfall in housing units nationally. And because of the way this works, the the folks who are most vulnerable, the the homeless population, the mentally ill, or drug addicted population, they’re the ones who are least able to compete for what, what housing exists at the low end of the spectrum. And so they end up homeless and the resources to build that huge number of housing units that is needed are just not there. Particularly if construction costs have almost doubled in the last two years. And if interest rates make it even more challenging to pull together the funding to make it happen. So it’s a it’s a huge societal crisis. And my my worry is that our existing models, which which have worked pretty well, for the last 35 years, I mean, the the primary system for building affordable housing, actually goes back to before 1992, it goes back to the Reagan tax reform of 1986. And the creation of the Low Income Housing Tax Credit, which is the primary tool that we use to to build housing today. Back then, you could build a housing unit for Well, under $100,000. And the tax credit and the way the system was set up, function just fine in that model. Today, construction and development of a housing unit is approaching a million dollars, even in Chicago, it’s been close to a million or over a million dollars in California for a number of

 

Will Bachman  33:09

for a number of years. Now. Wait, this is like with his like per apartment,

 

David Block  33:13

per apartment. Exactly. And when you’re talking numbers that are that daunting. something isn’t working, and I am concerned that we are kind of at a crisis point with the the financing model for how this is built. Because many people including I can hear in your voice are saying that’s crazy.

 

Will Bachman  33:36

Yeah, I mean, like, you know, we’re land is cheap. You know, I mean, you can buy a house for, you know, 200,000 bucks or something right? You know, you could you could you could, you could put a couple one of these, like, you know, half houses together that you get prefabricated partly, you know, whatever, for 150 200 grand, so why does it cost a million bucks to build a housing unit? In California?

 

David Block  34:03

Yeah, it’s, it’s, you know, there’s, I could I could have a whole separate hour long discussion with you about that. And I’ve actually, I’ve done presentations to city and state government about why is affordable housing so expensive. So there’s, there’s a lot of reasons having to do with regulatory requirements having to do with Union and prevailing wage requirements that go into these things, the sheer layers of financing that go into it, and at each layer, there needs to be an attorney working on it so and, you know, developers need to be paid at some level. Are we simply middlemen that would be it would be better off as a society if if government did this the way the old public housing was built in the night 1930s and 40s? I think that question, in some ways, answers itself because we know how that turned out most of that housing that was built in the 30s. And 40s, by by government has now been torn down because it was so bad and unlivable. Whereas housing that was built with tax credits with market exposure to units and with oversight by banks and regulatory agencies, is almost all in much better shape and is doing better is better maintained. So I think the intentions are right, but the model may be at a breaking point. And I don’t know that anybody has, including me has a really good answer for where we go from here.

 

Will Bachman  35:46

Big issue facing cities is all this empty commercial real estate post COVID. What are your thoughts about opportunities there? What are some of the barriers of converting that into residential or retail or event space or something else? Because it doesn’t seem like people are going back to the office?

 

David Block  36:08

Yeah, it’s a it’s a great question. And many cities are, are experimenting with a lot of different opportunities for reuse of these buildings. So in Chicago, the city of Chicago Planning Department put out an RFP for the redevelopment of a number of buildings along LaSalle Street, which is kind of the Wall Street of Chicago. And, you know, when I was at TCB, I had, I had my office and two different buildings on LaSalle Street, both of which are in big financial trouble right now. And they were both fantastic, historic 1920s and 30s, Art Deco buildings that felt timeless, in a way while while I was there working in in the office, but tough buildings to reuse. I mean, the first part of that challenge is you have to convince people that they want to come downtown and, and live on LaSalle Street. And you know, some of it is maybe just a failure of imagination. Because, you know, LaSalle street has had a reputation for being, you know, a little bit dead after five o’clock. And so convincing people that the amenities that they need to live comfortably downtown, are coming grocery stores. There’s there’s no shortage of cafes, but restaurants that that cater to more than the business lunchtime crowd. You know, most other amenities are readily available downtown. So that shouldn’t be a tough sell. But, you know, the challenge is that these buildings need a lot of, they need a lot of work to adaptively reuse them as residential buildings, particularly the newer ones. So the ones from the 1920s and 30s. Pre air conditioning are easier to reuse because they tend to have narrower floor plates, because the idea of when they were built was you needed to have some cross breezes to, to air conditioning the building. So reusing those to bring adequate light into a new apartment is a little bit easier than taking a building from the 1960s or 70s that had a central elevator core and air conditioning off of that, where you’ve got so much distance from the outside windows to the core that it’s it’s hard to make that a livable code compliant unit that is attractive enough to take a huge financial risk on it. So

 

Will Bachman  38:58

that’s so that’s interesting. So the older buildings would have more kind of, you know, maybe like some central inside the actual footprint of the building. They’ll have these sort of columns, you know, with, with windows facing the interior courtyard or something. And whereas new building, and so is there a rule like because if you tried to make an apartment inside this big, big, massive floorplan, you’d have apartments that maybe have a window, just very at the edge or maybe not even at all like, I guess there’s rules like you can’t have an apartment that doesn’t have a certain amount of Windows.

 

David Block  39:34

Yeah, there’s there’s rules about light and vent, you have to have a certain percentage of the floor area of a unit as outside windows and as operable windows, you have to bring a certain amount of fresh air into units and that’s based on a percentage of the floor area. And it’s easier to do that in the older buildings and you You know, because they’re, they’re narrower in the newer buildings, you end up with a lot of wasted space, because you need to push your your common corridors closer to the perimeter of the building. And so all of that space in the middle of the building becomes almost unusable. And, you know, economically, it’s, it’s tough to deal with that. So I think that, you know, everybody is looking for some creative solutions right now. And cities are throwing varying degrees of funding at these problems. So the city of Chicago is, is offering a significant amount of TIF tax increment financing. For developers who do this, we’ll see if these projects actually get built or not. It’s at the very early stage, I know San Francisco in particular is struggling with it. And there’s a there’s a giant shopping mall, right on Market Street in San Francisco, that the owners have just handed back to their lender. And, you know, what do you do with something like that a giant mall in the middle of the city, I think it will be tough to reuse that for housing.

 

Will Bachman  41:11

I’m curious about the postgraduate degree kind of options. Now looking back, my understanding is a architecture degree, you know, maybe at Princeton is very much this literary power dynamic stuff. But your typical more practical place, it’s how do you build a building? Like one specific building, you know, the toilet seats and stuff? What are some of the other degrees that might have been more appropriate are that someone who wants to go into urban planning or wants to go into urban development or work at a real estate development type firm? What are the typical degrees that that people might get who want to go into those fields?

 

David Block  41:55

Well, so I think my group at Evergreen is a pretty good reflection of that. So the woman who is my second in command, in my group, she’s an engineer. And she spent the first part of her career building bridges and, and culverts and other bits of infrastructure. But she knows how to build she knows how to work with designers and contractors. And so that translated pretty well into into this work. We have a number of people who have urban planning degrees. And they come out of school, I think, with a with a good sense of how the pieces connect, but not necessarily understanding the economics of development. And so we need to teach them that the I think what I most enjoyed about this work about the business of being an affordable housing developer is, to me, it’s sort of the ultimate generalist job, I get to know a little bit about an enormous number of things, I get to know a little bit about the legal side, because I have to spend a lot of my time reading complex legal documents, I have to work with a lot of bankers, so I need to be able to speak their language, both as lenders and investors in projects, I need to be able to work with architects and engineers and surveyors. I need to be able to work with elected officials. So I have to be able to understand politics and the power dynamics within each community I’m working in. So for somebody who has a really broad range of interests. There are multiple ways to get a degree and get into this business. But you need to recognize that you’re going to end up learning a lot about a number of different areas, not enough necessarily to be an expert in those areas, specifically, but enough to be able to have intelligent conversations with experts working in those fields.

 

Will Bachman  44:07

I’m going to turn back to college. Are there any courses or professors that you had at Harvard, that continue to resonate with you in some way?

 

David Block  44:19

Yeah, I still think that I ended up being an English major. Because I figured while I was in college, if I didn’t really know what I wanted to do, and Harvard didn’t have an architecture major, at least I should read some really good books and learn to talk and write and think about really good books. So So I had some great English classes that I really enjoyed. And you know, just several come to mind. I took three classes with Helen vendler. I took the the English survey class and then I took a class on William William Butler Yeats. And Helen vendler is an expert on Yeats and just hearing this, this professor who had such an incredible breadth of, of knowledge about English literature, poetry in particular. And just listening to her speak often it seemed extemporaneously about all of these wonderful poems and the insights that she brought, it just it just really opened my eyes to the fact that you can speak about artistic and creative matters precisely, and, and creatively in a way that that actually advances a meaningful conversation. And I contrasted that with my experience at Princeton, where it was all about power dynamics, and I just, you know, the the sort of post structuralist view of the world. And honestly, we’re seeing an awful lot of that today with identity politics and critical race theory and all of that. It all stems from those kinds of post structuralist. Everything is based on power view of the world. And I think it fundamentally misses what is beautiful. And what was so inspiring about Helen vendler, and I think Derek Piersol talk took Chaucer class from him. Their their passion, and they’re very, and they’re very precise, and articulate and reasonable remarks were fundamentally about how beautiful this literature was. And so I that’s stuck with me, because I’ve translated it into another medium, right? I am, I am a passionate believer in great design for, for housing, and I’ve worked with some incredibly talented architects. And I like to think that working with these architects, I’ve, I’ve helped them create some some really beautiful buildings over the years. And I’m proud not just of the fact that I’ve created housing, but that I have created something beautiful, that can be part of the environment in urban neighborhoods. And to me, that is that is sort of the ultimate test of, of whether what I’ve done over the last 30 something years has been worthwhile is are people going to look back in the future 10 years, 2050 years from now and say, This is a building that stood the test of time, the way, the way, Helen vendler spoke about Yeats or Piersol spoke about Chaucer. This is a work of art. And it also has the has the benefit of being a library or of being a place where people can afford to have a decent apartment, because that’s how it’s designed. So that’s kind of the lens through which I evaluate whether my work has been successful or not. And I’ve had some not successful projects. But I think for the most part, I have had a few opportunities to do some projects that have been successful, and I hope they will stand that test of time.

 

Will Bachman  48:22

What a wonderful mission in life, David, where can listeners go to either reach out to you or to see some of your portfolio of work? Find out more of what you’ve done? Share, share some links with us. Where can we where can we go and find out more?

 

David Block  48:37

So my company evergreen Real Estate Group. You can look on our website and my contact info is on there. It’s evergreen, ar e g.com.

 

Will Bachman  48:50

All right, fantastic. We will include that link in the show notes. David, thank you so much for joining today. This conversation could have gone on much longer. I have so many more questions about urban development. This is fascinating. Thank you so much for joining.

 

David Block  49:04

My pleasure. And thanks for having me.