Don't Give Up on Real Estate Investment

V.2, N.46

When the U.S. Bureau of Labor Statistics recently released data showing higher-than-expected inflation in March, the financial markets panicked. Biden skeptics predicted a dangerous resurgence of inflation. The Fed all but called off hope for reductions in interest rates. And the financial press pronounced the real estate sector dead on arrival since homeowners can’t get cheap mortgages.

But let’s get real. The March data showed an increase in inflation of four-tenths of one percent (over February).

If you’re a home purchaser waiting for mortgages to go below 7%, alas, you may have to wait a little longer. But the widespread impression that the real estate market has seized up and collapsed is wrong. In many cities, commercial real estate freed up by the work-from-home revolution seeded by the pandemic is now available at a steep discount. The repurposing of commercial real estate has been underway for a while and will only accelerate as lower interest rates become available.

Our lead commentary piece, by Tracy Hadden Loh and Ida Rademacher, explains that “the reality is that commercial real estate encompasses diverse products and places that combine to form hyperlocal submarkets. Many of those submarkets—particularly neighborhood retail and mixed-use developments—are emerging from the pandemic’s disruption stronger than ever. Investors and lenders who lump all commercial real estate together are missing real market opportunities.”

Nor are high interest rates deterring serious metro redevelopment. Our second piece, by New Urbanist Bruce Katz, lays out the strategy for Community Preservation in Latino Eastern North Philadelphia. “The anti-displacement strategy,” he writes, “contains three signature initiatives: a residential rental land trust, a commercial land trust, and a community preservation district.”

In New York City, as Mayor Adams is preparing to spend $24 billion for affordable housing, a new coalition of cooperative housing organizations is advocating that 15% of those funds be used to convert old office space into permanently affordable cooperative housing in Manhattan Midtown South.

Along with these articles, we also have a piece from ImpactAlpha on the accomplishments of Colorado’s recently created employee ownership office. More than 60 companies have used the state’s resources to convert to employee ownership since 2021.

In the bad news department, our final piece reports on how Argentina’s new president, Javier Gerardo Milei, a libertarian who ran for office wielding a chainsaw to explain his attitude toward government spending, has also been dismantling privately owned worker co-ops. Looks like he doesn’t mind some kinds of government overreach.

If you want more news, please subscribe to the MSJ Extra! through this handy link. Besides our weekly interview, we just added a listing of local investment funds around the country ready for your investment.

~ Michael Shuman, Publisher

NEWS

• The Real Commercial Real Estate Bomb, The Hill (April 10)

• Community-Oriented Investment in Eastern North Philadelphia, The Philadelphia Citizen (April 8)

• New Coalition Calls for Affordable Housing Cooperatives in NYC, National Cooperative Bank (April 9)

• Colorado Accelerates Employee Ownership Conversions, ImpactAlpha (April 17)

• Argentina's Worker Co-ops Under Attack, Grassroots Economic Organizing (April 3)

WHAT YOU MISSED IN LAST WEEK’S MSJ EXTRA!

For more than a decade, Elias Crim has written essays about economic democracy, decentralism, and spirituality. Consider subscribing to his Substack newsletter, Solidarity Hall. He recently announced the launch of a Social Co-op Academy, and we thought it would be a great opportunity to chat.

MS: Elias, for readers unfamiliar with your work, give us a thumbnail sketch of your journey to creating Solidarity Hall.

EC: At one point in my 30s, armed with a degree in comparative literature, I found myself working for the Chicago Board of Trade promoting supply-side economics and exotic futures contracts. By 2008, I realized I had been working for the wrong side and started reading people like E.F. Schumacher. I discovered there was a kind of “third way” in economics. Some friends and I launched Solidarity Hall around 2012 to discuss what we found.

MS: How would you characterize the “third way”?

EC: As neither capitalist nor state socialist—but that barely tells you anything. I guess you could say the third way is the economy for people, the human-scale economy, including the informal economy. In fact, it’s the old, original pre-capitalist economy. And in some ways, it’s coming back.

MS: You are an enthusiast of cooperatives, but co-ops come in many shapes and sizes. What kinds of co-ops most excite you and why?

EC: My latest enthusiasm is for the idea of importing the foreign model of social co-ops to the U.S. They are created primarily to deliver different forms of social care—child care, elder care, etc. According to the data, social co-ops create the highest quality social care at the lowest cost of any model you can find.

MS: What are some examples?

EC: Social co-ops have been used in Italy and Quebec, among other places, for two decades or more as a way to deliver community-run, bottom-up social care of high quality and lower cost than other models. A social co-op, like a worker co-op, is worker-owned and democratically managed, but it is multi-stakeholder. This means it has multiple categories of membership and can even include volunteers, family members, and community members.

SPONSOR CORNER

The National Coalition for Community Capital (NC3) is dedicated to educating, advocating, and activating community capital—and serves as MSJ's fiscal sponsor. Thank you for being a part of a growing movement! All new and existing members are welcome and encouraged to reach out at any point to schedule a conversation with us—simply email info@nc3now.org.

NC3 UPDATES AND ANNOUNCEMENTS

• The National Coalition for Community Capital (NC3) co-hosted SuperCrowd24 last week, bringing people from all areas of the world of crowdfunding together to share insights, resources, and reflections. NC3's Board Chair, Chris Miller; Board Secretary, Brian Beckon; Board Members, Jenan Jondy, Topiltzin Gomez, and Bill Huston, as well as our Executive Director, Katharine Gilman, all presented, moderated, or mentored throughout the event. Thank you to Devin Thorpe of The Super Crowd Inc. for convening us, and thank you to all those who attended! We are proud of and grateful for all those who have pushed crowdfunding to be as accessible as it is. We hope to continue supporting the field while working on the other areas of community capital so they are equally accessible.

• The Securities Exchange Commission (SEC) held its 43rd Annual Small Business Forum last week. We are awaiting the results of the public's opportunity to submit and prioritize policy recommendations for Congress on raising capital.

PARTNER NEWS & VOICES

• Move Your Money: Community Wealth Building, American Independent Business Alliance (April 21)

• How Crowdfunding Is Democratizing Real Estate Investment, Superpowers for Good (April 16)

• CClear Investment Crowdfunding Data Reporting Store, Crowdfund Capital Advisors (April 8)

• Combining Community Land Trusts and Limited-Equity Cooperatives, Shelterforce (April 5)

• How Community Land Trusts Help Preserve Farmland, Schumacher Center for a New Economics: Featured in Modern Farmer (April 4)

NEW INVESTMENT OPPORTUNITIES

Our complete list of recently posted investment opportunities has moved to MSJ Extra! As a teaser, here is an offering from our list. (Please note that our listing of these opportunities is not an endorsement, and remember that all investments are risky, so click on the hyperlinks and read all the details carefully before investing.)

• Stellaris (Nashua, NH), StartEngine: Photovoltaic electricity-generating window technology.

NOTABLE NEW RESOURCES

• 2023 Economic Survey of Employee Share Ownership in European Countries, European Federation of Employee Share Ownership (April 4)

MSJ EVENTS

• Community Capital Live: The Guarantee with Natalie Foster - Virtual Event. May 6, at 5 pm ET.

OTHER EVENTS

• Finance for a Regenerative World - Virtual Event. April 30, at 11 am ET.

• Social Co-op Academy - Virtual Series. First Session: May 1, at 2 pm ET.

• Total Impact Summit 2024 - Philadelphia, PA. May 1 - 2.

• Online Legal Cafe - Virtual Event. May 15, at 3 pm ET.

ICYMI

• Where Small Businesses Thrive, NextCity

• Community Not for Sale: Popular Education, Community Organizing, and Cooperative Economics, Schumacher Center

JOBS BOARD

• Black Farmer Fund: Business Support Director and Development and Investor Relations Director

• Mission Driven Finance: CARE Finance Senior Director and Senior Data and Analytics Engineer

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About The Main Street Journal

The Main Street Journal aims to catalyze the movement of $50 trillion from Wall Street to Main Street to facilitate economic development and economic justice. It’s sponsored by the National Coalition for Community Capital, with grants from the Heron Foundation, Wallace Global Foundation, and the Bondi Foundation. We welcome feedback about everything, from our design to content. Also, we welcome suggestions of other groups to involve as partners and additional information to include. Please send ideas to Jen Risley at jen@main-street-journal.com. 

Our Team:

• Michael Shuman – Publisher

• Jen Risley - Editor

• Jessica Landman - Strategic Advisor

PARTNERS

Abrams+Angell | American Independent Business Alliance | Candide Group | Capital Institute | Community-Vision Solutions | Council Fire | Crowdfund Better | Crowdfund Capital Advisors | Democracy Collaborative | Exit to Community Collective | Fair Food Network | Impact Finance Center | ImpactPHL | Initiative for Local Capital | Institute for Local Self-Reliance | The Kassan Group | Mission Driven Finance | National Coalition for Community Capital | Natural Investments | Neighborhood Associates | Neighborhood Economics | New Majority Capital | Next Egg | Nonprofit Quarterly | Ownership America | Ownership Matters | Partnership for Southern Equity | PathLight Law | Project Equity | Project for Public Spaces | Prospera Partners | Raise Green | Revalue | Rising Tide Capital | Schumacher Center for a New Economics | Shelterforce | Slow Money | SOCAP | Sun Valley Institute for Resilience | The Super Crowd Inc. | Transform Finance | Uwharrie Bank | Village Well | Zebras Unite

We welcome any nonprofit or for-profit committed to local investment as a partner. If your organization is interested, please contact Jen Risley at jen@main-street-journal.com.