This video was edited by my friend Kirsten Dirksen of faircompanies.com
This is a tale of how a hard core liberal achieved her goals by adopting a seriously conservative economic approach once she realized the usual government bureaucracies weren’t getting the job done.
In 1980 Lois Arkin began her quest to build permanently affordable housing for low income residents in her neighborhood in Los Angeles. She worked with all the established government agencies and non-profit organizations. She followed the rules and read up on all the procedures. She applied for funding and received numerous grants for studies. A city-owned plot of land was identified and earmarked for the project. Well respected architects drew up plans pro bono. Graduate students built models. Financial advisers provided their expertise. Local political figures smiled and said yes at every meeting. It was going to be a grand $50 million complex with all the latest bells and whistles. But year after year the project never got built. Whatever funding was available was always consumed by committees, studies, and bureaucratic procedures. There were too many NIMBYs and too few political allies who actually delivered anything tangible. There were too many unwieldy strings attached to too little actual money. Then in 1992 the infamous Rodney King race riots hit her neighborhood hard. She woke up and realized that she needed to take another approach, “So this shit doesn’t keep happening.” She realized that well-intentioned salaried bureaucrats who live out in the suburbs weren’t ever going to solve the immediate problems of the inner city poor.
Lois completely dropped the grandiose plans she had spent a dozen years working on. Instead she worked with an ordinary real estate agent, found a dilapidated forty unit apartment building that was in “slum-like condition” with many unoccupied units. She reached out to thirty five individual people that she knew personally and gradually convinced them one by one to lend her a modest amount of money. On average each loan was about $15,000 – not a small amount of money, but not outrageous either. She used this money to pay cash for the building. She moved in to one of the apartments herself, immediately lowered everyone’s rent, and started to make gradual improvements to the property on a cash basis. All thirty five loans were paid back with interest within ten years and the building is now debt free. She went on to buy the building next door and the building across the street in the same manner.
Over the years the neighborhood began to gentrify as a new generation of educated young people started to repopulate the inner city. New luxury condo “lifestyle centers” have been built nearby. In order to keep the property permanently affordable Lois reorganized the buildings into a coop where the occupants actually own shares in the enterprise they’re living in. They’re no longer renters but co-owners. She knew there would be a temptation for many residents to sell their stakes at a profit and move away as property values rose so she segregated the land from the buildings in a legal land trust. This created an economic poison pill to ward off speculators and flippers. Instead she insisted that all the money collected each month to go back into the gradual improvement of the properties and eventual acquisition of more buildings. Monthly coop costs in the complex are half to a third of the surrounding market rate rentals.
Here we have a perfect example of liberal social goals being achieved with conservative economic techniques. Keep it simple. Stay out of debt. Live within your means. Work directly with people close to home. Avoid regulations by working outside the strictures of banks and government assistance programs. Roll up you sleeves and get the job done.