Where do everyday people turn for quality housing options that allow them to remain in the zip code their family laid roots in generations ago, when the neighborhood was likely known by another name? Tawan Davis, CEO of the Steinbridge Group, has answers and a refreshing vision for the future.
What’s the difference between urban development and gentrification? In practice, there is often none at all. But in conversation, perhaps at a recently opened Starbucks in what used to be a forgotten vacant building on an overlooked block, gentrification is a fighting word, and the people being displaced by skyrocketing prices are losing the battle. The pattern has repeated in Harlem, Brooklyn, Philadelphia, Washington DC, Los Angeles, the Bay Area, and virtually every other major US city in between. Even smaller urban markets are following suit, striving to provide a taste of condo-style luxury within walking distance to the growing menu of restaurants, cafes, and boutique retailers, luring buyers with healthy annual earnings and even stronger credit scores.
Responding to the lingering fallout of the 2008 economic meltdown, Davis has crafted a $425M strategy to provide single-family rental and small multifamily residences in major transitioning cities. For Davis, the math behind this move is simple. “US home ownership dropped by 17%, and today, the average couple is renting for 6.6 years before buying, compared to 2.2 years in the 1980s. For most developers and investors, their recent entry into the rental space was a lucrative but short-lived focus on high-end apartments. Construction competition drove up costs and lowered returns. Developers also encountered a rent ceiling for expensive units targeting affluent Millennials and Baby Boomers. At the same time, they underbuilt for the average American family most affected by shifts in home affordability.” The economic crisis created an opportunity that others were slow to grasp. Rather than overthink and overdevelop with a short-sighted focus on profits alone, Steinbridge is community-driven, responding to core needs in thoughtful, humanizing ways.
Steinbridge’s $60M launch in Philadelphia, paired with a newly opened office in the Old City neighborhood and Davis’s move there from New York, models the mantra of Philly’s beloved Ben Franklin, “well done is better than well said.” The real action comes from what Davis describes as the “economic multiplier” effect of Steinbridge’s deliberate, multi-layered approach. Their acquisition and rental strategy is not a quick flip for short-term gains, but a true partnership with investors and community members, providing a rewarding living experience over the long-term.
“Less than 2% of the rental homes in the US are owned by institutional investors. The vast majority of rented homes are owned by individuals who sometimes lack the resources to maintain the property. For us, this opens an opportunity to acquire houses, improve them, and invest the resources to keep homes in superior condition for families. For each dollar we invest to purchase a home, we spend another 25-30% to install new kitchens, bathrooms, roofs, floors, and other meaningful improvements. We also partner with community organizations for job training on our redevelopments. Our internship program brings in local high school and college students. We are rolling out a program to put solar panels on each of our homes. We are creating a land trust for future community green space, tree planting, and development sites. We donate to local schools and community organizations. For us, social impact is not what we do when we’re not working, but it’s integral to our profitable business plan.”
Davis’ upbringing is what fuels his vision and his “latent assets theory,” allowing him to see the deeper value in communities and people. The ensuing business proposition is an investment in hidden talent and preserving pride, as opposed to displacing and uprooting untapped American dreams. Without similar good fortune and grounding, his own story would be quite different.
By creating hundreds of jobs through the dozens of homes Steinbridge has under development at any given point, bringing in diverse tradespeople, attorneys, accountants, and more, there’s a deep commitment to breaking institutional obstacles and making up for as much lost time as possible. He has no patience for naysayers; he knows the value of his story, and trusts that calculated risks can overcome all imagined limitations. “Achievement is among the purest forms of protest,” Davis added. Looking beyond the paper chase to see the greater measure in people and community is another. “Instead of being displaced, people who have lived and worked in changing areas for generations will be able to stay and benefit from the improved schools, increased job prospects, cleaner parks, restaurants, social spaces, and safer communities that can come along with neighborhood transitions. Our approach also encourages demographically and economically mixed communities, instead of the stark concentrations of economic class that we often see.”
Read the full article at Forbes.