What decisions and paths should the real estate industry be prioritizing? And how can you, whether managing a team or an entire company, bring those best lessons to bear where you work? In February, in advance of building an industry blueprint at Inman Disconnect, we’ll plumb the topic of leadership with Q&As with top industry leaders, contributions from esteemed Inman columnists and more.
M. Ryan Gorman made clear last week that his ouster as CEO of Coldwell Banker wasn’t his final act. In his first interview since departing from Coldwell Banker, Gorman shared details on his next chapter.
He’ll use his real estate development firm btcRE as a source for collaboration and a conduit for groups and policymakers striving to address housing affordability. He’s prepared to be a policy wonk and a leader by example, working with other developers, nonprofits and municipal governments all broadly working on improving access and availability of affordable housing.
And he’ll dust off things that were previously commonplace in real estate while righting often racist wrongs of the past.
Ryan Gorman | Co-founder of btcRE
“What’s old is new again,” Gorman said. “I’m trying to bring back ideas that we’ve forgotten, that created places we loved in the first place so that we can create new places we love that are also affordable.”
Gorman co-founded the firm 12 years ago, while he was still working under the Realogy and Anywhere brands, and eventually as CEO of Coldwell Banker. BTC focused on commercial projects during that time to avoid perceived conflicts of interest.
Freed of that perception, the firm is already working on adding residential work to its portfolio, acting as consultant to nonprofit organizations and cities looking at clearing out red tape that often prohibits housing affordability.
Here’s his game plan.
Inman: I want to be clear about what kind of development you’re going to be focused on. BTC’s portfolio currently looks primarily commercial. But you spoke a lot about issues with housing affordability, so I imagine that’s a big part of your next move.
Gorman: We’ll be moving into both development and advisory in residential. On the development side, ideally we’ll be doing redevelopment work like we have historically done on the commercial side. To take perhaps different buildings like office-to-residential conversions, or derelict, neglected spaces and bring them up to a quality but also affordable residential space.
I anticipate also augmenting facilities with additional units where we can work with towns and cities to do so. Building more within the existing property, converting the existing envelope to more residential use.
I actually didn’t notice that btcRE meant ‘be the change you want to see in real estate.’ What are the biggest changes that come to mind?
Gorman: One specific area that comes to mind on zoning is a popular and hot topic, which is single-family zoning. That is often mischaracterized as a desire to eliminate single-family homes, when instead it’s maybe a desire to allow something more than single-family homes. Accessory dwelling units come into play there. Demising individual properties as they exist today to allow for multi tenant experience.
That can create missing-middle housing — the type of housing that is oftentimes affordable at market rate as opposed to Capital A affordable, government subsidized.
Something that is discussed less often than zoning reform is helping towns and cities to understand their existing regulation patchwork, which includes zoning, parking regulations, use regulations. Even criminal statutes that when brought all together make it sometimes impossible to build as of right — meaning anyone to build anything needs variances that are expensive and uncertain.
M. Ryan Gorman speaks at an Inman Connect Las Vegas event while CEO of Coldwell Banker.
There’s no shortage of these kinds of regulations. Deed restrictions are another. As are minimum lot sizes that require more land for fewer homes instead of more homes on smaller lots.
I am talking to you right now from precisely that type of home. I’m looking across the street at an enormous mansion that is now a church. The grounds around it were developed into dozens of smaller but still large properties 100 years ago or so. And then all of the space between those still large properties was developed into smaller homes, including mine.
Until very recently, maybe five years ago, there was a deed restriction for this entire neighborhood that nothing other than homes that were expensive were permitted.
So you’re going to focus on the wonky stuff. What exactly is your playbook to get that done?
When I stepped into the leadership role of the franchise of my prior employer, one of the reasons I think our franchisees and broker-owners appreciated what I had to say was my experience leading my own brokerage operation. I was involved in the exact same challenges and opportunities as them, and that led to a lot of credibility and gave us all ideas and cross pollination of best practices.
I’d like to do the same here. As a redeveloper of properties that require use and zoning variances to bring them into compliance, and a landlord-user of the Section 8 voucher system to fully understand the vetting and rental to those who utilize that system.
I saw you mentioned acting as a consultant, as well.
Literally this morning I had a conversation about an urban community center that is trying to expand their mission into providing housing for a particularly underserved group, as well as a rural nonprofit that is trying to expand their mission to provide emergency housing to families of the children they serve.
Both of which can learn from one another, neither of which would probably have spoken with one another or known they existed but for the kind of cross pollination that we at btcRE can provide.
Your post focused a lot on integrity, and you cited an example from when you started btcRE. I’m curious if you could shed light on that example. Also on common areas that test the integrity in real estate and in development.
One of the things that was extremely beneficial in my prior work, especially when we were acquiring companies, as many as 50 in a single year, was being able to say to a potential seller, ‘I mean what I say, I say what I mean. If you and I have an agreement, then we will stand behind that. You don’t need to trust me. You can call literally any broker with any press release that we’ve ever acquired and asked them if that was their experience with us.’
That was massively beneficial to being able to get really difficult deals done. We could create trust through reference. That’s the kind of level of trust we try and also engender with the town council, with the mayor. So that when we show up proposing a variance request for a different approach to a residential unit, they’ll stop and listen instead of just thinking we are greedy developers who will do anything to get a deal done.
What do you think real estate professionals and brokerages should be doing to promote homeownership?
Something we have done in the past at Coldwell Banker and other brokers in the market as well but everyone should consider doing a lot more is dispelling homeownership myths.
There’s a big financial incentive to do that with middle income and higher income potential buyers. There’s much less financial incentive to help low-income individuals and communities understand the programs that are available to them, the options available to them.
For instance, you do not need 20 percent down. You do not need a 750 FICO score. You do not need a two-income household. You do not need 10 years of uninterrupted job history. All of these myths are common and keep people from stepping into the path to homeownership.
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