"To address the ills of commercial development," an Atlanta group is attempting to rebuild a community by offering neighbors equity in the projects -- for as little as $10 at a time. Commercial real estate and affordable housing alike are included in The Guild's plans. The group's website says it launched in 2015 as Atlanta's first co-living company that's expanded into diverse programming and is now taking on the issues of gentrification displacing both people and retail businesses there.
Currently, that means redeveloping a 15,000-square-foot 1930s commercial building in the Capitol View neighborhood that would include two floors of permanently set, affordable rents atop first-floor retail space, Bisnow Atlanta says in a recent article.
"Our mission is to facilitate self-determination," Antariksh Tandon, director of development and design for The Guild, told Bisnow Atlanta. "Not making this out to be a utopian project, it's not to try to come up with a thing that is sort of foolproof, but to come up with a way to address the ills of commercial development."
Investors can put as little as $10 a month into the project, and the organization said it's upfront about the long timeline for a return, as well as the risks inherent in the project.
Will this work, and could it be a model for other places?
Gentrification is an issue in a lot of places and has been for many years, often fueled in part by well-meaning programs that offer tax breaks to investors, who then sell properties to new homeowners at higher prices than the folks already living there can afford.
A few other groups are already trying to pool small, local investments to buy commercial real estate, the Bisnow Atlanta piece says, adding that "the overarching goal is to allow historically marginalized communities a chance to participate in wealth creation through real estate, while simultaneously stemming the tide of displacement."
The results so far have been mixed, says the Urban Institute's Brett Theodos, co-author of a December 2020 report titled "New Models for Community Shareholding" that takes a 13-page look at equity investing in neighborhood real estate investment trusts (REITs) and cooperatives.
"This really is quite new and different, and it's worth acknowledging that real estate is not always a performing asset," Theodos told Bisnow Atlanta. "It has booms and busts as well."
The Millionacres bottom line: Giving communities a stake, as well as a voice
The Bisnow Atlanta article includes a quick look at the experience so far of similar efforts in Los Angeles (where a small REIT is working to pay its first dividend), San Diego, and the Twin Cities, and it's worth a read, as is the Urban Institute report.
They can provide insight such as finding ways to overcome resistance to development and redevelopment projects by enabling people of modest means to take part in the revitalization of their own neighborhoods. That goes well beyond participation limited to simply speaking up, say, at zoning board meetings.
Perhaps, they also can inspire some thinking about how outside investors can participate through such vehicles as historic tax credits, the Low Income Housing Tax Credit, and qualified opportunity funds that invest through the Opportunity Zone Program.