Too soon old, too few young
By David A. Smith
4 min read
Unlike my peers, I do not age. Yet my contemporaries, seen last month at AHF Live in Chicago, look so old. I asked a long-time colleague if I were imagining things. His response took me aback:
You’re not imagining it. I was at a conference last year where executive aging was brought up as an issue. The average CDC director is in their fifties.
We apply aging-in-place to residents, to properties, and even acerbically to regulators. But we need to apply it to our industry and ask ourselves: What are we doing to rejuvenate our workforce and our ideas?
Evidently not enough, for aging-in-place of leadership is a direct threat to an industry’s viability.
It’s hard to keep young people in this business.
All human societies need an age pyramid: more young people, fewer old people. A successful economy depends on having more working age people than those at life’s endspans (childhood, retirement). The affordable housing business is complex and abstract, so everyone we hire, we give an on-the-job postgraduate degree.
We bring in a constant stream of inexperienced project managers. When we hire people, we’re introducing them to a whole new set of concepts. The learning curve is steep and it takes time.
As we grow new leaders, we need to keep them in the field. When the age pyramid narrows, the economics of society’s contributors and beneficiaries turn negative (as we’re seeing with Social Security and Obamacare). When the population pyramid becomes a column (as in Japan today), the elderly become an insupportable societal burden. When the pyramid inverts, a society collapses.
Affordable housing isn’t keeping many of our best and brightest; we lose them to our own glass ceilings and to the talent updraft.
Once they get a few years in the business, the good ones become very marketable to for-profit developers. Let’s face it, CDC executive directors make far less than a typical for-profit project manager, and that compresses the wage scale all the way down. We can’t keep up.
The same talent updraft of economic reality also sucks people and companies out of affordable housing entirely into other, more profitable asset classes (e.g., shopping centers, luxury condos).
A business dominated by people who learned it decades ago stops innovating – and starts dying. Any policy-dependent group drains its political capital because it loses connection to elected officials and their influential staffers, for whom 28 is a seasoned veteran and 35 is a dinosaur. What do staffers know about LIHTC?
Our industry is pretty insular. Young people don’t get exposure to the field. When you say affordable housing, they think public housing, HUD bureaucracy, and big government programs. Not a positive impression.
Entrepreneurs start young and don’t know what’s impossible. They also don’t know that such-and-such a program or project failed in 1987. Even if they did, they’d regard it as irrelevant ancient history.
Young people are also daring, ready to take greater intellectual, emotional, and entrepreneurial risks. Young entrepreneurs instinctively use and adapt technology; we oldsters adopt cautiously and use fractionally. Our industry operates and manages LIHTC properties using 1990s communications and information technology. Where is the Low-Income Housing Tax Credit’s social-media platform? The find-a-LIHTC-apartment apps? The customized social-services or homeless-support app? The fact we cannot figure how to use the new media for LIHTC is proof of our intellectual obsolescence.
Once we were that way, impatient with codgers in our way. Dredge out that pre-digital photograph from your first deal closing many moons ago. Who in your organization today looks similarly young, has similar passion, bursts with similar wildcat ideas?
Every year, social-entrepreneurial talent spills out of graduate and business schools by the thousands looking for work and careers: intelligent, passionate, and oh-so-inexperienced. Many are possible future affordable housing leaders. As people who believe in the social and economic worth of affordable housing, we need to recruit our share of these talented Millennials, create career paths for them, mentor them, and reward them: with jobs, with friendship, with praise, with responsibility, with money, and with risk capital. If not, they’ll see us as dinosaurs, and they’ll be right.
David A. Smith is Chairman of Recap Real Estate Advisors, a Boston-based real estate services firm that optimizes the value of clients’ financial assets in multifamily residential properties, particularly affordable housing. He also writes Recap’s free monthly essay State of the Market, available by emailing dsmith@recapadvisors.com.
