An Army of Normal FolksTim Sittema: Money Isn’t The Only Scorecard (Pt 2)
After decades working as a traditional real estate developer, one day Tim Sittema was shocked by a study that ranked his city of Charlotte as dead last in upward mobility out of the top 50 cities and he couldn’t unsee this reality. Tim felt called to dedicate 50% of his time on a type of development that you would never do if your goal was to make money: affordable housing. He’s since built around 500 affordable housing units, with another 500 on the way!
Everybody. It's Bill Courtney with an army of normal folks. And we continue with part two of our conversation with Tim Seema right after these brief messages from our general sponsors. Why can't we do this in every city? Bro?
You know, I think you said in an earlier, earlier podcast you talked about you know it takes an army of normal folks. You know that the thought itself doesn't do it. I mentioned earlier, I'm a person of faith. I would I would say, you know, probably more forcefully that if you're a Christian in business, it actually doesn't matter whether you're in business or not. But if you're a Christian, this this isn't an op. It's an obligation. If you have a gift, if you have resources, if you have a platform, that's what you're here for. You're called to serve this. This is not an option. And you know, I happen to be a real estate guy. You're a coach and a business person owning a lumber yard and so on. But there are firemen out there, there are teachers out there, There are obviously policemen out there, there are janners out there. All of us, you know, have an ability to improve the lives of other people. And and as a believer, I would say it's not an opportunity, it's it's not only an opportunity, it's an obligation. That's what we're here for. We're called to serve.
And that's a far cry from belief like me or you're going to Hell. Yeah, I mean, unfortunately, I think, and I'm a Christian too, I think we Christian's done ourselves at a service over many years with an unfortunate narrative that is, believe like me, or you're doomed. Believe like me, you're doomed. And I love hearing what you're saying because there's people listening that aren't Christians and are Jewish and agnostic or Muslim or Hindu, and I don't want them to think that because we're Christians, we don't invite them to the same table we eat at. Unfortunately, we've done a disservice because there's this narrative out there that says, if I'm a man of faith, you think of me, you either think like me or you're doomed. And you're right. The the whole point behind Christianity is Christ came to serve us, and if we're going to be christ Like, we're called to serve others.
Yeah, we're not going to lead with judgment.
It's not what it's about.
That's not what it's about. We talked earlier about you know, some of the things the public sector does haven't been the most effective and efficient. Well, I would say the same thing about churches in the faith community.
Unfortunately, I would, which I think is healthy to say on this forum, so that those are listening to us that aren't Christians don't be put off by our faith. All we're saying is we're called to serve, and we invite anybody of any faith to serve with us.
That's exactly that's exactly right.
Why don't you get emotional when I talk about the kids?
Yeah, I think it's just a it's it's such a a a rich feeling to know that you're making a difference. And I'm you know, I'm a people call me a hard ass business guy, but deep down, I'm I'm a I'm a softie. And and seeing the impacts where the rubber hits the road, I think, yeah, you know, I go to sleep, you know, at night, knowing that you know, I'm trying to do just a little bit more each day to to try to improve the lives of others. And uh and what a what a neat opportunity for me that you know that I've been given so much and so to be able to use some of that for the benefit of others is a gift. I'll say another thing that there is a cost to this work. I mean affordable housing. If you stack up. If somebody said I'm going to develop an affordable housing apartment community or I'm going to develop a market rate apartment community. If you if you stack those two together, you would and you did a financial analysis, you would never build affordable housing because you take three times the risk and you make a for action of the upside. So that's why there's so many more market rate apartments getting built and not affordable housing. But I like to say God keeps scoring differently than we do. You know, he has a different scorecard. And uh, you know, how much money do you really need?
You know? Well, there's also what I said early. I mean, honestly I believe this. There's a pragmatic side to this that we better get involved in this. We better get involved in this, because what's it looked like forty or fifty years from now. If we continue to gentrify and push people, you're going to run out of places to push people eventually. So, like you said, pay me now, pay me later. I think it's an investment now in our grandchildren's future.
That's exactly right. And and you know what's interesting is you know, these people that are getting displaced move further and further away from their jobs.
Which is again the cycle.
It's the site and transportation options, aren't is their costs and everything else and traffic and everything else that's generated from that. So I mean they're they're you know there. I like to say, affordable housing is not a poor people problem, it's a quality of our community problem. I mean, our whole community has a vested interest. Businesses, companies have a vested interest in making.
Someboder's got to buy your goods and services.
That's right. And if you've got team members that have to drive an hour and a half to get to work every day, well, what kind of quality of life is that? And so you know, it's it's it speaks to the quality of the community to the degree they care about affordable housing in my view, But affordable housing also shouldn't be a place where people move in, they get a diskind of rent, and they stay there for the next thirty years. It really should be a stopping point on an upward mobility.
Which again happens when you cross in a.
Mixed income Yeah.
When you provide mixed income places, you provide children a healthy, safe place to learn, and you quit making these families transient, then you have as for it not to be a final point, but just a lift off spot.
That's exactly right. And and I'll tell you, I, you know, my life has been changed as a result of this. Maybe that's in part why I get emotional too. I you know, this is not just serving others. They've changed, you know, I have your perception of the world's changed, haven't it completely completely? The color of my friends have changed. I mean, I'm locking arms with people that I, you know, didn't you know, even know a year or two or three ago. And and you know, we don't agree on every topic. And if we talk politics, we'd probably disagree, but there's a lot of things we agree on. And those are the areas that we.
Yeah interesting that politics and whether or not you watch Fox or CNN, and where or how or if you worship starts really becoming less and less important when we get out of those apartments and we just work for one another's humanity.
Yeah, that's exactly right.
And is it not the most rewarding experience that you could you could have ever met. You get a thousand times more out of it for your own self than you put in it.
Even we started this conversation with a young man, Stip that that I work with. You know, Stip in part is working with us because we're walking the talk. We're building affordable housing, and he's a young guy that cares about that kind of stuff. He could go to work anywhere, but he's choosing to work and stay at our company. And I've got a bunch of other folks. You know, those are indirect benefits where when you start doing some of the stuff that we're talking about, there's no question that our company has benefited. Even though we may not be making money in the affordable housing space, we benefit in other ways that that never would have expected. The culture, the company culture is I'd stack our culture against any other real estate company out there. We had great relationships with the elected officials and the city of Charlotte, and then we start doing affordable housing and the respect that we get because they know that we're we're doing it. We don't have to you know, the the reach, the the you know, the ability to sit down with some of these folks and talk about policy issues that matter.
It's it's again, it breaks down barriers.
It breaks down barriers. It's it's fantasic. And then you know, they come in and say, hey, you know, the elected officials says, I think you need to do affordable housing in this development, and we say we can't. And here's why we we We they know if we could, we would.
And so I mean maybe maybe that's also a precursor to some of those guys in the public sector saying, well, let's change that designation of that area. Let's make it where you can do it. Isn't that an interesting thought.
Well, that's why I tell that that qualified Census track, that's QCT, QCT. If there are politicians listening, change change it, We'll build more. That's exactly right, That's exactly right. So I mean it takes you know, a conversation like this to reach somebody that says, you know, I can do something about that and it could and should be changed, but you know, like you said, it's a policy that's fifty years old, and there's a lot of inertia in the government, so it's hard to make some of those changes.
We'll be right back. So after six years, Tim, six years, right, two thousand and one, No more, six five?
Yes, we started Freedom communes.
Yeah, seven years. You know, I realize you're managing and spending a lot of time on getting projects done and the financial side of it and dealing with the government, getting tax credits and all. But along the way, has there been kind of like one of your favorite interactions and stories that's kind of imprinted you as you've gone through this process.
That's a great question, and you're right. We just had a board retreat for Freedom Communities this last weekend, and I've told our staff how jealous I was because they're the tip of the spear and they get to have all these great interactions with people. And I said, so every board meeting, every time we're together, I want you to come up with some of your favorite stories so we get to be inspired by those. But I was doing a little piece. One story comes to mind. I was doing a little piece there was a freelance journalist that had heard about this and the Freedom Communities and affordable housing, and so she called to ask if she could do a little three minute news thing for one of the local news channels, and we said sure, and so Hannah, the executive director of Freedom and myself met her and she filmed Hannah first, and then she she filmed me. And between the two of those little segments, there was an African American lady that was walking by asked her what she was doing and and uh, they said, we're doing a little piece for the news. And the lady said, well, I'd like to be on it. And you know, you don't really know what they're going to say. And and I had not met this lady at the time, and so the journalist put her on the camera and asked her, you know, so how long have you been in this affordable housing development? And she started answer the questions and well, what do you think about it? And she went on to say kind of gave her testimony that I mean, it's changed her life. She you know, didn't have stable housing before and now she's got it. She lives with a couple of her kids and and she uh and and we had named the street that enters the development as Blessing Lane, and she said, that's the deal, Blessing Lane. This is a blessing to me. And it was another one of those. So so this journalist was telling me about that when she was filming me, and then this lady happened to be walking by, and so she said, well, here she is right now, and she introduced me and kind of caught it on camera. And I teared up again when I talked to this lady, but she she was. She talked about how her life had been changed with just the opportunity to get this stable roof, keep her kids in school, and the whole works and so and that's what I said, that's what it's all about. I mean, if you're able to do it one family at a time and just get up every morning saying, let's let's impact one family. And like you said, you did the math, and it could be thousands of people so far, but and that.
One interaction there is enough fuel for another five years of work.
That's exactly right.
I know. It is.
It's like getting a birdie on the eighteenth hole when you're playing golf, Like.
You can shoot a ninety seven. Yeah, but that thing is going to keep you going coming.
Back the next day, and that's that's exactly right. So and some days it's it's pretty hard, and there's lots of challenges and frustrations, but but you hear those stories and it makes you come back, makes you get up in the morning. And I'm privileged to still have the energy level to do it. I hope the Good Lord gives me the energy for a number of years.
Yet it's beautiful, you know, Tim, As I hear all of the numbers of units and everything else. You've used the term you can't bore the ocean a couple of times, and I'd never heard that term before, and I love it. I'm gonna steal it from you. But there there's also, you know, there's mom and pop shops out there who buy homes and fix them up, who rent maybe fifteen different different properties. And the truth is, you don't have to be a big developer to do affordable housing. Right. I think you learned. I think I read that you learned in Atlanta that you know you can you can also start small and do this kind of work. You want to speak to that a little bit.
Yeah, that that's exactly.
Encourage people that anybody can really do this.
Yeah, I would say that, and I think I may have mentioned it earlier. That's one of the mistakes we made is you start getting into the work and the need is so great that you start taking on more than you know then you can handle. Uh. And you know, the the whole organization almost folded as a direct result of that because we you know, we're trying to take on too much stuff. I would encourage you just the opposite. Start small. And there are some people that form these these land trusts and they'll they'll raise a few bucks and they'll buy a house. The land trust will own a house and they'll discount the rent and they'll keep that house affordable, you know, for the long term, and then they'll go raise some funds and buy a second house. You don't have to be building one hundred and eighty unit apartment communities to start with. You can you can start at a at a much more molecular level. I guess to do this, but you know, it was kind of interesting. One of the first staff members we hired is a still with US, Cynthia Scott. She's African American lady just a beautiful person, great great story, grew up in poverty in Detroit, and she's now in Charlotte and interviewing for a job to be one of these life coaches to work with these moms. And yeah, and so I'm I'm talking to Cynthia. I'm meeting her for the first time, and she's just a delightful person. And uh, I said, Cynthia, I gotta tell you, I don't know what the heck I'm doing with this, you know, uh, And you know, but you do you do? I mean, you've lived it. You've you've got the lived experience that you went through poverty, and you're married, you got what I think, three kids. You're in Charlotte, and you want to, you know, make a difference. How did you do it? How do we do it? How can we generational poverty in West Charlotte? And she said, Tim, I don't know, She said, all I can tell you is one family at a time, you know, one family at a time, one person at a time, one family at a time. And so so it's helpful for me to start with one family at a time, just thinking about how do you change a community one family at a time.
We interviewed a guy named Rodney Smith who cut grass, and he was driving down the street. He's from Bermuda, didn't have a green card. He was here on a student visa and saw an old man struggling to cut his grass and just got out of his car and went up to him and said, please let me finish cutting your grass for you. And he the man was like, no, I got it, And he finally convinced him. His name was mister Brown. I can't believe I remember that part of the story, but that was a man's name, and Rodney cut his grass. Six years later, he has inspired over ten thousand kids to cut fifty yards across the world for free, and has cut two hundred thousand yards for free for the elderly, the single moms, the handicap, and veterans. And he has on eight different occasions gone across the country and cut a different yard in every state in our country, including Alaska, Hawaii, to honor veterans, to honor breast cancer, to whatever, and along the way gets all these kids to join the fifty yard Challenge to cut and they have cut literally a quarter of a million yards for free for people who can't afford to have the yard cut and physically can't do it. And it started with one yard, mister Brown. And it's the same story with everyone I talk. Don't let the don't let the magnitude of what any of you people, what any normal folks have, the eventuality of what your stories have become. Don't listeners, don't audience folks. Don't let that deter you of what is developed to just start. It's a first yard, it's the first house, it's the it's the it's it's the first outreach that matters. And if you do it right, with the right motive and the right compassion and the right effort, you never know where it's gonna go. And Rodney Smith started with one yard, and you start with one house. And I think it's important to understand that. But if there's some big developers out there, you can start with the one apartment building.
Yeah, that's exactly right. But I love that story. I think that's I think this you know that captures the essence of it. I in my younger years, I used to run a little bit. I ran a marathon with one of my kids, and we ran every step together. And when you get tired, It's kind of a mental game you play when you get tired. You're thinking, shoot, I got six miles left or whatever. Well, you'll get even more tired of thinking about that. So you say, I think I can run to the you know, the street sign up there, and then from there, I think I can run to the fire hydrant. I think I can run to that tree, and I think I can run to the intersection. And you just break it up into bite sized pieces mentally, just and and before you know it, you've been a mathah, you've run a marathon. And I think it's the same thing. He didn't start I guarantee he didn't start out by saying I'm gonna do hundreds of thousands of yards.
He went anything about cutting grassy saw the man.
That's exactly right.
And then it turned into this. And so you know, don't get don't get overwhelmed. But the more of the stories. Don't get overwhelmed by the scope of what any of our guests have done. Just remember they, like everybody else, started with the first one.
Yeah, that's exactly right.
We'll be right back tim. The biggest hope every one of these things I do is that somebody's listening. We had our che Cooper on two weeks ago, rowing we've had Tommy on Cops. We've had and will continue to have all kinds of people, and we hope that people entertain and inspired. But we hope that if someone listens long enough, if they have a passion about something that matches with their particular discipline, they don't have to ask, well, I love to get involved, but how? And we hope that they just heard how. We also want to match people up that want to note not only the how, that have the passion and want employ their discipline, but to have kind of a mentor to help them do it. So if somebody's listening to us today that says I want to do in my town what Tim does? How do they find you? How can they call you? How can they reach you? Email you? Whatever? To Actually, I would assume you would be happy to shepherd somebody through the initial ropes of doing this.
Yeah, we were kind of We use the term open sourcing, So the lessons we've learned, we're happy to share with anybody because we're not trying to steal somebody else's piece of the pie affordable housing development. We're trying to make a bigger pie. And so our company is called Croslin Southeast. See our os L A and D Cross in Southeast. Look us up on the internet. My email addresses in there. Shoot me a line and I'd be happy to get back to you.
My brother. You start in Southside Chicago, the son of a still worker and a teacher who got married and started having kids, and took a job in Denver as an engineer of some sort, and then took a wing and a prayer at thirty years old and started a business, ended up in Charlotte because your family mattered to you. There's nothing more normal than that. That's just an American story. And you are my friend, changing lives and you and your group, the numbers speak for themselves. There's four thousand people that are better off the day than they were before you started. And I have no doubt you're not ending this up. You just continue to start it up. And I hope people that listen to us, someone out there, or a few people out there who are in your world professionally might be motivated to reach out and say, you know what, I want to give it a shot. And you're a normal folk who's done some extraordinary things for some people. And dude, I just want to really thank you for sharing your story.
Yeah, thank you, coach. It's been great to be here.
So as I you know, I can't help my business brain keeps creeping into our conversation, and I'm thinking about the enormous front ended, front loaded costs to get.
This thing going. And I get that with the tax credits, the city bonds and whatever rent that the affordable housing spins off, you kind of piece all these legs together to hold up the stool, but you still had to start and those that money wasn't there at first. So I guess what I'm asking is how long did it take before it was at least funding itself? You know, what was what kind of investment did it take on the front end in terms of time and outlay before you're able to recoup your upfront cost and at least started cash flowing.
Yeah. That we could spend all day talking about that, ah bet, I tell you, just like any business, it's rare to start a business that's profitable, profitable from day one.
No, I know this. I actually it's part of a speech I do. But the data is a startup company rarely shows a profit before it's fourteenth month, and if by its thirty six month it's not profitable, it's bankrupt, just doesn't know it yet. And that window is fourteen to thirty six months. You got to get it right and it's got to start cash flowing or you're probably done.
We missed that window, so I would say it took us forty eight to sixty months to hit the breakeven break even.
Where the bonds and the and the and the tax credits and the rint you did get were.
Actually well, we don't get the rent. Freedom Communities gets the rent, I mean, that's what I'm saying. So we get a part of the company Cross in Southeast gets. So so again we have a just a really I think, rather unique partnership where Freedom Communities owns all the apartments that we build, uh, and now we're starting to do some for sale and for rent town homes as well that that Freedom is involved with, and Cross in Southeast does basically all the work, takes all the financial risk, makes all the upfront investment, and our team builds highest contractors and project manages these these developments and then Freedom then ends up owning them. So it's a great partnership between a business and a nonprofit and it took us four to five years before the development fees basically started covering our overhead expense. These development fees, it takes a couple of years to start a project. You know, when if you decide today, I'm going to be an affordable housing developer, by the time you start construction, it's probably two years from now. You got to find a site, you got to design it, you got to zone it, you got to permit it, and all that kind of stuff. And then the development fees that you're allowed to take are kind of back end loaded. They're not going to pay you first and then say I hope you build a project. They're going to say build a project, then it will give you your cut and so so right then, you know, that's three four years from now when you start getting some development fees.
And so did you ever lay on the bed start to say aem worried about it?
Well, yeah, we did more because I have great business partners and I kind of I told them I wanted to do the affordable housing thing, and they said, why would we do that? And I said, well, I'm going to do it. You know, I'd like to do it under our crawls in Southeast ben Or. But if not, you know, I'll do it myself. And they said, well, we don't want you doing that. So they said, well, we just hope we don't lose money on the deal. And I said, I guarantee you won't lose money. And so I had kind of promised my partners that we would they wouldn't lose their shirts doing it. And it took four or five years, but we got into I'll tell you another thing. We've got The first two people we hired our guys that are my age, that had full careers in banking and business and they wanted to do something different. They wanted to do something meaningful. These are two brilliant guys that could lead companies. And I mean they're one of the guys we call savant. I mean just super bright and and financially oriented, and they cared and they wanted to They kind of have we call a halftime journey. They spent their business lives doing something and now they want to do something from success to significance kind of. And I started talking to these guys and they said, yeah, that sounds great. And so we learned together. You know about affordable housing. And the truth is I pay him a fraction of what they're worth and give them a little piece of the upside. And they're not doing it for the money. They're doing it to make a difference.
Isn't that interesting? When I started at Manassas, it was Jim Tipton who really got me there, who works for me and me, and that was it. Fast forward seven years. Mike Ray, who works at FedEx and played football for Larry Lacewell at Arkansas State, was actually on the Team of the Decade. He's good guy. Was my offensive line coach. Jeff Germany, who played for Lou Holts at Arkansas, helped with defensive line. On offensive line. Mike Walker, who was Hardball's back up at the University of Michigan's quarterbacks coach haul him back, who's a FedEx pilot. The kids called him Coach Fly because he flew airplanes. They couldn't pronounce all them back. He was the kicking coach. I'd gone down the line. And the point is, these men are still among the most important friendships I have in the world, and I have no doubt I could call any of them today and they would be there for me. I would have never met him had I not gone to Manasses, I would have never developed a relationship with them to I have not gone to Manasses. And in it interesting the circle of people that are probably around you now that you would have never had around you, doing amazing work for the most disadvantaged among Charlotte, that you would have even never been around had you not ever gone down this path.
Yeah, that is that is so accurate. You know, they I've been reading for years. You know, twenty percent of your salespeople do eighty percent of your sales. Twenty percent of the people do eighty percent of the work. I like to say a lot. I like hanging around with twenty because those are you know, those are the guys that are getting done. And uh and I've got a team of people like that. And and that's one of the other indirect benefits that that I wouldn't have expected. But I've got deeper relationships with higher quality individuals, more deep seated joy, and just more fulfillment doing this stuff. I may have a smaller paycheck than I might have, you know, had I pursued other types of development. And I don't really care about it. I mean, it's it's something that not everybody can do what I'm doing. I realize that because I'm old enough to have made some money along the along the way, and and uh but a lot of people would keep, you know, trying to you know, build as big a bank account as they can.
And uh yeah, but Tim, you know what, there are a lot of people who have done what you've done. They could do this. Yeah, And I submit, And I believe with everything I am there's a lot of people in this country who are in a position but they get called for checks all the time. Yeah, they really don't have a template of what could happen, and guys like you provide that. Yeah.
Well I hope, So I hope. And if there's anybody listening out there that you know, is inspired at all by this, I'd love to have a conversation and see if I can, you know, help points you in a specific direction that that you can do some of the same kind of stuff. And again, if you're an accountant or if you're a school teacher or whatever, there's there's you know, you don't not everybody's going to do real estate or affordable housing. But you know, it's been a privilege to me. I feel. You know, I'm a sixty I'll be sixty five years old this year. I'll I have more fulfillment professionally in these last five or ten years than I've had in my whole entire life. And you know, I get up in the morning eager to get going, and not everybody can say that.
And thank you for joining us this week. Guys. If Tim or another guest has inspired you in general, or better yet, to take action by wanting to build affordable housing in your community, by donating to Freedom Communities, or something else entirely, please let me know. I'd love to hear about it. You can write me anytime at Bill at normalfolks dot us and I will respond. Or you can use the Badger hotline nine oh one three five two one three sixty six. Leave us a voicemail, We'll listen and we'll respond. If you enjoy this episode, share friends that on social, subscribe to the podcast, rate and review it, become a premium member at normalfolks dot us. All these things that will help us grow an army of normal folks. I'm Bill Courtney. I'll see you next week.
