Molly McCabe, MBA, LEED® AP, is CEO and Founder of HaydenTanner, a strategic real estate advisory firm focused on accelerating impact investment and sustainability in the built environment. Molly is also the Co-Founder of The Lotus Campaign, a non-profit development firm that is deploying market based solutions to providing homes for people experiencing homelessness.
What have you been up to since we last saw you at the ULI 2018 Spring Meeting in Detroit ? Along with co-founders, Gingko Residential Chairman, Philip Payne, his partner, psychologist Mary Ruth Payne, and former ULI Vice President and urban planner, Beth Silverman, we launched The Lotus Campaign, a non-profit dedicated to increasing the availability of housing for people experiencing homelessness by engaging the private, for-profit real estate community.
That’s a bit of a shift from what you’ve been doing in real estate finance and investment advisory. How did you head down this path? Well, really it arose from a desire by Phil and Mary Ruth to do more for people experiencing homelessness in their community of Charlotte, NC. Philip, Beth and I met through ULI’s advisory services program and the four of us got together and brainstormed. We studied the relationship between economics, workforce housing and homelessness. On any given night, there are 554,000 homeless men, women, and children. However, there are 40 million individuals and families living one missed paycheck or medical crisis away from losing their homes. Homelessness is a growing epidemic and current solutions overburden the public and private sectors.
We know there’s a critical shortage of affordable housing in the United States and while the cause is multifaceted, economics play a major role. The cost to maintain and operate multifamily residential properties has increased to the point that landlords are faced with a choice of deferring maintenance to hold down costs or demolishing the property for new development. Either choice reduces the supply of decent affordable housing. Residential units to house the homeless are in even shorter supply. The perception that homeless families and individuals are too high risk to house in traditional developments exacerbates this reality.
Current solutions assume local and state government and/or philanthropy will infuse capital to solve one of the most intractable problems and require the private sector to absorb the risk of housing a homeless person. Because we’ve been stuck in that model, we’ve failed to leverage one of the largest providers of capital and innovation. We realized we needed to bring the private for-profit development and investment communities into play and tap into their expertise, deep knowledge base and financial strength. By the Spring Meeting in Detroit in May 2018, we’d filed our 501(c)3 status and by July, we’d officially launched.
How does Lotus work?
It’s an innovative program with three pillars – Incent. Invest. Advise. We incentive landlords through our Landlord Participation Program. We’re investing in properties and working to develop new construction mechanisms. And we’re advising communities on new ways to engage the private, for-profit real estate sector. Since we launched we’ve housed 61 families and individuals. We recently closed on our first investment, a 144-unit mixed income multi-family project, which will deliver an additional 30 units to people experiencing homelessness while ensuring a 6% annual return and 12% IRR for the investors. We believe we’ve cracked the code on how to catalyze landlords to make housing available to the homeless. We think we’ve figured out a financial solution to encourage developers to build homes for the homeless and not compromise the bottom line. And we believe can do all of this while becoming a financially sustainable nonprofit and directing 100% of philanthropic support to our programs.
Shifting gears, what book have you read recently that you can’t get out of your mind? Educated by Tara Westover. It’s deeply inspiring and extraordinarily thought-provoking. It’s not just about religion, gender-politics, poverty and the urban-rural divide, it’s also about love and loyalty, ignorance and isolation, how a lack of education robs us of our ability to think critically and how a small spark of possibility, encouragement and perseverance can change the course of someone’s life. As a story, it was compelling. Each chapter brought new revelations. I was completely drawn in and couldn’t put it down. In an interview, Westover shared a marvelous quote from Hebrew 11:1 "faith is the substance of things hoped for, the evidence of things not seen.” I’ve been trying to live my life with just a bit more faith.
And finally, what’s your personal motto? I have a quote on my wall from Alaskan explorer Norman Vaughn, who said at the age of 93: “The only death you die is the death you die by not living - dream big and dare to fail.” It’s about not wanting to be complacent, to live just a bit on the edge, to continually be curious, to be challenged and always push myself to reach for something just a little out of my sight line. And, every day, to Get Outside! You can never get enough of nature.