Saturday Cup of Joe from Detroit


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Week 219 in Detroit. Time flies when you are having fun. Unless you are frog, then times fun when you are having flies.

Our business is moving fast and the market is generating incredible opportunity. This week we saw a 15 year fixed rate mortgage at 1.99%. The interest rate environment has created high volumes in both mortgage and real estate. Keeping up with demand, my inbox and Saturday Cup of Joe has been exhausting. So let’s go….and I hope you have a great weekend.

Racial disparity in housing. The wealth gap between blacks and whites in America continues to be an example of systemic inequality. Housing, being the primary way families pass on wealth, is a the center of the debate. Historically, housing was also one of the foundational mediums of discrimination. The Home Ownership Loan Corporation (HOLC), predecessor to the Federal Housing Administration (FHA), created home loan opportunities in many cities across the country. The HOLC created maps of 114 cities and indicated whether a loan was approved or likely in green, whether a loan possible but risky in yellow and, finally, whether a loan was declined or not likely in red. Those maps became known as red-lined maps because the red areas where all the black and integrated neighborhoods. In fact, I spoke to one housing advocate whose family bought a house using the HOLC in a yellow zone. Their loan documents actually stated that the house was of higher risk for being in a Jewish neighborhood and Jews tended to be more sympathetic to Black people. This was the type of institutionalized racism that defined the neighborhoods, towns and cities we all live in today.

Unfortunately, housing in these places is not getting any easier to access. Old lending models based on 40–50 year old credit history still dictate who gets a mortgage today. On top of that, housing is become more and more expensive. Affordable housing has increased almost 6% during a time when many people thought the global pandemic and/or unemployment rise might actually allow them to buy a home.

In reality, there was already such a strain on housing supply and enough eligible home buyers waiting, that the pandemic did not create opportunity. If anything, many areas are experiencing more intense competition for single-family homes than before the quarantine.

Yet, we’re still not focused on big picture solutions.

In fact, HUD is going down the regulatory path to roll back consumer protections that allow people to bring a fair lending complaint against landlords and lenders based on a pattern or practice, instead of intent to discriminate. That might sound odd coming from someone that works at Quicken Loans, the nation’s largest residential mortgage lender, but the biggest problem with fair lending analysis and enforcement has been the subjectivity of the process. Plaintiffs being allow to bring cases has NOT been the most expensive or burdensome aspect. The most burdensome aspect is the confusion and lack of consistency between the fair lending analysis conducted by academics, consumer groups, regulators and lenders.

HUD does not need to water down fair housing rules but instead work with the groups I just mentioned — academics, consumer advocates, state regulators and lenders — to improve fair lending analysis and technology (!).

Fair lending is a critical component to a balanced and transparent housing market. There have been myriad advances in data analytics and data collection. Yet, fair lending lags behind…but not for long. Innovators from outside mortgage lending, committed industry members, consumer groups and policymakers are working together to create productive solutions that will improve transparency and push lending to new, better outcomes.

And yet there is much to be done.

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What many consider a threat — this moment continues to expand the gap between white homeowners and everyone else — can also be an opportunity. Cities will be threatening on several levels. First and foremost, budgets have been spent on public health and COVID-19 respond. Second, lost economic activity is lost revenue for cities and states. Third, the existential threat that post-COVID-19 residents begin moving out of cities leaving both commercial and residential real estate empty. Clearly all three exacerbate the threat to cities.

Yes, cities are the answer.

Not only are cities more efficient but most cities offer the exact lifestyle millennials claim to be looking for. In Paris, Mayor Anne Hidalgo uses the concept of the 15-minute city to describe how Parisians should be able to shop, work, play and learn within a 15-minute walk or bike ride of their home. In fact, it’s the centerpiece of her campaign. 15-minute cities are also more equitable. Residents spend money more intentionally on shops in their neighborhood. This type of spending tends to benefit small businesses who get the best of both worlds — convenience for locals and connect to purpose.

In many ways, purpose has always been the driving force for Millennials. We want to be the center of attention. We want to be in the movie of our own lives.

15-minute cities support that feeling.

Millennials can feel like a big deal in any size city as long as we have the connection with our local businesses. It’s no surprise that micro-breweries and gastropubs are doing as well as they are (at least before the quarantine). No matter where we live Millennials want to feel a sense of luxury and curation.

Millennials will commit to a worldview. It just has to feel a certain way and look good on Instagram. 15-minute cities support that.

So, before you worry too much that cities are over and COVID-19 will drive young people out of cities and into the suburbs, make sure to put it in context.

Yes, higher priced cities where luxury and curation is out of reach will see a decline or exit post-COVID-19; but do not be mistaken. Those leaving big, expensive cities won’t be going to rural cul-de-sacs but smaller, more accessible cities. Live big, in a smaller place.

It’s just that mindset that puts Columbus, OH #10 on the cities where Millennials are moving TO in 2020. As you can see in this SmartAsset survey, Millennials are willing to move especially because of COVID-19 but it’s not “back home” as much as trendy and accessible (i.e. affordable) small & mid-sized cities.

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2019 Edelman Trust Barometer. Financial services tends to settle somewhere just above Government in the trust meter. Not surprising, frankly. In 2019, the percentage of respondents that said it is important the CEO of their company address both income inequality and diversity was 78% and 77% respectively. That was 2019. Imagine what those numbers might look like today.

CEOs must take the lead on issues like gender equality, racial justice and diversity & inclusion.

Consumers who agree with the sentiment “my wallet is my vote” now top 64% of the market.

Intentional capitalism is a whole new way of looking at the free market and of diversity issues. Consumers have the power to make conscious and critical choices about clicks, downloads and purchases. In the product world, this is the decision to pay a little bit extra for an American-made product. In the digital world, the product might be more content than American-made good, but the point remains the same.

Purchases = votes.

The more intentional we are with our spending the more We The People can influence the market.

A group of my friends are opening a sliders restaurant in Detroit and, lucky for me, they selected a location in my neighborhood. My responsibility, if I’m intentional about supporting them, is not just to come to Slyde for a meal but to “vote” with my wallet and support to keep them in the neighborhood.

This is true in my neighborhood or across the Internet. If I believe in a cause, my wallet is much more powerful than my vote. Obviously, if that’s not clear, I’m someone who votes and believes (almost to a fault) in the political process. Yet, I recognize that I have much more power in our economy based on where and how I choose to spend my money.

What’s more, if spending habits continue to grow as a reflection of values, the free market can become the antidote to empty political rhetoric. Just like elections have consequences, spending has systemic consequences.

Spend well.

During the quarantine, we had the same experience with existing restaurants in our neighborhood. We figured out a way to continue to support — through takeout and “kits” — the restaurants that we could.

We picked the three or four spots we could support and we did.

To me, it’s the larger theme of being intentional to support what we can support and commit to our community / neighborhood.

In talking to many of my friends, across the country, we all felt the same way. Our generation’s desire to be more intentional with what companies we support and why uncovers a larger trend that has the potential to change the game. For so long, at least as long as I can remember, the goal was to find the best deal or the cheapest thing.

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Dirty delegating. I heard this term this week. Delegating not the most appropriate work but, instead, delegating the work the leader does not want to do. It’s a great term because it sticks in your mind and should discourage you from being a dirty delegator.

Instead, you should delegate the best work. Delegation should be a thrill. As a leader on your team or in your organization, delegation can be the way you grow an empowered and strong team of leaders.

I always try to build teams that can do my job better than me.

Maybe that’s why I was so quick to jump on the concept of dirty delegating as soon as I heard it.

Either way, do not be the leader that hordes the best projects or visibility. It will never be a path to long term success anyway. Delegate the coolest work, the most interesting work, the highest profile stuff that you believe your team can achieve. Be generous with your delegation and your team will thrive.

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One of those quotes that I heard on a podcast once, back when I had a commute, was “as an entrepreneur, to be first and to be wrong feel the same.” I never forgot that. In fact, it’s become somewhat of a defining thought-process for me.

Entrepreneurs, like authors or artists, risk a lot by telling others about their vision. Ridicule, doubt and laughter can discourage the strongest of us to stop what might be their life’s work.

Everyone now and then, someone comes along whom everyone laughs at or dismisses that goes on to change our lives.

This week, I experienced a small example, though years behind everyone else, may still provide some inspiration to you. I finally saw Hamilton. I know. My wife saw it on stage. My friends saw it on stage. Through a weird series of almost and just-misses, I never actually had the chance to see Hamilton either in New York or when it came to Detroit. On July 3, as you are probably aware, it came out as a movie on Disney+. This past weekend, I settled in and finally got to see it. Despite all the hype and the soundtrack playing in my house over the past few years, I was still blown away.

One thing that struck me in particular was the creativity. Lin Manuel-Miranda inspired a whole new generation of storytellers. The point is that connecting with the material, however you connect, whether historically accurate or not, is the difference between success and failure. Just like Alexander Hamilton built his reputation on writing, Manuel-Miranda writes his ass off.

We all connected with the material and that’s why the show is a hit.

What I cannot get over is what my wife, Meredith, showed me a few days later. In May 2012, Lin Manuel-Miranda was asked to perform at the White House and, as you’ll see in the video, he introduces a song he’s writing for his “concept album” about Alexander Hamilton.

What’s incredible to me is that even as he entertains the crowd with his wit and performance, there is still a sense the crowd does not take him seriously. This is the White House. Dedicated, brilliant people are seated all over the room. (Remember when that was true.)

And these people still don’t know what they just saw. It kinda seems like a quirky rap or maybe even a fast-paced poem. The idea that someone would write that passionately about the former US Treasury Secretary still seems like a one-time gimmick for the President.

In reality, the seeds of Hamilton are planted and growing before our eyes. Only two people seem to realize the significance — the performers. You can see it in their performance. They know. This is special. It does not matter to them that no one else realizes it.

And that’s the key.

It does not matter if anyone else sees it or recognizes it. If you are doing “the thing,” and you want to see it through. Keep going.

Being first and being wrong feel the same.

How many people left that performance in May 2012 at the White House and never gave Lin Manuel-Miranda’s song another thought until Hamilton became a hit?

My point is that if you don’t believe, no one else will. Be your own biggest fan and let everyone else figure it out.

If it’s a musical piece or a business or a book, no one else is going to see it the way you do. They’ll laugh. They may even applaud politely (if you are lucky). The only way to create Hamilton is to believe and work with the small group of true believers that see it to and to do the work.

What’s your concept album?

Go out there and make it happen.

Quote: “One might think that the most powerful man has the most choices, but in reality he has the fewest.” — Mark Bowden

Bonus Content: Audubon Society photography contest. Birds are crazy but beautiful and impressive.

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Continued success and continue to answer well,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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