As seen in Authority Magazine.
“You’ll have to put up with egos and learn not to take everything personally. I used to take things personally all the time. It’s just business and people are really just thinking about themselves.”
In many large cities in the US, there is a crisis caused by a shortage of affordable housing options. This has led to a host of social challenges. In this series called “How We Are Helping To Make Housing More Affordable” we are talking to successful business leaders, real estate leaders, and builders, who share the initiatives they are undertaking to create more affordable housing options in the US.
As a part of this series, we had the pleasure of interviewing Eddie Lorin.
Eddie Lorin is Co-Founder of Alliant Strategic Investments (ASI). ASI was formed as a partnership between Strategic Realty Holdings (SRH) which was founded by Mr. Lorin and Alliant Capital, one of the nation’s largest Low Income Housing Tax Credit (LIHTC) syndicators. Through the course of his career, Mr. Lorin has successfully acquired more than 200 properties; 40,000 units contained in over $4.2 billion in real estate. Mr. Lorin earned his bachelor’s degree from the University of California, Los Angeles and has been a licensed California real estate broker since 1988. He is a member of the EIG and the Novogradac coalitions for Opportunity Zones.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I grew up in Long Beach, California. My father died when I was 10 months old, and my mother died when I was 17. In essence, I was orphaned before started college — I went to UCLA. All of my life, I vowed to make sure people had a loving and clean place to live like I did. The old adage “you can be poor but you gotta be clean” is how we lived. I thought that was a lucky thing to have such a home and I wanted to make it my passion to make sure everyone had the right to a decent safe, clean, home. Even though we didn’t have much, we always had that; it’s really important that everyone in the world has access to food clothing and SHELTER.
Can you share the most interesting story that happened to you since you began your career?
In 2013, my daughter shared a sweet sixteen party with her best friend at the Bel Air Hotel. It was there I met my new dear friend and business partner as the two father hosts compared notes with each other on one’s affordable housing business and my workforce housing value add business. Since then, together we have gone on to create and preserve thousands of affordable and workforce housing units…all from that fateful day sharing our daughters being born on the exact same day. Serendipity is a magical thing.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
I let go of my inhibitions and realized no one knows more than me about the life I am living. A lot of people act like they know it all and I realized that at the end of the day you die alone and are responsible for your own actions. I began to follow my gut; when I was done deliberating I could just “go for it.” You can always backtrack if things go awry; you can always figure something out. There is one certainty and that is: doing nothing never solves a problem. You need to be decisive in your action once you have weighed all the facts. If you don’t close a deal, you’ll never make money. Don’t have analysis paralysis. Inertia and lack of movement are killers. Publish or perish they say, and I say “close the deal or perish.” You always have to move forward.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful who helped get you to where you are? Can you share a story about that?
Everyone you collect along the way is a factor in your success. If I didn’t have a strong mother, I wouldn’t be here. She raised us with no money but a lot of support and love. My wife has been an incredible partner in life. I wouldn’t be successful without her understanding and genuine objectivity and common sense. I really have a lot of love in my life. I’ve tried to be a sponge, I have three brothers I’ve learned from. I’ve always said that everyone has something to share and teach; I try to absorb as much as I can. I try to be a good friend and I appreciate the people around me. People want to be around people who appreciate them and take their advice. Now that I’m older, I can see people who I would like them to take my advice. I try to never be arrogant and to really follow the leaders who are ahead of me and pay it forward.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
Dale Carnegie. He’s the bible for survival and the common sense world. I’ve read all of his books and I relate deeply to his works. I used to worry all the time; his teachings along with Mussar (a character guidebook based on the torah) has really helped, inspired me, and allowed me to thrive in business and life. Everything you learn all goes into the mix and you can make a career with common sense and passion if you listen to these lessons. Everyone you interact with can be a potential impact on your life.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Good deals are made not found. Anyone can do it with money — can you do it without money is the question.
Ok super. Let’s now shift to the main part of our discussion about the shortage of affordable housing. Lack of affordable housing has been a problem for a long time in the United States. But it seems that it has gotten a lot worse over the past five years, particularly in the large cities. I know this is a huge topic, but for the benefit of our readers can you briefly explain to our readers what brought us to this place? Where did this crisis come from?
Simply, rents have far outpaced incomes. Cities and bureaucracies have become more difficult to build in. Not in My Back Yard (NIMBY) folks have the right to block the building of affordable housing and it has stalled the production of new units for decades. The cost of capital is too expensive and waiting to build is a killer, making it even more expensive to deliver units. Construction costs have gone through the roof as well. There is not enough “political will” to help the poor with what they need to feed, clothe and house them; that’s another reason. We also need to incentivize government staff to deliver results (units) or lose their jobs versus the protection mentality of doing nothing to avoid “making mistakes.” Another issue is the lack of available supplemental vouchers to get people the help they need to afford to live where they work. Vouchers help supplement the difference between what market rents are and what people can afford. These are hard working people who just don’t make enough to live close to where they work. They need to pay their other bills but rents are exceeding 30% of incomes.
Can you describe to our readers how your work is making an impact to address this crisis? Can you share some of the initiatives you are leading to help correct this issue?
We’re working on financing with recycled bonds which is a creative way to provide affordable housing. We continuously look for alternative ways to fund projects at a lower cost to capital. If rents are cheaper, common sense tells you that the cost of capital has to be cheaper and not more expensive. We’re partnering with school districts to get land from them and structuring the ground leases to government agencies to get that cost of capital down. We’re setting housing policy with the school districts that will give us school land that now we can build housing on. We’re really involved in policy development and sharing our expertise with the community that gives us the ability to help address this issue.
Can you share something about your work that makes you most proud? Is there a particular story or incident that you found most uplifting?
Whenever people are willing to listen to me and my ideas, that’s the biggest compliment I could get. I spend every day creating and implementing solutions to solve this housing problem and it makes me proud when I see people who can come together and we can work together to get these problems addressed in real time. I am a self-proclaimed “Mad Scientist of Affordable Housing” and am ready to share these ideas to come up with creative structured financial solutions to get people housing they can afford. We piloted the first NOAH (Naturally Occurring Affordable Housing) project to house 50 people experiencing homelessness in Koreatown (Los Angeles) as a pilot to prove that older product can be deemed affordable at 40% of the cost to build new.
In your opinion, what should other home builders do to further address these problems?
Implement inclusionary zoning; allow and accept it. We need up to half of the units built as affordable and attainable housing. This will help us end up with “integration” instead of the antiquated days of segregation of yester-year. We need to build housing where people live together, rich and poor, to create a greater society of equality. In the days of discrimination in the 50’s and 60’s, there was no opportunity for many classes to create wealth and the results are evident today. Everyone should be able to secure safe, clean affordable home in this country, no matter their status.
Can you share three things that the community and society can do to help you address the root of this crisis? Can you give some examples?
First, lower the cost of capital to do the right thing…if rents are below market and all other costs are the same as building luxury housing, then something has to give; the cost of capital in the form of return to investors on their investment. It is a basic risk/return analysis. If your rents are well below the market rents, you will always be full and thus the risk of a loss of capital will be mitigated. Hence a lower yield that is tax free should suffice for these investors to accept. If there was a bond issuance that was tax exempt, people could invest in affordable housing simply and that could help solve the issue. We have to create investment opportunities that allow us to building housing that is affordable to more people.
Second, society and the lawmakers need to get rid of NIMBY regulations. We need more housing on all levels, and NIMBY is a massive impediment for housing. Nobody should be able to protest to a human being living in a home next door that is affordable.
Finally, we need to be able to help more hard working people across the country pay the rent. Supplementing incomes with vouchers will help this crisis.
If you had the power to influence legislation, are there laws which you would like to see introduced that might help you in your work?
Bonds and making it easier for wealthy people to invest in affordable housing directly. We need more government vouchers. We also need accountability for government programs like opportunity zones. They were a failure because they didn’t build much affordable housing. We also need accountability for our legislators who need a sense of urgency to solve this housing crisis. Legislation approvals need to be expedited so we don’t end up with worse problems, in particularly rent inflation that is making it even more difficult in 2022 to afford rents. The tax code also needs to change to support affordable housing and tax more to the people who can afford to pay more taxes.
What are your “5 things I wish someone told me when I first started leading my company” and why? Please share a story or example for each.
- People aren’t the same as you. Many people are more selfish than you think.
- Don’t trust everyone to be as honest as you would be. I know it’s negative but the school of hard knocks teaches you that people don’t necessarily have your best interest in mind when it comes to your business. I wish someone would have told me I would need to be tougher to get ahead.
- You’ll have to put up with egos and not to take everything personally. I used to take things personally all the time. It’s just business and people are really just thinking about themselves.
- Grit means eating a lot of crap from people but in the end that is paying your dues; everyone must pay their dues.
- Trust fund babies have it easier…more money, running room, access to capital and an easier life. It is way harder to start from nothing.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
This would be around housing for me. If I could come up with a tax exempt bond structure where everyone could invest in affordable housing, that would make my mission on this earth complete. There are many units not being built because the cost of capital is high, and there is a disconnect where people aren’t getting the returns they think are commensurate with the minimal risk of affordable housing investment. I would like to change that perception and develop an investment vehicle to build millions of units and homes nationwide. That would truly repair the world.
Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them. 🙂
My father. I never knew him and would love to meet him.
This was very meaningful, thank you so much, and we wish you only continued success.