Who goes to Liverpool in January?

Other than Beatles fans, of course ….

After my Edinburgh insight and then my Bird of Paradise moment, I had been seriously contemplating creating an international affordable housing finance consultancy (pages 9-11, link in .pdf) focused in impact – making positive change.  The customers, therefore, had to have a public-policy orientation: governments, governmental bodies, bilaterals, foundations, policy groups, or trade associations.  The services and products had to be either public (information, studies, reports) or public benefit (program innovations that would appear in the marketplace). 

But, I realized, even if that were true, there were two questions I had to answer in the marketplace:

1. Do housing finance ecosystems obey similar structural principles?
2. Could I ‘play’ outside the US?  That is, was what I knew about affordable housing useful and communicable?

“There is a strong family resemblance about misdeeds, and if you have all the details of a thousand at your finger ends, it is odd if you can’t unravel the thousand and first.”  A Study in Scarlet, page 23

I was in Liverpool, along with a half-dozen other Americans and a score and a half of British, at a symposium convened by Andrea Titterington, then group CEO of Maritime Housing (now Regenda), to focus on the question, Could US-style fiscal initiatives work in Britain?  After all, in AHI’s unofficial motto of the USA’s affordable housing experience, “We’ve lost billions so you don’t have to.”

To do that, and with the help of George Bull of Baker Tilly,

Would you trust this man with your money?  I know I would!

we created the US-UK ecosystemic comparison.  Eventually the group put out a Liverpool Symposium Report (link in .pdf) that led a group of us to propose a Housing And Regeneration Tax (HART) Tax Credit, modeled on the US LIHTC, that has garnered considerable stakeholder interest (link in .pdf). 

“I wonder how much faster we’d have done this with tax credits?”

To date, with HART, we have seen many crucial government officials and received a strong response, but unfortunately those who have given us a strong response are not in government, and those in government have not given us a strong response …

“Your manuscript is both good and original; but the part that is good is not original, and the part that is original is not good.”

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Fast-forward to December, 1999. While the newspapers were full of Y2K (remember that?) scare stories, we had taken a wonderful vacation to Australia, with a two-day jaunt into the highlands of Papua New Guinea, one of the world’s most culturally isolated places. There, at a vastly empty highlands bush lodge, we and the other nine (!) guests total (out of 120 possible) had been seated, family style, at a communal table. So we played what-do-you-do with the other guests, one of whom was a distinguished silver-haired impeccably polite South African named Bob Tucker who explained that, “I’m a banker, but I really work with” — his voice dropped an octave and a hundred decibels — “affordable housing.”

“Oh really?” I pounced, the puppy digging into the details.

“Housing? Housing? Must be housing down here somewhere.”

Well, yes, he explained, he was working with the South African Banking Association to develop initiatives to stimulate affordable housing in South African townships.

The next day, we got up before dawn to spy the elusive Bird of Paradise, and I thought, gee, a financier of existing affordable housing is just about as
ecosystemic-dependent as the bird of paradise, who lives on epiphytic plants.

Fast-forward to fall, 2000. It turned out that Bob Tucker would be coming to Boston for a board meeting of the Christian Science Church, so of course we hosted him. On Saturday, over Cheerios, he mentioned he was facing a free Saturday morning, so I asked what would he like to do. With the same sheepish reticence he said, “what about looking at affordable housing?”

“Let’s go!” quoth I.

“Can we go look at housing? Can we? Can we?”

So, for three hours, I took him on a drive-by-and-parking-lot walk through affordable housing in Cambridge and Boston. Cambridge is a botanic garden of housing programs, with at least one of just about everything.

Okay, no Crystal Palace …

At each property I explained something of its financing, history, problems, and subsidy. We wound up at Harbor Point (the former Columbia Point, success on the third try!), and as we were climbing back into the car, Bob said with some bitterness,

“I’m really angry for two reasons. I’m angry because American economists and GSEs tell the world that all you need for affordable housing is a secondary mortgage market and low long-term interest rates. Yet every property you have showed me has government involvement, and subsidy, and nobody from America tells us this?”

“And what’s the second reason?” I asked.

“I’ve been to global conference on housing finance, and met with ministers of housing from many countries. And none of them have come to America and seen for themselves.”

As I drove Bob home, I was uncharacteristically quiet ….

“What are we gonna do about this?”

[Concluded in Part 3.]

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… without whom AHI would never have become possible.

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