Hi, I'm Chauney Pham. As your 2021 Diversity Committee Chair and with the help of my colleagues from the YPN, Global, Commercial, and Diversity committees, we’re sharing our common thread in real estate — what connects us and what will ultimately sustain us. Together, we’ll dive into the connections between our increasingly diverse consumers, Millennial homebuyers, the rise of global climate-conscious investing, and how commercial development can create inclusive communities across Texas. This is what brings Texas REALTORS® across diverse specialties all together, by a common thread.

 

Sustainability isn’t just a buzzword in our industry. It’s not just about going green. Sustainability is at the core of ensuring our industry adapts and continues to thrive ...

 

Let’s start in Texas. Thirty years ago, this state looked pretty different. In 1990, there were only 17 million residents and the population was fairly homogenous; white residents almost doubled that of other race and ethnicities.1,2 But over the last three decades, the Texas population has increased exponentially, growing at a faster rate than the country.3,4 In 2019, Texas was growing at a rate of 1,000 people per day. 5 That growth has brought with it a change in the makeup of the state — residents are more diverse than ever. 6

 

If you ask REALTORS®, they’ve witnessed this first-hand.

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I have noticed over the last handful of years that we do have a lot more diversity from places like Africa and Burma, I mentioned earlier - we have a large Chin population here that have come for exactly that — they’re starting businesses, they’re working it wherever they need to provide for their families and build a world the same way my forefathers did when the emigrated from Scotland and Germany. It’s the same thing. And so we’re now seeing that here a lot more.

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The San Antonio market is a very multicultural, diverse market. There is a heavy Hispanic population. And just I think because of the city’s demographics and those kind of counts, I would say the population that I work with is predominantly Hispanic and that’s just really because that is the makeup of the city. That is specifically my experience.

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We also have a large amount of entrepreneurs, and so we’ve always attracted diversity in age, in race, in background, and where you’re born ... international. There’s just a lot of opportunity here, and when there’s monetary opportunity and an opportunity for business growth. It’s just a beacon, right?

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And this beacon seems to be far-reaching, extending internationally. The same 2019 data showed that roughly half of the new residents in Texas were migrants. And in 2018, the majority of immigrants to Texas came from other countries. It marked the second straight year that international migration to the state exceeded domestic migration, with Hispanic and Asian immigrants taking the lead.

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And so it’s interesting to see that diversity sort of infiltrating into a very predominantly, very historically conservative, white, republican area, just from some demographics that are easy to remember, and really flourishing here: building businesses, having families, putting down roots, loving it out here.

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I am a guy for diversity and I have done a lot of panel discussions on cultural differences around the world, because the way that people do in different countries, they do businesses or transactions in real estate, is completely different than here. You need to know what they’re expecting and what they get and educate them based on the U.S. rules. That’s very important.

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It makes me a little sad that there’s such a huge segment that I’ve seen in our industry that are unwilling to take some of that diversity because of the challenge that comes with it, because they’ve built such a big business in who they are, and what they are, and who they know. And that’s great, and that’s awesome, and congratulations to them, but serving I think a more diverse clientele ... there’s a gap there and it's bad.

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You are going to work with very, very different people than yourselves. It could be age, it could be where you’re from, it could be your religion … It could be any of these things that are protected classes and therefore you’re going to have to work with these people. But what’s exciting about that is that you get to shape our community, you get to shape Texas. You get to shape Dallas.

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There’s another influence playing into the diversity of our clients and our state — the Millennial generation. This generation, those born between the early 1980s and late 1990s, is classified by many unique characteristics:

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Research shows they have higher educational attainment than preceding generations ; they have grown up with the rise of the internet, assuming for the first time the title of "digital natives ;" and this group, which makes up around 44 percent of the population, is the most diverse adult generation in American history and currently makes up the largest share of homebuyers . Right behind Millennials are the Generation Zers, those born between 1996 and 2012, on track to outpace Millennials as the most ethnically and racially diverse generation in America .

 

These younger generations are generally more committed to implementing sustainability goals into their lives, addressing equality, climate change, peace, justice, poverty, and prosperity. They’re eager and passionate about making a positive difference and committing to social responsibility .

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More diversity in the younger real estate professionals that are joining the state level, like we are here at Texas REALTORS®, national, or local. They are younger, more diverse ... These things that we kind of consider intangible items like who you love, poverty, social injustice, these are, I don’t want to say passions, but they’re so ingrained in these younger people that I’ve met and have dealt with. Like, who you love doesn't matter as long as you love someone and are loved in return. And how you treat people that are of other different nationalities or colors or religions, matters.

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So, I actually started getting involved in the local association with my local YPN network and my local NAHREP [National Association of Real Estate Professionals] chapter. That’s what I started. And for me, YPN made sense because it was people similar to my age bracket and wanting to do something. And with NAHREP it made sense with the mission statement because that was the market that I was serving. And so I was really excited when Texas decided to form a diversity committee and kind of meet those things. To me it seemed like a natural continuation of my work from NAHREP to Texas REALTORS®, so I was really excited about that kind of work like that.

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Millennials will soon take lead as the generation that volunteers the most. A study found that 46 percent of millennials volunteered for a cause within the last month that was affiliated with a social issue they cared about. Ninety percent of Millennials think people like them can have an impact on the world to make it a better place to live . Their passions for social responsibility and climate change coupled with their almost innate knowledge of technology has a strong impact on not just their volunteerism but also their buying habits, affecting all industries, including real estate.

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One thing I love about the Millennial generation is all the tech.

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I have noticed several young buyers are definitely interested in green features, especially thermostats, whole-house communication, which I know necessarily isn’t green but it’s very tech-level.

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It is interesting because it is something that I have noticed — is my younger generations are the ones that are very conscious about sustainability, about green homes, about, you know, going into more technology.

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And sometimes those can kind of coexist together, green and tech. Because when the whole house is tech, you know, one system, monitoring the HVACs and the water heaters and electricity used, and trying to make the HVAC more efficient, a lot of that matters to younger buyers, my younger buyers, A) because it’s tech related and younger people generally love tech stuff, but it’s also knowing that you’re not using so much of the planet’s resources seems to be a very big deal.

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The older generations are- they don’t seem to have the knowledge, I don’t think it’s that they don’t care, I don’t think they have the knowledge that they should have when it comes to sustainability.

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Solar has become a value-add for a lot of people, and I would say that a majority of the conversations that I have are with the Millennial generation. And I think a lot of that is, again, it’s the availability of information and their ability to go and get it.

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Millennials and Generation Zers are the first generations to have grown up in a world where climate change is part of a regular and global dialogue. They have been forced to face the realities of extreme weather patterns, rising sea levels, and species extinction . It’s not surprising, then, that this generation is made up of homebuyers who take environmentally friendly features into consideration when buying a home .

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They know about climate change, they have the desire to make a difference, and they seek to align spending habits with those values. And so technology was developed to meet the demand, with smart home tech, solar panels, and other sustainability features flooding the market.

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American businessman and former Intuit CEO Brad D. Smith put it well: "Millennials, and the generations that follow, are shaping technology. This generation has grown up with computing in the palm of their hands. They are more socially and globally connected through mobile Internet devices than any prior generation. And they don't question; they just learn."

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I think there’s a thirst for knowledge in that younger generation, especially in the under 30 crowd.

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I would say that there has been increased conversation about some of those things, like solar panels and like the smart features and smart houses. I think a lot of it maybe not necessarily be contributed to social awareness, it may just be kind of their thoughts being more like -- it makes more business sense, especially if you’re looking at an older house; is it updated windows, low-e windows, what do my utility bills look like, what’s the insulation? I think that those kind of questions are stemming from what is a long term cost of owning a home besides like the typical mortgage payment. Although I think that the market that I do serve is more conscious about the environment, I think that the need for those features kind of have to do with, again, the cost of owning a home.

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That’s an important factor - while Millennials are interested in having a positive environmental impact, they have to prioritize economic tradeoffs. That’s not because they don’t want to invest in green, it’s often because they can’t afford to. A 2018 study from the Federal Reserve found that “Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets and less wealth” . They have to prioritize their financial situation before their goals and aspirations. But when both align in a home, they’re eager to invest in sustainability .

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So that's the trend, I would say, from a new buyers standpoint. I get asked that a lot when my sales team is consulting new buyers; they ask that solar panel question a lot because we have started, just this last 18 months, started seeing it in resale homes and say, ‘Hey, what is this going to do for my value?’

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Even things like as far as trees — is there enough shade to help shade the house and help with air? Those are the kind of conversations we do have, but it is more an economic conversation.

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What I see into the future is that sustainability will become more attractive when time comes and the cost will continue to drop with the help of technology. So yes, we do have a lot of barriers , but I also see a hope in the future.

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Some international homebuyers follow a similar pattern - their interest is in environmentally friendly investments, but their financial responsibility comes first.

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The diversity, especially from other countries I’ve noticed, the cultures - it’s just a very different process for us. So when we need to consult and represent someone like that, then we have those conversations about proceeds that you have to have in a purchase, how are things going with your equity position, did you refinance this last time, is that something you want to do?

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We have to consider the investment in the long run. How much is it going to take to maintain the house? The repairs, the replacements, so with all those things sustainability comes in a big big part for them because it is the plan that they have to put into the future.

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A lot of the international buyers and sellers, they’re just fiscally more responsible I think than a lot of our American ones. Especially the younger ones.

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One of the things that is important for investors is that having all those green items also reduce their vacancy levels and the vacancy rates.

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But the case for sustainability is easier to make at the scale of commercial real estate. Investors and developers are reevaluating the traditional cost-benefit model and considering sustainability as a profit generator.

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Considering the impact of utility costs on commercial profits, it makes business sense to adopt green efficiencies, which are estimated to consume 29 to 50 percent less energy than non-green buildings . There’s also clear evidence showing that buildings with green features depreciate less quickly and will be better positioned to meet the growing demand of occupiers and investors that are more discerning .

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All that technology has been kind of pushed upon us for going back years, but the technology now makes sense and people are more willing to put those in. We certainly try to do that to extend the life value of our assets, and those that we manage, and those that we own, to extend the life expectancy and just the profit in both the building value and the economic value of the properties.

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Together with tech advancements, financial incentives are moving green forward. In 2015, the U.S. Department of Energy estimated that buildings account for 40 percent of energy use and associated greenhouse gas emissions . And the U.S. has a history of programs and incentives to combat that. From executive orders calling for federal agencies to cut energy usage , to energy policy promoting environmentally sound production , to net zero commercial initiatives and program goals to drive down the cost of solar and support solar adoption .

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Public-private partnerships have also filled a development need for responsible urban planning. Such as the WHARF D.C. and the Highline in New York City. These public-private partnerships enable local governments to work directly with private developers to create community-driven, sustainable spaces.

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In my experience working at Brooks, which is a 1,300 acre mixed-use community, we are able to do really creative unique structures because we do not pay property tax and we’re a public entity; our partnerships and the type of deal structures that we are able to work with partners on has been very cutting edge and allows for the opportunity for sustainability.

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Brooks is a 1,308-acre mixed-use community in San Antonio, Texas, owned and managed by the Brooks Development Authority — an 11-member board of directors that is appointed by the San Antonio City Council. Brooks is a true public-private partnership and was created in 2001 by the United States Congress, the State of Texas, and the City of San Antonio to redevelop the former Brooks Air Force Base.

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Its mission is to promote and develop a vibrant, sustainable community that serves as a catalyst for progressive economic development and regional prosperity .

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And diverse consumers are buying into that sustainable mission. Millennials are environmentally conscious, and are seeking energy conservation, open spaces, walking trails, and sustainability in their home choices, says Anne DeSimone, author of Housing Choice 2020 . On top of that, a majority of agents and brokers say that energy-efficiency promotion in listings was very or somewhat valuable .

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I believe that the consumer is driving that demand. Because of the fact that we have our parks and we have some of the components that we do, you would be surprised how many people are coming from other areas — that sustainability was a big part of that community and they found it at Brooks. They were surprised that they would end up living in the Brooks community on the South-side of San Antonio. But it was the only place that they found that connectivity, that connection, to where they had lived in Europe, or where they had been up North, in a different environment.

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Grace Farraj, Senior Vice President of Development and Sustainability at Nielsen, aptly stated: “those that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share, but build loyalty among the power-spending Millennials of tomorrow” . And that power-spending includes real estate buying and selling.

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What I’ve noticed, at least from the commercial real estate environment, is a lot of times it can help in the resale of the property in a competitive market. You might be able to get more than you used to be able to get for those improvements. That’s just my opinion, and looking at the experience from other commercial brokers, where years ago it was just purely black and white on the resale of a facility. But in San Antonio, we’re in Texas where there’s a lot of relocations, and we’ve become more of an attractive market. Part of that is recruiting employees. So are you going to get a facility that doesn't have really any bells and whistles, that just meets the minimum standard, or do you want a high quality facility that attracts attention and will basically represent your brand in a stronger way. I’m seeing more affinity to spending the money and making sure that you’re providing a more attractive product for your business.

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And spending that money can be a net positive in the life cycle cost assessment of a building. From the development side, sustainability is directly linked to increased market value and reduced vacancies. On the occupier side, these investments are directly linked to health, well-being, and increased productivity .

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Another component that has become really popular and we really care about it at Brooks, is LID, so low impact development. What we’re seeing is that in partnership with organizations like the San Antonio River Authority and relationships with our tenants and companies, looking at sustainability and the way that they develop their facility is becoming more and more a thing. It’s a lot more expensive, but it’s much more attractive and it makes for a much better environment for the employees as they’re living and working in that community.

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And that attractiveness can ultimately lead to resale premiums.

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I think about a real estate deal I worked on about eight years ago, where he had put in a bunch of green features. At the time, people would not value those solar panels and some of the water containment that he had done. But now, that same development more recently in the last couple years, I saw it resale at a major return to that developer. So again, I do think there’s becoming more and more of a market for it and especially if you’re looking at long term, maybe that buyer is also looking that way. So I think we’re going to see more sustainability integrated into commercial and residential real estate.

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With the profitability of sustainability becoming more apparent, real estate is increasingly prioritizing people and the planet.

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Obviously the planet, but since we’re kind of responsible for the planet, it really comes down to the people. Profit-- you know, when it comes to protecting lives and protecting employees, workers, tenants, then how do you put a value on that? However I think the technologies and advancements have really brought costs down, so in that aspect, we’re seeing a lot more investment into that phase of it. And I think that a long-term, I think that’s going to be carried forth.

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Now that the technology has caught up to the requirements, it’s kind of brought the pricing down so that’s helped. So I think that the aspect of putting the people of the three Ps in sustainability, that’s here to stay, I think that’s going to continue to be probably foremost forefront of the whole process.

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In some situations, the people outweigh the profit.

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We have had companies that have made us incredible offers but they did not share the vision of bringing high-wage or good quality jobs or bringing those sustainable capabilities to their project and we have turned them down. Really, we have a high standard and a high bar for what our anticipated goal with our community is, and so even if the numbers look good, or something like that, we have to look at the greater vision.

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And in other situations, the planet outweighs the pocketbook.

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And I will say the young people that we put into apartment communities, whenever the sales reps, or leasing reps, talk about why that building is LEED certified because they have a park on the roof which lowers the overall temperature of the building, or they use reclaimed water in the pools or something like that - when we do leases for those young people, a lot of those things check mark boxes that necessarily they weren’t looking for but once they knew that that building or that house, even, has those features, it made them feel a lot better about making that decision, even if the property cost a little bit more because that was an amenity or a feature that they really liked so they were willing to pay for that. So I do think some of these green items are just going to increase from here, as more tech is available and as less expensive - like solar panels - that they become, I think it will definitely be the wave of the future.

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Real estate, climate change, and social good are inextricably linked. The Global Wellness Institute reports that a hazardous environment and lack of outdoor spaces are leading factors contributing to unsustainable health expenditures. This ranges in outcomes from decreased mobility, rising stress, and segregation .

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Remnants of redlining also shaped the wealth and demographic patterns of American communities today, with 3 out of 4 "redlined" neighborhoods continuing to struggle economically - more than 85 years later . But an increasing number of REALTORS®, planners and developers are helping us shape more inclusive communities.

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At the time of taking the project on around 2001, the zip code and the area has been known as being heavily challenged. Mainly for jobs and for living wage of the surrounding zip codes. So really making that economic-development and bringing those jobs is super important to that part of town. And still today, the surrounding zip codes are still not where we want them to be but significantly better than when we took over the development.

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As we were planning how we would develop this successful community that would attract these kinds of employers, we had to really look at what does the mix-used community need to attract those type of companies. Obviously, it’s similar to many of the brokers and clients out there, that real estate brokers are communicating with, is they care about the schools that their children are going to go to, and so do we. We care that there are great schools for these workforce and the employees to put their kids in, because they’re not going to want to come to a community that their kids aren't going to have a better opportunity in their future.

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Using land and building development to serve the community is a growing consideration .

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I had mentioned a while back we were doing an industrial building with solar across the deck of the roof decking and the intent was to provide solar energy into the building to be basically self-sustaining and if there was excess production, it'd go back into the grid. Especially where this property was located-- very low-income area of the county, and offset electric costs for low-income down in that area. That did change the requirements of the machinery inside the industrial building, required a lot more than what we could provide for. That didn’t happen but that’s, that is certainly now is something that’s on the radar of how to put back into the grid on some of these buildings to offsets low-income costs and obviously to profitability of the operation of the building itself

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Global investors are also seeing the value of community building to facilitate long-term growth .

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Nissei Plastics out of Japan, Mission Solar out of Korea, Cuisine Solutions out of France. On and on, more international companies have got the bigger vision of building a community, having your workforce close, and really those sustainability components were a shared vision also.

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The business case is that a lot of the companies that we’re talking to are not only looking at building their facility and say, bringing 300 jobs. They’re looking at being a part of a community, that the workforce is there and that they can grow that 300 jobs to 1000 jobs, expand. And so looking at the long-term of their facility and how they’re going to grow and how they’re going to give back, it is important to not only Brooks but the companies that we’re recruiting and their success in the long-term. So they care about looking at it from more of a global view not just dollars and cents.

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The sustainable future for real estate is clear. Increasing diversity is leading to higher demand for climate-conscious investing, which promotes well-being and inclusive communities. Our industry has the power to address access to health, wealth, economic opportunity and housing. As REALTORS®, we have a role to play in this common thread.

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Maybe you have to do some things that are a little outside the box that build that environment. And I think Brooks was really smart in making those investments that were a little bit risky, they weren’t going to give us a big return, if a return at all, but long-term have really added value to the community.

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A lot of times that buyer will incorporate their family, you know, to give the thumbs up and it’s exciting because not only is the first time homebuyer excited, but like the whole family is excited about the whole process and you’re really teaching them all about the journey and the process. And so it’s really exciting to be a part of that sense of pride that you know, to see it happen. And it’s very common where, you know, we see that first homebuyer and then other family members see, like, ‘Hey, it is possible, it can be done.’ And it’s an awesome experience to be able to help, you know, more family members out there achieve, you know, the American Dream … to be a part of.

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We definitely need to bring more awareness and like you said, in the long run it is a big benefit for people to afford staying in their houses. Not only buying it, buying it is only one step, being able to maintain it and to keep it for longer generations.

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I love the diversity, I love inclusion of everybody, because everybody is entitled to a home buy, purchase, lease, as long as you are qualified. That’s what I understand, but I don’t see anything negativity on that and I am for it.

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I think it’s a matter of trying to be a good neighbor, trying to be good citizens, trying to be a good industry and the more honest and open we are with how things are developed and why. Why there, why this neighborhood vs. this neighborhood. You have to take into consideration a lot of details. The demographic you’re talking with and you’re speaking with, and trying to see how best to help them.

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It's just that reference point, I think, some people who’ve really had to go through some persecution, especially racial persecution, is always something that I think that we can be on the forefront of in the real estate community, because we’re so diverse.

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So I just want people that are watching this, myself included, to know that this is a melting pot and the way of the future is sustainability, the way of the future is diversity. And we just need to come together to pull these forces, the intangible things, together. I mean, you’re going to work with young people, I’m going to work with people much older than myself, and I think it’s just realizing that we all live in one world and we need to come forward together. You get to be a part of ensuring our future for a much happier place for our kids and our grandkids and I think that’s a really, really cool thing.

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