In the last article, we discussed the lack of diversity in real estate, particularly through the hiring process, development, and education. The first step to fixing any problem is to identify it, and now that we have established some of those issues, let’s look at some solutions.
Solutions to barriers to entry: Early success for new professionals in real estate can depend heavily on the kinds of university or family connections that they already have in place. If candidates don’t know the right people, they may have trouble breaking in—no matter how qualified they are. One way to improve diversity in the real estate arena is to reconsider the hiring process and evaluate how best to widen candidate pools.
This could mean looking at what kinds of professionals are already being hired, widening avenues for seeking candidates through different networks than usual, and making sure that postings find a wider and more diverse audience. Some ways to achieve this could be to actively recruit through historically Black colleges and universities (HBCUs) or to recruit from a broader array of local universities and colleges. Another way could be to make sure job postings find their way to local business groups run by people of color and women, or through other relevant social networks already in the community. Also, it’s helpful to identify underrepresented persons in an organization who may be able to spread the word about job postings in their social networks.
A top-down approach is also effective, with an emphasis on educating people in leadership about improving diversity. It is important for employers and recruiters to be aware of their own biases and actively reach out to potential candidates from all kinds of backgrounds. If existing hiring and recruitment systems depend on a narrow group of candidates, then they may be insufficient and require reevaluation.
Development: Our last blog discussed the lack of diversity in developers, which can lead to a lack of product diversity and shape communities accordingly. We also discussed that people of color or women may have a more difficult time getting the requisite funds from banks or private equity. But there are areas in real estate where Black developers, or developers from other minorities, do have more representation, and that is in affordable housing.
There are multiple reasons for this. For one, there are fewer barriers to funding, as many of these developments come with some government subsidies, therefore reducing reliance on private financing. Although affordable housing developments can be time-consuming and difficult to acquire, the capital requirements are reduced and can be a good place for minority and women developers to start and grow before moving into other areas of real estate.
It can also be a good space for minority real estate developers to collaborate in order to create networks and build each other up. In addition to capitalizing on these networks, it’s good to increase initiatives to build even more connections. This can help new professionals bring in more capital and broaden into other areas of real estate.
Education: One of the reasons that I have developed an online platform to share what I do is that I know what it is like to go to a conference or into a real estate space and not see or hear anybody who looks like me. There are all kinds of communities to engage with through real estate. The challenge is ensuring that the educational materials match the diversity of the people and communities to be served. If not, then that education is lacking and inaccessible to a lot of people trying to break into the industry.
This issue can be improved by people of different backgrounds in real estate going the extra mile to establish online platforms to help educate others. It can also be achieved through various conferences and larger social platforms making an effort to make sure that their speakers and representatives more closely match the diversity of participants and the communities that they serve. Or if someone has a significant online influence, they might use that to highlight real estate professionals from different backgrounds who approach the real estate business from different angles and strategies.
Diversity does matter. Before May 2019, I was a ghost online. I had no online photos, no social media presence, and you really couldn’t find me. In time, I realized that by not sharing my success with others, I was contributing to the diversity problem.
If you go to a conference or interact in a social real estate space and there is no one like you, it may bring up some uncomfortable questions for you. And while it’s not necessarily a black or white issue, the fact remains that there are more people from all kinds of backgrounds working in real estate than what one sees on many social and educational platforms. Contrary to what the real estate establishment may convey, there’s no right way to look nor one set strategy for being successful in real estate. Everyone wins when people from all walks of life enter the real estate space and broaden its reach.
As the head of a black-owned multifamily investing education company, I’ve taught people of all colors, cultures, and socioeconomic backgrounds how to successfully invest in apartments and discover powerful streams of passive income. I’m proud to be increasing diversity in real estate investing and look forward to being part of proactive solutions to make the industry even more inclusive.