Denise Scott of Local Initiatives Support Corporation (LISC): How We Are Helping To Make Housing More Affordable

I want young people to start thinking about ownership earlier, whether it’s a business or a home. If you start getting on a trajectory to make that pivot earlier, you’ll be stronger throughout your life. I’d also like to see people being more entrepreneurial because that is how we get more creative, innovative thinkers. It would be great to see entrepreneurial skills taught in school to support people who are interested in that pathway.

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 Denise Scott, executive vice president for programs at the Local Initiatives Support Corporation (LISC), the nation’s largest community development organization.

Denise Scott is the executive vice president in charge of many of LISC’s national, and all of LISC’s local programs. As such, she leads LISC’s neighborhood investment strategies to expand and sustain opportunities in communities across the 37 cities where LISC has offices and manages the organization’s Health, Housing, and Safety & Justice programming areas, among others. Currently serving as chair of the Board of the New York Federal Reserve, Scott has a long history in housing, including as head of LISC’s New York City office, and as a White House appointee to the Department of Housing and Urban Development (HUD). She also previously served as the managing director/coordinator responsible for launching the Upper Manhattan Empowerment Zone Development Corporation, an organization that facilitates economic development through job creation, strategic investments, and small business assistance.

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?

After college, I got a joint master’s degree in public health and urban planning because I was interested in both, but I was more drawn to the public health side. When I hit the job market, however, all the jobs available seemed to be in housing, so I took a position with the NYC Housing Agency, figuring I would stay for about a year until I found something in public health. That was almost 40 years ago!

Today, housing and public health are seen as very interconnected — people understand housing, employment, and so much more, as the social factors that determine our health outcomes — but that was not the case when I started out. I felt it though. And I have to say that, after all of these years, it’s exciting to find that more people in both the public and private sectors finally see these factors as entwined.

Can you share the most interesting story that happened to you since you began your career?

It all changed for me when I moved from working in Queens to working in Harlem at a time when Harlem was facing a massive abandonment of its neighborhoods. In the mid 80s the city owned over 50% of the land and buildings in Harlem, and it was one of the most neglected places in the country; today, Harlem is both one of the hottest real estate markets and a place where people of all economic levels can live and work and maintain their community. To be at the forefront of helping to cause that change was a tipping point for me. I saw that intentionality, focused investment, and engagement in community can cause massive change. That’s what made me decide to stick with housing as a career. And memories of that job still inform the work I do today.

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?

My father was the greatest inspiration in and on my life. We used to talk for hours as he guided me.

Most parents say, “Don’t play in traffic.” My dad always said, “Play in traffic, Denise.” He meant that, in order to cause change, you have to understand other people’s perspectives and, in order to understand perspectives that are different from your own, you have to get out there — get in it. You have to think strategically and assess the politics of the situation.

He was a chef, but he was always involved in his community. He got me interested in community issues as a child. He knew the mayor, all the elected officials. And he actually influenced my decision to take that first housing job even though it wasn’t the one I wanted. He always had a vision that I was meant for community development and, to him, that meant housing.

He used to say, “If you don’t know where you’re going, any road will take you there. And you don’t want to take just any road.” He taught me that you have to lay all that information out — all that knowledge you get from playing in the traffic — and think critically.

Most of all, he taught me to love who I am and to always be myself.

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?

It was really my father and his words of wisdom that have had the greatest impact on me, much more than any podcast or book.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Each one, teach one.” Again, this quote comes from my father. He truly believed we all have responsibility for one another — that you’re not going to get any further than the person behind you. You always have to pull up the rear. I think about that every day.

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?

The lack of affordable housing is related to many issues: lack of supply, the high cost to build, not enough focus or funding from local governments, and lack of adequate subsidies, just to name a few. We have been underbuilding relative to the need for years, and what is built tends not to serve families in particular. The cost of land also doesn’t support affordable housing production — cities are becoming ever more expensive, which, while a success story for urban areas compared to the 1970s and 80s, is creating huge issues of gentrification and displacement, particularly for communities of color.

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?

LISC invests in historically disinvested communities across the country in order to close gaps around health, wealth, and opportunity. Last year, we invested over $2 billion in housing, community spaces, small businesses, workforce development, and programs related to health, safety, recreation, and much more. Currently, we work in 37 cities and over 2,100 rural counties, so we have the ability to scale market-specific solutions to have an outsize impact. Over our 40+ years, we have supported the creation of 436,320 affordable homes and 74.4 million square feet of commercial space representing $69 billion in total investment.

Preserving and developing affordable housing is always one of our top priorities, and we do it in a way that utilizes diverse sources of capital. We develop creative new ways to build new homes and purchase existing affordable housing by combining resources such as philanthropic, private, and flexible financing — and to identify money that can act like government subsidies.

One great example is a successful fund we manage in Charlotte that has financed over 1,200 units of affordable housing using capital from local government, philanthropy, and the corporate community — a great opportunity to see many players come together to create real impact. The local government decided they needed to do something about housing affordability; the philanthropic and private sectors reached a similar conclusion at the same time; and the community was ready for the change. They called LISC and said, “We have a vision to improve economic mobility here and to build more affordable housing, and we have all these local players who want to work together on it, can you help us do it?” It was very exciting because our theory of change is that it takes all these layers together to make it happen.

Another big focus for us is diversifying the pool of developers so that more women and people of color — groups that are drastically underrepresented in non-profit real estate development — are involved in housing production. We’ve had a program in California called the Housing Development Training Institute running for 30 years that trains nonprofit housing developers to this end; and last year it expanded to Ohio. We are expanding the program to other cities and hope to see it launched nationally for an even greater impact.

Can you share something about your work that makes you most proud? Is there a particular story or incident that you found most uplifting?

I think the moment we’re in right now is pretty uplifting. We have an opportunity here to focus on BIPOC communities — to lean into this moment and really use it to invest more and empower communities of color to take on leadership and ownership. That’s what’s going to fundamentally change the conditions of poverty and close the gaps in wealth, health, and opportunity. This is a moment in time and let’s not waste a minute of it. Let’s be assertive and do everything we possibly can to try and take advantage of the attention that this work is getting, of the funding that it’s getting, and let’s do some bold things with it.

In your opinion, what should others in the affordable housing industry do to further address these problems?

We need to be willing to try innovative approaches. We need to consider working with more flexible sources of capital. We need to increase the minimum wage to truly be a living wage because, if we’re not addressing the economic development side of the equation, we’re not dealing with the whole issue. And there are policy agendas we should advance. For example:

Existing programs like LIHTC, HOME, CDBG, and Section 8 need to be better funded and expanded to serve more people. Currently, the mortgage deduction is larger than all the low-income housing subsidies combined. Renters need the same supports that owners receive. Rent stabilization programs should also be expanded to provide a measure of control for rent increases, particularly in hot markets.

Tenants should be protected through strong eviction and other tenant protections laws, and through legal aid and housing counseling organizations. The federal funds designated for past due rent need to move quickly to reach those in need. Nonprofits can be incredibly helpful here, bridging the gap between government and landlords and tenants.

City governments must be strategic about how they utilize their federal housing resources to maximize impact. This means targeting resources to the lowest income and most vulnerable families and ensuring community-based organizations and local stakeholders are engaged with program delivery.

We need to pass foreclosure protection laws, and allow for flexibility with payments, such as extending the mortgage timeline an additional year or two.

Funds should be provided for down-payment assistance and home-buyer education counseling.

Freeze property taxes in hot markets and increase access to grants and 0% interest loans for home repairs.

Develop alternative housing, such as rent-to-own programs, community land trusts and land banks, co-ops, and accessory dwelling units, to increase supply.

Remove zoning laws that prohibit density in order to increase affordable housing supply.

At the federal level, enact the Neighborhood Homes Investment Act, which would provide tax credits to support developing and rehabbing single-family homes in distressed communities.

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?

We know that the high cost of living in many cities is forcing people out, in particular people of color. One way to prevent this is to pay people more money. We need to increase the minimum wage to a living wage so that people can afford a home, food, education, health care — everything one needs to live a safe, fulfilling life. Secondly, the supply of affordable housing has to substantially increase, and existing affordable housing needs to be preserved to remain affordable. A third focus should be on increasing ownership, both of housing and of small businesses.

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?

In addition to the minimum wage increase, I’d like to see the Neighborhood Homes Investment Act passed. In many historically disinvested communities, it costs more to build or repair a home than the home is worth. This Act would provide federal tax credits to close this gap, increasing affordable housing production. I’d also remove laws that reduce housing density so that we can build more in areas where the cost of land and building is high, as in most cities.

It would be good to have dedicated funding streams to support the increased need for nonprofit capacity to better support communities in need. Nonprofits are a vital component of the local service delivery systems in every city. Their infrastructure is critical to sustain!

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.

There’s a real complexity to finance that I had to learn how to address in order to do my job well. I think I could have achieved more earlier on in my career if I had started with a deeper understanding of that complexity, but you have to go through it to get to that understanding, so it’s a bit circular.

Another thing I learned over the years is how important it is to keep pushing for a good idea even when you’re told no, even when you have to be flexible or negotiate to make it work. If you believe something to be a really good idea, keep pushing and its time will come. Often, we give up on an idea because we can’t sell it at the first try. There’s a level of stick-to-it-ness that‘s required in this work.

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. 🙂

I want young people to start thinking about ownership earlier, whether it’s a business or a home. If you start getting on a trajectory to make that pivot earlier, you’ll be stronger throughout your life. I’d also like to see people being more entrepreneurial because that is how we get more creative, innovative thinkers. It would be great to see entrepreneurial skills taught in school to support people who are interested in that pathway.

I’d also like to see philanthropy be more flexible about how funds can be applied to solve a problem. The more flexible funds are, the greater an impact they can have. Right now, philanthropy tends to be very prescriptive, which impedes the possibilities. Historically, philanthropy was more thematic, and when the pandemic began, it shifted again to being less restrictive in order to help people quickly. I’d like to see that be a permanent shift so that we can tackle more multi-dimensional problems in the most creative manner. Banks and government could consider more flexible funding options as well.

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. 🙂

I would love to share a meal with Kamala Harris and talk to her about improving equality for women of color. I’d like to see more women in positions of leadership in finance, STEM, government, and industry, and to see a pipeline of women rising in the ranks. I’d love to talk to Kamala about how we can grow this pipeline of women, particularly women of color, for future leadership positions — including president of the United States.

How can our readers further follow your work online?

Denise Scott of Local Initiatives Support Corporation (LISC): How We Are Helping To Make Housing… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.

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