Episode 94 - Serving a Big God in a Big Way with Jonathan Reckford
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Jonathan Reckford is the CEO of Habitat for Humanity International. Before joining Habitat, Jonathan spent most of his career in leadership positions at Goldman Sachs, Marriott, The Walt Disney Co., and Best Buy. Since joining Habitat in 2005, Jonathan has grown Habitat from serving 125,000 individuals each year to helping more than seven million people annually. It’s no surprise why he was named the most influential nonprofit leader in America in 2017. Today, he serves on the board of the Federal Reserve Bank of Atlanta, is a member of the Council on Foreign Relations and the World Economic Forum. Jonathan joins us today to share some of his story, what God is doing in and through Habitat, leadership lessons he’s learned in his career, and what it means to serve God at scale.
Episode Transcript
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Jonathan Reckford: Help, you know, find the cause, the thing that's bothering you and your community and jump in. But to me, it's do get your own hands involved in your own feet involved because if you do it just at a head level and you're not relationally connected, you know, the relational connections create the heart change that then allows us to create the next change.
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Rusty Rueff: Hey everybody, welcome back to the Faith Driven Investor podcast. We're so happy you're back with us once again this week. Today we have a guest by the name of Jonathan Reckford. Jonathan is the CEO of Habitat for Humanity International. Before joining Habitat, Jonathan spent most of his career in leadership positions at Goldman Sachs, Marriott, The Walt Disney Company and Best Buy. Since joining Habitat in 2005, Jonathan has grown habitat from serving one hundred and twenty five thousand individuals each year to helping more than seven million people annually. It's no surprise why he was named the most influential nonprofit leader in America in 2017. Today, he serves on the board of the Federal Reserve Bank of Atlanta, is a member of the Council on Foreign Relations and the World Economic Forum. Jonathan joins us today to share some of his story, what God is doing in and through habitat, and what it means to serve God at scale. Let's listen in.
Henry Kaestner: Welcome back to the Faith Driven Investor podcast. I'm here with my co-host Luke Roush. Luke, greetings. Welcome.
Luke Roush: It's great to be here. Great to
Henry Kaestner: be here. How are things in Nashville?
Luke Roush: Things in Nashville are lovely. What a great place to live. Come join us.
Henry Kaestner: A lot of people are you don't even need to issue that invitation anymore. We miss you out here. We miss you out here. We're grateful that we've got an incredible guest and a friend of both of ours and friend of Justin's too. As we've gotten to know Jonathan over the years at the Christian Economic Forum, so shout out to chuck Bentley and his incredible leadership and bring together a group of men and women just really committed to understanding how God is at work in the marketplace, the financial markets and the macroeconomic environment. And I've been looking for this episode in particular because, as I said before we went on air this summer, I had several different highlights which are really cool. It's just great to emerge from COVID and spend time with friends and family. But there is a hike that I took with Jonathan before the events get started, the Christian Economic Forum that was super encouraging for me and it was encouraging to me on multiple levels. One was a leader in the space that could challenge and encourage me. So it's great just to spend time with Jonathan Richard just for that reason. But then there are two different things that really made an impact on me. Number one, we spent about half our time talking about what does it look like to be and Russell through being good fathers and how to attend to the different needs of our children. And I hadn't expected to go on a hike with Jonathan Rickford and come away having been blessed in that area, but I most assuredly was. And then the second one was we spent some good time not just talking about habitat, but the broader macro economic environment that he operates in. Having been the CEO of Habitat for Humanity for a long time now, having served on the board of the Federal Reserve in Atlanta and helping me to just understand just the larger societal challenges that impact poverty and what does that look like and the merger of NGOs and public policy and free enterprise? And just the kind of the bigger cocktail, if you will, that we found ourselves in. Those of us were on this podcast caring about how we invest the assets that God is in trust us with, according to our faith. And in some ways, that can be really simple in terms of being faithful and obedient and getting down on our knees and asking God to lead us in other ways. It can be pretty complicated. And so when you find somebody like Jonathan, they can help you to navigate through that and make it less complicated. And to be clear. Poverty is a complicated process, but whenever you get the chance to spend some time, whether it's on a hike in Colorado or on a podcast like I hope that you will experience today when somebody can help you to make sense of all that in a way that might be actionable, that's a big deal. So that's what we're hoping to accomplish today. Jonathan, thank you very, very much for being with us.
Jonathan Reckford: Thanks so much, Henry. It's great to be with you all.
Henry Kaestner: So we'd like to understand everybody's story that comes on the podcast. And there's a lot, of course, to you and who you are. And I know a bit about the fact that you grew up in one of the greatest towns in the world. So why don't you share a little bit about your background and your time before habitat and before the Federal Reserve? Please.
Jonathan Reckford: So thank you and great to be with all of you. More broadly, my story, I would break it. Maybe two parts one the family side and how I got launched, and then a very unlikely career that just shows that God has a sense of humor, I think. But in one now I can look back and see how all those pieces were useful, even if my career didn't make sense. In some parts along the way, I grew up in Chapel Hill, North Carolina, which is a spectacular place to grow up. Yes, Father was a classics professor at USC, now retired, and that was the fourth of five kids, and it really was a special place to grow up. Did a brief stint in England, which was very formative for second grade when he was on sabbatical, and that probably first opened my eyes to a bigger world in a new way, and I was blessed with a couple of really powerful role models beyond my immediate family. My grandmother was a quite iconoclastic and formidable woman. Her name was Millicent Fenwick, and she was one of the relatively small number of women in the US Congress in the 70s. And she was a civil rights pioneer and ferocious fighter for human rights. And some people know the comic strip Doonesbury. She became famous because Gary Trudeau created his character, Lacey Davenport, after her in the comic strip. But every time I saw her as a kid every summer and Christmas, she would say Myka six eight and is shown your man. What is good and what does the Lord require of you but to act justly love mercy and walk humbly with your God? And then she would ask us what we were going to do to be useful and her view of the good life as we're supposed to be useful. And it took me a long time to live into that and my other real role models. My godmother, who was an extraordinary pathbreaking woman as well, an Australian who was the first woman president of Smith College and ended up through this talent, becoming lead director of Merrill Lynch, Nike Colgate-Palmolive and the executive chair of Lendlease Corp in Australia. So along with all sorts of nonprofit and writing bestselling books, and she had that incredible ability to be so gifted and yet fully present, which I found quite amazing and really tried to emulate her and I miss. She was my go to person for career advice all the way along, so was launched with that. On the career side, I was going to go to law school and go into politics because that was I was really passionate about and came to the shocking realization as a senior in college that I was only going to law school because I thought, that's what you did to go into politics. And I had no actual interest in being a lawyer, so had to quickly find something else to do. And I'm not sure I would advise this from a career perspective. But as a political science and English major talked my way into a job in corporate finance at Goldman Sachs. With the hubris that I could learn finance faster than I could teach other people to communicate. And then I suffered mightily for that for a couple of years, and it was a great education and including the learning that I probably wasn't cut out to be an investment banker. But it was also probably the low point for me in many ways, from a personal perspective, because I wasn't leading a life that in any way really seemed to line up with who I was hoping to become. I was working all the time and in some ways acting out, and I think that period made me think I needed to readjust. And the first big inflection point for me was then I, instead of going on to grad school and I'd become interested in business. At this point, I applied for a bunch of things and was lucky enough to get a grant from the Henry Luce Foundation to work for a year in Asia and lose. His parents were missionaries in China. He was the founder of Time Magazine and created and still just 15 young Americans from all different fields every year to go work in Asia. And I was a huge sports fan, and Korea was going to host the Olympics so lined up and I was able to go over with Goldman, who was going to finance the first convertible equity offering for a Korean company. And I worked on that deal and then set up a job working for the Olympic organizing committee, doing marketing. And then in a giant twist, and they told me because they were the host country and qualified that they had just fired their rowing coach. They saw this rowing in my background and wondered if I would come and help coach their rowing team. And I told them I was completely unqualified and they said, No, we're really serious about this. So I quit Goldman early and went to the US rowing coaching college. And if you sort of think Jamaican bobsled team, it would give you a, you know, they they were not globally competitive, but the US coach. We're not intimidated and loaded me up. And the important part of that story is I spent the year living in the training camp with all the Korean coaches and athletes. And, you know, in a pre-internet pre-digital age, it could not have been a more complete immersion and removal from anything that was familiar for me. And that was the year I really got serious about face. I'd grown up in a nontraditional but devout Catholic family and had never walked away from my faith but never really owned it. And that year in Korea, God put the right person in my life. There were two of us of the 15 of us spread across Asia. The other person in Korea and the only non Korean I would see was my lifelong friend Jim Peterson, who was an American Baptist pastor and had just finished his Ph.D. in the ethics of genetic engineering and just in a brilliant scholar. And he was that person who could both go as deep intellectually, but also had the kind of the Holy Spirit flowing through him. And I met people who had one or the other, and I think he gave me the extraordinary gift of every Monday night for the rest of that year, and we went through systematic theology and the whole New Testament together. And it was really I had such a high bar of not wanting to be a hypocrite, but it was through that process that I gradually got to the point where I could take that leap and make a full adult commitment to my faith. And that really changed everything. So came back and went to Stanford Business School because Stanford was one of the only business schools back then that believe we needed professional management of nonprofits. And I was intrigued with the idea of at that point, I actually wanted to go be Peter Ueberroth and run the Olympics, but I wanted to find a mission that really mattered. And in business school, which is less true today than it was then I thought I should go to the private sector first, learn the skills and then put those skills over once I find the right mission. And what really intrigued me was strategy. And how do you grow organizations? And I know many in this audience are people who are true startups I got interested in how do you start new things within big companies? So I went to Marriott Corporation first and worked on two new businesses for them and then actually got laid off in the S&L crisis, went to The Walt Disney Company and got to work on a couple of big successes and one spectacular failure leading strategic planning for their real estate based entertainment. And then was recruited to a company called Circuit City
Henry Kaestner: before you move on from there. Everybody's a Disney fan, and I know that you hired one of our great friends and partners at Sovereign's Capital as an Imagineer. Michael Tremaine. But before you go in there. So two things. How did the cranes do? Did they do better in optics?
Jonathan Reckford: They did not do very well in the Olympics, but we beat the Japanese, which there you go. This context was there was a huge day.
Henry Kaestner: Okay. What did you work on at Disney?
Jonathan Reckford: So at Disney, I worked on their urban entertainment and something called the Disney Vacation Club, which was Disney's timeshare strategy, which has become a large and very successful business, and then worked on this as a whole podcast in itself or a book someday. But a project called Disney's America, which was going to be a new urban entertainment concept that then turned into a history based theme park in northern Virginia, which then drew the ire of The Washington Post and turned into a huge mess and ultimately got canceled. So that's a whole story in itself, but the the original idea actually evolved in a couple of other businesses, which was how could Disney bring entertainment to kind of urban areas in addition to its theme park strategy?
Henry Kaestner: And then downtown Disney ended up being a pretty good success. I think you should take credit for that.
Jonathan Reckford: It is. I certainly don't. And then there were projects like the town of Celebration, which is actually Disney's first residential community trying to live a little closer. And that was actually very much tied to their actually their highway and road improvement strategy. So there's a whole build out of the giant Disney complex, but I love living there and working there. The theme park side is very pixie dust movie studio side, a little more sharp elbowed, but
Henry Kaestner: OK, so going. I'm sorry, I interrupted you. So Circuit City?
Jonathan Reckford: No, I was giving you a long story. So Circuit City was starting something called CarMax, and I was just fascinated by that. And they were going to disrupt the whole way cars were being sold and sort of solve the conundrum of the lemon law and used car sales. So I went to and became head of strategy for Circuit City, and now my business credibility will be shot because of course, CarMax has done great. Circuit City is no longer around. And my hope was actually to start the next car max after we took it public. And then if people read Jim Collins, my old business school professor suggested is the only company that was in both good to great and how the mighty fall. So it became a cautionary tale. And at that point when I joined, they were, you know, had been the top stock on the New York Stock Exchange for a 10 year period and had really redefined big box retailing where retail is a tough area. And if you don't re redefine, you can still get challenged. And I was then recruited. I really wanted to move from strategy into an operating role and have the the opportunity to be president of another. Now, sadly dead retailer called Music Land and some of you listeners on may be old enough to remember going to the mall to buy music or movies. And back then, Music Man had Sam Goody and Sancho's video and two other chains and was the largest specialty retailer, music and movie. You said I always loved the entertainment world. And clearly, they had a huge challenge because the internet was coming. And what I didn't plan on, but we had had grown. The business is the best buy bought it and I'll fast forward that was in two thousand and two and it was clearly the right thing for the business to sell. It turned out to be a flawed acquisition, and I stayed for a year to help make it work. And then had one of those tough calls, as do I stay or do I go? And as my wife and I prayed about it, it just felt clear I'd already stayed in the private sector longer than I'd ever planned. And this led to a decision to leave, and I usually recommend don't leave if you don't know what you're going to do next. But we just took the lead with a big non-compete clause into protection. And the next big inflection point in the way was that next period because with my wife's blessing, I finally decided I'd want to do it went off on a short term mission trip to India to serve with a group of Presbyterian pastors in rural India. And it was one of those next moments where I think all those late in issues of social justice came roaring back where we were serving with the bank, which among the Dalits or the outcasts in India and rural areas. This is at the absolute kind of lowest social tier in society, where there are literally only allowed to hand clean latrines or clean up dead animals. And at that time, about half the children were dying before their 13th birthday because of the conditions they were living in.
Luke Roush: So Jonathan, where are you by yourself on this trip?
Jonathan Reckford: I was by myself, but with a group of I think it's 12 or 13 other. No kids, no, no family on this trip. Actually, my kids were too small. They would have been it would have been overwhelming, I think, at that age. For them, though, they have since been on many trips with me. And so I really had the pastor who founded Habitat or came up with the idea of Habitat for Humanity had this phrase that divine irritation. But it's that idea that we're also good at seeing problems in our world and thinking someone ought to do something. But I think that moment of divine irritation is where God grabs you by the scruff of the neck and the responses that I have to do something. And I just came back from that trip with a deep sense of upset around poverty issues and how to engage and turn down a couple of really good business jobs, thinking, OK, I've got my deal with God now and almost got a couple of nonprofit jobs with international profits. And in both cases, I got to the finals and then they picked someone who'd already run a nonprofit, which was completely logical. And I was like, God, we had a deal. And suddenly all the doors closed and nothing was opening. And what I really learned in that would turn into quite a waiting period is one it was spectacular for my family and less spectacular for my ego, but in a really good way. And two, if I'm really honest, which is a little embarrassing. My deal was God, I'll do anything you want as long as it meets my geographic time, financial and social gratification and all my other big deal cutting deal. Yeah, getting the deal and what I had to as imperfectly as I could get there. Move towards Okay God, no conditions is best able. I will. I will follow where you lead. And that, to my great surprise, led to my local church asking me to be the administrative executive pastor, which was not at all what I was looking to do. And all my friends who I trusted for career advice said not to. But Ashley and I really had a sense of that. This was a call and we should be obedient to it. And this is such a nice God part in retrospect accepted the job almost immediately got a call from one of the big headhunting firms with a great opportunity to run an internet retailer. And I remember just telling the search partner, Gosh, that sounds like a great job. I'm going to go work for my local church and I thought I am exiting the market and will be blacklisted forever. And two years later, when I was happily working at the church and not looking, she was the partner leading the habitat search who called up out of the blue and said, Jonathan, do you know anybody who'd be interested in Habitat for Humanity? And if I went back to that list with God, it checked every single thing on the list and I never thought they would hire me, but wrote this very passionate letter, saying, I think this is the kind of thing God has been preparing me for all this time. So that was 2005, and as you can tell, I could never keep a job. But this is it is a challenge, but an incredible joy to be part of this mission since then.
Luke Roush: So how do you think one of the things we talked a lot about in the context of Christian Economic Forum is human flourishing. And what does it look like for human flourishing to exist? Maybe speak a little bit just about housing and the role that plays in individual security community. Maybe just speak to that a little bit.
Jonathan Reckford: You know, I've I've had a chance to learn so much, Luke about housing. And, you know, I came with the lens not to solve housing by the lens, to think, how do you solve poverty? And certainly what I have experienced and then seen all around the world is housing is clearly not the only thing, but in some ways it's a prerequisite. So if you think about after food and water, shelter is almost the most basic level of need. And what we know from the data is if people. Child grows up in good housing, she stays healthier, she does better in school and then is in a position to lift herself up over time. If you pull housing out of that equation, it's extraordinarily unlikely that someone can both stay healthy and be educated. And so in many ways, we think of it as a prerequisite, almost for all the other things we want in life. But if you think about it, we certainly recognize that housing is only one component and people need all the elements of a healthy community, so they need access to food and fresh water. They need, of course, employment and the ability to earn income. They need health, they need education. So they are all interconnected and none of them by themselves. One challenge sometimes the nonprofit world is we all say, well, if we just solve housing, everything will be perfect. And I think the reality is, no, we have to actually partner in ways that create the conditions so that we can meet all the needs of a healthy and sustainable community.
Luke Roush: Absolutely. Absolutely. When you think about so we've dabbled as an investor in the kind of real estate technology and through different ways to re-imagine home ownership and trying to broaden access, but maybe just speak a little bit about some of the efforts, whether it's Terwilliger center or kind of other things that habitat has done to really actually be a first mover in terms of real estate, technology and innovative models to change the system and how homes are owned.
Jonathan Reckford: Well, what I think the giant realization and when I joined in 05, it was an interesting it was not only a part of my plan, but we had the Indian Ocean tsunami, this massive regional disaster in Asia. And then we had Hurricane Katrina hit. Literally, the week I was joining, which was a massive U.S. disaster in terms of housing. And in both cases, it forced us to start thinking about scale in different ways, and habitat had gone really wide. One hundred and three countries and we had at that point one thousand eight hundred U.S. chapters or affiliates, but we were building very small number of houses and all those places. And so the question are in some ways, our core metric had been how many houses can we build? And that's a really good it's a good metric. But we flipped it to say, what would it actually take to meaningfully reduce the housing deficit in all the geographies that we serve? And that's a much more scary question, but forces you in the system thinking a little bit to it what Henry talked about at the opening. Because in many ways, then you have to look at the whole housing value chain and think about how do you create the conditions so that markets would actually work for low income families? And I would argue we started primarily outside the U.S. in low and middle income contexts. Right now, you can clearly make the case in the U.S. that the market is failing because we can't produce enough housing for low and moderate income families in this country, either. So that started us down a journey. And the first place was really policy and especially in the international context we take for granted in the US that you have property rights, you can get title to your house or entitled to a piece of property. In much of the world, especially women and marginalized groups can struggle to have legal right to stay on their property. And if you don't have the right to stay on your land, it doesn't really make sense to take a loan out. It doesn't make sense to take risks to upgrade. So we created a global advocacy campaign called Solid Ground All Around Property Rights. And if you have a quick example, one of my favorite stories in Bolivia, women didn't have the right to own land. And if you think about inheritance, divorce, abuse, all the different things that can happen if you have no right. And so we trained an incredibly impressive cadre oblivion women, and they not only successfully got title of their own land, they got the federal law changed. So if a man is married and wants to register either his land or his home, it has to be joint titled with his wife so that that would be an example of changing the enabling environment. Now the next step is can we help those 1.8 million women in Bolivia who now were enabled to be property owners to actually become property owners? And we would count that in the next layer? But so the first step is can we ensure property rights and good housing policy? Next layer was how do we increase access to finance? And what we found is banks in most low and moderate income countries would only lend to the top five percent of the population who actually had both income and property and were viewed as a credit risk. There was a huge unmet need. So we started with a bet that the microfinance industry there could be a business in making small home improvement loans to very low income families. And we started lending our own capital and training microfinance banks to do home lending and then working in the communities with the recipients of those loans that worked so well, we actually created a wholesale fund called Micro Build. We raised $100 million the first time we took on debt, and we started lending that out as a wholesale lender and then fund is now getting closer to wrapping up now. But we have directly helped over a million people get loans and then with add on capital, it's now helped approaching 10 million people get housing finance. And so we have demonstrated which was the real goal that there a market opportunity for housing lending. And then the next step going down that housing value chain was could we impact services and products? And we created under this umbrella of our 12 Center for Innovation and Shelter, a shelter venture fund, small scale and shelter tech accelerators where we're investing with and alongside entrepreneurs around the world who are coming up with better building products for very low income families. And then in some cases, they can actually test their markets with habitat in terms that we can be a buyer in a test market for them. In other cases, we're creating cohorts to help them grow or scale their businesses because that would improve the access to good products for the families we're trying to serve. And then the last step has been around skilled trades and how do we increase access and validate quality trades in the community? So the goal would be if we did this successfully, that all the conditions for healthy market would exist, where in some ways we could pull back and families can improve their own housing, which can scale. That's how we've moved from helping tens of thousands to hundreds of thousands to millions of. Families, but we know the need is still far greater.
Henry Kaestner: So that's super motivating on a bunch of different levels. One of them is that presumably at the outset of Habitat for Humanity, there was a desire to address the felt need of more affordable housing in partnership with the families. And there's so much about the habitat model that we've come to know their families several skin in the game, they labor and it's just a great opportunity to partner with local church. So we've understood that. And that's one of the things that I learned on this hike that really just really changed my my context, my framework about the space. I thought that habitat was known for the 50 houses that it built in Durham, which is for those 50 families, is a very big deal, to be very clear. But we talked about the fact that Durham was short 14000 housing stock. And what you've been able to look at, let's look at the problem that we're trying to solve here. And at the beginning it was let's get affordable housing. We'll do it by building houses. But then under your leadership, you're let's say, what's the bigger picture here? And are we ever going to be able to make a big enough splash through the tactic that we have of building houses? And let's take a step back and understand what the broader mission and vision is and some of the other things we can do in addition to building houses. And so I thought that was great. And whenever an executive director of the ministry comes up and talks less about their programs, but more about why they're doing what they're doing in the larger systemic issues, I don't I think that that's awesome. That's the type of ministry partner I get really fired up about. And then after coming out of that, you've been able to provide us all with a framework that starts off with policy and talking about homeownership and talking about title. Then you talk about finance and you talk about innovation, and then you talk about increasing access to skilled trades. And in none of those did you actually talk about building houses, but that's how you've gone from serving 10000 families seem to be clear. All those 10000 families have had lives changed and transformed. But how you able to go ahead and look at the global issues? That's super motivating and encouraging. I love all that talk about both of us.
Jonathan Reckford: But what I left out, which I hope many of your listeners and if you haven't, you should is the volunteer peace and COVID has really gotten in the way of some of that BAM one lens that went with that. That sort of circles the loop is we want to engage the huge number of volunteers with habitat in some ways, not as a construction strategy, but as a social change strategy. And so if you put that together, and the reason we want people to come out and volunteer is when they come out. In some cases, it's the first time they've actually had meaningful interaction with somebody outside their socioeconomic class in a relationship. And it helps them to understand and experience the mission in a way so that hopefully they will then become the people who are willing to change those local zoning laws. They're willing to actually get engaged in thinking about housing differently. So if you then do the full circle, if we can change hearts and minds so that we can change policies so markets can work better, so habitat and other houses can build more houses in our case, then we can engage more volunteers who hopefully then keep making that change happen.
Luke Roush: And that's powerful.
Henry Kaestner: So if I'm listening to this in Memphis, Tennessee or Eugene, Oregon or Billings, Montana and I'm just impacted by food, water and shelter, and I'm just really drawn to the shelter part. What are some tangible next steps about getting involved? What can people do? Maybe a good point of entry is to volunteer and to see how habitat does it. But talk to us a little bit more about bridging that gap of getting people in the game, advocating for policy change. I love the fact that, you know, Luke comes out this Luke, you know, public policy guy out of Duke. And so this is right up your alley, too. But public policy seems like it's so politics. It's just hard to just even get your arms around. How do you advocate for that? And yet some of that public policy change will do more than if you volunteered it, you know, building 100 houses. So how do you get involved?
Jonathan Reckford: I think it's a both end. Of course, we want everyone to come help with habitat, so that goes without saying. But the reality is that everybody should help habitat help, you know, find the cause, the thing that's bothering you and your community and jump in. But to me, it's do get your own hands involved in your own feet involved because if you do it just at a head level and you're not relationally connected, you know, the relational connections create the hard change that then allows us to create the next change. And I would say, sadly, all across America, it's all talk us context. Now, what we have moved from is historically mixed income communities to economically and sometimes racially segregated communities, and economic segregation is creating an outcome that your zip code to some extent determines your economic future. Because what we know is that mixed income communities create the best outcomes actually for everybody, but particularly for historically disadvantaged groups or low income families. And so, you know, a great example my beloved hometown and actually just happened last week. So very fresh example when I grew up. If you worked for the university, you could live in the town. That's not true anymore, really. Only the business school and medical school professors or tech entrepreneurs can live in town. Everyone else has to live outside Chapel Hill, so it's no longer, you know, when I went to Catholic. Church growing up, anybody who is Catholic, so the church had blue collar and white collar doctors and business people and academics, all in community together. Not true anymore because only upper middle class people can live and therefore are the ones who are worshiping together. And then what has happened is sadly, this is not a Democrat or Republican thing. Human nature is once you're a homeowner, you want to protect your major investment. And so not in my backyard or nimbyism is such a big deal and the brand of affordable housing is so broken. So that was a long way of getting to your question, which is what we really need are people of goodwill, and churches and people of faith should be at the forefront of this, which is how do we create inclusive communities where you do have mixed income and where there is a path of opportunity for folks? And in Chapel Hill, actually, I got to do the groundbreaking last weekend of an amazing mixed income community, and I'm so excited. But it took almost 19 years to get done because of community resistance. And so they were going to give up after 15 years of being rejected for being allowed to use it for habitat homes. They actually expanded their vision, which was a step in faith, bought more land. And last week we broke ground on a community that is going to be one hundred and one habitat homes and another one hundred and fifty market rate, affordable market rate, condos and houses. And it's going to be a spectacular community, but it's a good example. It couldn't happen unless you got both City Council and the mayor and private sector leaders and the university. Everybody had to kind of come to the table to get that passed. And that's where I think if people can first kind of get skin in the game and then translate that into being willing to talk to their neighbors and actually create some of that change, those two can go together.
Henry Kaestner: Is there a central resource also? So I love that example. I love the new expression nimbyism. I'll use it three more times today. I may or may not give you credit. Is there another resource also that once you go ahead and you've done the the hard side and you roll up your sleeves and you've actually worked and you've gotten to know a little bit? Are there resources? Are there Bly's? Are there podcasts that kind of explore the housing situation and where people can learn more about this? Yeah.
Luke Roush: Or funds or people who have kind of made a name for themselves, either through the investments it made or the strategies they've employed, he'd love to get your sense
Jonathan Reckford: from several different things. So, you know, a shortcut. We actually through COVID, have been doing a campaign called Homes Community Hopes and you and we've done a series of episodes so you can go to Habitat Ward and each one is tackling a different elements. The last one I did was with our new HUD secretary talking about some of these issues. Before that, we had one focused on housing and race and some of the historical issues there. We did one on economic models for housing innovations and housing. So those are some accessible kind of shorter versions. Actually, one of my dear friends and heroes, Ron Tolaga, who is the founding donor behind our Tillegra center, has also created a bipartisan center for housing at the Bipartisan Policy Center. And that's a good source. There is the Urban Land Institute. There are a number of places that you know where there is as good information around housing and housing policy. Certainly the National Housing Conference, which we are a member, you know, and there's federal level housing policy. But a lot of it is still local. And in some ways, the fundamental thing which is I love this audience is we have a supply problem. So the real question is how do you change the market conditions such that we can actually build way more houses we've been under building ever since the Great Recession? And that means we can now have a cumulative gap of four to five million units of housing. So one of the sessions actually I really enjoyed was what would it take to build ten million houses in the United States? And we had the the president of the Atlanta Fed and we had the head of the National Housing Conference and we had the chief economist for the Mortgage Bankers Association. And that was a great conversation because, you know, what would it take to do a step change level of increasing supply? And in some ways, we've got to think at that level from a federal perspective, but at the local level in your community? Same question. What would it take from a multi sector approach to make it possible to build enough housing for everybody in that community and make the math work? And the reality from a public policy perspective is that we'll take some subsidy in either land or financing.
Luke Roush: So 10 million units is a lot. How many years of sort of, you know, pedal down work is that to actually dig out of that hole?
Jonathan Reckford: So we're building depending on the month and year, you know, we were building between 700000 and 1.4 million units a year as a country. So that gives you a sense that, you know, we've got to significantly increase our build rate to catch up because we are if you assume any kind of growth in households, you've got a little bit of COVID distortion. But Covid's actually made it worse because suddenly everybody wanted more living space. And so it's actually exacerbated the problem because incomes haven't gone up nearly as fast as housing prices, and that's part of that supply imbalance problem.
Luke Roush: One, he's got a whipsaw problem on materials, too, you
Jonathan Reckford: know, and huge supply. And issues lumber has just exploded, but many other items have slowed down, and skilled labor is scarce, so you're getting squeezed on of all the key inputs.
Henry Kaestner: So you talk about that. So the last two areas, your framework, having added volunteers in to it as well, but where innovation and increasing access to the skilled trades. Can you talk a little bit about both of them? So you have a fund you alluded to? You said you've got a fund that invest in innovations in building better building products. Can you talk a little bit about that before you get into the work that you're doing in increasing the amount of skilled tradespeople they come in? But tell us about running a fund.
Jonathan Reckford: So that has been quite a learning experience. So we're actually exploring two additional funds. So we actually hired a fund manager. So in this case, we use a group called Triple Jump from the Netherlands because we didn't have experience being a fund manager that we control the investment committee. But they do the vetting of the potential microfinance banks and organizations that are borrowing from us against our criteria. And then we're looking at a larger fund that would continue to do housing microfinance, but also look at potentially micro mortgages and some larger scale loans as well, and a little bit bigger scope. So we're just finishing the feasibility and we're actually doing our feasibility for our first ever U.S. focused fund around a housing opportunity fund to help habitat affiliates, but also other housing non-profits to be able to acquire property. Because there's a little bit of a gap today in the ability to the private sector can move so fast to grab property that non-profits are often at a big disadvantage. So we want to bring some more capital to that space. And again, we're doing feasibility work there. Some examples outside the U.S. of the kind of we just made an investment in a company called Vaster TV, a stay in India, and they are building 3D printed houses in India. So we just built the first 3D printed home in India, and we think there's an interesting growth opportunity there. There's another company, also India based, that I think is really interesting. They have a great waterproofing technology that a lot of people are living in concrete homes with flat roofs, and there's a huge cost if they get leaks, obviously quality of life and health issues, but also it degrades the quality of the home over time. So it's a relatively low cost treatment that extends the life of that home significantly and improves the quality of life for the family in terms of livability. A third example is a company in Africa. In multiple countries now, which started in Rwanda that is called Earth Enable, and they found a process for sealing Earth floors to give them the health benefits of a cement or concrete floor. And so by compacting and then sealing it, it helps with many of the health benefits. There's a huge health benefit for a family to have a proper or hard floor. And this, for a fraction of the price, allows the family to get those benefits from a smaller piece. So those are examples of. We also have a clean cookstove investment that's rolling out very quickly in Africa. And because indoor air quality is such a big issue, even though it's you could say it's a little peripheral to housing, but if you're cooking with kerosene indoors or charcoal or even worse, the health and air quality is so bad. So if we can actually lower costs for the family and improve their air quality, that's a that's a significant quality of life. But those are all private sector investments. And our thesis actually is the private sector can scale those things faster and they're actually coming with solutions that are meaningful for those low income families and the communities we serve.
Luke Roush: One last question and then we'll wrap, but 60 seconds or less. How do you see habitat partnering with the local church? Is there anything to be done there? Yeah, speak to that.
Jonathan Reckford: Maybe, you know, the church has been so much at the core of habitat, and it goes in some ways, a wise person say a long time ago, there are problems you solve and tensions you manage. And how do we keep that grassroots faith side and have the benefits of scale? Because as we move towards market based solutions, private sector actors, public policy, you lose that incarnational personal relationship on the ground in the community. And I think that's where the church really comes in in a powerful way. And my hope is, you know, how that literally started in church basements all over the country and world. And my hope in some ways now is that we can be a servant back to the church because I think in our increasingly unchurched world, I think the face of the church has got to be come served with me, creating the credibility for a spiritual friendship that can then lead to come worship with me. And I think finding so if we can be a vehicle for churches to express in a very tangible way in the community, their faith and build relationship, I hope that. But for me personally, that's a huge value because it is, I think, one of the the other tensions we want to live in is can we be Christ centered and radically inclusive? And some people today would say, you have to pick one. We are fully committed to both ends of that, but there are tensions that come with that.
Luke Roush: OK, so we got to keep going on that topic, though, because that's actually the most interesting conversation that I had this year at the Christian Economic Forum is what you just said. So I know we got another call coming here, but this is really important. Maybe speak a little bit more to what you just mentioned in. Terms of radical inclusion, but also Christ centered. How do you navigate that leading an organization as diverse and as broad as habitat?
Jonathan Reckford: You know, our board is actually going to be talking about it in a couple of weeks and it's something that I don't think you ever saw that that we have to hold up that the, you know, the front of our mission statement is putting God's love into action and the center is bringing people together and in ways those reflect those two pieces. So at our best, I think about when I was in Indonesia, in Banda Aceh, after the tsunami, one of the saddest places ever been context was there was a civil war. Christians were not allowed into Aceh and we had a habitat team from both the region and Habitat Indonesia that was part Christian, part Muslim. And I heard one of the comments and habitat as a Christian ministry. And one of the comments, one of the families when we were visiting with them was and obviously among all the heartbreak that they had rebuilt now they were starting to put together. And they said, you know, we may not share their faith, but we're so glad they're here. Those Christians helped us rebuild our community. You know, I think God can do a lot with that. And sometimes you know, what our call is is to show up with the serving towel and just love people and have faith from that. But it is tricky in today's environment, and I think the biggest if the framing is, you have to pick one. It's all over because we will tilt towards inclusion and end up drifting. I think from the center we would actually reframe that to say we are inclusive because of our faith. Jesus modeled inclusion and God loves every child in this world and in fact, the greatest love you or I have for anyone that we know is a pale shadow of God's love for every child. So that's the moral call to inclusion. It's the reflection of our faith and our call.
Henry Kaestner: OK, that was gold. That was awesome. Jonathan, I'm so grateful for you and your friendship and your partnership and your leadership and being at the front end, the pointy end of the spear of a really global organization that's doing things at scale, serving at the highest levels of government with the work that you're doing with Federal Reserve, speaking into small communities and large ones. And yet, you know, a point back to your foundational faith and trying to understand not just like, well, I go to church on Sundays. And then I do have a and we just get an air on that radical inclusion side. But fighting that fight and just being able to point back to the most inclusive exclusive religion of all time, the inclusive story of Jesus Christ. So that was awesome. Thank you. Is there something that you're hearing? One of the things we asked for every one of our guests on either a Faith Driven Entrepreneur podcast or Faith Driven Investor? My. Is there something that you're hearing from God through his word and it doesn't need to be this morning. It could be over the course of last week, last couple of months, but something that you feel that he's speaking to you about through his word.
Jonathan Reckford: You know, thank you. Thank you for that opportunity. I was actually reflecting. I gave devotions. We have a virtual leadership conference going on this week with all of our board chairs and national directors from across Latin America and the Caribbean. And I was giving devotions on Monday night and and talked about the idea of waiting on the Lord and the AHA. And it reminded me of a conversation we'd had many years back with a group of theologians and often in my mental model waiting on the Lord is sequestering myself and having time to go deep and listen. And that's really important. But this was a little bit of a twist on that day of wait on the Lord, which is we should actually put our serving towel and go serve the Lord. So it's actually turning that around. Do can we wait like a restaurant server on the Lord? And how do we, as we're trying to hear God's voice, do that in faith? And it reminded me certainly of which we need for the COVID time of, you know, the message Joshua heard over and over again to be strong and courageous. The Lord, your god will be with you. And then I'm struck by that moment where finally, after 40 years, they're going to cross into the promised land and the Jordan. Not the trickle it is today. Is this rushing river? And they had to actually step into the water, the end of the storm and then God's still the water, and they were able to cross into the promised land. And so I think combining that idea, wait on the Lord with how do we keep stepping out into faith in the middle of the rushing rivers that are around us right now? And trust that God will be with us.