Atif Z. Qadir 00:03
Welcome to American Building. I'm your host Atif Qadir. Join me as we explore the skylines and strip malls, the crosswalks and rail crossings, the balconies, the buildings and the burrows shaping the next generation of real estate. Let's build common ground.
Atif Z. Qadir 00:22
Today’s guest is Jim Heid, the founder and curator behind the Small Scale Developers Forum, now evolving into Building Small. Over the last decade, Jim has created an intimate, action-oriented forum that brings socially minded developers, designers, and local leaders together to solve real project problems, share tactics, and trade hard-won templates for getting things built right. The gatherings move from city to city every six months and have become a rare place where doing meets thinking. Jim, you and I have crossed paths at SSDF events in Philadelphia, Savannah, and Fayetteville, and I’ll be at Mexico City next year. Today, we’ll talk about the evolution of SSDF into a membership platform, the playbook for running powerful in-person gatherings, and how developers of all sizes can scale impact without losing craft or community. Thank you so much for being here, Jim.
Jim Heid 01:34
Yeah, thanks for the opportunity. I really appreciate your podcast, and it's great to be have a seat at it. So thanks for that,
Atif Z. Qadir 01:42
Absolutely. So let's start at the very beginning, just like Mary Poppins would say. So what was your path into real estate development?
Jim Heid 01:51
You know, in a lot of ways, I would say, similar to a lot of the people in the cohort around Building Small. And I think that's maybe why there's so much empathy and connection, but started, trained as a landscape architect, spent 15 years working as a consultant, doing design all over the country, fun projects, but had a bit of an epiphany one day. I just said, you know, most of the stuff I'm drawing is never getting built the way that I would like, you know, the way that we're talking about it, the important values that we're putting forward about creating community and trying new ideas. You know, what is that? Why is that? And so went back and got a graduate degree in real estate development, which I often liken to learning a foreign language. I mean, in design schools, they teach you all the, all the jargon around design, you know, kind of made up words that are that are important, but only understood by us in the room, right? And I went to grad school thinking, Oh, I've worked for these really good firms, I've worked on these great projects. I'm going to be the smartest guy in the room. And suddenly realized I didn't know anything.
Jim Heid 02:52
I didn't understand net present value, didn't understand internal rate of return, didn't understand the complexity that developers deal with. And suddenly realized that design is probably 10% of what actually drives what gets built. And so it was a really important kind of change for me. And came out of that, and then started a role where I was sitting between developers and designers, kind of translating back and forth the value of good design and how it adds to the outcomes of projects, financial outcomes of projects, and to designers why that probably won't work, or how you need to package the presentation differently in order to speak the language that developers are used to making decisions on. And so got more comfortable with the language, got more comfortable with the issues, and just really wanted to just really wanted to started to get my hands dirty in my own projects. Had always kind of done back of the napkin analysis on buildings and stuff.
Jim Heid 03:50
And, you know, then, like a lot of small developers, first project was a renovation house renovation that I did. And, you know, thought, oh, this will be so fun. And realized all the pain and suffering that goes with building a building permit and dealing with contractors and getting that invoice on Friday, that was like, Oh my God, how did they spend so much money? But anyway, so started to hone the skills, and then just continued to ladder up bigger projects, more complex stuff, and I'm still doing, you know, relatively small things compared to what others are doing, but just get a lot of joy out of it. And it's so great to just get your hands dirty and see the full cycle from design to certificate of occupancy, and then for some of the things that I've done, just the incredible appreciation the people that are living in the places that I've worked or created, living or working place, of how much they go out of their way to say how great it is, how inspired they are, how great their life is. So that's not an IRR calculable value, but it's a really important value that I think unfortunately gets lost in a lot of the bigger projects.
Atif Z. Qadir 04:57
So those early experiences as a developer, we're really formative in understanding or helping you develop and grow your understanding of the art and the science of development. So tell us more about what those first projects were all about, and what you learned through them in terms of the process of development.
Jim Heid 05:19
Well, again, it was kind of a laddering. So I went from single family renovation to a single family adding two ADUs, kind of renovation. So you're generating that revenue stream and and what I call my Bernie Madoff capital stack, which was Home Depot Interest Free Credit cards to pay for the ADUs, and then get that reappraised, and pull some money out. And, you know, some funny stories, you know, working with big banks that wouldn't loan, but the local community bank where the President happened to be in town and walked over one day and said, I really like this project. Yeah, we'll do the loan. And just, you know, that kind of introduction to the how you get financing. It's not as black and white as a lot of people would think it would be, to then going and doing your ground up project and working with getting a serious construction loan. And the real rite of passage for any developer signing a personal guarantee, and that's, you know, as you as you know we talk about at the forums, there's a lot of people that talk about how the world should be, but I think my mantra now is, until you've signed a personal guarantee, it's nice, but don't talk to me. You know, after you've signed a personal guarantee, then you got real street cred to be able to talk about the way things should be so.
Jim Heid 06:31
And then I think, you know, learning to work with consultants, learning in California, obviously very complex, everything from their energy codes to some of the, you know, accessibility issues and construction types. So I think just learning each time what you what seemed like a really big hurdle on the first project now is kind of subconscious, and you're learning you're moving up to the next level. The big thing that I would say, the lesson that's come out of that now I've done probably eight projects here in town is, you know, we talk about small scale development being hyper local, meaning that it's people who are working in a fairly narrow geography, because they know where the hidden value is, and they accrue value to their projects by building a portfolio. So this, my case is, I'm working in a small town in northern California, but often when I talk to students, is, you're building you're not building projects, you're building a brand. And I think in that context of hyper local, it's super important, because the good work that I did on the first project led to, you know, easier access to planning staff and building staff and building those relationships, that when things get tough or you're trying to innovate, you've got thought partners, as opposed to just regulators. And I think that's something that for all the conversation about changing codes and zoning and how it's going to lock if we don't get more people on the other side of the development equation that are thought partners, not just regulators. Regardless of what the code says, we're still not going to unlock the potential. So long answer there, but I think the key lesson is, it's a people business. It's a relationship business, and especially at a small scale, the relationships are really important.
Atif Z. Qadir 08:16
Yeah, there's two things that you you mentioned, well actually, first you had said that you've done eight projects as a developer locally, and that refers to Healdsburg, California. Is that correct?
Jim Heid 08:26
Correct, correct. Yeah.
Atif Z. Qadir 08:26
Tell our listeners a bit about Healdsburg, where it is, in California. What are the dynamics around there?
Jim Heid 08:29
So it's about an hour north of San Francisco. It's a bougie, cute little wine town that you know has this incredible old urbanist DNA. I think the Smithsonian ranked it as the second best Town Square in the country, the first one being Chautauqua, where my mother used to live. So she used to always kind of let me know that.
Atif Z. Qadir 08:52
That's upstate New York?
Jim Heid 08:53
Western New York. Yeah, yeah, outside of Jamestown. It's an interesting confluence. So it's like a lot of small lifestyle communities, and it was one of the things. It was our second home for 10 years, and then became our permanent home. So we moved from being that villainous second homer that was eating up local home stock to becoming a permanent residence that's actively now engaged in a lot of conversations. But the real dynamic here is well-traveled, well-heeled people moved here a long time ago, so they're very protective of the community. It's resulted in some very onerous growth regulations that's made development very difficult, and yet it's a very attractive place to live 60 minutes north of a center of wealth that's probably unmatched anywhere in the country, except maybe outside of New York. And so you have basic Adam Smith at work. You know, law of supply and demand, low supply, extremely high and well, deep pocketed demand. And so affordability is a huge issue, and even just types of products is a huge issue.
Atif Z. Qadir 09:57
And there's two things that you mentioned in your description of your early projects, which likely resonate through in terms of the those kind of tensions or issues with development, one of them that you had mentioned was the ability to finance projects and the requirement of a personal guarantee as being like a preliminary developer to a big boy developer and a big girl developer is once you put your home, your first child, your car, your cat and your dog all on the line, then that's actually big boy, big boy development. And the other is the importance of relationships and the brand that you create effectively on top of those relationships. So I feel like that's a really, really good segue into the concept, this beautiful idea of Small Scale Developers Forum, and you decided to create that because you didn't find a place where people could talk about those issues, about the personal brand and the business brand about how you get over the hurdles of access to capital for developers who care. So tell our listeners about the origin story of the Small Scale Developers Forum and what moment, what event, what project really encapsulated for you the need to move forward and do something with that idea.
Jim Heid 11:26
Well, it's a fun story, and it's still ingrained in my mind as the moment that it kind of was birthed, as, you know, 2011 and still as fresh as if it happened yesterday, but quick backstory. So I had been an active member of the Urban Land Institute since the late 80s. And, you know, big believer in their mission, big believer in what they do, attended to conferences, did a lot of professional teaching for them in a variety of programs, mixed use development, residential developed a whole series around sustainable community design. And I did those because I enjoyed having the access to a really wide variety of people who, you know, I could learn from. I mean, the great thing about creating those workshops is you get to ask really smart people the questions that you have on your mind, and you just happen to have an audience in front of you.
Jim Heid 12:14
So, you know, I had been attending and that I was also reaching a point in my career where a lot of the work that I was doing, which was really large scale, and, you know, might not happen in 40 or 50 years, and it was a lot of, again, it was a lot of jargon, it was a lot of watercolors and pen to paper. And I just felt I wanted to get my hands, I was falling in love with these little gritty projects I was seeing around the country that I would spend my evenings in while I was, you know, spending the days in charettes on big projects, and you'd go to the cool little bar down the alley, you'd go to the great restaurant that some local entrepreneur had created, or you'd find some boutique hotel that was made out of, you know, little warehouse. And I just found myself wanting more and more of that.
Jim Heid 12:56
So then I distinctly remember, so it's, it's, I think it's April of 2011 I'm at the spring Urban Land Institute meeting with a colleague of mine, Howard Kozlov, who has Agora Partners in LA and we come out of a session on capital markets or something like that, and we're standing on a street corner, it's like, Oh, man. You know, there's just nothing at this meeting for me and where I am and what I want to do. You know, I love the organization, I love the people when I'm here, but there's just no content that relates to where I'm at in my career path. And about four months later, David Mulvihill, who was the Vice President of Education, who I'd been working with on other programs, said, You know, we need we're thinking about some other programming. Do you have an idea or anything? I said, Yeah, I'd really like to do this stuff. I think there's a market, and I think there's an interest for people like myself that want to do more crafted kinds of projects that are transformative to their communities. So we did the first Small Scale Developer Forum in San Francisco. Didn't really know what to expect. Didn't know what we were going to get. I think there were about 20 people. Lorenzo Perez was there. David Wanzer was there. So some of our, our long time, small OGs, you know, were some of the first, first adopters, and from there, it, you know, took on a whole new life of its own, we could talk about. But that was, that was kind of the origin story.
Atif Z. Qadir 14:12
Okay. And Lorenzo and the who's a wonderful developer, and the other folks that joined, you use this expression the land of the misfit toys. And I love it. And so tell me, where do these people come from? Did you like it was 2011 so it was pre like, the ubiquity of social media. So how did he find these people? How do they find you? And what was like that, that first breakfast or lunch or dinner, like when at the very first one of those.
Jim Heid 14:41
Well, it's it has certainly matured and grown into something different than where it started. I think the ethos is probably similar, but it's taken on a very different kind of, you know, experience. And so the first one was all day in a hotel, like most conferences are. Fortunately, I was adamant that it had to be a nice boutique hotel, not the usual basement of some crappy, you know, downtown hotel, because it's, you know, I mean, you can relate to this. It's hard to talk about inspired things in uninspired spaces. And so, you know, the experience of where you are.
Atif Z. Qadir 15:13
Or talk about innovation in a very lame place.
Jim Heid 15:17
Yeah, exactly. And we put it out there, and with high aspirations that you actually had to apply to attend, and you had to demonstrate.
Atif Z. Qadir 15:25
I love it. I love it.
Jim Heid 15:26
Yeah, demonstrate, you know, we're gonna create some exclusivity and all that kind of stuff. And we thought we would get people early in their career and or people who were real estate development, relate, adjacent, wanting to make a transition. So brokers, architects and contractors who were interested in kind of doing the projects and, and we certainly got some of that. But what was surprising was the number of people we got who had been doing it for 20 years, and it was a choice that they'd made. It was a career path they made. They were very passionate about it as a strategy and to your point about the Island of Misfit Toys, it was like I thought it was the only one that felt this way. Oh, there's a whole room full of people.
Jim Heid 16:08
And so it kind of word of mouth spread, and I would create these programs. We'd pick a city based on, typically, in the early days, we'd pick a city where I knew had enough of a network that I could put together a program that I thought was cohesive. And so again, it was one day, some drinks after, a lunch. And then we got to about the fourth one. We said, you know, I think we went and we toured a project. And people like, wow, that was really great. You know, they should have that in. So we had an optional tour the next morning. And then we started to get enough of a returning group that we said, well, let's do an, you know, people that get in early, let's just have a no host meetup at a bar. And so, you know, 20 of us would meet, and we'd had some drinks, and we'd catch up, and then we'd do the day of programming, and we do a tour the next day.
Jim Heid 16:53
And then that was so successful, we started adding the second day with a lot more content and tours. And then the meetup turned into the welcome reception, which is, you know, one of the really big things, and a full day of touring and panels and really mixing it up. And it took, took to about 20, well, in post covid, I took it over. Urban Land Institute decided it wasn't consistent with kind of the things they were interested in. So, and I had too much joy and passion in it that I just took it over personally, which was another thing about learning to sign a personal guarantee for a hotel for 150 rooms. Oh yeah, that was a whole nother level of sleepless nights. But I figured all that out. Like most entrepreneurs do, you put one foot in front of the other, and you figure it out, and, you know, and then it really blew up. I mean, we would get when it was ULI and they were marketing it through their channels, we'd get 30, I think maybe peak to 35 and now, as you know, we're at 110 in Savannah. Waiting list already got, you know, 200 people that have signed up for next year to be notified as soon as the registration drops. But the other thing, so, the two other things, so it was the fifth one where we started Pecha Kucha. And you know, what a delightful kind of experience that is. And that was when somebody said,
Atif Z. Qadir 18:09
For anyone that doesn't know, could you explain what Pecha Kucha is?
Jim Heid 18:12
Yeah, well, in a second. So let me explain how people said, I'd love to know who else is in the room and what are they doing. And we've all been to these kind of smaller workshops where everybody stands up and says, Hi, I'm Jim Hyde from Healdsburg, California. I'm a developer, and you go around the room by the fifth person, you've kind of zoned out, or at least I zone out. So, so if we need something more engaging than that, so why don't we do a slideshow? And we took a tour page out of the Pecha Kucha or what, however you say it. For those aficionados, I like Pecha Kucha. It's easier to say. But the short story on Pecha Kucha is, it's a Japanese presentation technique developed by a series of architects who were bored to death by their colleagues, who would drone on for hours showing slide after slide of their work. And so they created this methodology.
Jim Heid 19:03
It was 20 slides in 20 minutes, so a minute for each slide. So everybody had a consistent. So we took a page out of that playbook, but we greatly shortened it, and said, you get three slides and 10 seconds for each slide. And in the early days, everybody would send me their slides and I would assemble the deck. So when we got to Savannah and 110 people, you can imagine how complicated that was, because, you know, the people in the room that are handing me a USB on that afternoon, 10 minutes before the presentation, hey, can you, can you slip my slides into the presentation tech, you know? So we finally, we finally found a hack on that. But as you know, it's one of the things that's always the most highly rated, and it's a great way to see who's in the room. But the other thing that I think is so meaningful for me about it, and you've witnessed it, it's gone from just an introductory session of people, but it's this island of misfit toys that we talked about, where people have been coming for five or six years and they're showing their projects and the evolution, and there's standing ovations, and there's applause and there's this feeling of support that comes from the group that's just, I mean, it's, it's not something you get at a typical conference.
Atif Z. Qadir 20:14
Totally, I think this idea that you're talking about is the work of development is unique to a project, but there are through lines to the experience. And if you are in your locality doing great projects, you may not have those abilities to overlap. And I think the that introduction method, which is, I think, so unique to people that work in the building industry is to be able to describe yourself through the physical projects that you've built, and you can point to is something more unique than going around a circle and saying an adjective that describes you, and everyone says creative. So I think I can totally, I could tell, like I could say, from the experience of having done that three times, is even the preparation of it is to say, what is the story of me in a way that is authentic and could connect with other people. And I think that process itself, of branding, like we talked about earlier, is a very, very useful one for folks that work in development at any scale. Okay, so you talked about the early ones and the elements that are in it. Talk to me about, like, the crazy things that happened in those early ones, like a hotel that you booked at didn't exist, or somebody like, totally went to the wrongs, like that Portland, Maine versus Portland, Oregon, so, like, something like that.
Jim Heid 21:00
Yeah, I mean, generally speaking, we didn't have a lot of there were always issues early on with the busses that didn't know where they were going, or they would show up late, and so you're standing around, or you'd lose somebody. We had one or two where we'd lose somebody, and then they're, you know, reaching out, like, how do I get back? And I said, well, take an Uber, you know, we called the patient. You should have been on the bus kind of thing. So I think the one that I remember that was, I wouldn't call it crazy, but again, it was the classic entrepreneurial ride. It was Nashville, and the speakers showed up and they said, Oh, you wanted me to do a presentation. And I'm like, Well, yeah, we talked about this. We got like 90 people here. You're supposed to talk about, you know, the hotel.
Jim Heid 22:20
And it's like, oh, well, yeah, I didn't really. Said, Well, you know, do you have a brochure? He said, Well, yeah, we got this. So while everybody's on break, we disassembled his PDF and created an entire slideshow that was really, really good. And I don't think anybody even knew that that hadn't been prepared or scripted or anything else. But that was, that was a classic moment of like, always on the fly try to fix something, you know, just no matter how many times it's a little bit of the challenge, I think, with this creative types, they just don't follow the rules very well, and they don't read their emails, me included, and so, you know, and they're happy to show up maybe, I mean, I've had another call the morning. I'm not feeling that really well, or I'm not really sure I want to do this. It's like, Hey, dude, I got 100 people that have flown in from all over the country just to hear you. Do you think you can make it? And I'm like, oh, okay, I'll show up. So it's a lot of cajoling, and, you know, talking people off the edge to make it happen.
Atif Z. Qadir 23:15
What this sounds like, in terms of that preparation style, is getting ready for the first night at a Indian or Pakistani wedding, which typically is it's it's when the cousins and the siblings do coordinated Bollywood themed dances and skits and roasts and all of that stuff. And usually it's the night before is when all the cousins get together in one place through the night, script and prep everything. And it looks like it was had been prepped over a week, but it was literally just done, really, wow, wow. Okay, it's a skill set that you gain after having gone to a lot of them, right, right. So you talked about Nashville, you talked about few of the other early locations. How do you pick places that you go to for these events? And what do you think makes a good host city for an event?
Jim Heid 24:09
Yeah, and before, before I go there, I wanted to pick up something you said, because I do think this is a very important point for entrepreneurs and for the listeners, which, which I've had to learn, and it's this, when those moments happen, the speaker's not going to show up, or the slide's not ready, or whatever the thing is, I've been through it enough times that I trust the process, and I know it works out, and I don't sweat it. And I think the real art of being a successful entrepreneur is taking stock in moments you've had before in your life where that kind of, oh shit kind of thing happens, and you knew that you came out okay and it worked out, and trust yourself and trust the process, and know that it'll be fine. And don't let that fear of what could go wrong, or the fear that, oh, why didn't this person, you know? Why is this happening to me? It's just like, hey, this is where time before. I did this isn't this and one foot and for the other, and I got it done. So really important thing for me that I've learned both on projects, but also in the process of the forums.
Jim Heid 25:10
So in terms of selecting locations is, you know, as I mentioned, we started with places that I knew people, and I thought there was enough there, there that it could create kind of an interesting story and, and especially when it was just people talking in panels, it was really about, who could I get to show up and, and what would be a connective through line? So, Miami, you know, it was about arts and small scale. Portland, about the public realm and small scale. Austin, you know, weird and small scale. So just trying to figure out what you could connect there. But, and we started with what we thought would be attractive places for people to go, so the sexy six, you know, San Francisco, Seattle, Washington, DC, Miami. But we were finding those places while they were attractive to people, it was harder to find that small scale, handcrafted, you know, bootstrappy kind of projects, because they're so dominated by the big players, and the price of entry is high.
Jim Heid 26:07
So then we moved to what I would call the emerging urban, or suburban to urban, so Phoenix, Denver, Austin, and started to see some of that, you know, around the edges of those cities you see these kind of smaller projects that are transforming neighborhoods. And then we did a rust belt stint, Pittsburgh, Detroit, Indianapolis, and that was really fascinating, because there the cost of entry was relatively low. Very passionate developers, great building stock. I mean so much to work with in terms of creating unique places and the ability to be transformative and a catalyst for bringing back some, you know, Midtown Detroit being a perfect example. Sue Mosey's work there, you know, going into a neighborhood that nobody would touch, and being the Pioneer as a nonprofit to prove there's a there, there, and it can work economically. And then, you know, I've kind of been toying around with places that I go, and I call it my my sixth sense, or my cool dar.
Jim Heid 27:11
I go to a town for a business meeting, or now speaking gig on the on the as a result of the book, and it's like I can immediately feel it. It's kind of like, you know, there's something here. There's a there's a vibe, there's an energy. I'm meeting people after the talk that are our kind of people, and I think our group would, you know, want to come here. And the thing that I love, that I hear a lot from people, is these are places that they may not have ever thought to go, or it's been kind of on their list, but they wouldn't know where to begin. So I jokingly refer to it like the hemispheres magazines, three perfect days. So mine is two and a half perfect days, if you were a small scale developer interested in really cool places. So it's that kind of a, you know, playlist that's right there for you.
Jim Heid 27:57
So, you know, recently, Fayetteville, Bend, Oregon, San Luis Obispo, I mean, great, cool little towns where small scales had a big impact, a big output, and you've got these very entrepreneurial cultures that are driving that conversation. They're too small for the big institutional players. And there's a there's a field or a canvas of opportunity for developers to do cool stuff that now you're seeing, you're seeing real projects, you're learning from people like yourself, and hopefully you're leaving really inspired by what people have been able to accomplish, and take that home to you and figure out, how do you do that, you know, in your in your own portfolio.
Atif Z. Qadir 28:38
Excellent. And the origination of SSDF was through these live events, and now you're looking to transition to a different version of this that's called Building Small, and it focuses more on a membership model and a different kind of orientation organization. So walk us through building small and what you're hoping to accomplish there versus what has been done so far through SSDF.
Jim Heid 29:09
Yeah. And I think an important kind of link in that that evolution is the book. So it was about, you know, I think it was probably the seventh or eighth forum that I'd been to. It was actually coming back from Denver, and I'm like, Oh my God, these stories, these projects, the people, the passion, the challenges. You know, it's just too rich a portfolio of things to just let it because it's such a fragmented industry, and it's such a hyper local industry, nobody's collecting all those stories into one place, and so embarked on this quixotic venture to write a book that became building small, and ironically, that was the that was the title that's jumped out at me from the beginning. I never really deviated at all. It was always, always building small. And so took a while. It was a very different book. If I had done it on time, it would have been a very different book. But it was two years later.
Jim Heid 30:00
It was through Covid, and it was through two of my own projects. So there's a very both personal story about a lot of that journey of being a small scale developer captured in the book. But then the book came out, and the forms were ramping up, and I was taking those over, and the whole thing was starting to really the flywheel was really starting to go and people were saying, you know, hey, is there anything beyond, I love the forms, but is there any way we can stay connected? You know, what else can we be doing? Are you thinking of any other programming? Could we be doing something so then, and then I'm going around, and I'm doing talks around the book, and I'm, you know, on panels, or I'm speaking, and I'm hearing from people. So there was this almost organic expansion of what started as a forum into this whole ecosystem of small scale development, what it means, why it's important. How do you get it done? Who else is doing it? And now a lot of communities are asking, Okay, how do we support this? How do we support this group? What do we need to do to make it work for them?
Atif Z. Qadir 31:08
This episode of American building is brought to you by New Blueprint Partners making industrial real estate accessible to the everyday investor. They provide a simple, hassle free and transparent path to owning industrial properties backed by experienced operators. You may remember founders Ron Shinick and Mark Esrig from our episode on the Vancouver Innovation Center, where they shared how collaboration and communication shape successful projects. Learn how you can build your industrial real estate portfolio at newblueprintpartners.com
Jim Heid 31:50
So that's led to, for right now, the working title, you know, building small 2.0 as an organization, as an ecosystem, that would include three primary pillars. First is building out this community. So the the Island of Misfit Toys, making it maybe a whole continent instead of an island. Then the, what we call bridging the gap, and that's really bringing tools to the table that are what seem to be the consistent pain point for small scale developers, and then the last one, because we have such a strong cohort of, I think, very design-forward, people who are part of our group. We want to continue to champion great design and innovation. There's a, you know, a lot of great organizations focused on small scale development. They're focused on zoning, they're focused on advocacy, they're focused on, you know, your first project. But not a lot of people are talking about, how do you leverage this to be those crafted incremental, block changing kind of projects, both in terms of program, but also in terms of great design.
Jim Heid 32:53
I mean, one of my personal mantras is, you know, we have a responsibility to get people to ask for better, but to know what better means. And so that's by showing them great projects. And as I said at the beginning, I love when the people that have either bought a place I've done or come into my co working space and say, you know, I feel so inspired. I mean, I just didn't know this was possible, but I just, you know, I feel so great about that. And it's like, okay, they don't know why, but they appreciate that it's actually changing their worldview, and for a moment, maybe, and I think that's really important, and that's, you know, what we do as developers, is we create that opportunity for inspiration.
Jim Heid 33:30
So the other important part about Building Small, 2.0 is, unlike, I would say, any other organization that is out there, is it starts with a verb. And so a lot of other organizations are noun based, and ours is a verb base. We're building small. And so our basic purpose is to support entrepreneurial developers to succeed. And so we're really focusing on the ones who are building and doing at that granular level you know, with brick and mortar and making sure they succeed. And so there's a whole series of tools, hopefully it'll come out after the first of the year, everything from, you know, online content to a whole realm of coaching, more forums, both locally and nationally. And then, you know, the opportunity to participate at different levels, depending on what your needs are and your financial interests.
Atif Z. Qadir 34:23
Very nice, as in this idea that it's building small, not small building. And what you're doing is focusing on not the the object, but the crafts and the activity of it.
Jim Heid 34:37
Yes, and the people that are doing it, and again, to make sure they succeed, excellent.
Atif Z. Qadir 34:43
And you had mentioned that, rather that there's going to be a different way that people engage in order to have this over the long term. So talk about, it's like the web platform. Talk about subscriptions or memberships, how you're thinking of organizing it like, logistically?
Jim Heid 34:59
Yeah, logistically, and I would say sustainably. So, you know, Building Small to date is, you know, very much a passion project to me. It's one of those things when you love what you do, you just figure out how to make it happen. But you reach a point in your life where maybe you realize it's bigger than you are. It needs to live on. As I move to, you know, the next chapter phase of my life, I think it's it's demonstrated that it's too important to just let it wither away with my with my retirement. And so the goal is to create a, you know, enduring organization that, but do it a little different than I think a lot of the organizations that are out there, so different levels of membership, starting with what we're calling the Small Pro which are experienced developers, and that creates, and you've attended one of our Small Pro workshops, which is really kind of almost, you know, YPO meets, you know, Vistage meets, you know, kind of soul bearing session where you can really open the kimono and talk about not only projects, but, you know, personal challenges, and build that, that cohort of support of people that understand what you're going through. So that's one level.
Jim Heid 36:03
And so Mexico City, Minneapolis, in January, are what we're calling our Small Pro unplugged, which are these little field trips that are just kind of ad hoc and organic, and you get to go hang with the group and stuff like that. So that's, again, we're typically saying people that have round tripped five projects or more. Then there's a small member which will have, you know, access, early access to the Small Scale Forum. Because we've been small scale forum now has been selling out probably in about a week's time. So once it drops, it goes pretty quickly. And so early access maybe a little better pricing, Small Pros, we typically offer a split payment, because we know cash is king when you're a small developer, so kind of split that up so you don't have to pay it all at once, but get your spot reserved. So Small Member, you know, early access. And then the key is getting to what's called the Building Small Platform, which is where all of the recordings from at least the last five forums resides. We're going to be doing some interesting rollout next year, where each month we'll take a theme around one step in the development process and combination of just talks, sections from the book, relevant articles, case studies, and so if somebody's just getting started on their journey, it's a great way to kind of get some little check ins and nuggets from experienced people what's being done.
Jim Heid 37:23
And then one of the other ones I'm really excited about is one we're calling Small Lab, which is an online critique so if you have a project and you want to have some experienced people look at it and give you some feedback, you could submit that. I'll curate a group of our Small Pros that are maybe especially knowledgeable in that area, and go online on the platform for an hour and just give you some feedback and talk about it, and others can sit in and watch. So kind of learn by osmosis in that one so, so obviously, a lot of aspirations there. And in order to do that, we're, you know, we're going to be starting a membership fee. We'll also be looking for some sponsorships. So if you have any listeners out there that love what I'm saying and want to be an early stage sponsor, would love to talk to you about that. Yeah, and then the and then the events and the meetings.
Jim Heid 38:12
Well, the other thing that we're talking about doing is finding local what we call our local partners. So rather than building an organization that needs to cover things nationally, to find aligned, mission driven, built environment organizations that share our values and have their own cohorts, and where some kind of a cooperative relationship to grow our base but also bring them content around our ecosystem and our programming would be beneficial to their cohort. And so we've identified about six or seven of those that we're in conversations with. And so we'll be able to have more localized stuff for people that do want to meet their peers. We'll have regional stuff if perhaps they want to do like a smaller scale version of the forum. And then we'll have the ability to maybe share best practices between those groups about what's working in this space. Excellent.
Atif Z. Qadir 39:01
So given the wealth of knowledge that you have through the course of SSDF to Building Small, I want to take a big picture and get your perspective on the challenges that our country faces in terms of development and things like housing. So there is a growing interest in incremental and small scale development as a means of addressing the housing accessibility and a housing affordability crisis in our country. So talk to me about the place that you see small scale and careful, thoughtful development playing in addressing that big national issue of housing accessibility and housing affordability.
Jim Heid 39:46
Yeah, well, you know the and I think you've seen the diagram, and I'll send it so maybe you can put it up, put it up on your show notes, but there's as the whole concept of Building Small has evolved, I tried to graphically demonstrate it and really see it as an ecosystem built around three key pillars, one, one more authentic places. The second is a stronger local economy, and the third is an incremental strategy to diversify and increase housing supply. And it's one of the things that anytime I get a soapbox, I say we spend a lot of time talking about housing affordability. We don't talk enough about housing diversity. And there's a bit of a sub text there that sometimes that's implied, but I think it needs to be made explicit that the lack of housing diversity is as much a problem as it is lack of housing affordability.
Jim Heid 40:36
So I think the role and the promise of small scale development as one of the solutions, not the solution, but one of the solutions to the housing crisis we have is, you know, born out in a lot of the conversations around missing middle housing, selective infill, surgical infill, what one of our attendees called urban acupuncture, these little pinpoint decisions, or, You know, moves that you make that help improve the health of neighborhoods. And I think it's intellectually, you know, really exciting. And you can see it as an urban planner, you can see the, you know, the grain of these existing neighborhoods getting richer and more diverse. I think the practical reality is the industry just is not set up for it. So I think for a lot of the conversations around how zoning changes, is unlocking the potential missing middle housing, I think the real gains are being made in the Greenfield, where production builders are able to create more units, which is great, and more variety, which is also great, but it's still Greenfield, because they can get the economies of scale. And I think that the holy grail of neighborhoods being definitely improved with four plexes and eight plexes and bungalow courts. And that is really hard to do, because the industry from capital to construction to insurance to approval fees is just not set up to support those kind of surgical projects that have a kind of a mid scale.
Jim Heid 42:10
And it's, and I saw that on my cottage court, it was too small for a production builder to build efficiently, and too big for a custom builder to understand how to build efficiently. So we're, you know, ended up in the, you know, trying to find that Goldilocks builder that could do 12 units like a production builder, but do it with the craft and care that a custom builder would do. Because it was a, you know, it was a finely crafted, finely tuned, you know, very well nurtured design and development. And then there's the whole host of other things that goes with that, which is the challenges and the complete falloff in condominium development, for defect liability laws and everything else, which, again, the holy grail would be a whole series of eight and 10 plexes that small developers could create, they could sell. They could give people their first rung on the ladder to ownership and wealth building, but it's just really hard to do, and a developer that has the capacity to withstand the defect liability issues and the balance sheet to be able to get the construction loan isn't going to do a project of 10 units.
Jim Heid 43:19
So there's a scaling problem that we have yet to solve. And I think the the beyond codes, the solutions really lie in, you know, cities being willing to provide credit enhancements to developers, maybe providing land, if it's ownership that they're trying to get to, providing underutilized assets at a discounted price so they can get the pull out the land cost from the building to make it more attainable to the intended buyer. And Lorenzo and I actually working on some projects in Arizona like that, where we're working with a city that owns lots that does not want to turn them over to a master developer. They want to grow an army of small scale developed builders, and they want to create housing, missing middle housing that could be sold to owners as a first product. So we're trying to reverse engineer what that costs and how that works and all that. So it's pretty exciting to see that, but it is a whole systems approach. It's not just, Hey, we changed our code and now we're going to get all this great housing.
Atif Z. Qadir 44:17
Yeah, I think the what you're talking about is that the willingness to think beyond go fill in the blank name of large scale national developer that builds things that are five over one or four over one, and look the same, whether you're in San Jose or Jersey City, but rather looking at that small scale. And one thing you talked about was the ability to adjust processes to allow that to happen. You touched on changes in zoning code and building code, like, for example, in the northeast, it's the requirement for two stairs versus a one stair internally, which causes a lot of problems on small scale, it's about changes in the density that's allowable, the number of units per unit of land. And on a particular lot. I mean, that's something that the city of Hoboken changed about six, seven years ago, when I joined as a city planning commissioner to upzone a portion of our city.
Atif Z. Qadir 45:04
And I think another thing that you touched on, which is interesting when talking about small scale as a response to affordability, is utilizing city owned but underutilized land. And that's actually one of the supply side solutions that the incoming mayoral administration in New York, Zohran Mamdani's administration, has talked about, which is continuing the work of previous administration, expanding it and using city owned land, parking lots and perhaps even spaces in between other city owned housing, especially as transit is more and more emphasized as a means of getting around our city. Yeah, so a whole suite of things that I think that you touched on that are really important to think about. Okay, so you also talked about the role of learning through doing and learning from a cohort of other people. Could you talk about the role of mentorship within real estate development, and why you think that's important?
Jim Heid 46:03
Yeah, and I make big distinction between coaching and mentoring, because I think there's a lot of mentoring programs out there, and what I found them to be is the old white guy who's built a portfolio of $40 million, loves to sit around, Well, when I was your age, here's how I did it, and the different with coaching and I, you know, and I learned this that I spent seven years as a coachee, not as a coach in an entrepreneurial coaching program. And difference being helping people unlock their inner genius. And so I think a lot of mentors think you're supposed to provide the answer to help a young person get on their path, versus ask them the questions they need to have to figure it out themselves. And so it's, you know, it's a classic case, you know, teach, give a person a fish, and they eat for a day. Teach them to fish, you know, they eat for a lifetime.
Jim Heid 46:47
So I think the purpose of the coaching versus mentoring is really helping people develop that inner capacity as they work through and struggle and have to make tough decisions on a project, so that when they get to the next one, they've run that course, but they've also learned they haven't just gotten through the project, which is what sometimes I think mentoring does. They've actually built the capacity to do their next project and scale it up, or do two projects or something else. They've built that institutional knowledge so. And I see this in so many. I mean, there's so many. There's a lot of the emerging developer training programs that are using my book as a textbook, because I think it really speaks to that entrepreneurial developer that wants to work in their community or their neighborhood, doing small moves that make a big difference. But they get, you know, they get at the end of the they get to the graduation, they've got their certificate, and then they're like, and then I'll, I'll do a coaching workshop, and they're like, What do I do next? You know, or, well, I had this idea, but as it works out, a lot of what we're building around the coaching is really to fill that gap after training.
Jim Heid 47:55
There's a lot of great training programs. Gives you familiar with the language, gives you an idea of the process. I think it creates a false myth that it's a linear process versus an iterative process. And I think small scale is incredibly iterative, because you're you're solving for multiple equations, especially if you're doing something really creative that hasn't been done before. So it's really to be there as kind of on call, as well as develop some life skills to be able to manage yourself successfully in what can be, you know, as you know, a very brutal business, not necessarily from the outside, but just all the things that get thrown at you on a daily basis. And as an entrepreneur, you've got to, you know, get up every day. You don't have somebody else to pick up the slack when you're not feeling good about the way things are going. You know, on Tuesday, you still got to get up and do it. So those learning to navigate that is really, really important, beyond knowing how to do an Excel spreadsheet and read a, you know, an online market data report or something like that.
Atif Z. Qadir 49:00
So, so one of the other things that's really critical in being able to use small scale development to address the housing crisis, touching on the earlier topic, is access to capital. So could you talk about some of your experience or other your perspectives on that, and where you see opportunities and solutions lying there.
Jim Heid 49:25
Yeah, when I wrote the book, you know, one of the things that talked to the after, you know, 250 or 150 projects, and how many ever developers and a whole range of cities that span the transect from rural to suburban to urban. The two common themes that came out of it were regulatory barriers and lack of capital. And I think the regulatory barriers are improving. There's at least really good conversations and work being done there. There's still regulatory cultures that need a lot of work, but at least the written word is getting changed. But capital still is, you know, the significant problem, and it's. It's one of scale. You know, it's often say it's a lot easier for a fund to write one $100 million check than 100 $1 million checks. They don't want to deal with the reporting, they want to deal with the underwriting, they don't want to deal with managing. Let's write, let's bet the whole farm on that one project that's, you know, done the same thing that's been done 15 times. And so versus, let's try, you know, 50 smaller ones, and see which one of them is kind of the next big thing.
Jim Heid 50:25
Because then, you know, unlike a commodity or tech, where you can scale, if you hit it big, you can scale it up across markets. A project is a project, right? It either does you can't commoditize that and monetize it. It's with a quick scaling, so it's always down on the back of one single project. So I think the first lesson was, I spent a lot of my career trying to convince capital that, hey, this was a this was a risk diversification play, because you had, you know, more projects in more cities, or doing good things for the community, or you'll get these better long term returns versus short term returns. And I often tell this story about I did a panel, I put together a panel in Seattle, Washington for one of the spring ULI meetings. And we had some of the luminaries in small scale development, Eve Picker with Small Change, Kevin Kavanaugh with Guerrilla Development out of Portland, Oregon, and then Lorenzo Perez, which I mentioned. And so they all did the thing. Did a great job. Showed the work. 70 people in the room. End of the presentation, standing ovation. People are applauding. Great, best presentation day. Yada yada yada.
Jim Heid 51:34
And so some guy at the very back puts up his hand and he says, Hi, I'm so-and-so I am so enamored with what you're doing. This is so important. I'm with so-and-so's hedge fund, and you do not want to talk to me, because we will never, ever get this. So here was a guy who was the gatekeeper at capital, who was in love with what we were doing, that recognized they were never going to get it. And so what it meant is we've got to find some other sources. And so the work that's going on now with what Eve's doing with small change, I think the impact investor mode, what Patrice Frey is trying to do with repurposed capital at National Trust. And then, you know, one of our aspirational things is there's a core group within Building Small that is actually set out to try and create a fund for small scale developers that we will be launching next year.
Jim Heid 52:24
And I don't want to, I don't want to make any promises, because I know how hard this stuff is, but I think totally the time may be right, because I think there's enough people who have done well that want to be part of the solution, and they want to participate in constructive change in their communities at this granular level, and they also want to support entrepreneurs who are doing good things in an entrepreneurial manner with smart intentionality. And they recognize that it's not just an agnostic investment, it's a holistic investment in really positive change, and as long as you know, you can show you're not gonna they're not going to lose their money, and they're going to maybe make a little return, but they're going to make a big impact in communities they care about. I think there's an opportunity. So I think the timing is improving to the point that I think this can actually happen.
Atif Z. Qadir 53:14
That's amazing. And one other part of the conversation about small as a solution for housing is this idea that because of the urgency and the speed to produce things, it has to be at scale. But the other thing is, it has to happen fast, and design doesn't matter, and it's totally okay that you have everything look exactly the same. Could you talk about the importance of design in your vision and your perspective of small development, and why that's important to keep cohesive and keep a part of any solution to our country's housing accessibility and housing affordability crisis?
Jim Heid 53:55
Yeah, it's a really good question, and I think a very sensitive subject, because it is, it is hard when you're scrappy and you're young and you're trying to do your first deal. I mean, yeah, you were with us in Philadelphia where this came up with the Black Squirrel Program, and somebody said, I can't afford to have an architect, you know, I'll do that on my next project. And I think one of our members said, No, you can't afford to not have an architect, because it's and so, you know, my biggest fear about the small scale movement, and what keeps me up a little bit at night, besides the personal guarantees, is that we're going to going to finally hit scale. The tipping point is going to happen. All of this stuff is going to happen, and it's going to be really crappy. And people are going to say, five years from now, I don't want any more of that small scale stuff. It's all so ugly. And you know, you're seeing a little bit of that in San Diego, where they were very aggressive with their ADU regulations, and people kind of abused it and built some stuff that wasn't so great. And now they're, now, they're stepping away from that. They're stepping back to how many units you can actually do, and putting some, putting some guardrails on it.
Jim Heid 54:57
So I think, as I've always, regardless of scale. I think as developers, we have a responsibility to the communities that we're working in to build really good stuff. It is not we're not just making widgets. We're building stuff that touches people every day, and it affects their lives and their health and their emotionality. And unlike a stock or a bond, which is kind of out there in the ether. This is real stuff, and it means stuff to people's and and the smaller scale, even more so. Because I think the reason I love it, and the reason that people respond to it is there is a humanity about fine grained, small projects that you don't get with big projects. So there's a human connection and a personal connection, that if it's a really bad design, it looks crappy and it doesn't hold up well, and it doesn't pay attention to the street and the public realm properly. It's not only a missed opportunity, I think it could really set the stage for making it harder. Oh, well, we need anything that's under so many square feet, we really, really need a second round of design review, because everything that's been built last year so crappy or that stuff's not holding up very well. So we really need to increase the building code regulations for that small scale stuff. You know, those small scale developers, they're doing stuff a little bit on the margin with, you know, builder, pickup truck builders, and I'm not sure that stuff is structurally right. So I think there's an obligation to really, you know, for us to learn everything that goes into these projects. And that's the joy of hand crafting these things. It's also the complexity, because you don't have the volume and the dollars to hire the full team of experts, you've got to become, you know, the jack of all trades. And that's very different, which, again, is the joy. It's what we talk about, one of the one of the five things that connect us, connects the island and misfit toys. And I really do believe it's the joy of building things. It's not creating something that looks great on the wall or sits on a shelf. It's actually getting out there and building stuff.
Atif Z. Qadir 56:55
I dig it. And what is the best way for listeners who are interested and inspired and excited about what you're talking about, to keep in touch with you regarding Building Small and its evolution to advance small scale development across the country.
Jim Heid 57:15
I guess three portals, if you will. So my LinkedIn, Jim Hied, FASLA , because the other Jim Heid is, like, this really successful Mac book writer. In fact, funny story, when my book came out, there was like, this huge run up in sales. I'm like, wow, this is great on that. And then I realized it was because they thought it was a Jim Heid book about Macs. And I'm sure when they got their book, I was like, this isn't what I was expecting. So, so LinkedIn, Jim Heid.
Atif Z. Qadir 57:40
And by Mac, you mean, like, Mac the computer.
Jim Heid 57:42
Yeah, Mac computers. He was like, you know, the go to guy, you know, in LA.
Atif Z. Qadir 57:46
Well, good design, there's some through line between it. Maybe people...
Jim Heid 57:49
Yeah, maybe systems. It was like, the number one book in data systems. I'm like, well, that's kind of weird. So anyways, but So Jim Hyde, H, E, I, D, F, A, S, L, A, which is a designation fellow The American Society LandscapeArchitects. And then the platform that I mentioned is free for anybody to join, and that's called buildingsmall.mn, like marynancy.co it's actually mighty networks.co. So mn.co, and and then the last one is my website, where I have a Building Small page, and that's usually where the small scale forums drop for the coaching, where you can sign up for coaching individualized, or the various workshops, and then access to a lot of the other content. And that's just jheid.com and so that's probably the three best ways get a hold of me, and presume you'll put those in the show notes, or something like that.
Atif Z. Qadir 58:38
So they will be in the show notes behind door number one, door number two and door number three. So listeners have all those ways to reach you. So this has been such a wonderful discussion to learn about the unconference conferences. Yeah, I appreciate that. Yeah, that I've that I've loved to attend, and I'm very much looking forward to continuing attending, understanding the evolution and its connection to larger issues that many of our listeners are interested in. So we sincerely appreciate your time, Jim.
Jim Heid 59:10
Yeah, well, thank you. I mean, I love what you're doing with the podcast. I've loved meeting you and having you at the forums. You did a great job moderating couple panels with us, always very studious and do a great job of, kind of navigating between the various people. And you didn't ask me where '25 is going to be.
Atif Z. Qadir 59:27
Oh, I mean, '25 is Mexico City, right?
Jim Heid 59:31
No, no, that's no, that's, that's an unplugged that's not the forum.
Atif Z. Qadir 59:35
Oh, okay, so listeners, what he's referring to is where the next Small Scale Developer Forum is, and this has been, it's usually a reveal at the previous one, and it's exciting because you're like, oh my god, we're gonna go there next. And are you going to tell us where it is or that I'm
Jim Heid 59:51
I'm not, because I don't know. So the question is, people should, people should nominate. They should just nominate their cities and let me know. Let me know where you think we should be. I've got some ideas, but, yeah, I'm taking a, I'm trying to take a bit of a sabbatical next spring, because running these up, I mean, I barely get one over, and then I'm starting the next one. So I'm taking a break so it can really get Building Small 2.0 launched, but we will do one. So the next one will be fall of '26 and we're thinking about, you know, where we're going to go for that.
Atif Z. Qadir 1:00:19
So, so I'll give three that I think could be super fascinating. One would be New York, Jersey City, and Newark, New Jersey together, namely because of major changes in political administrations that will hopefully make housing very much front and center in all three of those cities. James Solomon just won as city council, from city council to Mayor of Jersey cities, or Zohran Mamdani, of course, won last month, and New York has a new US Congress person that's hoping to move change in that city. That's vote number one. Vote number two is New Haven, Connecticut, which is one of the oldest grid cities, Elm city, which is a really beautiful city. I really love time that I've spent I've spent there. And then my suggestion number three, this is, I think it's a tie between Providence, Rhode Island, which has a lot of really beautiful, historic, small scale development in a college environment, and also perhaps multiple cities in the Hudson Valley. Those are my four suggestions.
Jim Heid 1:01:20
I just did the keynote at a conference in Binghamton two weeks ago. I was really impressed. I mean, you have tough, hard hit city, tough kind of gritty thing, but great, had dinner with the mayor. Great guy, you know, understood urbanism really well, and they're doing some really cool stuff. So, yeah, that came out. Well, that's, that's a great list. And we have not made, we have not done anything in New England. So those are all good, Providence, I think, is where CNU held their conference last year. So there's a little bit of a track record there. So well, great, great suggestions. We will add them to the list and maybe do some kind of an online voting with with our cohort.
Atif Z. Qadir 1:01:56
I dig it. So thank you so much, Jim, and we appreciate your time as always.
Jim Heid 1:01:59
Yeah, yeah, thanks a lot. Always fun.
Atif Z. Qadir 1:02:03
I'm Atif Qadir, and thanks for joining me on American Building. If you enjoyed this episode, be sure to subscribe on your favorite listing app and leave a rating and review. America's housing crisis is one of our greatest challenges. But what are the real solutions? Hear from the developers and other industry experts driving meaningful change. Get our exclusive guide housing in America, eight ways we can solve our way out of a crisis at americanbuilding podcast.com you you.