The Community Impact of Affordable Housing: Damon Duncan

Damon Duncan oversees the Montgomery, Ala., Housing Authority’s $400 million real estate portfolio. MHA’s core business is planning, building and administering affordable housing.

Over the course of his career, Duncan has been involved in developing more than 1,250 units of housing. He holds a Master of Real Estate Development from Auburn and is current president of the MRED Alumni Council.

Transcript

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Narrator:

Welcome to the Harbert College of Business Podcast.

Sarah Gascon:

War Eagle, I'm Dr. Sarah Gascon.

Currie Dyess:

And I'm Curie Dyess. Welcome to another episode of the Harbert College of Business podcast. Today's guest is Mr. Damon Duncan. Mr. Duncan is the President and CEO of the Montgomery Housing Authority and its affiliated companies. He’s held various roles where he has contributed to the development of the affordable housing in several states as an investor, a consultant or development partner.

Sarah:

Thank you so much for joining us today, Mr. Duncan.

Damon Duncan:

Thank you for having me. Thank you for having me, and War Eagle to you guys as well.

Sarah:

You found yourself in a public housing arena through mentorship, can you tell us when and how that actually occurred?

Damon:

Yeah. It actually occurred purely by happenstance. Back in 1992, I was volunteering mentorship program, with a nonprofit organization in Pontiac, Michigan. Who happened to be operating in the same building that was owned by the Pontiac Housing Commission, at that time. And when a position became available, I was right there able to take advantage of it and then just go with the show. You spend your time volunteering, you never know how it could turn out for you. And here I am, almost 30 years later, still joined at the hip with a housing authority in one form or another.

Currie:

Who were your mentors during that time and did you emulate them as you were working with your youth groups?

Damon:

Yeah, I had a lot of mentors over the years. But early on, there was a gentleman by the name of Richard Clanagan, he was actually the board chairman at the Pontiac Housing Commission at the time. Really took a liking to me, really poured into me at that time. As I moved on, gentlemen like Mr. Reggie Richardson, who was the CEO of the Flint Housing Commission, as I advanced there, became a good mentor. Almost like a father figure. I always had a dad, so I didn't need a replacement for a dad. But he just added on to what my dad had already instilled in my brother and I. Reggie Richardson, I definitely want to shout him out. He's no longer with us, passed a few years ago, but he was directly influential in pouring into my career early on. Absolutely.

Sarah:

What's something that you learned about yourself during those mentoring moments that you didn't know about yourself and something that you apply in your work today?

Damon:

Well, one thing I learned about myself was that I was an avid team builder. Initially, I think is because I didn't want to take the blame when things went south. I didn't want to take all the blame. But I soon learned the value of input, team input, the various perspectives that team members bring to the table stood out with me. And I learned early on, if you want to build a great program, you want to have great people around you with great input, and you want to empower them with their input. So they will continue to add value.

Currie:

I love that. We talk a lot about empowering people, loving on them, you always want to be a stepping stone for them to be the best version of themselves and graduate past you, right?

Damon:

Absolutely, absolutely. Enough can't be said about that in terms of leadership and empowering those coming along. I mentioned to you guys before, in my capacity now, when I demonstrate to my staff that. I showed them the org chart, and I turned it upside down and actually gave them a version of it upside down with myself at the very bottom. Singular at the bottom, with the organization structure branching out like a tree. I let them know that my role was to support them in their work, in their efforts, to ensure that they are able to get their tasks done that they're responsible for. They're empowered to think and make things happen.

I have an open door policy and I stand by that. Sometimes I have to close the door and I have to get prepared for things like this. But by and large, I'm at the agency to support the staff that's there. They really feel empowered by that. And if people are allowed to operate in the space of their gift, in the space of their professionalism, their skills and capacity. They'll go a lot further than if you are overbearing, and you're breathing down their neck all the time. I found that to be the case with myself. Like I said before, Mr. Richardson really allowed me the latitude to grow and to experiment, to try and fail and learn and grow. And because of that success that I had, I try to emulate that leadership and pass it along to those that report to me.

Sarah:

Was it difficult for people that report you to follow, to line up with that model, because that's not necessarily a normal model?

Damon:

Initially, because during the trust building phase staff is like, "Okay, what's really going on? What's really behind the curtain here?" Over time, they learned that, "Hey, that's just Damon, being Damon." I've had a number of people say, "Wow, I really enjoy going to work. I look forward to going to work, I know, there's going to be new and exciting challenges. He's always throwing something in front of us." But I challenge the staff to be more than what they have been in the past, for personal reasons and organizational reason. In order for the organization to grow, you have to challenge the status quo, you got to, as they say, think outside the box. To challenge and grow, it can be a little painful.

At my urging and I don't require anything of my staff that I'm not willing to do myself or that I haven't done. They're looking forward to it, they're looking forward to their growth, and sometimes their growth, meaning they've outgrown their current positions and got themselves in a place where they can leave the organization and take a promotion elsewhere, we encourage that. If in fact, there is some internal growth, we encourage and promote that. I just got to use myself as an example sometimes. There's an old saying, in order to grow, you got to go. I've done that, I've not been afraid to take a position elsewhere in another state, another region, another part of the country. Almost start over again, in terms of my relationship building and that sort of thing, it can be a little challenging, and insight a little fear. But once you've done it a few times you know you can be planted anywhere and be successful.

Currie:

Absolutely. That reminds me of something that we talked about frequently, and that is that motion equals emotion. It's easy to get complacent if you're not moving around.

Damon:

Yeah. I tell people, a lot of times, the best time to leave is when you're doing great, everybody loves you, the organization's doing great. That is the best time to leave, because you're no longer challenged, you're enjoying all the accolades and your name is in lights. You're on the front page of the paper in a positive way, and everything you touch turns to gold, right? Sometimes you get to that point where you no longer growing, you're resting on your laurels. So if in fact, growth is exactly a verb, and you've embodied that and you've embraced that in terms of your career, you want to continue to grow. Sometimes you have to put yourself in uncomfortable, difficult, challenging positions, and to do that can be risky, because we're not spring chickens anymore. And you don't have a lot of opportunity to screw it up.

Sometimes, when you're at the top of the food chain in this day and age of social media and all of that you can get some bad press, and that could definitely impact your career. So it does come with the risks. But my position is, I've gotten this far by taking those risks, and it's the only way I know.

Sarah:

That's great. Let's get into the affordable housing market. What is affordable housing and what is its impact on the community?

Damon:

The textbook definition of affordable housing is housing that is, not at market rate but at 50% of area median income and 30% of area median income. In terms of what the market rents are for that particular region. Public housing primarily serves residents that earn an adjusted gross income of 30% or below. But now with tax credit housing and some more affordable options, we're able to move up to 50%, and sometimes as much as 80% of area median income and still provide quality housing options. The impact to the community is, communities thrive when there is a mix of incomes. When everyone can participate in the local economy, everyone has quality and affordable housing.

There are no disparities in terms of where you live, your neighborhood, the type of housing that you have. There's equity, in terms of access to education, equity in terms of access to jobs, quality foods and that sort of thing. That's why affordable housing is important to communities, it provides balance. A mix of housing provides a balance to all communities, which result in a healthier community in my estimation.

Sarah:

One of the things that Currie and I have talked about over the past year or so is the shift in the affordable housing market. We talk a lot about the financial crisis of '08, what's the difference between that point of time and now?

Damon:

Well, affordable housing has taken on a lot of negative connotations over the years, you get those people, you get welfare mothers, you get section eight. All these negative connotations associated with affordable housing. But after an economic downturn, there are a lot of people that find themselves now in a position requiring housing that is affordable and of quality. Now it doesn't have the connotation that it once had. People are looking at it differently when they get themselves to a point where they require some quality housing. They can see the need for housing authorities to push and redevelop some of these old, what was termed as projects in the past.

It means something different now. Here, with the pandemic, there's been a number of people that... I know there's an eviction moratorium, and all of that. But still a lot of people are finding themselves in the long term position that they're seeking affordable housing. We have a waiting lists on our public housing program and our section eight programs into the thousands. So, people that recently find themselves in a scenario where their income has been compromised in a way that it hasn't been compromised before, because of loss of jobs. Loss of industry, as a result of pandemic. Come to us to get on our waiting list. Our waiting lists have been closed for a number of years, and really don't have anywhere else to turn.

The new administration coming in hopefully will expand and bring about some more programs that will open up affordabilities to a broader range of families and individuals that now require it. That didn't otherwise required in the past.

Currie:

 it seems as though the affordable housing industry is becoming more and more encompassing. When you look at the larger piece of the pie, the larger pie, is that more indicative of a problem with our economy as a whole? Or the proliferation and success of the affordable housing movement, the affordable housing industry?

Damon:

You asked a great question and you're headed down the right path in that thought process. A combination of all of the above and then some. The reason that there are communities, pockets of poverty and disparities that exist in a lot of places, is because of a lot of atrocities that have happened in years past. In order to shift that and swing that pendulum, there has to be a movement in the opposite direction. We're in the middle of that movement, with some assistance of the local economy and some other things that are shedding a different light on affordable housing.

But there will always be individuals that earn less than a certain percentage of the area median income, whether... I remember when I first started out in my wife and I, we got married early on. We needed some assistance, and there was some project based assistance that was with a particular apartment and we qualified. And we were able to get some assistance for a year or so. At the end, it was time for us to move off of that assistance to create an opportunity for another young family or another young couple to take advantage of it. Use it as an opportunity to get a leg up and be able to compete and move forward. So it was never designed nor intended for individuals to arrive and park and be in a place of complacency, and utilize that assistance on a permanent basis. It's always been designed to be a level of assistance.

Now we know with our elderly, they've fixed income and typically, they'll need their assistance for the remainder of their years. The elderly and the disabled, but families that are capable of working, and that sort of thing should take advantage of the assistance for as long as they need it. But also simultaneously take advantage of the social programs, the GED programs, financial literacy, home ownership programs and options that are available. In order to not be reliant on the subsidy on a permanent basis. So there's one of the challenges that we're facing, not only as a housing authority, but as people find themselves in position. They finally win this lottery ticket of a section eight voucher, they're not quick to give it up.

But like I said, from a management standpoint, you got to continue to push but on an individual basis, you got to continue to push and challenge yourselves. And work without the safety net of housing authority assistance because one of the things, if you're with the Housing Authority, and you find yourself unemployed. You can go to the authority and get your rent adjusted downward, as low as $50. That's a tremendous safety net, regardless of how you look at it. But it takes courage and conviction and to belief in oneself. To not rely on that assistance, but free it up and make it available for some others that are coming along.

Currie:

If there are secondary and tertiary effects of the success of the affordable housing authority, what are some of those?

Damon:

One of the one of the effects is, there's always a rule of thumb, real estate, you want the highest and best use for a site, for a building, for a parcel. That's typically driven by market standards, being the most profitable, most advantageous from a capitalistic standpoint. Not from a socialistic standpoint, or a socialistic balance. As a housing authority, our primary mission is to provide safe, affordable housing, help revitalize and rebuild communities. So when we do market studies, highest and best use studies, we contemplate our mission as part of the highest and best use as well. Because also, we do studies where we determine the lack of affordable housing and what that need is by bedroom size? By types of housing, whether there's a shortage of elderly housing, or family housing, and we try to address those needs.

So, we're constantly combating the capitalistic aspect of real estate development and land development, land acquisition. But also, within our arena a lot of private market are starting to participate with us, by way of investors. You've got corporate investors, lenders and banks that are playing a role in the development of affordable housing, so were able to make that shift gradually. But we're way behind in terms of the number of units that are required to house the families and individuals that require it in any given area. This is a problem across the country.

Sarah:

How do you solve that?

Damon:

You run your leg in a race. Just like a relay, you get the hand off in a baton and you... One thing I will say that, the executive directors of housing authority these days are a lot more educated than they were in previous generations. Not only are they acquiring bachelor's degrees, which previously was not necessarily a prerequisite, but they're getting masters. I've convinced a number of folks to join the Auburn MRED program, the masters of real estate development program. They're sharpening their sword not just for the administration of public and affordable housing, but to understand the market as a whole.

Understand commercial, understand multifamily, single family, retail, all different types of real estate products. Land use, environmental issues, construction, all of that so that their skill sets can help these agencies become stronger in their community development capacities. They have a breadth and wealth of knowledge that exceed that of multifamily and public housing development. The push in the industry is to have more sophisticated, more educated personnel working in these quasi governmental agencies. But also, not only that, but you have an awareness, a social awareness and consciousness that seems to be growing every day. Many times a negative incident, really sheds light on a lot of the disparities that are taking place.

So, we're able to capitalize that and move forward. Sometimes unfortunate situations happen. But a greater good is realized from an unfortunate situation. But we're trying to capitalize on a number of things and grow, challenge our staff, challenge the local municipal leaders for the direction that we need to move in.

Currie:

There seems to be two very different schools of economic thought when it comes to housing. One is social driven, and one is capitalist driven. Is there a balance? Or where should the balance be between those two? For example, some people might think that the most good for the most people is to have a truly free market, so that market can find equilibrium. Then, of course, there's the other end of the spectrum where we should be providing these homes, we should be providing the affordable housing. Where's the equilibrium when it comes to that?

Damon:

That's a tough question. That's a million dollar question, if I had $20 I'd give it to you right now, by asking that. As I said before, we have to continue to try because we know that our industry is not even tapping the need. So we have to try to push the envelope as much as possible. And I don't think it can be achieved in our lifetime, for reasons beyond those that we talked about today. Again, some of the disparities that have happened over the years in many of our communities, you have school systems that are underperforming. And from a real estate standpoint, the first thing a family thinks about is safety and schools.

In many cases, you get a high crime and low performing schools. That has to begin to change because you can be in places where the housing stock is of low quality, but if you got a great school systems, and there's a safe community, people will pay a premium for that housing stack. There are a number of other things that have to improve in order for these communities to really improve. And we only control one aspect of it, but we have partnered with law enforcement aspect of it. We’re partnered with the educational aspect of it, and we just try to do our part and not be so overwhelmed that we give up. But take critical steps and strides toward the medium in the balance that we're trying to achieve.

But it's going to take a lot of work because to repair school systems alone, they have their challenges. Now, in the middle of a pandemic, nationwide you have students that are probably a year behind where they should be. Regardless of what their incomes is, regardless of what their household looks like, it's a challenge for kids going to school. We already have that, our children that are in impoverished communities really find themselves at a disadvantage. They lack the laptops, they lack the internet access. And if they have internet access and laptops, then do they know how to download their lessons and attend their lessons? And problem solve through the technology? Do they have tutorial access, to be able to ask the proper questions, when they get their lessons? That list just goes on and on and on with some of the challenges today, that we're facing in education.

And I tip my hat to the educators, because there's no guidebook for how to maneuver through this type of situation. In my field, there's an eviction moratorium, we're suspending evictions, so individuals are continuing to be housed. But on a school system, and now continue to be educated at the same level. Again, those disparities are going to create further disparities that drive down the values of neighborhoods and all of the amenities that come with a good school system.

Sarah:

That's why the mentorship component of it, like you were discussing earlier is so valuable and so important.

Damon:

Yeah. To help address this, we've received over a million dollars in CARES Act funds from the Housing Authority. And we've allocated a certain amount of it for operation where we've allocated certain amount of a for PPE. But also for supportive services for our families. We've opened up a Virtual Learning Center, not to be a replacement for education but to assist. We provide tutors and things like that, we got Chromebooks, we got hotspots and all of that, for the young people to come in and participate, get assistance with their lessons. Again, it was not designed to be a replacement for the school system, but to enhance because this school problem is not just a school problem, it's broader than that. So we're trying to play a role and assist in that area.

But we're seeing that the children are extremely challenged. It's a tough place to be. But I stand by the fact that, the stronger the school system, the stronger the community will be, that tends to be the driver. You've got strong institutions, strong educational base, you got educated individuals to tap into, from a workforce standpoint, and it just makes for stronger communities long term. The lack of that you have just the opposite, you have struggling communities.

Sarah:

There's a different type of challenge financially and the shifts in government,  So, you're experiencing these things at a different level. Can you talk about some of your challenges and your experiences and how you've evolved throughout your career?

Damon:

There's been a number of bureaucratic challenges. Every administration that comes in, there's a new type of program. One of the things, having been in this industry a long time, I've seen a number of different programs, how they evolve? How some of them are the same with a different name. You just learn how to take advantage of the program of the day, with the understanding that this program, this pot of money, this revitalization tool is not the cure all. Then you learn there is no cure all. But you take advantage of what Congress have allocated in terms of a budget, and do the best that you can with it. You be extremely prudent and fiscally sound as an agency so that you can deliver the best product with the amount of money that you're receiving.

But you also got a raise the bar in terms of outside resources that you attract to the agency because you know what you get from the US Department of Housing and Urban Development is not enough to do what is needed in some of our challenged communities. Over the years, we've just learned a new program, adapt, figure out ways to be innovative within the context of the program. I like to ask for forgiveness later, instead of permission upfront, because a lot of the bureaucrats their first thing is what you can't do. "You can't do this, you can't do that you can't do. “Well, let's do what makes sense."  You try to operate within the rigs, and you got to be creative and innovative within that.

Now, I'm fortunate to sit on some of the policymaking boards on the national level. And I can have some say on the front end, in terms of what policy should look like? What budget should look like? Special allocations, what that should look like? That's really the best that we can do, try to a bit change user experience myself, people like myself, and there are a number of people like myself, and even better than I am at this. I by no means consider myself the best in the industry, that can affect change. We're going to continue to push and continue to fight and run our leg in a race.

Currie:

Damon, the Montgomery Housing Authority has an annual budget, in the tens of millions of dollars, and they have over $400 million in capital assets, as well as 80 employees. The Richmond Redevelopment Authority is at about  90 million  a year with 200 employees. Can you explain how you balance the financial and personal responsibilities?

Damon:

First of all, you got to have a good CFO. I am not the financial wizard, nor am I the wizard of anything outside of bringing great people together, and helping them be as good as they can be. But there are checks and balances that must be met, that you have to monitor on an ongoing basis. We just had a finance committee, a two hour finance committee meetings, at the Montgomery housing authority. What were the long term plans, short range, how are we doing? Care funds, what are some of the triggers that affect our budget? That went very well, were in a very sound position, we have a respectable amount of reserves, upwards of $26 million.

For anybody listening, that doesn't mean that it's an open checkbook. But when things happen, like the government shuts down for a couple of months, we still have to deliver services to our families. We still have to pay the landlords, that checks on the Housing Choice Voucher Program. That doesn't mean that we're rolling in dough, because at any time HUD could have a reduction in the funding, and you have to utilize your reserves for operations. So it was a healthy reserve, but it's a responsible reserve.

The personnel aspect of it, this is really one of my strongest suits, and it's hard for me to let people go, I'll say that upfront. It's hard to let people go and sometimes you inherit a staff. My first thought is that, even if there were a few bad apples, many times the apples may have found themselves in that position because of the previous leadership. You a private college a bit, is you understand all the various leadership styles, democratic, autocratic. There's seven primary pay setting styles, authoritarian, there are a number of them. But good leadership adapts all of those and applies them when they're most needed. The ability to observe, analyze a situation on a case by case basis, department by department basis, individual by individual basis, you're able to apply the appropriate leadership style, that's going to get the maximum output for your staff.

Now when you have a large staff like that I want to say, you don't manage them all. No CEO manages 1000 people. You get good direct reports and division heads and Richmond had about 13 of them. Montgomery got about half that, like seven or eight, direct reports. And you coach them in terms of how to manage and get maximum output from their staff. Because, succession planning, you're growing leaders, you're creating leaders and you're training them how to manage it and one day be a CEO. That's kind of the way that you oversee. And they're larger organization, the Atlanta Housing Authority has probably four times the size of Montgomery. You got Philadelphia, Chicago, NYCHA, New York City Housing Authority has over 100,000 units, and just five, six, 700 staff.

Sometimes these organizations probably should be broken down into smaller organizations, to be maximum efficiency, to be able to provide the service that they should provide. But that notwithstanding, your direct reports are the way you manage organization. Because not only do you have to manage that, you have to manage externally, the politics associated with running a multi million dollar organization. There are a lot of folks that want to benefit from that, whether it be contract or service providers, politicians, and you have to balance all that as well.

Sarah:

In terms of your personnel, what qualities do you look for in an individual? Aside from the education, I know that's an important component but, if those things are equal, what else do you look for?

Damon:

I look for those intangibles. I don't follow a traditional thinking pattern, I look for things in people's background. I asked the types of questions that extract, how they behave in certain experiences, just get to get a sense of their thought process. And I always leave room for the fact that an individual was able to be as good as they were under their previous leadership. But that's a caveat, and I always leave a little room for my ability to insert my management style and help to grow that individual. Sometimes people come with a bad rap or a situation that have happened. Rumor mills take a life of their own, just a number of things.

I try to be as objective, err on the side, I give people the benefit of the doubt. But sometimes they proved to be who they were said to be, and it's just not going to work out. And if it doesn't work out... Every time I had an opportunity, the regretted opportunity to let someone go, walk them out the door, shaking their hand, exchanging smiles is never a bitter type of scenario because they know that the fit is just not there. We're always changing and evolving, the fit could have worked at one point, but the fit no longer works and that's fine. That's fine because we're all moving through, we're passing through and there'll be other opportunities for you. But I really go the extra mile before I terminate. But leadership is required to terminate, but you're required also to exhaust all means and measures to make sure that in fact, the termination is the last resort and it could not be avoided.

Currie:

Damon, you are a true example of leadership. Thank you for your lessons in your leadership. How can our listeners continue to learn and grow from you? How can they contact you?

Damon:

Well, I don't even know my phone number. I don't. That's some transparency for you. But I will tell you this that, just follow the Montgomery Housing Authority on social media, we're ramping up our social media presence. We're in a process of rebranding. The board just approved the first round of logo iterations. Now, we're moving on to the website rebranding process. Www dot M-H-A today.org. M-H-A today, Montgomery Housing Authority today.org and watch for the changes. We'll be pumping out a lot of videos or were ramping up videos, a lot of good content, educational content on our LinkedIn sites, as well our Facebook.

Look us up. You can, as the young people say DM. You can direct message me and I will respond, we will respond and try to direct you in the area to assist you based on your questions. I return a lot of calls myself, to help young people, help individuals learn and grow, not only in his industry but any industry that I can assist. I write letters of recommendation, reference. Just look for us in the community. We plan to be highly involved. Actually, on a side note. We were honored to participate in the first round of vaccinations in partnership with Alabama State. That announcement was made on Monday. Dr. Ross, the president of the university and myself, along with the state health department started to administer the first round of vaccines in the Montgomery area. Of which our elderly residents aged 65 and above had an opportunity to get their vaccination. So we're very, very proud about that. And we're just going to have an external communications outreach effort beyond that, of what we've had in the past. So, we're looking forward to that, so it won't be hard to find us.

Sarah:

It's so great to have you. We really appreciate it. 

Currie:

Damon, thank you.

Damon:

All right.

Sarah:

War Eagle.

Damon:

War Eagle. 

Narrator:

Harbert, Inspiring Business.