Heather Weerheim (00:00): Well, let’s get to it. Okay. All right. Welcome Chris Velasco. Did I get that right?
Chris Velasco (00:04): Yes. Thank you.
Heather Weerheim (00:05): Welcome to Greiner studio. Thanks for coming downtown and taking time out of your day. I know you’re very busy. I’m gonna start out with reading a little intro about you and then we’ll jump into it. Cause I think we have a lot to talk about. That’ll be very interesting. So for 25 years, Chris has been actively engaged in the development of leading edge communities. He has worked in over 200 cities around the world and has been a leader in the creation of over 1 billion in new mixed use specialty facilities in early 2013, Chris and PLACE founder Elizabeth Bowling filed a US patent application for E-generation, a renewable energy process that powers communities from renewable energy and waste. We’ll dive more into that in a little bit, but did I get that all right?
Chris Velasco (00:52):Yes.
Heather Weerheim (00:53): Any more that you wanna add?
Chris Velasco (00:54): It’s hard to believe it’s been 25 years.
Heather Weerheim (00:56): Yeah. Does it feel like it?
Chris Velasco (00:58): No. No. Well, in some ways, I mean sustainability which is an important aspect of what we do has come a long way. When I first started saying I wanted to build green buildings, people thought I was talking about the paint color. Yeah. So that seems like a long time now, but in other ways it’s gone by fast.
Heather Weerheim (01:16): So in your year one, what did motivate you, especially when people are thinking sustainability, not knowing what it was. Why did you feel it was important to you?
Chris Velasco (01:26): You know, I just didn’t, I could see the writing on the wall. I just didn’t seem responsible anymore to build buildings that wasted energy wasted resources. And so as I looked into it more, I found lots of data to suggest that it doesn’t even cost anymore to do buildings that are significantly more efficient, significantly less wasteful. You just have to do it.
Heather Weerheim (01:49):I think people would find that hard to believe. But I mean, I guess you’ve done it so far, right?
Chris Velasco (01:55):Yes.
Heather Weerheim (01:55): Okay. It’s just putting the work into It.
Chris Velasco (01:58): It’s putting the work into it. It’s knowing what you don’t know, so you have to go in, you have to jump in and find out what you don’t know. And oftentimes the systems that, and the materials that we use are the principle ones, the ones that get used all the time. That doesn’t mean they’re the best. It doesn’t mean they’re the most efficient or the least toxic or any of those other things that we care about. So we just have to do the homework and find out, and maybe it’s a smaller manufacturer that is doing things the right way. And we can give them our business but it takes a little extra work and it takes working with an architectural team. You know, our MSR folks are absolutely the best in this business at that. And so they’re an excellent partner and of course, Greiner has been there to kind of ask the questions along the way. Well, let’s make sure that doesn’t cost more. Let’s make sure that we know how to implement that system, how to build that system. Let’s make sure we got the right people at the table. All of those things that are involved with the implementation of it, that’s so important.
Heather Weerheim (03:04): Yep. I couldn’t agree more. I like that. I did have a little shameless plug in there about what it was like working with Greiner. So I think you answered that. So thank you. Well, this is a fun project to be apart of…
Chris Velasco (03:13): Well, I’ll bring up Greiner more because it has been hugely important to us. I mean, it’s really been almost a partnership with Greiner and and we’re looking forward to doing more projects and that’s just because there are not a lot of, there are people who know what they’re doing out there, know how to build a building, but the folks who can support doing something nonstandard that can just kind of jump in and be your partner on that. That’s really rare. And then folks who have the kind of necessary integrity for us, we have to hit the highest standards as a nonprofit because we’re using other people’s money and they want to know that we’re doing it the best it can possibly be done. And so Greiner does that for us.
Heather Weerheim (03:58):Oh, I love hearing that. Yeah. Spencer’s definitely our visionary here. And then Stacy just knows how to run a project. And then of course I gotta give kudos to Derrick Hillstrom too, our superintendent. Who’s just willing to jump in and do it and go for it.
Chris Velasco (04:12): Yeah, he’s got that can do attitude that you want in a superintendent for sure. And I’m constantly saying I’m gonna, this week, in fact, I’m gonna bring 50 people through the building. Oh yeah, we’ll figure that out.
Heather Weerheim (04:25): There’s always a way. That’s awesome. Well, okay. Let’s jump into it then. Cause I think we do really wanna hit on some of your new, sustainable your new, okay, sorry. Let me start over. We do wanna hit on that E-generation power concept and how you’re gonna hopefully develop it into the new, into Via Sol. So tell us a little bit about your patent pending E-generation power concept. And I also wanna know more about this urban forest that’s described too, at Via Sol.
Chris Velasco (04:58): Yeah. Well, let’s start with the E generation first and then that may use up all the time, just cause there’s so much to talk about.
Heather Weerheim (05:05): I’ll cut you off if needed.
Chris Velasco (05:07): But actually we can build sustainable buildings. We’ve been doing it for a long time now. And the problem is people still waste as much as they’ve always wasted. Even though your building is being very efficient. The households are throwing as much away as they ever, even more than they ever threw away before. And they still have to get food. And the sad truth is, that in Minnesota we get fresh fruit and produce from California. And it’s trucked halfway across the country to us that is just not an efficient way to do things. And so we’ve been looking for a way to bring food and energy to community building. How can we include that? And as we started talking more about it, the team in the board realized that they’re intimately connected. Food doesn’t come from a grocery store. It has to be grown somewhere and that takes water and energy and it has a carbon footprint moving it around energy gets made somewhere. It doesn’t come out of an outlet, and that gets sent down a wire and that’s very inefficient because about 26% of our energy is wasted getting sent to us down a wire. We can’t afford to do that. So this idea of we’re throwing stuff away about 55% of that is organic material that has all of these vitamins and minerals and nutrients that need to go back into the soil, but it doesn’t, it goes into a landfill or an incinerator and all those nutrients are lost. There’s a finite number of those. And so instead we can take those food scraps, we can use natural microbes to break them down and they convert them to energy. We use the energy to power the building and then the leftover byproduct from the life cycle of the microbes is heat, which we can use in the building, definitely and fertilizer, which we can use to grow food. So we use food to grow food. We use energy, right, where it’s being made. We eat food right where it’s being grown and we clean up over half of all of our waste instead of sending it somewhere.
Heather Weerheim (07:16):That’s amazing. So now if other sustainable, I’m curious to know about other sustainable options that you have for Via Sol, with or without E-gen, what kind of amenities, I guess. Would you call them amenities?
Chris Velasco (07:31):There’s solar power all over the building and when we ran outta roof, we decided to put solar power over the parking lot. So there’s just not, there’s never enough space to generate solar power. We want to put it on every square inch of everything. So that’s the name Via Sol by way of the sun, and that’s what that means. But we also have a wind turbine, which is a cool thing. It’s made by the fins, and they make these for like Arctic research centers and so forth. So they’re super durable and they can go as fast, I mean, if you have a hundred mile, an hour wind blowing across the north pole, it’s turning super fast and generating a lot of energy as opposed to a big propeller type turbine.
Heather Weerheim (08:15):Yeah. That’s what I was envisioning. Okay. So did you dream up this or did you see one, what inspired you?
Chris Velasco (08:21): Yeah, so I think that we were looking for something that could be deployed in a residential area. Obviously these big utility windmills that we see out in the countryside, they can’t be deployed in residential areas. So then you have this problem again, you generate it over there, you use it over there. What we want to do is generate it here. So they don’t generate nearly as much energy, but they don’t have to because we’re just using it ourselves. And they turn pretty much all the time because it only takes 0.2 kilometers of wind in order to make them spin. And they don’t make any noise. They don’t kill any animals. They don’t make any vibrations. None of the things that bother people about the utility sized ones and wind power’s great, you know, but everything that we do has a shadow side to it, wind power included. It’s much better than coal fired energy by a mile. But I think these little helical turbines, we could be deploying them in a lot more places. And the truth is, that sometimes when the sun isn’t shining, the wind is blowing and when the wind is blowing the sun isn’t often shining. So they compliment each other really nicely.
Heather Weerheim (09:26): Is this the first type of project that’ll have?
Chris Velasco (09:28): Yeah. What’s nice is, it’s visible, so people driving by which is let’s face it, that’s how we see most things is in the car these days, you can’t see the solar it’s up on the roof, but you can see the wind turbine.
Heather Weerheim (09:40):Yeah.
Chris Velasco (09:41): So that’s gonna be exciting.
Heather Weerheim (09:42): This is kind of off topic, so we can maybe edit it out. But I just remember solar panels, there’s a discussion of having I live out in the country and they have those solar farms.
Chris Velasco (09:53):Yeah.
Heather Weerheim (09:53): And we got a letter that they would maybe end up in a farm field in our backyard. And my husband was like, yeah. And I couldn’t believe that my reaction was, “not in my backyard”.
Chris Velasco (10:04): It’s natural, isn’t it?
Heather Weerheim (10:05): I know. I was like, oh my God, Heather, you cannot be that person. You know? And I eventually, it didn’t end up going in our backyard, but it is very visible. And we do have them nearby and again, you can see them and usually typically we try to hide them.
Chris Velasco (10:21): The farms you can see. And I’m one who thinks they’re beautiful. And they’re usually over, other land that isn’t usable for other things. And you turn just kind of a brown field into this sort of beautiful sculpture. They are you know, the best energy form there is. There’s more energy then falls in one minute on the earth to power us for an entire year, the entire planet.
Heather Weerheim (10:50): So, I have five acres up front. If I put some solar panels in my yard, you think that would cause a stir in my neighborhood? But maybe in a good way?
Chris Velasco (10:58): Absolutely. One of the engineers that we’ve worked with over the years, Charlie Thornton is a wonderful structural engineer. He, got excited about solar after we were talking, he put it in his yard and he said, now I pay $18 in, electric bills is all.
Heather Weerheim (11:13): Yeah, I might need to talk about that, cause our electrical bills are skyrocketing. Okay. By the way, back to it. Okay. So then tell me a little bit about this urban forest too. I think, and anything else you’re proud of about this project? That’s, unique, I’d love to hear.
Chris Velasco (11:29): We took almost an acre of the site. So, when you think about most developments, they are talking about, we’re going to use every foot of the block and build as tall building, allowed by code as we possibly can, for money reasons. So one of the things let’s call it a luxury of being a nonprofit is that yes, our projects still have to make economic sense, but they don’t have to make maximum profit. That’s not what we’re about. And I think that people living in urban areas miss green space, and I think it’s important to their health.
Heather Weerheim (11:59): Absolutely.
Chris Velasco (12:00): So we’re taking almost an acre, reforesting it because of course, when we build cities or even apartment buildings for that matter, the first thing we do is come in and mow down all the trees. And then we name them, Maple Grove or whatever it turns out to be. That’s the truth. In this particular case we’re gonna reforest it and then it turns into a little walking path. So people can take a walk in the woods, even though it’s a very urban site. There’s a freeway, there are two freeways, there’s a train station right outside our front door. So I mean, this is an urban site, but take a walk in the woods and then our creatives, our artists, are putting in sculpture so that you can kind of discover new, changing sculpture as you walk through the woods.
Heather Weerheim (12:46): Oh, that sounds lovely. Have you done any urban forest like that on any of your other projects?
Chris Velasco (12:51): No. I mean, we usually have community gardens. We just don’t often times have enough space. This was the first time that we kind of had enough space to build a kind of building we wanted to build and still leave behind a significant enough space that it could really be an ecosystem, because just a few trees is not a forest make. We need enough to have underground communication between them enough trees to pollinate one another and become habitat and generate oxygen and use up carbon dioxide. I mean, there’s so many things we get for free from trees. It’s amazing.
Heather Weerheim (13:28): Yes, it is amazing. So with a unique project, like this, I’m gonna kind of switch gears. Do people, I guess, do people understand the benefits, by people, I mean, banking institutions, is it hard to get this type of work financed?
Chris Velasco (13:42): Yes.
Heather Weerheim (13:42): These types of projects. And why is that?
Chris Velasco (13:45): I think anything nonstandard is always difficult to get financed. I think that everyone wants to kind of look inside the usual box. In fact they often have checklists, and our project checks different boxes that they didn’t even know about and it doesn’t check the boxes that they want to get checked. So I think we have to start early in having conversations with potential investors, potential lenders in this particular case, bond holders, and tell them what we’re doing and why. So it doesn’t just seem like a random set of things to make their life harder, instead it’s to make all of our lives better. And I think that we’ve all the time found through this long process of communication, people who say, “I get it and I wanna be part of it.” And in the case right now we just have a new lender, JP Morgan coming into the project and they said, look, we are a corporation that’s dedicated to sustainability and they have a particular standard to certification that shows that they’re putting their money where their mouth is. This is one of the projects that they wanna be able to cite.
Heather Weerheim (15:01): Oh, how cool is that.
Chris Velasco (15:02): Yeah, so now we’re finding people who are, want to make those investments and matching them up with the projects that want their investment. And that’s exciting. And I hope we’ll do more with them.
Heather Weerheim (15:14): Yeah. Getting a bank like that. Could we talk about, I ask in here a little bit about benchmarking and what determines like a project success, but even getting off that, project off the ground. So this must have been a success. Did you have to educate that client or that banking institution? Do they come to you? Do you come to them?
Chris Velasco (15:32): Yeah, I mean in this particular case, when I’m talking about JP Morgan we were on public bond holder calls and they were on because they’re looking for these kinds of projects and they knew that we needed some investment. And so they reached out to us and said, we wanna investigate being your lender. And that’s how that happened. Other times we’ll reach out to turn over every rock. I mean, it’s, it’s a hard process. So I think I understand why other companies don’t want to do it. It’s a lot of work. And, if we didn’t believe in it passionately, we just wouldn’t do the extra work. It’s much easier to not do it. So we reach out to companies. We, if they say, no, we say, do you know anyone who might be interested in this? We just don’t take no for an answer until finally we meet the right people. And that’s how it gets done every time. It’s always hard, but I’m hoping that some of these relationships might be more durable. The problem is a lot of them are local and we work nationally. So great, we got this great local relationship, and then we’re off to work on a project in Florida or California or something, and they don’t work there. And so suddenly, we’re having to make all new relationships again and having to reinvent the wheel. That’s just the way it goes.
Heather Weerheim (16:50): Yep. If anyone’s up for the job, it sounds like you are. But I have to ask, and again, you mentioned that you can still build affordable housing with sustainability in it. But, you say that it doesn’t have an impact on construction costs or it does? I find that hard to believe.
Chris Velasco (17:09): We do it in a way, I think this project that we’re doing with Greiner, there’s a little bit of a premium, but it is not so much that we still can’t make two thirds of our apartments affordable. So I think it becomes a difficult cost calculation, and I’ll tell you why, because people are focused on first cost. When people say, how much does a project cost, they’re only talking about first cost. This is a problem. We need to educate people to look at the total cost of ownership.
Heather Weerheim (17:43): Okay. So explain that first cost.
Chris Velasco (17:45):Versus total cost of ownership. Right? So let’s take mechanical systems, for example, so how do we bring fresh air in, how do we heat and cool things in a very efficient way. Obviously a lot of energy gets used doing that. We are working with Horwitz. They’re probably the best mechanical engineering firm in Minnesota. They’ve been around for over a hundred years.
Heather Weerheim (18:09): I’ve worked with them before.
Chris Velasco (18:10): You have. Yeah. They’re amazing. They’re amazing. We wanted to find a way to be more efficient and they did, they helped us do the calculations, turns out that the cheapest system. So when people say, how much does it cost? It’s the first cost. The first dollars to buy the system are the cheapest. However, you have to replace them about every five years. Because they wear out and you throw them away and you gotta worry about refrigerants and releasing them into the atmosphere and all of these environmental problems. And they leak because you put them into the wall and they punch a hole through the wall and they let cold air in, in the wintertime. So it’s a bad system. And yet that’s what everybody chooses, cause it’s got the cheapest first cost. But if you look over just say 25 years, all of a sudden, a much more efficient system becomes much cheaper. How much cheaper? About 500% cheaper. The better system is actually cheaper. If you look at the total cost of ownership.
Heather Weerheim (19:10): How do you show that to someone?
Chris Velasco (19:11): It’s a tough calculation. You have to say what’s our money worth. Instead of spending it now, how much does it cost to service maintain? How long is its life? When do we replace it? How much does that cost? And when you look at all of those things, you find out that it costs a lot less money to put in a lot better system and people will be, their comfort will be greatly enhanced.
Heather Weerheim (19:36): Yeah.
Chris Velasco (19:36): If you ever stayed, you probably don’t have one of these cheap wall in the wall systems, but you’ve probably been at many hotels that have them in the wall, and they blow on you and you wake up with a sore throat and it’s noisy. Yeah. It’s just, it’s not a comfortable system. It’s not a very human centered system. The system we’re putting in is whisper quiet and people on the sunny side of the building can have on the air conditioning and people on the shady side can have on the heat because this is Minnesota and things are different. It’s a great system for humans and it’s a great system for the planet and it costs less money. There’s a great example.
Heather Weerheim (20:12): That’s amazing. When I spoke with Reese with MSR just a little bit ago, he talked about data driven design, and I think he couldn’t have been the more perfect fit. From what you’re describing, I think is stuff that he, that excites him too, is getting data and understanding how it’s gonna work and then putting together something that can actually be used for a long period of time or designed a certain way so that people can enjoy it for a long time. He talked a lot about quality.
Chris Velasco (20:40): Yeah. I mean, and they MSR, they were right there from the beginning and we sat in a room and we said, look, we’re not using any rules of thumb here. We’re not gonna make assumptions. This isn’t gonna be based on your experience. Don’t get me wrong. Your experience is valuable or you wouldn’t even be here.But now we’re gonna only pay attention to data. We’re only gonna pay attention to calculations. And it took a while because people are used to doing what they already do and they’re experienced at it and they’re good at it. And it’s a little bit extra work to not do that. When people come in and say, I think you should use this system, I say, show me the calculations. Not in an aggressive way, but in a show-
Heather Weerheim (21:24): prove to me.
Chris Velasco (21:25): And pretty soon the whole table was doing that. Show us the calculations and great ideas were coming suddenly from people that nobody ever talks to like the interior designers. This is in the beginning of a building, and we’re trying to get how much lighting energy does the building use, trying to get that down, down, down, down. So it’s really efficient. And the interior designer says, hey, have you thought about paint? And everybody said, what are you talking about? They said, well, paint has an intrinsic reflectance factor. If you choose paint to reflect more light, you can actually lower your light intensity. It turned out to be like 15% less energy by the paint that we chose. And if we didn’t have that big group conversation and we didn’t create the spirit where everybody was jumping in with their good ideas, we wouldn’t have done it.
Heather Weerheim (22:17): That’s awesome. I love that creating a space that everyone can chip in, give an idea and feel comfortable doing so. Any bad ideas come out of it.
Chris Velasco (22:24): Sure, I mean, there’s this whole idea about there are no bad ideas. And I’m joking kind of, but because we test things and then we choose the best thing, which means that we didn’t choose five things or 50 other things, depending on what we’re talking about, all go by the wayside. And we use a scientific way of choosing it’s called choosing by advantages.
Heather Weerheim (22:48): Okay.
Chris Velasco (22:49): This was invented by the forest service and it’s actually a scientific way. When you talk to the guy, Jim at the forest service, who was responsible for kind of developing this with two universities, he says, I used it in my kids. They’re like what kind of jacket do you wanna buy? Oh, we’re gonna sit down and do choosing by advantages. I kind of drive them crazy, but it’s the only way to make choices. We will look at all these systems and everybody can put them on there, and it’s sometimes, it’s really obvious before you’ve even finished the exercise, like, yeah, those aren’t not gonna win, you know? And they thought, the people who threw them on the table, they thought they were gonna win. Or based on my experience, this will be the best system. Didn’t turn out to be the case. Once we crunched the numbers, once we looked at all of the factors, and that means not just data because some things are important, they’re aesthetic things. I like the way that looks. I don’t like the way that looks. There’s no data associated with that. But you can use this process to include subjective and objective information in the same process. And that helps you sort that out.
Heather Weerheim (23:56): So I’m curious to know, then as you’re finishing up the project and how many, what number development is this for you? How many have you developed so far?
Chris Velasco (24:05): This will be my 27th major project. Also did some minor projects and a little project, single family homes, things like that. And they were just as much work as these big projects. So might as well get more impact.
Heather Weerheim (24:15): Yeah. Good for you. And you’re exactly right, they are. So what will deem this project a success? What are the benchmarks or what will you see or need to know to know that this project was a success?
Chris Velasco (24:26): Well, I mean, there’s a series of them, you know, figuring out how to design a building that uses a fraction of the energy of the buildings in our neighborhood. We worked with the university of St. Thomas to help us with this. They, I don’t know if you’ve ever done these carbon calculators or tell you what your carbon footprint is, you know, they’ll ask you, what kind of car do you drive? How many miles that-
Heather Weerheim (24:52): I’d be horrified, I think.
Chris Velasco (24:53): Yeah, I mean most Americans are just, there’s a, really annoying data piece, which is that an American baby, by the time it is two uses more than the average life expectancy of a human in Mozambique, their entire life. And they’re babies. I mean, how are they using so much stuff?
Heather Weerheim (25:15): What is happening?
Chris Velasco (25:18): It’s crazy. So yeah, all of us would be shocked if we did a carbon calculator, but what we try to do is to say, what happens if people are buying food and it’s being grown right downstairs, and their energy is being generated here, and they’re getting on the train instead of their car, or they’re using live and work to work at home. And they don’t even have to commute at all, all these different things that we’re doing turned out when they did it all, they came up with some number of tons of carbon dioxide. Then the people at the table said, nobody cares about tons of nobody knows what that means. So they brought in their artists from their art department at the university, and they worked with them to figure out this wonderful, easy to remember, beautiful thing, which is living in this project, this Via Sol project, will be the equivalent of saving 384 trees every month versus living in the apartment, building across the street.
Heather Weerheim (26:12): Okay. But how can, based on… I mean, that’s wonderful. It sounds great. Yeah.
Chris Velasco (26:19): Yeah. So that’s, I mean, that’s how much carbon it’s the equivalent of saving that many trees. As opposed to chopping them down, think about it another way we don’t like to ever be critical of somebody, but let’s just pick some other building in the neighborhood. That’s like cutting down 384 trees every month compared to us.
Heather Weerheim (26:38): Is that how you’re going to get people to leave.
Chris Velasco (26:43): No, but I’m super proud of 384 trees. That’s every apartment every month, not the whole project.
Heather Weerheim (26:50): Oh, every apartment.
Chris Velasco (26:50): This is when you move into your apartment, you’re gonna be saving 384 trees every month.
Heather Weerheim (26:55): Do you put that in the lease?
Chris Velasco (26:55): Just by living there? Yeah. We’ve talked about it. We’ve talked about it. What’s gonna happen is people walk in, they’ll see this big screen, and it’s gonna say, this is how much energy we’re generating from the sun. This is how much energy we’re generating from the wind. This is how many pounds of waste we didn’t throw into the incinerator it’s gonna be compelling.
Heather Weerheim (27:12): Oh, cool. I think you’ll get a great response from that. Right now you’re starting tours, Is that right? Via Sol is set to open?
Chris Velasco (27:18): Yeah. We’re having a tour this week. We had one before it was jam packed and it was really still, sticks, up there, but people wanted to get in there and see, you could at least stand in a room and say, oh, I love this it’s high ceilings. And you could get a sense of that. Now they’re gonna, the countertops are in and appliances are in and it’s painted and they’re gonna, I think they’re gonna freak out when they see it. It looks really great. Again, for people, this isn’t, everybody’s cup of tea. Some people, some people aren’t thinking about this stuff and that’s okay. But the people who have been thinking about this, they have no idea where to go. That would make a difference. They’re wondering what kind of toilet tissue will help the environment. Should I buy? Here’s a thousand decisions that we made and all you have to do is move in. That’s pretty cool.
Heather Weerheim (28:13): You’re talking a lot about marketing, as we’re discussing this, so that’s huge.
Chris Velasco (28:20): And we’re not too good at it. I mean, the truth is we’re not too good at, we don’t have big marketing budgets. We don’t have glossy brochures and that sort of thing we just never do.
Heather Weerheim (28:30): But they’re finding you, it sounds like there’s a need.
Chris Velasco (28:31): We do a lot of these kinds of conversations, not necessarily podcast conversations, but just one on, talk to people, say, here’s what we’re doing. You might be interested in that. And they tell people. And because like I said, for the people who are looking for this, there isn’t any other place like it.
Heather Weerheim (28:47): What could cities or the state, what could cities do to make affordable housing, easier to develop?
Chris Velasco (28:54): This is a huge question. I mean it has been called a national crisis. And this was before the pandemic and the pandemic, there were some emergency protections that came in to keep people from either having their homes foreclosed on them, or of being evicted from their apartments. And I think that those are just about to come off. This crisis that we had before going in is only gonna get worse. I think it’s a shame because so many, if you care about your fellow Americans, then you don’t want them to have to make a choice between rent or medicine, or food or rent. This is going on all the time with millions of our fellow Americans. And that’s one of the reasons I do what I do. But even if you said, I can’t think about that, it’s too much, I can’t think about it, then do it because it’s good for the economy. Because when people’s money is going only to rent then they don’t do anything else to stimulate the economy. And for better, or for worse, we’re an economy that is driven by consumption. And these folks who are millions and millions and millions of people in the economy, they can’t do anything except pay their rent. There’s no money left to stimulate the economy and billionaires don’t do it. It takes everybody, it takes the bottom of the pyramid to stimulate the economy. There’s been some data to suggest that we’re losing hundreds of billions of dollars in economic activity, because we don’t have enough affordable housing. So if you don’t want to do it for the single moms and the low wage earners then do it because it’s really good for the economy.
Heather Weerheim (30:43): You stimulate the economy.
Chris Velasco (30:44): Yeah, and sometimes I find it’s good to find, if you haven’t noticed, I like to find, a handhold for, anybody, this stuff works on either side of the political and I have to be able to find arguments that are compelling for both sides of the political aisle. Otherwise, you can’t do what we’re trying to do. You need everyone.
Heather Weerheim (31:03): You do, you really help put it in a perspective. Easy for people like me to understand. So I appreciate that. So then if a developer is going to do a project and they’re trying to decide if they wanna do an affordable housing project or a market rate project, what would you tell them?
Chris Velasco (31:21): Well, I think that again, the economy is starting to find affordable housing, actually kind of , a worthwhile investment from an investment standpoint, because its performance has been really carefully underwritten. So when you are using other people’s money, there’s a lot of microscopes focused on your project. And as a result, it’s pretty much bulletproof. So people are finding, all right, so I only make 5%, 6% on my money, whatever I know I’m gonna make that it is rock solid. Those people are gonna need those places to live for the next hundred years. And that’s a good investment. It doesn’t give me, 20 times, Silicon Valley kind of return on my investment, but I need something that’s stable and is gonna work. So I think the economics are starting to kind of come out about affordable housing and people wanting to make investments in it. But I think for developers and I think for developers there are folks who have managed to kind of verticalize everything to the point where they’re their own contractor, they’re their own architect, they’re their own and, and they can do projects and, make money. Because they are pulling every job in, and they can charge the maximum fee for each one of those to themselves. I think it ends up making a compelling business case that way. So as usual, there’s a policy here around affordable housing. It’s not giving us, all I can say about it is not giving us enough affordable housing. So if you are judging the policy on the basis of, is it solving the problem? It isn’t. Everybody knows this, so we need something else. That’s one of the ways that Via Sol comes in is because we used a new way of financing, affordable housing hasn’t been done before. And so what we’re trying to do is work with our friends at LISC who are a big national group to get the word out that this works, we can use this financing tool and it’ll expand the affordable housing pie. We’re not taking resources away from anybody else, we’re creating new resources to do this. That’s important.
Heather Weerheim (33:33): Do you think that there’s a community outside of Minnesota that you think does affordable housing really well that we could emulate?
Chris Velasco (33:43): Well Via Sol is in St. Louis Park and they have an inclusionary zoning ordinance there that has been working well now for many years. And there’s been kind of an epic battle going on around the country about inclusionary housing and, right next door in Minneapolis, they still haven’t decided to do it. So I often will point to St. Louis Park and say, here’s an example. If you want to build an apartment building in St. Louis Park, you have to make 10% of your apartments affordable. And it’s at your cost. That’s the cost of doing business in St. Louis Park. There are cities like Portland, Oregon, who say 20%, and I think that’s probably getting to be the upper end of what’s feasible.
Heather Weerheim (34:30): Okay. I guess, why is that?
Chris Velasco (34:34): Why is that? Because I think that the apartment buildings are not so profitable, that you can afford to take 20% of your profit earning units and make them affordable. Make them money losers somewhere between 10% and 20% is probably the right number. California uses the tax credits that every state uses, and then they do a big bonding issue and they create more but double what other states get on a per capita basis. And so they have been churning out quite a bit of affordable housing lately to try to catch up with their deficit. But no, I would say everybody’s falling behind Minnesota maybe was behind. I haven’t seen the recent statistics, but I think pre-pandemic, we were about 40,000 apartments behind.
Heather Weerheim (35:23): Oh, wow.
Chris Velasco (35:23): In other words, there were people standing in line for 40,000 apartments and that number keeps going up every year because we, each year we fall further and further behind. That’s not a good situation.
Heather Weerheim (35:34): No, no, we can definitely do better. One more question for you about the future of your housing development. So will there be more, will there be a 28th, large development you think, are you gonna keep going?
Chris Velasco (35:48): Yes. We’ve been talking to your colleague Spencer at Greiner about another one down in St. Peter, Minnesota. That, we’re kind of just doing the, all that hard work upfront that we do to try to make sure that it works. It Is in the process right now. And we have other cities that call us. We probably get a call every week. We love what you’re doing. Can you do it here? The answer is usually no because the ingredients aren’t necessarily there, but one of those, all it takes is a few of those calls. And then we’re working in different places and creating more communities like this, this particular one Via Sol happened that the stars really aligned. We are able to do more here than we often can do.
Heather Weerheim (36:34): Yeah.
Chris Velasco (36:34): That’s exciting.
Heather Weerheim (36:35): Well, I wanna know, when you say ingredients, what does that mean? Like a big enough spot to do , a big enough parcel of land or that you’re next to the light rail system or what is the secret spot?
Chris Velasco (36:46): Yeah. So an opportunity for what’s called transit oriented development. That’s what we did here. It’s more than just a light rail station because the bike trail also runs contiguous, a thousand feet along our property with us. You can be on a, you can take that downtown, never get on a city street. That’s pretty amazing. That’s a viable commuting, and a tool for people. Even in the winter, I see people out there since we’ve been working on this project, people with these big kind of snow tires on their bikes, and they’re all bundled up and going. So, I mean, Minnesotans, they’ll find a way.
Heather Weerheim (37:19): Yes they do.
Chris Velasco (37:21): That’s great, and then there are bus lines, four bus lines right around us. And so that, all together, really can reduce the dependence on the car. And then we’ve got a partnership going with Our Cars, another nonprofit in town. I don’t know if you’ve seen them, but you can kind of rent their car by the hour.
Heather Weerheim (37:39): Car sharing, Okay.
Chris Velasco (37:39): They are putting two electric cars that everyone can share on the site and plug them into the solar array to charge them. So they’ll be really solar powered cars. People can just spend seven bucks an hour. They don’t even need insurance or fuel or anything else and drive around in an electric car. So I think that’s gonna be great when you do need a car, then there’s one right there.
Heather Weerheim (38:02): That’ll be pretty cool. I’m excited to see how this all turns out. So do you wanna plug anything else about Via Sol or leasing?
Chris Velasco (38:10): Well, I mean, if people wanna learn more, we have a website for it. It’s vialiving.org. Yeah, vialiving.ORG. I think they can also find their way back to place in case they’re interested in what is our next big idea is going to be, because they’re out there and they’re coming. I also would say that there’s a tour, if you wanna come to the tour on Thursday, that information is up on the website or just come on out to the site at four o’clock and we’ll be taking people through. That’s Thursday, this probably won’t air in time. Right? To tell people about it.
Heather Weerheim (38:49): No, probably not.
Chris Velasco (38:49): But there’ll be another one. You’ll find it on that website. There’s something here for people kind of across the income spectrum. So we have opportunities for people that are lower wage earning households, and we have people that are, you know, really nice places for people who are doing well. And there’s something for everybody here.
Heather Weerheim (39:11): Yeah. And they just wanna do the right thing. Well, thank you for being so passionate about what you do and for saving our planet and saving some trees. That’s really important.
Chris Velasco (39:19): Thanks for reaching out to us, you know?
Heather Weerheim (39:21): Absolutely. You’ve been a great partner. So Chris, thank you so much for your time. And I think I could see another podcast in our future.
Chris Velasco (39:28): Okay.
Heather Weerheim (39:29): I think people need to know more about some of your sustainable efforts and how we can always do more.
Chris Velasco (39:35): Yeah, there’s never enough time to talk about it as I said so, and I never get a chance to really talk to people who are interested. So when I do have a lot to say, it’s all stored up.
Heather Weerheim (39:46): Well, here’s a great place for you, a platform for you.
Chris Velasco (39:48): Absolutely.
Heather Weerheim (39:49): Thank you. Thanks again, Chris.