The murder of George Floyd in May 2020 and the Black Lives Matter movement have turned racial justice into a rallying cry for many companies. And for organizations that provide the fundamental service of housing, it’s paramount. Both the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) have launched initiatives to help members take action—whether it’s helping leaders foster a more diverse workforce, understand unconscious bias, expand their supplier network, or even create more equitable housing.
“When it comes to diversity and inclusion, a good portion of the industry is starting from the ground level,” says Sara Keene, director of member programs and staff liaison for the Diversity & Inclusion Committee at the NAA. “There is a big need for companies to figure this out—everyone’s looking for what to do.”
Cindy Joseph, founder of The Cee Suite, a New York–based talent management consulting firm, points out that the industry is all about relationships. “It’s very network- and referral-driven, which means that you typically work with people who have similar lived experiences, identities, and backgrounds. It’s harder to break in if you don’t have those connections.”
At the moment, the demographics of the business world are still markedly different from the country’s racial composition, especially in leadership roles. White people are 61% of the U.S. population, but they make up 81% of vice president posts and 85% of C-suite positions; nearly 93% of Fortune 500 executives are white. To get demographic data on their members’ leadership and management ranks, the NAA is conducting a survey and expects to release results by June. Existing surveys in related fields suggest there is plenty of room for improvement. In a 2020 CREW Network survey of 2,900 professionals in commercial real estate, nearly 60% reported that their workplaces were not very diverse, with 29% reporting that only 5% or less of their colleagues were BIPOC (Black, indigenous, and people of color). Just 2% of real estate funds are minority-owned, according to a 2019 Knight Foundation report.
Meanwhile, the rental market is racially diverse. According to Harvard’s Joint Center for Housing Studies’ “America’s Rental Housing 2020” report, despite the recent increases in renting among white and native-born populations, people of color and immigrants remain the major sources of demand for rental housing. People of color drove 76% of renter household growth between 2004 and 2018, while foreign-born households accounted for 30%.
Diversity, equity, and inclusion initiatives—referred to in shorthand as DEI—strive to increase the racial diversity of a company’s workforce—but also diversity of religion, sexual orientation, disabilities, and age, among other differences. These voluntary programs trace their origins to the civil rights movement. In the 1960s and ’70s, the landmark Civil Rights Act and the Equal Employment Opportunity Act led to the rise of affirmative-action programs in education and government. Over the past decade, DEI initiatives became increasingly popular in the private sector after reports from McKinsey and others showed how diversity was correlated with stronger business performance. In McKinsey’s latest report from 2020, “Diversity Wins: How Inclusion Matters,” companies with greater ethnic diversity were 36% more likely to outperform the least diverse ones.
“Diversity of perspectives and of experience is so important when you’re developing housing for people,” says Julie Smith, chief administrative officer at Greenbelt, Maryland-based Bozzuto. “It’s the right way to run your business.”
A thoughtful DEI strategy will address recruitment, hiring, and promotion, but also how products and services are marketed and developed. A first step is to do an audit to gain insight into a company’s current status: It’s possible to assess workforce demographics at different levels of responsibility, promotion rates, pay equity, and how decision-making is handled. One simple benchmark to consider is how a company’s workforce lines up with the demographics of the U.S. or of the local market.
“Representation is a decent starting point, but it’s just one part of the puzzle,” says Joseph of The Cee Suite. “What about opportunities to advance? Do you have better representation in certain departments?” Another important step is to align diversity goals with your company’s business goals and to set some clear targets. For example, you might try to interview at least two people of color and at least two women for every manager-level opening. Or you might find that there is a 20% gap in workplace satisfaction between able-bodied and disabled employees, and aim to close the gap by year’s end.
While quotas are illegal, it’s perfectly fine for companies to set targets and goals. Title VII of the Civil Rights Act of 1964, which prohibits discrimination and allowed minorities and women to enter fields from which they had been shut out, has occasionally been used to argue reverse-discrimination lawsuits. But that fear shouldn’t discourage companies from pursuing diversity goals as long as they aren’t exclusionary, according to legal experts. “Like any business activity, you’re going to have key performance indicators and targets, which you may not meet,” says Joseph.
The most difficult aspect of DEI appears to be the “inclusion” part. Diversity does not in itself ensure a culture of inclusion, according to the McKinsey report. Citing that 61% of survey respondents felt negative about the inclusivity of their workplace, the report concludes that “even relatively diverse companies face significant challenges in creating work environments characterized by inclusive leadership and accountability among managers, equality and fairness of opportunity, and openness and freedom from bias and discrimination.”
One strategy for fostering an inclusive culture at Bozzuto, which has roughly 2,800 employees in property management, construction, development, and home building, is a tradition that started about seven years ago—a regular community forum. About once a month, a dozen or so people gathered to share their personal journeys, allowing each other to see life through a different lens.
“At the time, we were still a regional company, but growing bigger, and we felt like it was important that we understood each other,” says Smith. The company hired professional facilitators to run the forums, who then trained company staff to take over. Those forums became large “Courageous Conversations” after the Floyd murder.
The latest iteration is a new program called “Belonging at Bozzuto,” which will train leaders in recognizing unconscious bias and eventually be available to all associates. The company also has six employee resource groups, including ones for Latinx, Black, and LGBTQ+ staff. To find out what is working well, the company uses the employee engagement tool Glint; similar tools include Great Place to Work and Qualtrics.
Among its efforts to increase the diversity of its staff, Bozzuto recruits at historically Black colleges and universities as well as state schools to find candidates for its internship program, and tries to hire 50% of its interns for entry-level positions.
“The challenge in our industry is—no surprise—we have more diversity in certain sectors at entry level,” says Smith. “But once you start getting into the management level, there’s almost no diversity. And part of that is having people who are prepared to take these jobs. So much of this is about succession planning.”
According to Smith, the company is working on creating a “jungle gym” instead of a career ladder for its employees. “If you work as a general ledger accountant but would like to move into a regional property manager role, what would have to happen?” she says. “A lot of it is proactive leadership, where you’re looking at the skill set of your employees and what else they could be doing. It’s about the long game.”
To aid its members, NAA has compiled resources, including an online course on unconscious bias, or unwitting stereotyping, which can affect workplace interactions. Last year, it launched a $25,000 grant program to fund promising DEI programs at member companies, with the hope that successful programs can then be adopted by others. This year, it also plans to host at least one virtual recruitment event to help members find candidates from underrepresented groups.
The NMHC, which held a half-day virtual conference on racial equity in February, will offer a “one-stop shop” toolkit developed by The Cee Suite to help companies diversify the “talent ecosystem,” including how to do an audit and ensure that succession planning is inclusive. Another NMHC toolkit by The Cee Suite will address supplier diversity and expanding relationships with business partners. There is no centralized database of minority-owned enterprises, making it difficult to find these firms. In addition, there are multiple certification programs across federal and local levels, and the process can be onerous, especially for smaller companies.
As Betsy Feigin Befus, NMHC senior vice president, general council and strategic initiatives, points out, it’s not just about changing organizations internally. “While it’s very challenging work, focusing on talent is the most understandable to people,” she says. “People are thinking more now about the power of industry-facing and externally facing efforts that really focus on equity—beyond talent.”
NMHC’s racial equity task force, formed in summer 2020, looked for overarching ways that the industry could have the most impact. Along with developing the talent pipeline, the group has singled out two other levers to help overcome racial injustice and promote economic inclusion. The first is providing access to capital and credit, which is important for startups and small firms. A second priority is doing business with a more diverse group of suppliers and leveraging discretionary spending—the billions collectively spent on property maintenance, legal, brokerage, accounting, and other services.
NMHC also is working with Enterprise Community Partners, a leading affordable housing nonprofit, to create a housing equity toolkit designed for providers of all asset classes of multifamily housing. It will provide a historical overview of how legally sanctioned activities such as redlining, in which the federal government color-coded Black neighborhoods and refused to insure home mortgages in those areas, has contributed to racial disparities. Case studies will show how to build and operate housing that contributes to upward mobility, and how high-quality housing can strengthen resident satisfaction and retention.
Says Anne Griffith, director of national initiatives in the Northern California market for Enterprise Community Partners: “We’ll be looking at the operational benefits of bringing an equity lens to this work and demonstrating the business case, as well as the social and historical importance.”