Also in this episode
Reporter Daniel Schoenherr from the Cadillac News talks about his reporting on how Mesick schools is removing screens from its elementary classrooms, in favor of paper books. Read the story.
Most of the time when you hear about real estate investment, you hear about big banks or private equity firms, which are becoming some of America's biggest landlords.
One group in Emmett and Charlevoix counties is trying to reverse that trend.
It's starting a community investment fund with a focus on housing that would let community members in the tip of the mitt area invest in housing right there in their hometowns.
IPR’s Claire Keenan-Kurgan talks about it on today’s episode of the Up North Lowdown. Below is a transcript of that conversation that’s been edited lightly for clarity.
ED RONCO, host: What is this new investment fund that's starting up in the Tip of the Mitt? How did this idea get started?
CLAIRE KEENAN-KURGAN, reporter: The fund is called InvestMitt. It's a pun on tip-of-the-mitt and investment, as you might have realized. It grew out of conversations about how to finance affordable housing. There's a volunteer board that's been running the fund and developing the idea for the past six years, and Derek Shields is the board chair. His day job is working for The Little Traverse Land Conservancy, but he's been running the investment board for a few years now.
DEREK SHIELDS, audio clip: InvestMitt started with a desire to do something about the housing crisis. That's what brought us all together initially, and we started talking about asking, how do we actually finance more attainable housing? And that led us to the concept of community capital, where money is raised from within the community and then gets invested back into local projects.
RONCO: Community capital. OK, so, he gave us a little definition there. Tell us more.
KEENAN-KURGAN: A “community capital fund” is kind of like donating to a local charity or a local foundation, except with one huge difference, which is that you get money back based on the fund's performance. So instead of just giving money to help build new housing or to support new local businesses, you're actually invested in those businesses like you would be in the stock market, but it's in your home community. There are examples of funds like this across the country, mostly in bigger cities.
Shields described it as moving money from Wall Street to Main Street, meaning, what if some of that money that people invested into mutual funds went directly into their own town?
RONCO: So who is this designed for? Who can be an investor in this?
KEENAN-KURGAN: Shields said their goal is for the fund to be for a large swath of the community, not just for wealthier people who fit the mold of a traditional investor. The minimum investment is $500.
DEREK SHIELDS, audio clip: It's for those of us who don't think of ourselves as investors as well. We've structured the fund so that anyone can be an investor, truly focusing on the community, and this idea of community capital keeps wealth circulating locally. It's a seven year term of investment with either a 4% or 2% return rate, which is pretty modest and still has some level of risk like any investment. But it's for those looking to put some money in Emmett and Charlevoix counties directly.
RONCO: Okay, so how's it going? What are the organizers starting to think about for their first projects? How's it doing?
KEENAN-KURGAN: It just started up this winter, they just launched, and Shields said so far they have nine investors who have put in a total of $300,000 so far. They're hoping for an initial fund amount of $3 million. Their focus, as I mentioned earlier, is on real estate investment. That relatively low return rate could keep the housing more affordable than if some outside real estate investment firm were to be doing it.
It's still pretty early, but they're eyeing one locally-owned apartment complex with 24 units ... and this could keep it in local hands and keep it relatively affordable. They're also keeping the door open to expand beyond housing in the future. It could be an investment in anything in the local community.
This conversation is from the “Up North Lowdown,” IPR’s daily news podcast. Listen and subscribe through the options at the top of this page.
Producer: Austin Rowlader
Editing: Steve Junker
Music: Blue Dot Sessions
