An Interview with Alan Neff of 36Square

Home prices are increasing on the Eastside, making it less affordable for lifelong residents to stay put. Seeking ways to combat gentrification, Alan Neff and his wife, Martha, started a company. Their company, 36Square, has a unique approach to developing affordable housing.

What are some changes you’ve seen in the Eastside since you’ve lived here?

AN: It really went from all kinds of vacant properties and no one cared, and the City wasn’t interested. And a lot of people had moved away from generations of poverty, and crime and lack of attention from the City and really anybody. So, houses were abandoned and the change that has happened in the last two years has been dramatic. Now investors want the properties.

What’s the importance of legacy homeownership?

AN: It builds a cultural identity in the community when you have people that live in one place for so long. All the neighbors know each other. They know all the places to go around [here]. Their kids go to the same schools, from generation to generation. And there is pride in that. Also, an understanding what a community is. When you have just new people come or just Air B&B’s everywhere, there is no longer a community. People don’t know each other; they aren’t connected with each other.

How are the rising housing prices affecting the community?

AN: They’re pushing away all the low income, working-class, people of color from the neighborhood. No one is going to be able to hang on to these homes if they grew up in these homes. If a home was valued at 5 to 20 thousand twenty years ago and now they’re selling houses for 300 to 400 thousand next door to them. In some cases four houses in one lot and each one is 450,000, you now have a lot valuing at 1.6 million next to a house where someone owned it and it was 30 or 40 [thousand] so their taxes are gonna go up to 300 thousand evaluation instead of 40. Even if they own it outright they might not be able to afford those taxes anymore.

What are some solutions?

AN: The biggest (and hardest) one is changing the tax code at the state level so not all the burden is on homeowners to pay the state’s taxes. Without a state income tax, without businesses having to pay the fair share what taxes are worth on their property, it is falling on the backs of homeowners who have pay 100 percent of the evaluation price and that’s very difficult to support a school, educational system and everything else that has to be paid for. The burden is us, the homeowners.

Also, other aspects are making sure everyone knows what tax exemptions that they can claim, and make sure they have homestead exemptions, senior citizen exemptions, historic home exemptions. There is a list of things people can do to protect their taxability and then protesting.

Give an example/story of people being displaced.

AN: Yea, my neighbor across the street, who is my age. And she grew up in the home since 1996. Her mother owned it and she had 4 other siblings. There were about 7 to 9 people living in the home across the street. And the mother who had a good job and paid the mortgage all the time, well, she got cancer and died within several months. The children didn’t know she was about to pass and she didn’t have a will. And they fell behind on mortgage because of her passing. When she borrowed money to catch up the bank refused to accept her payment because she was not the homeowner. She was not on the deed. I tried to help her by finding a St. Mary’s volunteer attorney that help her with probate. You have to be an attorney to figure this stuff out. No way to inherit the property without going through probate which costs thousands of dollars she didn’t have. In the end, the bank foreclosed on the home, she only owed 12 thousand in the house. I tried to help her find someone to get the money to pay it off and completely, buy it and let her buy it back. The bank wouldn’t allow anyone to purchase because they wanted to foreclose because they would make more money. It ended up going to foreclosure on the county courthouse steps for 40 thousand dollars, it is probably worth 150 thousand as is at the time it was sold.

She just drove by one day and talked to me and told me she and her whole family were staying in a Rodeway Inn off of Perrin Beitel and 410 and she was having to get her kids to school but her car had broken down. And she didn’t know what she was gonna do because she can’t pay that weekly price. I had just bought a house a block away so I said, “Get out of the hotel and move into the house for 4 or 6 months and save up some money. We will find a new rental house.” She stayed for 4/5 months and was able to save up enough to get into a house in Spruce, which is in the neighborhood. Her children could go to the same school. She could walk to her job downtown. Not sure if she’s still in the neighborhood because now the house she moved into has been flipped and sold. It’s hard to find a rental house. It’s a tragic situation.

Tell us a little bit of 36 square?

AN: My wife and I started 36Square. Because my background is in architecture. Her background is in public and community health. She worked in government for many years and I worked in private architecture industry, designing, you know, very nice buildings for wealthy people and public buildings and great well-known projects in the city and we both saw ourselves like “where are we going, we are not helping the community at all, we’re helping government, are we helping anybody." In the private industry, we’re helping wealthy people develop expensive properties. We weren’t comfortable with that. My wife went to grad school and got her masters in social entrepreneurship. And in that, she did her capstone project on us forming a social enterprise in which we develop properties that include affordable housing and mixed-use opportunities for small businesses and incorporate healthy amenities into those projects. So it’s a holistic approach to providing affordable housing with opportunities for small businesses to open up micro-businesses or first startups or neighborhood-oriented little stores and shops. We want to have an urban farm in the center of a property we're developing across the street. So a community of housing and mixed-use all surrounding a farm. Where everyone is engaged with each other and engaged in the farm and is able to support or operate the businesses at the street corner and have it be a social enterprise in which some profits achieved from some of the market-rate housing in it offset the reduction in the prices of the affordable housing. And also help support the farm where everyone’s rent is supporting the farm as well.