Modular Mindset: Tim Swanson on Rebuilding Communities, One Inherent Home at a Time

Video Version: https://youtu.be/kROn6MD5P78

In this episode, host Bo Kemp sits down with Tim Swanson, a visionary at the crossroads of design, construction, and community transformation. As the Founder and CEO of Inherent Homes, Tim is leading a movement to reimagine affordable housing through modular construction — creating a model that’s scalable, cost-effective, and deeply rooted in equity.

From major public-private partnerships in Chicago’s West Side to national conversations on the future of construction, Tim shares how Inherent Homes is addressing America’s housing crisis by changing not just how we build homes, but why.

Bo and Tim explore how Tim’s background in architecture and civic design shaped his entrepreneurial vision, the Cook County pilot that’s turning vacant lots into opportunity through modular innovation, why modular construction isn’t just a trend, but a potential revolution in housing delivery, what’s working — and what’s still blocking — progress in the modular space, from financing to public perception, the importance of mission-aligned capital, systems-level thinking, and breaking down silos between design, development, and policy, and Tim’s long-view vision of Inherent as a platform for community empowerment, not just construction. 

This episode is a masterclass in innovation, social impact, and future-focused entrepreneurship. If you care about housing justice, urban revitalization, or using business to solve big problems, this one’s for you.

Transcript

SPEAKER_02 0:00

Are you ready to grow your business, build wealth, and spark transformation in the South Suburbs of Chicago? Visit Southlanddevelopment.org today and sign up for our newsletter to stay connected, get the resources, and be the first to hear about the achieved time, where entrepreneurs, developers, investors, and change makers come together to ignite growth and opportunity. Don't just watch change happen, be a part of it. Join the movement at Southlanddevelopment.org and start building your legacy today. What if solving America's housing crisis didn't simply mean building more housing, but building more housing smarter? I'm Bo Kemp, and in this episode of The First Million Is Always the Hardest, I sit down with Tim Swanson, founder of Inherent Homes. We dive into how Inherent Homes is using modular innovation to turn vacant lots into vibrant communities and to rethink how cities tackle affordability, speed, and equity in housing development.

SPEAKER_01 1:15

Well, I appreciate being here with you, Bo. Uh and it's been wonderful getting to know you. So my name is Tim Swanson. I'm blessed to lead an organization here in the city of Chicago on the West Side. We fundamentally believe in building housing uh for everybody, creating better spaces for housing, creating opportunities for careers so that our communities can thrive on their own. Uh that's what we're all about.

SPEAKER_02 1:36

And so just give a little description of inherent homes and what you guys have been doing, how long you've been around.

SPEAKER_01 1:43

Yeah, yeah. So uh three different versions of how long we've been around. So over two decades ago, trying to work with Mayor Daly to do large-scale volume housing to support communities. Uh and it didn't get that far. Uh and so it was a it was a career spent kind of grabbing all the badges to become an Eagle Scout and what we needed to do to build a better Chicago. We have been pushing on this for about seven years within community, just understanding what working class families need, what the housing looks like, what the neighborhoods need, how we finance it, how we build it. And for the past four years, have been building housing out of a factory in North Lawndale. So we build high performance modular housing. So these are built, fully finished in a factory and then delivered to communities where we get working class families into first-time home ownership.

SPEAKER_02 2:25

And so you you have an amazing background to have decided to move into this space, and I think you're attacking some of the issues that are just critical to what needs to happen in not only this region, but in any region around the country. But I want to take you back to a little bit of your background. So tell us a little bit about how you grew up, um, your background, and what led you into this space.

SPEAKER_01 2:50

I love that. So uh I was blessed to be born into a big family. Uh blessed to be born to uh a uh multi-generational lineage of pastors. Uh I think my uh pulpit is out on the street, and I probably have uh too much profanity to make that count. So, you know, it's all right. Um that's exactly right. Yeah. So born in New Mexico, lived there for a while. Uh my dad uh took a call and our family moved to rural Wisconsin to serve a farming community, and then to the inner city of Memphis to serve uh uh another community. And throughout that, kind of growing up, it was always housing was always there, right? It was a parsonage, it was attached to a church, it was all those things, but it was a community that made certain that housing worked. Uh, what we saw, what I saw, was that people always came together uh because we're designed to be in community. And um, and so ended up heading to New York, uh getting a degree in economics, uh, working in the field of policy and architecture, and going back for architecture, right? Like gathering these pieces to figure out how we could build a better version of it. We know how to do it, right? Uh we are a brilliant people in a brilliant country, and we need to put those pieces together. And so it was chasing, like I said, all those pieces. Um living here in Chicago and then living around the world, sort of building uh practices in the Middle East and in India all around sort of that working class. Like, how do we create a path for our next generation?

SPEAKER_02 4:11

You had told a story earlier, a little bit about your experience living uh in Abu Dhabi. Um I'm curious to the how that influenced your thinking to what you do today and your experience in India.

SPEAKER_01 4:23

Yeah, yeah. It uh one of the things I like to say all the time is that when you experience how the world works and you have a heart for a city like Chicago, you realize there's tools that are being used in other places. How do we bring them back? Uh in Abu Dhabi, it was a realization that we had tens of thousands of people building these glamorous buildings, um, but living in the worst conditions. In India, when we built a city for two million people, it was an understanding that there was a growing middle class that had no place to go. And simultaneously, there was this outmoded model of let's just hope that if we have 10,000 people, 10 of them will figure out how to be plumbers. So let's build a trade school and a program. Um, it was blessed to do some work with UN Habitat on global migration and and and the realities of people moving into cities. You see all these tools working and you see them in culture and climate and communities where you have to leapfrog, you have to skip a couple steps in the book uh to catch up or or pass. And then coming back to Chicago, realizing that's exactly what Chicago needs. We can talk about like what is the next iterative thing? Like, how do we move the needle just a little bit? Or we could make some good trouble and sort of skip a few chapters on the book, sort of accept that there's learnings that are global and they're wildly uh uh uh uh relevant here in Chicago, but also in every city from a 2,000-person rural community to a multi-million person uh uh uh region.

SPEAKER_02 5:47

You know, it's really interesting. You talked about that in other episodes of this podcast. We've talked a little bit about how sometimes technology takes a place that was technology um uh barren and all of a sudden allows them to leapfrog places that appeared at least to be technologically advanced. Right. And sometimes it comes in the form of just technology, sometimes it comes in the form of policy or process. And it sounds like some of those things are experiences that you've had in other places. Is there anything you can kind of put your finger on where you think, hey, they got this right in this area, and this is something that I want to port and bring back to the market here in the United States?

SPEAKER_01 6:27

Yeah. One of my favorite stories about how that works, right? And it is technology and innovation, but sometimes it's like human engagement technology, right? It it is sort of lo-fi person to person. In Medellin in Colombia, right? Um, at a time it was one of the most dangerous cities in the world. 2% of its population was murdered every year. Um and like many uh uh uh communities, they had large-scale favelas. Uh, the average resident in the favela had no expectation uh that their home would be there the next day, right? Uh, because they were illegal, they were not structured, right, all those wonderful things. Um, but what leadership did there? They said, let's actually start by checking on you. So we're gonna stop by the Kemps every month for a year. And if you answered the door, by the end of the year, we're gonna give you a deed to that property. Now it doesn't meet code or regulation or anything, but it's now yours. Now we're gonna bring infrastructure to support you, right? So so now you're saying, oh, I have a place. I'm actually seen as a resident of this community. This is mine. And then what Medagene also did is they paired it with training programs. So they went to their businesses and they said, What do you need? You Colombian fabric is very high quality and people love it. Why aren't you making more of it? Well, we have old machines, people don't know how to run them, this and that. And they're like, okay, we'll build these bibliotecas, we'll build training centers within communities, we'll train the parents, the grandparents, the aunties, whoever the caregivers are, and then you're gonna hire them. So what the industry saw was I've got a workforce that is now getting trained. I'm now increasing my output. So that's great for the GDP of the city and the region. Um, but what also happened was that that mom or dad or auntie or grandma who got that certificate, now that 11, 12, 13-year-old said, Oh, if they got six weeks' certificate, now have a good job. What happens if I finish high school? No. And so it was this pairing up of let's actually provide the dignity of ownership and come alongside communities that have always existed. And let's train to build an economy that actually functions with it. So what you saw is this sort of systemic shift into uh ownership and collective, say, and power and also jobs, careers, opportunities that never existed. So uh there was this, you know, rising tide lifts all boats sort of attitude. That's exactly what was happening, right? And everybody benefited off of that. You see things like that happen, and then you come to a city like Chicago, a city that has uh just within the city limits over 2,000 vacant acres of residential land. You see significant systemic disinvestment. And it's this wonder like, okay, all right, there's ways to do this. Let's skip past the part where we we just hem and haw and sort of wring our hands. Let's actually go to the doing, creating the careers, partnering with community groups, uh uh building that housing stock and seeing that sort of bounce up uh that everybody on the block gets.

SPEAKER_02 9:15

You know, it's interesting. You didn't talk about this directly but indirectly, but you come from a family of pastors who've actually been on missions. So part of the reason you've had the experience of being able to see all of this is that you've lived in these places and you were out. And how do you think that both your uh uh life living with your family kind of on these missions um and your personal experience have really opened you up to different opportunities that you would not have had otherwise?

SPEAKER_01 9:46

Right, right. Uh it I couldn't be where I am without the uh that narrative, that story, that those learnings, right? Because those learnings were all about meeting people exactly where they were with what they needed and how they needed. It was about being of community, not uh above community. Uh that was so powerful. Uh and it was a uh a cadence of life lessons that taught that. Um even when I was an architect in Chicago and I was traveling abroad and called my wife and I said we should move. She said I was crazy, and three months later we were living in the Middle East. It was because there's like there was more out there for us to learn. I need to know more about the people that I'm working for. Um and we fast forward all the way to inherent now. So the legal definition of the word inherent is the right or privilege to invest in somebody else, right? And that's really important. And that that's that string of life lessons for me.

SPEAKER_02 10:34

So say that again, the right of privilege to invest in someone.

SPEAKER_01 10:38

Yes, right. So the right or privilege to invest in somebody else, right? So does my privilege to invest in other people with the skills, abilities, and tools I've been given. And you learn that when you seek community that comes together with whatever they have, you know, offering plates that had government cheese in it because that's what was available, or eggs or milk, there was this heart for whatever we have, let's let's do it as a community. And then you see that as you travel the world, right? You see communities that constantly come together.

SPEAKER_02 11:05

Yeah. It's interesting. So when you decided I'm gonna start inherent, um, did you start inherent with the thought I'm just gonna solve the world's problems? Did you start with the thought I'm hopefully gonna make some money out of this? You know, I'm gonna build an empire, maybe I can pass down to my kids. Kind of what was the combination of the issues that kind of ran across your mind? And there's not usually one answer to this of this is what I think I'm trying to do.

SPEAKER_01 11:30

Yeah. Uh it for me is the culmination of a series of uh career opportunities. So being blessed to lead very large architecture and engineering firms, or push the bounds on how technology works, do a lot of public policy work around the country and around the world, and then realize, you know what, if I put all this together, that's actually what we need, right? So uh housing is policy, economic creation is policy, uh, economic creation is housing, right? Like all of these are intertwined. We often think that to address some of these big challenges, we have to go deep on one of them. And what we find is you actually have to go deep on all of them. You have to make those circles bigger and bigger. When I set out to do this, what I realized was that I'm blessed to have a roof over my head, food my kids' tummies. Uh, and you know, we've come from nothing, we're going with nothing. So, how do we leverage that while we've got it? Uh, the very first homes and the very first uh people that we employed when we did inherent, it was all leveraged on retirement funds, kids' college funds, a mortgage on the house. And and there's the one side that's like, so in order to build working class housing, you have to leverage everything to try to make it work. And that's a negative. I see that as a positive, in order to prove that we're deeply committed to this, that we can do it. The legacy is you know, certainly there's a familial legacy. I I certainly uh look forward to leaving things to my family. Um, but what I look forward to leaving to my kids uh and to the future generations is that idea that we can actually do good and do well. We can build better.

SPEAKER_02 13:02

You know, um, and uh I'm just curious when you think back, um what are the examples for you of business opportunities that both did good and did well?

SPEAKER_01 13:14

Yeah, yeah, yeah. It is uh over and over again, we've seen sort of very successful organizations that understand that if they're not part of the community they're within, um, they have missed ups. And what we've also seen, we sit here in Chicago, uh Pullman was a phenomenal example of what it looked like to invest in your people, and a phenomenal example of what it looked like when you were actually just investing in yourself and limiting those opportunities. Um we've seen things like Habitat for Humanity meaningfully uh building tens of thousands of homes. Uh, and our wonder is the more that we can show that there's an economic viability to it, the more people will be doing it, right? There's there's really beautiful examples of building business for the wealth and building business for the purpose. I think that wealth and purpose aren't that far apart. Yeah. It's just how you define wealth.

SPEAKER_02 14:05

So before you launched Inherent, um, had you ever launched any other businesses before?

SPEAKER_01 14:10

Yeah. So uh uh when we moved back to Chicago, uh um was uh fortunate to work and lead a large architecture firm. Uh there was a moment when our family church on the west side of Chicago needed uh the their next building built. Yeah. And I was not in a place to do it. Uh, but when our twins were born, uh just over here, right on the lake, and and our daughter was born not breathing, I got a chance to spend two weeks with a little nugget on my chest looking at the lake and wondering what my purpose was. Um so the first business that we started was walking away from a career to build a family church, right? Um, and then the next business that we started was in partnership to build high performance, uh more future-thinking, factory-based housing. Uh, in that chapter, learned so many great things, but also learn where my center was, where my truth was in that. Um, and so it's been this sort of trusting that let's do the right thing. And when you do the right thing, the pieces come together.

SPEAKER_02 15:05

And you know, there's so many people you had an advantage of having been both an architecture and public planning to at least be in and around the space of development. But there are many people, many of our listeners, who are eager and interested in becoming uh real estate developers um and don't come from that background. And typically the way people get into this space is they buy a house and they redevelop the house either into a rental or they sell it themselves. Do you have any experience kind of in that market yourself? Has that at all been part of how you thought about the development of inherent? Or did you kind of go from building the family church, you know, to moving into this place and leveraging your experience to tackle a much bigger problem?

SPEAKER_01 15:47

Yeah. So after the family church, I ended up back leading another architecture firm here. Um and one of my last big projects in Chicago was Malcolm X College here on the West Side.

SPEAKER_03 15:57

Oh wow.

SPEAKER_01 15:57

Uh what was really cool about that was that I went to Malcolm X in the evenings to understand the reality of uh, you know, our fellow Chicagoans. Yeah. Uh not only how they move around within the space, but how they juggle multiple jobs and raising their children and sometimes other people's and still show up for a night class to make their life better. Um, that was kind of bringing all these pieces back together. And so then as we were doing that project, got to know the neighborhood and found a vacant lot on the west side that had been vacant for almost four decades. Wow. And municipally owned, right? So this was a piece of Chicago, quite literally two and a half miles from where you and I are sitting right now. It was a vacant lot, uh, and it had been in an otherwise hardworking block. And so then built a family house there. Uh and when we built that family house, and I used to joke with some of my friends downtown, uh, it took me longer to get a permit on that single family home than it took for a 30-story tower to top up, right? Yeah. And that was what that was like that next piece of conviction. I was like, well, if that 300 unit apartment building can go faster than just one house, what happens if we do 300 units across a neighborhood and not straight up? Uh and so it was like that was that moment, that impetus of like, okay, all right, we figured out how to do it. We, you know, we got the bruises to prove it. Now, how do we do a lot more of that?

SPEAKER_02 17:17

You know, it's interesting. One of the things that we have been actively doing with the work at the Southland Development Authority is taking people who say, Yeah, I want to, I'm an aspiring developer and kind of guide them. Because there's many ways to get there. One of the things that I've really counseled people a lot on now is if you could pick one area to get into, it's probably multifamily housing. Um but your business, which is not necessarily building multifamily housing, is actually another form of multifamily housing. And your analogy you just gave was a really important one because the same effort that it might take to build 30 stories up, if you can do it systematically, you can build 30 stories horizontally. Correct. Right? And and have the same kind of impact that you're desiring to have and all the same kind of economics and benefits that could come from it. That's right. But that is a heck of a challenge. And I'm interested in you telling us a little bit about what are some of those challenges. And I know you do a lot of work with the county, you've done most of your work in the city of Chicago. Um, we're moving you out to the south suburbs, so you're gonna be doing some work out there, but just talk through you know, what does it take practically to actually do that horizontal development um similar to what it be would be to do the vertical?

SPEAKER_01 18:33

Yeah. And and to sort of frame that, uh we we think about this all the time in the work that we do, Bo. We we say um we work with but for organizations and but for individuals. And what I mean by that is but for the ability uh to build housing, we'd be doing it, right? Uh some of the young entrepreneurial uh developers that we work with, but for the experience to do it, they'd be doing it.

SPEAKER_03 18:54

Right.

SPEAKER_01 18:55

Um and so for inherent, it was about all right, let's build the tool set so that that but for goes away and it becomes a yes and. How do you do one? How do you do the next? How do you do the next? So that's really important. Um there's a I'm gonna use a sort of a naughty word, but I think it should actually be a great word. Yeah, we've lost sight on housing as a commodity, as a volume-based thing. We started with single-family housing, uh, primarily because that's what our communities were craving. Uh the south and west sides of Chicago and South and West suburban Chicago were communities that had structural uh uh limitations to allow a lot of people into the world of housing. And so we heard that loud and clear. But what we also knew was that it takes all types, right? For some families, generational wealth through home ownership is I have a home that I own that I'm raising my children in and and setting them up for success. For other families, I finally have a phenomenal stable rental unit. Yeah. So now I'm not scared of the roof over my head. Uh my kids are sleeping well, so I'm setting them up in a different way for success. Um, it was an understanding that just because we can Build things in a factory, for example. That's not, that's not, that's not the secret, right? It's an important part of what we do. Um, but just because we can build more efficiently doesn't mean that everything is solved. Just because we can acquire land, uh, whether directly by ourselves or through community partners, uh, doesn't mean that we can actually solve it. Financing is a really important thing, especially when you're talking about working class housing. Major issue. Um contractors, subcontractors, right? Uh uh of growing workforce, like all of those things in and of themselves are monumental and they're they're challenges. They're sometimes sisypantean in our efforts to get them there. But what we've actually found is that by doing all of it, while it is kind of oh, you know, it's rough sometimes. Um, I believe that to manage risk, you have to see and control all the risk, right? Yeah. Um, and so by doing all of it, they sort of level each other up, right? By committing as an organization where what's considered an L3C. So eight states recognize that designation. It's a low profit liability. It's a low profit, limited liability corporation. Gotcha. It doesn't actually limit profitability. I want to be real clear about that. Uh, but what it does is right on my sleeve, it says that our mission is to transform lives, communities, and generations through the power of homeownership and thriving careers. So as long as I do that, then profitability is profitability. That's really powerful for us.

SPEAKER_02 21:21

You know, it's a real interesting point, and and this is one that people struggle with. You know, I say a lot within our own organization, which is also a not-for-profit, um, you there is no mission without money. That's right. Right. And so the idea that we're focused on ways to generate revenue is not in um uh juxtaposition to our mission of creating growth and value, it's actually in service of that mission itself.

SPEAKER_03 21:48

That's right.

SPEAKER_02 21:48

But that's not always evident to everybody that's involved, and that that does have at times, you know, various conflicts. How have you had to manage through those instances where the need to demonstrate that you can generate a return stands maybe not in direct contrast, but requires you to make some compromises on service or vice versa. Right. Right? You yeah, the service is so critical. And I'm gonna lose money to do this, but I need to demonstrate the impact of this service because I think in the long run, it's gonna help me generate the revenue that I need to be able to continue to do this.

SPEAKER_01 22:24

Yeah, yeah. For us and for me personally, it's it's firmly in the latter, right? It it was this understanding that the authenticity of the work that we do, um, it is the hardest thing to earn and craft and the easiest thing to lose. Um and so there were a number of times over the past few years where there was an easy answer, and it would have helped with the liquidity, it would have helped with stability, it would have kind of let me sleep a little better at night, but it was then antithetical to the work that we're doing. And so, would have actually slept better at night, would it actually have depressurized? Um, that sort of that crucible uh for us was also really powerful because what we saw, and you had mentioned we we are really fortunate. We have a partnership with Cook County. Um, and Cook County has been wildly innovative in this partnership, a realization that a municipality doesn't need to put a ton of money into building housing, they just need to create new vehicles to revolve those dollars. Um, we have that relationship because Madam President Preckwinkle and her team saw the authenticity that there was no selling out to do this work and that we were in it for the big thing. We know um that to meet working class families with housing, um, that has to be at volume. I can't make a nut on one house, right? If I'm trying to solve it on a per unit basis, uh, well, gosh, then my sales price is here because it has to be to keep it going. I know that had to be wide and it had to go that way. And so so many of those points, I think it was 2023. Everyone, everyone that works for us, we have over 40 employees uh right now on the west side of Chicago. Everyone's a W-2, everyone has full benefits. Our entry-level employees, if they got together, could buy the host house they just built. For us, that's if we don't do it, then I'm extracting in order to sell it.

SPEAKER_02 24:04

Old school Ford model.

SPEAKER_01 24:05

It's the old school model. That's exactly right. But when we think about, and you asked earlier, some of the great organizations that built uh the United States of America believed in that idea, right? The Ford model that who's gonna buy this thing if my line work, I can't buy this thing, right? There's a logic, there's a simple business logic to it. Um and so we knew that that was the case. We knew we had to structure it that way. In 2023, um, I think 39 of the 52 weeks, I had no idea how I was gonna pay make payroll the next week, right?

SPEAKER_02 24:33

That was real. That's a reality of almost every entrepreneur.

SPEAKER_01 24:36

That's right. And at the same time, you're like, all right, because you know, I'm gonna live to fight another day, and we never missed a payroll through all manner of things that we didn't expect, through all manner of partnerships, relationships that saw the authenticity and saw that we weren't straying from this big vision.

SPEAKER_02 24:57

This isn't an ad, it's just our experience. At the Southland Development Authority, we've spent the past five years growing our team. And time after time we've turned to LinkedIn, not because we had to, but because it works. It's where we found people who share our mission, our energy, our commitment to the community. For a small but growing organization, it saved us both time and money and connected us to the talent we might never have found otherwise. If you're looking for the right people to help grow your business, I can tell you from experience, LinkedIn works.

SPEAKER_00 25:33

Your listening to the first million is always the hardest. We are now returning to the show.

SPEAKER_02 25:38

Let's talk a little bit about what it is to run a business because um, you know, I've been an entrepreneur like you, and it is impossible for anyone to be in the space of entrepreneurship and not be in a position where you are worried that you will not make payroll. Right. Many, many, many times. Um, you know, I've had many people who've worked for me and we've had thirty-five thousand dollars of cash in the account, and I'm like, we need to go hire this person today. There's no money to know we were gonna hire this person today. And there's a mixture of kind of belief and yourself, a little bit of a delusion that you have to have, hopefully a little bit of luck, yeah, um, and a lot of uh I guess really confidence isn't quite the right word. Um to some degree, I think there's a bit of just kind of giving yourself over to the process. That's right. Um, and belief and trust in what you're doing that you've had to go through. But to the degree that you're comfortable, talk a little bit about those moments that were kind of harrowing for inherent as you were developing.

SPEAKER_01 26:38

Right, right. And and i you hit the nail on the head for any entrepreneur. This is the reality. Um is it confidence? Is it sort of certainty? Is it trust in process? It's all of those things, right? Uh and you know, even on the hardest days, when when I see a workforce kind of heading out because they had another day without rain or snow, right? Like, okay, so on the workforce side, that's worth it, right? Um you get to pay those people. Yeah, I get to pay those people.

SPEAKER_02 27:03

They take care of their family with the work that you do.

SPEAKER_01 27:05

That's right. And then those moments, gosh, about a month ago I sat with a Chicago public school high school teacher as we closed on their house, right? It was like, okay, so there's a market for it as well, right? This is those are those things, right? You you as an entrepreneur, you have those wild ideas that I think the market needs to work this way. I think this is what it actually needs. And I'm gonna bet, you know, I'm gonna pot committed to actually do it. And even when you're not realizing the returns on that, but you actually see the uptake on it, the celebration, the need that the the um the vacuum that existed, that these things are being sucked into, you're like, okay, all right, so this is worth it. We're gonna fight another day, we're gonna move another day. You know, the number of times where it was a credit card offer and an envelope sitting on my desk at home that was a credit card that was cashed out to fund things was not because Beth, who's my best half uh and best friend, um, married to her for over 20 years now, we knew that we were in it together. And we knew that we believed in this bigger thing, we trusted in this bigger thing. And so we were doing everything. There were uh we were just reviewing uh the past couple of years as we look at the next few years, the times we were like, I just put$117.14 in the business account because that's what I had, and that just covered the thing that I needed to do. Um, over and over again, it was like that. And also, um, when when you know deep in your gut that you've got a business that makes sense and that's worth pushing, um, there's not a hesitation in those. There are none of those moments, time and again, year after year, none of those moments were like, all right, you know, I'm done because this doesn't work.

SPEAKER_03 28:38

Yeah.

SPEAKER_01 28:39

It's all right, I'm done. Okay, I gotta wake up and go do it. Do you know what I mean? You got like I'll I'll check myself because I passed out on the couch at you know at six o'clock, leaving everything on the field, and the next morning you're up and at it again.

SPEAKER_02 28:51

You know, there's something um in that process of being an entrepreneur, there are typically five reasons that people um are afraid to take this step to do what you did in creating inherent. Um the first two are the ones that everybody knows, which is money and time.

SPEAKER_03 29:06

Yeah.

SPEAKER_02 29:06

Right? I don't have enough money or I don't have the time because I'm committed to something else. The second two are ones that people also inherently get, which is uh self-doubt in one form or another and fear.

SPEAKER_03 29:20

Yeah.

SPEAKER_02 29:20

Right? Um I'm not sure if I can do this, I don't have enough confidence to do this, I'm uncertain about my capacity, um, and I have a fear that if it doesn't work, kind of what happens to me. But the fifth is what you kind of mentioned a couple times, what I want to go to, and it's the one that most people forget. And it's their partner. Yeah. And in most people's case, their partner is a loved one who they are you know living with, married to. Sometimes it's somebody they take care of, a child or an a an adult. Um, but this is the area that I find that most entrepreneurs don't do enough prep work up front to say Beth, I know we only have$120, but I need$117.14 to put into this account today, and I need to make sure that you're okay with that. Yeah. What was that process for you in going through that fifth version of this? How did you engage your wife, knowing that you have had a phenomenal career in architecture, you've traveled around and lived around the world, yeah, um, and you made the decision I'm gonna come back and invest in this industry? We're not only am I gonna start a business, I'm really gonna create an entire industry that doesn't exist.

SPEAKER_03 30:33

Right.

SPEAKER_02 30:34

Um, and so there is no playbook.

SPEAKER_03 30:35

Yeah.

SPEAKER_02 30:36

Um, and I don't know how much we're gonna risk, maybe everything. Um, what was the nature of that conversation? What did you do right? What did you do wrong?

SPEAKER_01 30:43

Yeah, yeah. Um well, let's start with the right because that's a shorter list than the wrong. So we'll go over it that way. Um what has been amazing in our relationship, right? It's just an honesty as to what we're about. Um, I know what Beth is about, and she knows what I'm about. That's why we got it, you know, and got together. We knew what each other was about. So when I started talking about this with her, it wasn't a hare-brained idea. It wasn't a scheme, it wasn't anything like that. It was truly like you've always been about this. So this is the this is sort of like the the most distilled essence of the the man I married from her perspective. Gotcha. Uh, and she's a brilliant artist and a painter. And I see that in her, the conversations we've had as she's gone on her journey. Because what we both decided was this is the perfect time to go start our own journeys together and and and live our best version. Um, and for both of us, it was like, this doesn't make sense. How are we going to keep things afloat? But we know we're doing we're doing us authentically. And and I'll sort of jump to today. I'm watching her thrive in ways she never imagined uh because she knew that no matter how hard that was, I'm backstopping her. Yeah. And vice versa. She she gets to watch me thrive because she knew that those hard decisions that when I asked for the$117.14, it wasn't a spur of the moment. It wasn't, yeah, it wasn't flippant, right? It was deeply considered and weighed, and deeply considered and weighed also with the value of our household and our family.

SPEAKER_02 32:11

Well, you also made these decisions in the context of actually having children already. Right. And this is another reason why many entrepreneurs say, I can't do this, right? Not only do I have the responsibility of taking care of a wife or a husband, but I also have children. And all of that you decided, yeah, you know what, this is the time for us to live our best lives. Yeah. Kind of walk through that just because this is one of these areas that people I think underinvest in. Yeah. And as a result, when times get hard, because they inevitably do, um, that ends up becoming a strain not only in the business, but a strain in the relationship, and that kind of doubles down the strain in the business.

SPEAKER_01 32:48

Right, right. So when when I jumped off fully into this space, our eldest was eight, uh, and our twins were three.

SPEAKER_03 32:57

Yeah.

SPEAKER_01 32:57

Um, which in and of itself is that's nuts. I have twins as well. Yeah, right. It's it it's a crazy time. And what we also knew is that doing this at that, so it's a crazy time, but it's such a formative time for our kids. And so there's a version, uh, as you touch on, like, I've got kids, I can't do this, right? Um, but in the world that we live in, our response was we have kids, we have to show them what this is. We have to actually show them what it looks like to bet on yourself, what it looks like to be together and in it, what it looks like to do something that is meaningful to other people, right? So, so for us, it was it was the worst, best possible time to be able to say, all right, kids, like this is, and especially for our eldest, like this is gonna be bumpy and this is gonna be hard, but for all the right reasons. Yeah. Um, at the end of the day, and this is a this is a thing for all entrepreneurs and all people in relationships and all parents, right? Um, I find myself, I'll get to the end of the day where there's nothing left in the tank for Tim. Um, but if there's like 1% left in the tank, it's going into the kids, it's going into my partner, it's going into us, right? There is a uh a separation that you have to do between the tension and then whether or not you're an entrepreneur, whether or not you worked in just the office building just next to us, there is a really important relational thing that I've got to I've got to separate that noise a little bit. I've got to be real for our kids. And so as we're doing this and as we're on this journey, we're also our twins are now five. They're doing kindergarten on iPads in our basement, right? And what was so powerful as we watched that, so like we're now adding layer upon layer of like what could go wrong. I remember with Beth, we were sitting on the couch laughing and crying because we heard the joy and energy in our kids' voices as they were on this like Zoom kindergarten class. And we heard fear and uncertainty in the voices of other little fifth grader uh five-year-olds in that same calls. And and it was this sort of like joyous laughter and crying of like, okay, we've created a safe enough space for these humans that they don't see these as existential crises to themselves. They see these as they see themselves as loved, taken care of, and a general attitude that, you know, if we lose our house, we don't lose each other. Yeah, if we run out of money, we don't run out of each other, right? And and and that fifth thing for entrepreneurs, that that's make or break, right? Whether that is make or break relationally, uh in your own uh uh, you know, familial unit or friend unit. Um, but it's also make or break for the business, right? No question. If I don't have that, if I don't have that love that kind of can overwhelm me, uh um then you know that then I don't have the thing to take back.

SPEAKER_02 35:36

I uh you know, I think it's hard. Everybody thinks they have love, but you know, the divorce rates kind of prove that maybe it's not quite there. But it's the not having the conversation and and not engaging in a level of investment of understanding what the fears are of your partner and what the concerns of your partner might be. And some of that is a function of how you grew up. You know, um everybody's got hopes and dreams. That's right. You know, and you don't know to what degree your partner's experience of maybe not having certain things or watching their father or mother lose a business impacts how they view whatever risk you may take. That's right, unless you ask the question. And yet you may be aware that this happened in their life, but you may not be aware of how they've processed that.

SPEAKER_01 36:22

The implications of what they're doing.

SPEAKER_02 36:23

Right, and how they view things today on the basis of that. And that's part of the reason I bring it up in these conversations is to really highlight the importance of that level of engagement. But the same goes for you. You know, the experiences that you had growing up, I you know, I know a number of people who are preachers' kids. Yeah. Um that's a tough gig. Yeah. You know, so when you were little, what were your dreams and aspirations? And how did those dreams and aspirations of your childhood get translated or not into what you're doing today?

SPEAKER_01 36:56

Right. Uh you're touching on something really important as well in in my story and a lot of pastors' kids' stories, right? Uh, you're a little kid that's carrying the full weight of the person up front. Right. Uh, and I know uh plenty of little ladies in my life when I was a young kid who reminded me that constantly.

SPEAKER_02 37:14

All the time.

SPEAKER_01 37:15

All the time. Um, and what I also saw was people coming together and people supporting each other. And so there was the complexity of what that was, but I also knew that the roof of our head was because of that, right? Uh, that was a reminder to me. And so for the for the struggle through those things, there was also the good.

SPEAKER_03 37:31

Yeah.

SPEAKER_01 37:32

Um and, you know, a lot of complex life pieces in early childhood sort of led to this, all right. Can I be four people or am I gonna just sort of wallow in the stress and the frustration of it? Um, both of them take energy, one of them fills your battery and the other one depletes it, right? So, like if I wallow and gnash teeth because of that childhood and that experience, um, I'm just gonna get stuck in a I'm gonna get stuck in a sad cycle there. Um, if I celebrate the wins, no matter how small they are, if I find joy in those little things, for me, that's just a way better way to live. And it's it's not easy and it's not and I can't and I firmly know that you can't just say, like, we'll be happy and deal with it despite circumstances. I get that piece as well. But it's an act of sort of every day is the day that you've been gifted and given and how you're gonna use it.

SPEAKER_02 38:22

Did you think you would be a preacher also? Because you come from a line of preachers.

SPEAKER_01 38:26

Yeah. I wondered if I would, you know, you know, as that little pip squeak that was eight or nine years old, you know, with his little tie a little too tight, uh, saying that's where I was gonna go, that's what I was gonna do. That seemed like the thing for me. Uh, but I was also really interested in how how the the social dynamic of it. Maybe, you know, certainly there's a faith dynamic to it, but I leaned heavily on the social dynamic of how people interacted, how in these small communities, how how things were done and taken care of. And and then I was always somebody who worked with my hands and always somebody who loved building things, creating things, imagining things. And so it was, it's kind of the same ministry, just a little bit different, right? It it's that same drive for if it at the heart of faith is coming together and believing in a big thing, the heart of community is the same, the exact same thing. And and so I leaned into the the latter there.

SPEAKER_02 39:16

But you weren't one of those kids, for example, who uh, you know, uh you could have, for example, put together in your ministry, you could have done all the music. You could have been the person that did that. That wasn't an aspiration for you when you were young. No, no, you weren't the one who wanted to actually put on the dance uh troop. That's right. That's exactly right. You know, what was it when you were a kid that you thought you wanted to be when you were little? Yeah. Not a preacher, but you were like, Are you gonna be a baseball player?

SPEAKER_01 39:40

I wanted to be a builder. Uh I wanted to be, I wanted to build. Uh, and uh, and and there's this idea, this theme of rebuilding and reinvesting. I wanted to build things, I wanted to make things. I thought early on in my career that the fruits of those childhood dreams were designing and building the biggest, fanciest, shiniest things in the world. And those are Those are fun. Don't get me wrong. Uh, but what I saw in that is like, oh, I'm missing, I'm missing the actual community piece, right? So what I originally thought that I wanted to be when I grew up, and then when I became that thing, um, maybe Bo, I I'd put it this way, that I actually became the thing I wanted to be when I grow up, way too young. Yeah. So then I was able to step back and realize, like, oh that's not exactly what I was looking for. Yeah. I I hit this a little too early and it's great, but I'm not gonna do this for the next 40 years. Yeah. Uh and I and and the uh the humanity layer of it is sort of totally abstracted when I'm thinking about things in the scales of 50 and 100 stories, right? Like, there's no human left in that.

SPEAKER_02 40:39

You know, there's uh this arrival fallacy, right? That you know, you have this dream of what you want to be, you get there and all of a sudden you're like, whoa, this is not what I thought it was gonna be. And there's a lot of emptiness that comes from that. That's right. Part of this podcast is about your uh mindset as much as it is about money and about business. And it's the idea that if you can kind of develop a North Star, and you're a planner, so you understand this, but people walk the things that they can see. That's right. Right? So that's why you have these towers that sit. You can see them off of in the distance, you walk in that direction. So we all need this goal of what we see in the distance. But one of the things that actually turns out to be more connected to happiness isn't necessarily reaching the goal, it's the progress towards the goal. And sometimes once you get there, you have this arrival fallacy of like this is not what I thought it was gonna be. But you did something that's really important that I'm an advocate for, is that it sounds like you reframed the opportunity. Once you got there and you were young and you said, All right, this is what I thought I wanted to be, but actually there's this new thing that's connected to it that I've reframed it into. That's right. How how did you go through that process of reframing when you got there early and you said, All right, no, it's this other thing that I'm really trying to get there. Yeah. Take us through that.

SPEAKER_01 41:58

Uh to jump into that, there's a a thing I love to tell students I'm blessed to sort of teach and to work with uh students, whether in high school, in college, in graduate programs. And a reminder is always like when you get to that place where it doesn't feel right anymore, then then kind of go back into your head and figure out what is the right thing that you thought you were gonna get there. And how do you use that thing? Right. So back to your reframing, it's sort of when you arrive at the place that you thought you were going, right? Uh and we do this when we travel as human beings. We're like we we set our destination, we get there, and we're like, this is not as cool as that last little town I just drove through. So I'm gonna kind of U-turn and go back, you know, 10 minutes. Sometimes it's going back. It's sort of arriving at a point and then walking back to find where maybe that last Y in the road existed. And let me go try the other road on there. That's really important. Uh for me, it was I've arrived at a point where I look around at my peers and I wonder if that's the path I want to have. Right. And there's nothing wrong with those paths, but for me, it was like I got a lot of, I got a lot of bandwidth left. Um, and so I'm gonna take the next step after that. Um, a a dear friend and a mentor of mine put it this way when when I did step away from that career, they said that there are folks that are uh aircraft carriers and there are folks that are fighter jets. And her analogy was that the fighter jets go out, they look at what's possible and they come back and they help guide that ship. And and the more you do that, the more you start to wonder why it took so long for the ship to turn.

SPEAKER_03 43:23

Right.

SPEAKER_01 43:24

We started this conversation looking at sort of those leapfrogs that happen in other parts of the world that we want to bring back to Chicago. And for me, that was a career piece was I could keep shifting uh the the this aircraft carrier a degree every year. And God willing, by the time I retire, it's kind of pointing in the direction that I think would be beneficial. Um, or you know, you you make those laps out and back and out and back, and then you you realize like I'm out, I have enough fuel to go back, or I have enough fuel to go forward. And and you you end up hitting that. So for the reframe for me was I have enough fuel to go forward. I don't know where I'm gonna land yet. I don't know what I'm gonna do next, but I do know that there's an ache um that this thing just wasn't quite accomplishing for me. It's it's a pivot to be able to say, all right, but but who am I? Right? Who am I in this? I achieved a thing, and is that thing me? Or is it just a mind?

SPEAKER_02 44:17

So that thing, what was that achievement for you in your mind?

SPEAKER_01 44:19

Yeah. So here in the city of Chicago, a world-renowned city for architecture, I was blessed to sit at the large firm round table. So these are the leaders of the largest architecture firms in Chicago. Yeah um, brilliant individuals. And I didn't see, I saw a lot of people that were twice my age, uh, and I didn't see a representation of the city of Chicago. Um, and that was a big wonder for me. So that was that first piece of like I I got to the mountaintop, and this certainly doesn't look like the rest of my city, uh the city that I love and that I grew up in. Um, I got to this place and I see folks that are they're, you know, they're in their sunsetting of their career, and I'm not in a sunsetting career, so I I have a very different take as to what we need to do or don't do. Um, I a big pivot for me uh was this idea that we as a city, the the architectural profession um does not represent the Democrat. We're not building a path uh for our black and brown sisters and brothers into architecture, for example, um, and a dialogue around in order to do that, we have to start, you know, an elementary school. We actually have to build that path. We have to partner with city colleges to do those sorts of things. And when I when I saw, to be frank, when I saw pushback on that, because that's not how we do it, because those are not the prestigious uh institutions, it was like, okay, then let's go make them right. And so that was a breaking point for me. It was like, all right, all right, I'm gonna do that, I'm gonna make a love letter to this profession, but I'm gonna do it and show what it looks like when it looks like that's awesome. The rest of us.

SPEAKER_02 45:43

You know, it's funny. I actually um, due to the Brady Bunch, my confession, yeah, I wanted to be an architect when I was a kid. And when I went to college, I actually started with architecture. But architecture, for all any of you who don't know, is exceedingly difficult. In fact, architecture is probably one of the hardest uh majors you could have at my university.

SPEAKER_03 46:05

Yeah.

SPEAKER_02 46:06

And in order to get into architecture school, you had to do your studio art classes your freshman and sophomore year, and then you apply um to get in and be accepted. But I played football. Yeah. And so I didn't have enough time to do all the studio art classes because I was uh practicing football when you're supposed to be outside drawing pictures of leaves or whatever it may be. Um so I'm uh I am a uh frustrated uh aspirationally an architect. Um but I I I I get it, your point about you were creating an industry. Right. And what you saw when you got there is that the industry is not reflective of the future. That's right. And so I'm gonna go and make it myself. And I want to talk a second about the idea of creating an industry, because it's not just that you started inherent homes. It's the fact that all the elements from what does the zoning need to look like for you know a modular home to um how do I buy that lot, how do I actually get the team of people who will put the product up, how do I build the product, how do I sell the product, the financing advice, who do I sell it to? Um all of those are different components that typically for uh you know the regular housing industry, there's entire industries for each one of those categories. In your instance, you essentially are vertically building that either because it's your choice, but even if it wasn't your choice, there's no alternative. Right. So just the concept of having to raise money where you're building a uh an industry uh at the same time that you're building a business has its own complications. And just take us through a little bit what that experience has been.

SPEAKER_01 47:42

Yeah. Uh in the world of architecture and in the world of studying architecture, uh there's a uh there's a word charrette. Okay. So charrette is it's it's it's drawing, it's great, it's it's a French term, right? Um and and it's about like the work involved and presenting that work. Um but where charrette came from in the world of architecture, it's the word for a cart that was pulled through the city. And how is that relevant to architecture? Because the masochism that comes in the profession is I'm going to present my work and I'm walking to class with my drawing on the back of a cart trying to do more, right? Like I am, I'm not stopping, I'm I'm grinding, right? So that's really important as we sort of jump into what we're talking about. Because there's this when you come from architecture, there's like, if I just have two more seconds, I can make it two seconds better. You know, like I I'm gonna use everything. Uh, what I saw was an industry uh that is really wonderful, but was missing where the future of it was going. I had conversations with folks um that dreamed, because historically architects were seen as uh, you know, what's called the master builder, the primary build. They they were the ones that conceived everything. And I saw an industry that was relegating the work of building, like the real physicality of what we were doing to others, right? And sort of sheltering back into uh to like what we could draw, what we could render, what we could model. Um and and that for me was like, okay, but but like let's actually build it. Right. Let's stop talking about it. Let's build it. In the world of public policy, then you look at that, and I was blessed to teach practicums at the University of Chicago because it was let me get policy students out into real challenges. So you could see.

SPEAKER_02 49:20

So you can see what it takes to do this.

SPEAKER_01 49:21

This is what it takes. These are the policy implications that you're making, right? Um, so I started to see all those pieces, right? We we are, as you mentioned, we've bifurcated an industry. If if you think about the zero-sum game of building, anything physical, every player at that table, whether it's finance, whether it's construction, whether it's development, whether it's government, whether it's design, et cetera, et cetera, et cetera. It's always and has always been seen as a zero-sum game. Bo, if you get a little bit more, then I got a little bit less, right? So we're all jacking for our slice of that pie. In the act of doing that, what us as a society and as an industry seeing is there's a whole pie that nobody is getting a slice of, right? Uh nobody can build for our working class. We haven't built meaningfully in almost 40 years, right? So we we have been underbuilding for way too long. I think longer than 40, but okay. Exactly. Right. That was one of those sort of funny tipping points where we were slowing down and then like the pain curve got past everything. Um, and then we didn't look at that and say, oh, we we actually need to fix it. We just sort of relegated to our corners. Uh real estate law went into the real estate law corner architecture into et cetera, et cetera, et cetera. And so what I saw when I got to the top of my industry was, oh God, we are a lonely island with a bunch of other lonely islands and we're playing uh, you know, uh radio and telephone between each other. Let's bring it back together. Uh, when we think about uh being entrepreneurs and we see successful entrepreneurs, it's the folks that say, like, why are these all separate? Why are these all broken? Why are all that together? When I do a house, and as you mentioned, we finance the house, we do everything. There, these are insanely uh high efficiency. They're smart homes, they're all the things, the best of what we have to offer. And when folks would look back over the past, you know, half a decade and say, Well, why are you doing it all? Right. What usually happened was it only took 10 to 15 minutes for like, oh God, you got to do it all. Right.

SPEAKER_02 51:10

Um, it is because if you miss any one step, you're not offering the value, you're not able to actually make the whole thing work.

SPEAKER_01 51:16

That's right. And there's there's nothing else that we buy. There's nothing else that we interact with where all those pieces weren't thought of together, right? Like you, when you decided to get a car, you didn't call up your friend who likes to draw cars and then find somebody down your block who could build it, right? So that doesn't make sense in a lot of other industries, but that's that's par for the course in real estate. So to build an industry was first to accept that there was a whole whole industry that was not being addressed. There was a whole pie that is bigger than everything else combined, right? Um there's a reality, and we see it time and time again throughout history, throughout society, uh in our country and every country, when people are stable and have houses and or at least structures that they that they can have a restful night on, those societies thrive. Um when you have larger populations of your society that don't have that, that are scared, that are staring at their ceiling, wondering if that ceiling will exist tomorrow, um, that is a significant mental suck, economic suck. Absolutely in the city of Chicago. Uh economic and racial segregation cost all of us two billion a year in gross domestic product. That is that is not political in any way, shape, or form. That is just the better we do it, the better we all do it. And and so that was now looking at how that industry was broken and saying, okay, well, what is the next thing that gets in the way? What is the next thing that limits a working class family, a hardworking family, from having that certainty? All right, let's go tackle that. All right, financing. Financing gets in the way for so many families. Let's go have that conversation. I think what we found is that by addressing all the pieces, um, you find partners in every one of those categories. We have bank partners that are like, oh God, yes, we'd love to do that, but no one's put all the rest of the pieces together, so we can't. We have municipal partners that are like, yes, that's exactly what we need to do. You're bringing the rest of the pieces so we can we can play our role. Um the magic, I would say, for this industry we're creating and this business that we've created, um, is that everybody has a place at that table. And everybody wins at that table, right? It's it's it's actually kind of crazy when you think about like everybody, if we do something right, if you do it right, um you're not extracting from any one person to make the thing work. So if everybody is winning, then you incentivize more people to get involved with it.

SPEAKER_02 53:33

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SPEAKER_00 54:10

Your listening to the first million is always the hardest. We are now returning to the show.

SPEAKER_02 54:16

One of the things that I'm gonna take license to tell a little bit of a story here that's important is you know, housing is foundational to everything that any uh municipality or region needs to do. And in particular, I have the belief, having lived in a lot of different places around the country, that the Chicagoland region broadly is gonna see a substantial uptick in population. That has not been the case for the last thirty or forty years. We're just starting to see a little bit of it. You see that population growth in the south suburbs, you're seeing a population growth in Chicago itself. Uh-huh. But I think it's gonna move. And I I've had the ability to live in places that went through that transition. Washington, DC area that's grown substantially New York, uh late 80s, early 90s, when it transformed. Um and I think that the kind of investment that you saw that redeveloped Chicago, uh redeveloped New York, redeveloped DC is what's coming to the Chicago area. But I wrote a an op-ed that was in Cranes where I specifically basically am making the argument that so goes the South Suburbs, goes the entire state of Illinois. And that's largely because what makes this area really interesting is that there is land available for development, that there's energy and water, which is not true in a lot of other places in the country. But most importantly, there is actually a very diverse uh workforce. And when I say diverse, I mean in all aspects, not just ethnically and uh, you know, but also with regards to skill set, with regards to income. This is actually one of the few major cities in America where uh husband and wife or two uh partners making fifty thousand dollars each can actually still live in the city. Right. You know, if you make a hundred thousand dollars, you don't live in almost uh directly in any city on the East Coast or the West Coast, but in Chicago you can. All of that is to set up this concept that we need more affordable housing and we need it all throughout the entire Chicagoland region. But the only place left to build affordable housing is the South Suburbs. And I I'll take back I'll I'll amend that because you're doing it effectively in parts of west uh side of Chicago and the south sides of Chicago. But these pockets that we're describing are where you can build that housing. And this is not just because you're trying to accommodate folks who need a uh supplement for housing, it's because without that population, you cannot recruit the next Amazon, the next Google, the next OpenAI, because they need to hire people at every income level. Right? It's not just the people that are making six figures, but at every level. But if you don't have people who can make$40,000 a year and live in proximity of the job, open AI can't come here and build a headquarters. And the work that you're doing inherent uh and the work that we hope to be doing with you with the Southland Development Authority is about building those units. I estimate that there's 10,000 of those units that are necessary in the South Suburbs alone. Um and my goal is to build a thousand of them with the Southland Development Authority. And hopefully you guys can help us build a hundred or so of those yourself. But that is all because if we build in enough density in proximity to transportation, which is another key asset, which we have in spades in this region as well, we can actually then supplement that dense uh new housing that's affordable and then bring in local businesses, right? Um that are you know not to the exclusion of uh of uh you know a Starbucks but a sip and saver, not to the exclusion of a Home Depot, but an ace hardware that have a bit more of a local focus and start to reduce the leakage of you know spending that happens in those communities, um, and in turn start to generate additional jobs. And all those elements together are something that we can do. I know that you're working on that in the communities that you're building. Yeah. Um and I know you fundamentally believe in what I just described, but walk us through kind of the way in which you envision the same thing happening in Humboldt and places that you're building as I'm describing that we are hoping to do in the south suburbs of Chicago.

SPEAKER_01 58:33

Yeah. Uh you're you're capturing this story so beautifully, and you're capturing why this industry needs to be created, because it's not any one of those things that makes the Chicagoland region phenomenal. It's all of those things together. Um I mentioned with Malcolm X College, that was an effort to realize that nine out of every 10 employees at a hospital are not a doctor. Uh and a lot of our world-class institutions here couldn't hire doctors, not because they couldn't find them, but because they didn't have the other nine people to make it work. Um, that's that's a reality as we think about this. Chicago and even the nearwest side here, uh, the West Loop of Chicago is the fastest growing community in the country and the highest net worth growing community in the country. And blessed to be the vice president of the chamber over there. We see it all the time. When we talk about population struggles in Chicago, it's a working class that is trying to find that home to live in, right? It's a working class that is needed to let the next Google or the next quantum computing facility or whatever it might be anchor here because it takes every aspect of it. We have both world-class educational institutions in the city, and we're finally coming back around that there's a whole host of career paths that include or don't include of those world class institutions. Um, so it's all of those pieces coming together. Uh the Greater Southland is exactly that, right? Uh, we have crisscross on infrastructure. Right over your shoulder is one of the largest freshwater reserves on the planet.

SPEAKER_03 1:00:00

That's right.

SPEAKER_01 1:00:00

And it looks pretty, right? Like and it's actually pretty great, right? So we have all those resources and it's a concerted effort to do it. Oftentimes we'll try to identify one or two of those per community. So what I see on the uh uh in our west side and south side communities is if I'm I'll just I I just have enough to do housing. Yeah, so I'm just gonna focus on that housing piece. Well, that's never gonna be sticky, right? Uh we talk about building virtuous economies. So all of our trade partners are businesses that come from the communities we work in, right? A, because that's the right way to do it. That's locable, right? And B, because if every one of them start to thrive within their communities, we don't actually have to do a lot in that neighborhood, right? We we just we we use our power to remove the barriers uh for other people to use their power in the neighborhood. Uh in at the Laurel Ward Village in West Humbold Park, two-thirds of the lots within two blocks of that elementary school were vacant. So we look at an underenrolled elementary school and we're confused as to why it's underenrolled. And across the street from the front door are five vacant lots. Population depletion. That's exactly right. Um, and so you start to see all these pieces, right? Chicago is really unique in this setting and the Broad Chicagoland area because it has thriving economies and growing economies, and we're not a one-trick pony, right? So we have so many overlapping industries that we can weather uh uh uh a lot of this stuff. And it's it's a it's a city of neighborhoods and it's a region of community. So we have those assets. And the thing that we have that so many of other sort of peer cities across our country or across the world don't have is exactly what you said. We have tens and thousands of uh lots that families could be on. We lost significant population over the past 30, 40, 50 years. Um, but we didn't lose the foundational infrastructure of the city, which means that we can repopulate it in a much faster way than most other places have. We do have this amazing natural resource in Lake Michigan right over there, but that's the only edge. I think besides that, the highest point that I've ever had to traverse on my bike across the city of Chicago was a bridge over train tracks, right? Like, so we have we have nothing limiting us in the other direction. So we have those as resources. We have a collar of thriving cities that are suburban uh uh all the way around. We're in a region that's rather unique. Uh, we continue to sort of reinvent ourselves, and that reinvention is really important. The greater Southland community, the 10,000 homes, um, that is not, I want to say this the right way, that's not aspirational. That's table stakes, baby. Right? Like we talk about these things, and maybe that's the other really important thing to think about. We talk about them as aspirational. When I talked with civic leaders five, six, seven years ago, they're like, well, you got to do one house in the neighborhood and then figure out what's going on. I remember talking to uh uh Mayor Lightfoot around like how many houses you have to put in a neighborhood to see change. And I joked, I said, well, one, and then you got to show up the next day, right? Like that is the that's the sort of Chicago way, and that's what we have to do. There's this misconception uh that we can we have to dip our toes in the water. And we're we're a region that makes no little plans, right? We rose up from the ashes, we built the parks, the Colombian Exposition, the Burnham plan. What that's our DNA and our fabric. Now, if we can do that for all of us, yeah, we we should be attacking at that level.

SPEAKER_02 1:03:10

I I fully agree with you. And and furthermore, and um not only should we be building a thousand, right? Um, but um what should happen is if we build our thousand, we'll go well past ten thousand. Because the only reason I'm building the ten thousand uh the thousand myself is to demonstrate that the financial calculation people have made about building is probably wrong. There's actually a bigger and better opportunity. Yes. Um, but you do have to kind of prove this out to folks and you're building this industry. I think one of the advantages that you have is inherent that we have as the Southland Development Authority is that by nature our mission is as important as I and so we should be taking risks that the private sector won't take. But the reason I'm taking those risks, and the reason you're taking those risks, is to demonstrate that their calculus is wrong to encourage them to follow back up, right? So we become leverage for them. By doing what we do, we demonstrate the capacity for them to do this even faster than what we're doing ourselves. Um but it's a tough road when you're building you know this industry uh from scratch. And I want to transition a little bit to just talk about what the future holds for you. Um and what how right now there are a number of companies in here in your space um because the the table stakes to enter are not as high as the table stakes to actually be successful, right? Um how do you manage that? Because you know, sometimes there's a reputational issue that doesn't come from you, but it comes from other players in your industry that are not performing in the same way or having other difficulties. How do you insulate yourself as a business from that and at the same time move the entire industry forward?

SPEAKER_01 1:05:00

Right, right. Uh what is interesting about this space, right, is that uh the vast major majority of folks that get into this idea of off-site construction, um, they get into it because they see how messy and broken construction is and how it could be better, right? Um and and that that is a a noble endeavor, don't get me wrong, right? But that is that's again missing the force for the trees. That's only one component of it. And so uh when you go into a space and you think like if I just fix this one thing, again, it's noble, it's uh you're exactly correct, and you fix the one thing at the broken table, you know, and still not fixed. It's still not fixed, right? Um, and so that has been a challenge. And for us, navigating that water a little bit to be able to continually emphasize uh uh the broader uh inherent, right? I remember, and I'll use as an example uh like a series of three articles written in Cranes about the work they were doing on the west side of Chicago. And the first one was modular factory to build houses. Right. And it was a great article, don't get me wrong. And six months later, community-based developer leveraging modular to build housing, right? It's like, okay, a little closer, a little closer. And the third article was reinvestment in communities through trade careers, ownership and opportunities, what lifts. And it's like, okay, there we go, we got there, right? As humans, we need that reference point. And so for us, the reference point had always been you're a factory like everybody else's factories, right? But we ran our factory different, right? So we have a factory, yes, because of all the benefits of speed and agility and volume. But we have a factory because if you're gonna build the next generation trade careers, um, then you got to do it in an environment that is a learning environment, that's a training environment, that's a certain environment. Um, it's gonna rain all weekend long here in Chicago, which means that if I were on site, I probably wouldn't get paid Monday or Tuesday. No, you can't work. Nope. I'm not bringing anybody into the trades when it's sort of, you know, catch what you can sort of attitude. We know that uh the more people that we invest in and employ, we have more people that want to join us than we can employ right now. Um, and that is a really unique thing to say in a in an industry that is sort of impossible to find talent. We say, yeah, it is. So make it, right? So so you start to tackle these pieces a little bit differently. Um, you start to think about, and and you were sharing this as sort of building the first thousand, uh, a mark of success for us in a couple of communities that we're working in. We're now getting feedback from our municipal partners that market rate developers are wondering why Inherent got all that land and they haven't got it. Because you didn't bid it. You didn't want it. That's right. And and and the exact response is, oh, now you care about it. And and what we say as an organization is great, we're out. Right? Like we built a market. You did what you were supposed to do. We stabilized for the families that have been in that neighborhood a long time. Now let the rest of the market play. Um, so in in order to build an industry, you have to you have to believe in this idea of seeding industries with a better version, right? Seeding to show that uh uh profits and purpose can be sort of uh they're commingled and they're actually attached at the hip so that more people get into the space.

SPEAKER_02 1:08:00

Yeah. Well, one one of the things that I do want to touch on is you know, this is a very difficult environment both to raise money and a very difficult environment to actually build housing. Yes. Um and we do face this maybe 50 year 60 year deficit of not building enough houses. I think technically they say that it was sometime in the 80s where we stopped building as many houses as we're needed for new people. But truthfully, once we got past the 60s and 70s, um which were the beginnings of the first suburbs, right? Um we stopped building housing at the pace that we've needed for for everybody. Um but we have two challenges, right? You've got tariffs, yeah, right, which have challenged the actual underlying cost of building, right? And then you've got the immigration, which you know, it's no surprise to anybody. Anything that you're building in the United States relies relies tremendously on immigration. And we can see it in the work that we're doing. Yeah that as we are buying and building houses, buying and building industrial plants and other things, it is a tighter market to identify all of the staff that's necessary to do this. How are you managing in that environment? How are these current policies impacting you?

SPEAKER_01 1:09:13

Yeah. Um a mentor of mine put it this way: Tim, you did the dumbest thing in the world by starting a business when it's incredibly impossible to do. Yeah. And you're brilliant for doing it. I said, Wow, that's what do you mean? And their point was just that when we set out to do this was the least easy time to do what we're doing, which means that we have no expectations of it being different. Um economic analysis from the beginning of the year said, you know, the thing that uh development and construction loves the most is deregulation and and opportunity. And the thing it fears the most is uncertainty and chaos, right? And so that's where we sit. Um when when I talk about the tariff side, it's a really interesting thing because it wasn't until December of last year that we were able to do bulk purchasing on materials, which is kind of funny, right? So there the as soon as these things were triggering, when my hot water heaters went up 20%, um, not because explicitly of tariffs, but they're coming, so let's just put the price where they are. Um, that was a reality, but I was now in a position to buy 15 hot water heaters, so I got 25% off, right? So I I've sort of navigated just on the tariff side of the uncertainty of the market. That's good. Um my whole business as an entrepreneur has been uncertain. So it's not uncertainty, isn't a scary thing, it's just a Tuesday, uh, as it were. Um, and that's been a reality. Now it's certainly a challenge, but the thesis around um building housing, anybody can get behind. I say all the time, I don't care if you're from the north, the south, the east, or west. I don't care the way you vote, uh, uh the way you worship, the uh where you come from. We can all generally say you put on a hard day's work, you should have a roof over your head, right? So so it's agnostic in that space. This other side, too, where we have a workforce, and and what's fascinating, at least for our workforce, we have so many members of our workforce um that are simultaneously fully allowed to do what they're doing, and and and they are residents of our country or they have work faces or whatever it might be, and scared for showing up on site. That's the thing that we actually have to carry right now. It goes back regardless of the category. The uncertainty is the thing that's complicated. And the chaos. And so our our projects over the past two months have slowed down. Um, not because we need to slow down, we actually need to ramp up, but because we're figuring out ways to best support our workforce and make certain they feel seen, safe, and supported. Um, that's a reality. Now, now on the raising money side of it, I think we're in another unique position where we're coming on a decade of a lot of people sort of, you know, compounding interest and making a lot of money and not seeing something worthwhile to put their money into. So there's a lot of money, A, sitting on the sidelines. Let's get there. Dry powder, as they call it. That's exactly right. So we see that as a reality. We also see in um what I love is when you mess with a city that's built by uh its citizens. I see the business community in Chicago and the Chicagoland area, the state of Illinois, Indiana, Wisconsin, the other communities that we talk with. We see that business community sort of like, yeah, these are broad shoulders for a reason. Yeah, right. We're in it to win it. We just three days ago got the keys to a brand new facility. Um, brand new to us. It's tripling our capacity, it's tripping, tripling our workforce. It's really amazing what we're going to be able to do. And that came in partnership with a family here in Chicago that said, let's bet on we're doubling down on Chicago because of what we see. So I sit in this space where, in fact, that chaos and uncertainty, in a space of chaos uncertainty, people seek opportunity and expectation. Right. We look for something that points past the chaos. Um, so when you're starting a business, everything is chaos, right? So this new chaos around us doesn't feel that new. No. Uh but what it but what we learn and what you learn as an entrepreneur and what you learn as a community investor is like, yeah, the chaos is there. So just what's right past it. You had talked about like, is it that sort of that milestone that you're getting to, or is it the journey along the way? It's the journey along the way. And then sometimes the journey is through the thing that you thought was going to be the thing.

SPEAKER_02 1:13:19

Yeah, no, I you know, you uh took a bet on yourself to create inherent, right? Um the county is taking a bet on you to help transform some of these areas that have been in deep need for transformation. Um, and now you found an additional family who is willing to take a bet on you to expand. Um, you're moving all in the right direction, and I'm really proud of the work that you're doing. Thank you. We intend to have you work directly with us as we also have hundreds of lots that are available in the south suburbs of Chicago, but really excited about the growth uh and the work that you're doing. So thank you very much for coming in and sharing this time with us.

SPEAKER_01 1:14:00

Bo, my friend, it's my pleasure. This is fun.