economic development interview

Incremental Development: An Interview with Derek Avery

We first met Derek Avery at a Strongtowns regional event in Plano, Texas. Avery is a local developer and property tax consultant who has successfully pursued several small projects in the Dallas area. He was by far the rock star of the event, discussing the challenges of creating desirable urban form while protecting existing residents and neighborhood culture. We were interested in his approach and wanted to know more. As a Black developer who has managed to see both sides of the built environment (both as a have and as a have-not), he is the type of person who can shed some light on equity and incremental growth.

1.  Tell us a little bit about your work and life history. How did you come to development as a profession? In your previous talk, you’ve mentioned some experiences you had as a kid (living in areas with poor services, living in a sprawling suburb and taking the bus 2+ hours to church, experiencing homelessness) that really shaped your awareness of how a city and how neighborhoods function. What made you realize that you could play a crucial part in shaping the built environment? 

I was born in the Third Ward area of Houston, Texas and raised in Alief, TX. It’s important I mention Third Ward and Alief together because in development terms, our dependency on car centric development patterns is highlighted in my story. Third ward is a few minutes from downtown Houston, but Alief is over 30 minutes by car. My mother never owned a car, so we rode the metro bus to Church in Third Ward every Sunday, Wednesday, and Saturday. I honestly thought we were moving to a wealthy suburb, but Alief proved to be a diverse sprawl of low middle class housing and not well maintained apartment complexes. I love Alief for the cultural diversity, and I love Third Ward for the connection to my African American culture in the area. I always looked at Scott Street from the bus windows, but I didn’t understand why leaders didn’t seem to see the value in Third Ward’s revitalization. Alief had amenities like grocery stores, but they were accessible by car, bus ride, or a very long walk with intermittent sidewalks. Third Ward was close to downtown, but was lacking some of the basic amenities. All of my mentors growing up were in some area of real estate. They explained redlining and black flight to me which hit me in the gut. I attended Baylor University which introduced me to people with different backgrounds, and I learned how other neighborhoods had all the necessities.  My experiences as a child and learning how others neighborhoods thrived, made me realize my unique experience could help shape development patterns in many places. 

2. You’re from the Houston area. What made you particularly interested in the DFW area? What do you feel are the major similarities and differences in doing business in these two cities? This is interesting to us because Houston is well-known for having a totally different land use regulation system than the rest of the country (eg, no zoning). But both are Texas cities undergoing huge development and population pressures, so we are curious to get your insight on what’s different and what’s the same in the dynamics of these two cities, what’s working and what’s not working, because we are at a huge tipping point in Texas.

Dallas and Fort Worth were intriguing because of the economic segregation I didn’t realize existed until I visited a few times. I never planned on living in Dallas. Houston is my home, and I love my city. I felt a strong calling to Dallas. It felt like I needed to be here. I wasn’t always sure why because the past five years have been pretty rough for me across the board, but my purpose was stronger than some of my circumstances. Dallas and Houston are polar opposites but have some striking similarities. In development, zoning is the biggest difference between the cities. In Houston, it is pretty easy to build whatever and wherever one wants. It’s not a free for all like some think because there is still a process for permitting and inspections. Land use is not restricted to a strict zoning code. Dallas, on the other hand, has very strict zoning policy. Land use is heavily regulated. It’s an arduous process to build in Dallas if zoning needs to change on a piece of land. The needs of the communities in both cities are the same. Quality affordable housing is lacking in both cities and surrounding areas. The development boom is in the higher priced markets in suburban sprawl areas and high end luxury apartments. People are moving from all over because property is relatively cheap compared to northern and coastal areas in the United States. The economy is Houston is largely based on oil & gas, so as prices go up or fluctuate, it’s good for the Houston economy. Houston benefits throughout most of the city during economic booms. Dallas has a more diverse economy, so the booms and bust cycles are more insulated. 

3. The profession of ‘developer’ sometimes gets a bad rap, because at its core, the job involves taking and reshaping an urban space, hopefully to improve it but also to make a little money. Everyone wants development and infrastructure and better quality structures, but not everyone wants to see the consequences of poorly thought-out development, like the urban renewal fiasco. Because we study the reasoning behind development and infrastructure, what are the moral or ethical conflicts you seem to run into most commonly, and how have you been able to navigate them to be in a place where your performance is consistent with your “5 values”? Are there or have there been times where this is really hard? What have been your barriers to the type of development you want to pursue?

The moral and ethical challenges are always there in my experience. Sometimes I do not mention what I do for a living initially when asked because of the awkward cringe when developer is mentioned. Ive often times felt the need to over explain my moral and ethical standing to avoid the quick judgment.  I’ve grown to be more comfortable in this industry.  I have built a reputation opposite of the stereotypical developer with actually practicing our values. It’s not always easy because we have to remain profitable to continue our mission. One of the conflicts we constantly see is in creating mixed income neighborhoods. There has to be a catalyst to spur development in a historically underserved neighborhood. We decided to build a new construction in a neighborhood of vacant lots, older houses, some maintained homes, and homes in disrepair. We studied the area for a year to understand why no one was building new homes aside from the local non-profits. Builders were scared to take risk on a market rate housing because there were no comparable properties, and they didn’t see a market in the area. We realized there were many people originally from the area who wanted to move back. The issue was there was no supply of mid-range housing for a middle class buyer. We saw a huge opportunity, but we were apprehensive because we were tip toeing around typical pattern of gentrification. We really had to pause to work through the optics of how we would be perceived. We were not interested in displacing current residents, but we also knew there needed to be more rooftops to bring in more commercial amenities. We were received with mixed feelings which were really tough on us because we know our hearts and long term objectives. We quickly began working our low cost same quality homes, and offered property tax consulting services for local residents near new development to prevent displacement based on higher appraisal valuation. The main barriers have been getting buy-in from the city and the current zoning policies.  

4. What in your opinion constitutes small and incremental development (as opposed to big and fast development) and what attracted you to this model? The concept of starting with little and modestly sized projects makes me think of E.F. Schumacher’s book from the 70s, “Small is Beautiful: Economics as if People Mattered” which was a call to make the scale of economic activity fit human needs and relationships, and not the other way around. He says in the text: “Economic incentives are good servants and bad masters.” Do you find this to be the case? 

I was attracted to small incremental development because I’ve always been fascinated with Black Wall Street which was in the Greenwood neighborhood of Tulsa, Oklahoma.  O.W. Gurley traveled to Oklahoma to create a development for African Americans, by African Americans.  At the time he had no choice but to develop incrementally along with other developers.  They created an entire community which was self-sufficient by developing incrementally as a team.  For me specifically to get started in development I had to do it incrementally because of the lack of resources.  Now that I understand both sides of development, large scale and small scale, I would still choose this same path because it’s more profitable for the community at large and for our city partners. 

I believe that economic incentives are a double edged sword because cities use them to attract large developments and developers but they end up costing more money that the benefits the incentive provides.  If economic development departments of cities spent more time investing in incremental developers and development, then more people from the local community would have increased economic opportunities.  Also the city’s tax base would be more diversified and profitable.  

5. What is your main motivation for your extensive community engagement, and what is your process? In particular, we were struck by your efforts to hire locally, and to loop in members of a neighborhood usually considered untouchable or undesirable by the development community (eg, people experiencing homelessness working as guards on your job sites) and by your desire to activate the whole community and get everyone involved in revitalization.  Are there other developers, neighborhoods or partners you want to call out as being particularly successful at this? 

My main motivation is that I never wanted to do anything other than community development.  Every other career path that I ever thought about always ended in some type of community development.  I believe this is my calling because the purpose is bigger than myself or my company.  What I strive to do is engage the people in the communities that we are building in to be an active participant in the community’s revitalization.  Revitalization includes creating more economic activities for people within the communities no matter what they’ve been through.  

People that I would definitely like to shout out include Taylor Toynes of For Oak Cliff, Kevin Brown of Simply Custom, and R. John Anderson of the Incremental Development Alliance.  They are doing phenomenal work within underserved communities.  

6. In our own research, we see connections between historic redlining and the continued devaluation of black neighborhoods through other mechanisms. We are concerned that black neighborhoods both continue to be perceived as “high crime” even when the numbers don’t hold up, and that the disproportionate targeting of individuals of color inflates crime statistics in these neighborhoods (when similar crimes, such as drug use, happen just as regularly in white and affluent communities, but are not detected or tracked).  Does this issue of perception and of the territorial stigmatization of black neighborhoods concern you? 

The perception of crime and the idea of the neighborhood not appreciating as well as other neighborhoods is one of central issues that we face in developing in these areas.  In particular, Dallas, TX metroplex has had a booming real estate market for the last several years. However when you compare the difference between real estate north of I-30 and real estate south of I-30 there is a gaping hole between them that is all based on perception.  The topography of the land below I-30 is actually more desirable than the land above because it creates for better views and more interesting site development in my opinion.  Redlining is the main culprit of creating this perception because institutional investors have shied away from these areas based solely on erroneous statistics.  There are investors who have never visited Dallas south of I-30 making decisions which impact investments in that particular area.  This concerns me because it creates a cycle of poverty in Southern Dallas neighborhoods particularly made up of black and brown people.  This stigmatization also prevents black and brown people from moving back to these neighborhoods once they have left them because they don’t believe that they will be able to get the same value in those areas has opposed to other places.  

7. You’ve mentioned several times that historic preservation is important to consider in development. We are interested in hearing more about your thoughts on this.  We feel that historic preservation works best when it focuses on people and relationships first (not just preserving the structures of a certain age and architectural type) and that fundamentally it’s about respecting that someone’s memories and identity are tied into specific features of a place. Do you agree, and if so, what have you seen that sustains those linkages? 

One of the ways gentrification destroys a neighborhood is by destroying its history.  Some developers only look at the highest and best use of a piece of property.  They don’t take the time to learn the history of that neighborhood before making a decision on what type of development they want to create.  The best way to sustain linking the history of a neighborhood with revitalizing a neighborhood is by forming relationships with the historians of the area and using that history to guide the planning of the redevelopment of that area.  

8. What is your ‘dream’ project, an area, neighborhood, park, project, or whatever, that you think ‘if only I could get the capital, interest, and support together to make this happen, I would move on this right now.” Alternately, what are some specific projects you are really proud of?  

There is a piece of land in Southern Dallas that’s over 80 acres and close to multiple modes of transportation with exceptionally beautiful topography where we would like to create a fully self-sustained, zero net community together with other incremental developers. If I could raise the capital to create this community, it would be a major accomplishment of a dream.  

To learn more about Derek’s mission and projects, check out his company website. To see Derek Avery’s presentation on incremental development, download at the link below:

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