While the real estate industry is aware of the racial inequality that exists within its ranks, efforts to bring about change need to be “turbo-charged” to meet the urgency of the problem, according to Kirk Sykes, co-managing partner of Accordia Partners, LLC, and a former chairman of the Federal Reserve Bank of Boston.
Sykes, who is also a director at Aimco (NYSE: AIV), a former director at Ares Commercial Real Estate Corp. (NYSE: ACRE), a trustee at Natixis Loomis Sayles Funds, and an emeritus board member and former chairman of the Real Estate Executive Council, said that while steps the industry is taking to address racial diversity are “well-intentioned,” they are “not reflective of the urgency that people of color feel.” He added that efforts need to be “turbo-charged,” and done with a scale and urgency that “I’m not sure we as an industry have embraced yet.”
Sykyes also discussed the need to bring students of color, and others, into real estate. “As an industry, we need to reach out and find those individuals that may not normally be in our Rolodex or our sphere of influence and welcome them in to be part of our organization,” he said.
Failure to address the racial imbalance would mean losses in the form of clients, as well as the loss of diversity of thought. “We owe it to our shareholders to source the best and brightest,” Sykes said.
Sykes also commented on increased diversity as one way to address the racial wealth gap. “Diverse teams build better outcomes and more financially rewarding outcomes. The fact that people of color have been excluded from the real estate business is to the real estate industry’s detriment,” he said.
Meanwhile, Sykes discussed the key historical markers that have shaped Black ownership of real estate in the United States. Those include the suppression of ownership through systemic racism, including lending practices, in addition to the GI Bill—a major builder of the middle class that excluded Black people, he said.