Why New Avenue is doing what we're doing
Last week, New Avenue was awarded a Social Entrepreneur scholarship to attend the SOCAP12 conference. SOCAP is a unique event with a mission that can't help but inspire -"a conference series dedicated to increasing the flow of capital towards social good." It's a forum for impact investors, social entrepreneurs, philanthropists, civic leaders and innovators to exchange creative ideas and make connections to further their work. It is effectively a gathering of very smart people strategizing to make the world a better place, and we are thrilled to be included in this prestigious group.
As part of accepting this scholarship, SOCAP asked us to publish a simple statement explaining the problem New Avenue is addressing, why people should care and why good will come from making progress on solving it. It's an excellent request and welcome opportunity to lay out why we're doing what we're doing.
The New Avenue Mission
50 years ago the average American family could purchase a nice middle class home, in a safe desirable community, close to their job, for 1.5x the national median income. It is nowhere near as achievable anymore, especially in bigger cities. Now, the average American family has to spend 11x the national median income for the same lifestyle. Or, to get a more reasonable deal on a home at 3-4x national median income, you have to start looking farther and farther away from work, and spending much more in money on time to commute to your job.
The status quo forces a poor choice - sacrifice time spent with your family for hours commuting, or, sacrifice income you'd prefer to spend on leisure, save for your children’s college funds, or put into your retirement investments, to attempt to afford a house. Either choice damages quality of life.
Our answer is to eliminate the choice by re-introducing accessory dwelling units into the landscape of American housing. ADUs are backyard cottages or additions that provide a second independent living space on one property. Five decades of American suburb development following World War II left second units out of the design for the typical single family property. Meanwhile, 100 million people live in 1-2 person households, 90% of seniors prefer to age-in-place in communities they've known all their lives and most median income families are face with the undesirable tradeoff mentioned above.
By adding ADUs to our single-family homes, we are able to offer a tremendous opportunity to our clients. ADUs allow grandparents and families to live comfortably and independently on the same property, or give friends the option to grow old together in a co-housing style development. Or they can be created as rental units to generate passive income for the property owner, allowing them the financial flexibility to pay off mortgages early and plan for retirement. New Avenue's mission is to re-introduce this new trend in housing at scale to remake American neighborhoods and make them more flexible and affordable. In so doing, we can decrease the financial barrier to entry to a high quality family lifestyle and increase the number of people who get to enjoy our best neighborhoods.
The benefits to quality of life of sharing space in this way are numerous. The cost of living goes down, family time goes up, more families can have access to good schools, more people can live in transit oriented neighborhoods, and everyone benefits by living in a more connected community.
We believe that multiplying these benefits across millions of American families produces and excellent social return on capital deployed, and lays the foundation for a financially sound, socially connected, resilient society.