Dear NMHC Members:
Today, the NBA took meaningful steps to hold Los Angeles Clippers owner Donald Sterling accountable for his recent racist comments. Since news of his hateful remarks broke, I have been amazed by the sheer amount of texts and emails that I have received about Sterling’s comments, which came from family, friends, business associates and several NMHC members. Given the outreach I’ve received and Sterling’s involvement in the apartment industry, I thought it worthwhile to share my perspective on this situation as an African American executive in the apartment industry who also happens to be a Los Angeles Clippers season ticket holder.
People across the country from President Obama, to LeBron James and Michael Jordan, to fans everywhere, are rightly in an uproar over Sterling’s comments. However, I have actually been more troubled by reports over the years in relationship to Sterling’s alleged racist policies as an owner of rental properties throughout Los Angeles and other communities. Sterling settled a lawsuit against his company in 2009 that alleged discriminated against African American and Latino American renters.
As apartment owners, developers, investors, lenders and other participants in the industry, I believe the key takeaways from the Sterling situation are:
Racist Elements Continue to Exist in Our Industry. Most of these elements are more subtle than Sterling’s offensive comments, and fortunately, they represent a shrinking segment of the apartment industry. Nevertheless, they do exist. I personally encountered them a few months ago when my investment team and I toured apartment property in a highly diverse urban community we were considering acquiring. When we asked the senior executive giving us the tour about the number of Section 8 residents at the property, the executive responded with a diatribe about not renting to “those people.” She went on to make highly disparaging remarks that were clearly about the African American and Latino American residents.
Naturally my team and I were appalled (particularly since this executive was talking to a potential buyer who was African American!), but we also saw it as an opportunity since we immediately understood why this property had an occupancy at 87%, versus a market occupancy of 95%. We now own this property and have significantly improved the operating performance, in large part as a result of our positive view of the diverse community where the property resides. I do strongly believe that there is a “Darwinian aspect” of the apartment industry; in an increasingly diverse rental market, operators with the “Donald Sterling mentality” will not survive and will be driven out of the market.
We should be Very Proud of the Leadership of Industry Executives and NMHC on Embracing Matters of Diversity and Inclusion. Diversity is a priority issue for NMHC and one that I am working hard to continue to advance as the NMHC Chairman. This work is not new, though, and much credit goes to a number of previous NMHC chairs who made this a priority, including Jeff Stack, Mary Ann King, Ric Campo, Peter Donovan and Tom Bozzutto. Jeff has enlightened all of us on the plight of our disabled veterans. Ric has been a proponent of REIT board diversity. Peter pushed to establish the NMHC Diversity Committee and Mary Ann stepped up initially to chair it. A number of our most prominent NMHC members have also volunteered considerable time and energy on the committee, including David Neithercut, Connie Moore, Eric Bolton, Stan Harrelson, Julie Smith, Vince Toye, Albert Berriz, Sue Ansel, Ed Padilla, Michael Katz and John Williams. We certainly have much work to do, but we should all be proud of the efforts of our industry leaders.
New Ideas, Efforts and Initiatives Must Be Pursued to Create Stronger Communities. Over one-third of America rents, and 15 percent live in an apartment. Many of these residents earn incomes in the 60 to 100 percent range of area median income. They are school teachers, maintenance workers, retail sales workers, police officers, etc. Many have children in public schools that are often underfunded and suffer from large class sizes. I am proud of the fact that a large number of NHMC members are not only offering housing to these families, but are also actively involved in improving the lives of their residents and the communities where they own properties.
Our members are involved in the local schools, are working with law enforcement on public safety, support local charities, are investing in environmental sustainability and other initiatives. Importantly, they are operating their properties in a professional manner and providing superior service to our increasingly diverse universe of renters. I would encourage all of us to continue these efforts and to even try to do more. Our nation’s communities need the strong support of the apartment industry.
I also want to take this opportunity to respond directly to the three most frequently asked questions about Sterling’s comments that I have received over the past several days:
Is Sterling’s viewpoint commonplace in the apartment industry?
As mentioned, Sterling is indeed in the apartment industry, but he is not a member of NMHC and he represents the kind of owner that NMHC and other leaders in the industry have worked very hard to eradicate.
What do I think about Sterling comments? In particular, this question came from those who were not African American who wanted the perspective of an African American.
The answer is, of course, that I was appalled and shocked at the bigotry and hate in Sterling’s comments - the same reaction that most sensible people are having regardless of their ethnicity.
What was I going to do personally to “protest” Sterling’s comments? Was I planning on boycotting the Clippers playoff games?
My answer to this question is a bit more complicated. On one hand, I am sickened by the alleged comments and actions of a man who should serve as a role model for the youth in America. And I hate the idea that the money I spend on tickets provides an economic benefit to Sterling. On the other hand, hundreds of other innocent people depend on the franchise for their livelihood-the players, coaching staff, training staff, equipment managers, team security personnel, ushers and food servers to name a few. Having seats right next to the Clippers bench has provided my family an opportunity to develop friendships with many of these people. And Clippers Head Coach Doc Rivers exemplifies the highest level of class and leadership that one can find in sports or any industry.
The players, led by Chris Paul and Blake Griffin, are always gracious and go out of their way to greet younger fans like my children. In addition, the Clippers staff is fantastic and always makes attending games a positive, fun, safe and entertaining family outing. Ironically, the Clippers coaching staff and other personnel are quite diverse, representing a cross section of ethnicities. So although I hate to further enrich Sterling, I do understand that my attendance at the games also supports all the hard working and wonderful individuals who work for the Clippers organization. As a result, I will attend the playoffs and support these outstanding individuals who have become our dear friends over the years.
while I am appalled by Donald Sterling and his racist comments, I think it is
useful to use this incident as an opportunity to look at our industry and see
how we are adapting to the growing diversity around us. I for one am pleased with what I see. I am also very proud to be the chairman of
NMHC and greatly appreciate this opportunity to share my personal opinions on
the Sterling situation. Certainly, my
commentary represents my personal views and not those of NMHC.
Daryl J. Carter